
                                       

                                  MEMORANDUM



Tetra Tech, Inc.
10306 Eaton Place, Suite 340
Fairfax, VA 22030
phone	703-385-6000
fax	703-385-6007

TO:			Paul Shriner, EPA
FROM:		John Sunda (SAIC) and Kelly Meadows
DATE: 		March 23, 2011

SUBJECT:		316(b) Existing Facility Cost Tool

For the 2004 Phase II rule, EPA developed a compliance cost methodology based on the application of a number of different intake technologies and upgrades to individual facility intakes.  Various intake attributes, such as the intake type, location, size, design flow rate, existing control technologies, expected performance standards, and other parameters, were used to determine an appropriate compliance technology.  While water use does vary by type of facility, the types of intake structures and intake technologies are not different between Phase II and Phase III facilities. EPA subsequently concluded the same compliance technologies used in Phase II were appropriate for Phase III facilities.

For the Phase III Rule, EPA developed a cost tool that incorporated the Phase II cost equations and cost development methodology for each compliance technology.  The cost tool was a spreadsheet program that created intake-specific or facility-specific compliance costs.  The use of this program makes multiple cost calculations rapid, transparent, and reproducible.  The cost tool also included algorithms that helped select appropriate technologies based on compliance requirements, known site conditions, and various EPA rule options.

The scope of facilities subject to the proposed existing facility rule includes both Phase II and Phase III facilities.  Since Phase III already included existing manufacturing and power generating facilities, the cost tool was already designed for use with both kinds of facilities.  EPA further updated and modified the Phase III cost tool to incorporate corrections, methodology changes, and additional compliance options.  During the development of the existing facility rule, EPA evaluated a number of different compliance options for both impingement mortality and entrainment mortality reduction.  As such, the technology selection component has been modified several times in order to model different approaches with respect to compliance requirements and technology capabilities.  Some methodology changes were made as well and are discussed in detail in Chapter 8 of the Technical Development Document (TDD).

A major modification to the compliance technology selection process resulted from the re-evaluation of the entrainment reduction capabilities of the suite of technologies.  The result was that EPA's compliance assumptions do not rely upon any of the intake technologies as the means to comply with entrainment mortality reductions.  Entrainment reduction compliance costs are instead based on closed-cycle cooling and were developed using a separate methodology.  As a result, the current version of the cost tool was utilized to derive costs for compliance with IM reduction requirements only.  Also, certain input values (e.g., "Capacity Utilization, "River Proportional Flow") that were used in the previous rulemaking efforts as criteria for specifying compliance requirements were not used in this effort.  In addition, due to revisions to the technology selection process, certain input values are not used in the active algorithms and are no longer functional, but have been retained in the current version of the cost tool.  These are identified on the user input sheet and in the description below.

The tool accepts site-specific intake data, executes the cost derivation methodology and analysis and then outputs a set of costs for use in compliance option evaluation.  The intake-specific data and cost information used by EPA is generally handled as confidential business information (CBI), but EPA has made available this cost tool (without the facility-specific input data) so that the cost methodology is transparent.  To provide for greater flexibility in use, an input variable has been added to allow users to select compliance technology modules under consideration and obtain separate costs for each.  This allows potentially regulated facilities to use the cost tool to predict EPA's compliance cost estimates for various alternatives.

The development of the cost technology modules is described in Chapter 1 of the Final Phase II Rule Technical Development Document (DCN 6-0004, FDMS ID EPA-HQ-OW-2002-0049-1462).  The initial development of the cost tool is described in detail in Chapter 5, Section 2 of the Phase III Technical Development Document (DCN 9-0004, FDMS ID EPA-HQ-OW-2004-0002-1543).  Additional modifications to the cost development methodology are described in Chapter 8 of the Technical Development Document for this existing facility proposed rule.  The cost tool will compute compliance costs for the individual cost modules developed under Phase II plus several combinations listed in Table 1 below:

                    Table 1.  Module Technology Description
                                   Module #
Description
                                       1
Replace Traveling Screen with Ristroph Screen and Add Fish Handling and Return System
                                       2
Replace Traveling Screen with Fine Mesh Ristroph Screen and Add Fish Handling and Return System
                                      2a
Add Fine Mesh Screen Overlays Only
                                       3
Add New Larger Intake Structure with Double Entry, Single Exit Traveling Screen with Fish Handling and Return
                                       4
Add Passive Fine Mesh Wedgewire Screens (1.75 mm mesh) at Shoreline
                                       5
Add Fish Barrier Net
                                       6
Add Aquatic Filter Barrier (Gunderboom)
                                       7
Relocate Intake to Submerged Offshore with Passive Wedgewire Screen (1.75 mm mesh)
                                       8
Add Velocity Cap at Inlet
                                       9
Add Passive Fine Mesh Wedgewire Screen (1.75 mm mesh) at Inlet of Offshore Submerged
                                     10.0
Combination of Module 2 and Module 5
                                     10.1
Combination of Module 2a & Module 5
                                     10.2
Combination of Module 3 & Module 5
                                     10.3
Combination of Module 1 & Module 5
                                     10.4
Combination of Module 1 & Module 8
                                      11
Add Double-Entry, Single-Exit Traveling Screen with Fish Handling and Return
                                      12
0.75 mm Passive Fine Mesh Wedgewire Screen at Shoreline (For Estuary & Ocean only)
                                      13
0.75 mm Passive Fine Mesh Wedgewire Screen at Inlet of Offshore Submerged (For Estuary & Ocean only)
                                      14
Relocate Intake to Submerged Offshore with 0.75 mm Passive Wedgewire Screen (For Estuary & Ocean only)


The Cost Tool Structure

The cost tool program makes use of basic database retrieval functions and logical statements to mirror the costing methodology hierarchy used by EPA for development of the existing facility technology costs to comply with impingement mortality reduction requirements.  The cost model described here modifies the cost tool to Version 6.1 which calculates the costs the Agency developed and considered for the proposed existing facility rule.  The cost tool combines the varied analyses and data presented in the TDD into an automated decision tree that ultimately assigns a technology cost to each facility.

In the "User Inputs" sheet of the cost tool, the user supplies data at the facility level, or the user may choose to input information at the intake level where multiple intakes at a single facility have different features that might affect which technology modules are feasible for each intake.  Once the "user inputs" have been entered, and as long as the "Qualified Impingement?" box is left blank, the cost tool will apply EPA's decision tree for assigning site-specific cost modules for IM reduction compliance; see Exhibit 8-1 in Chapter 8 of the TDD for a schematic of this decision tree.  Finally, the costing methodology is performed through a combination of calculations and functions (that is, an algorithm).  This work is mostly carried out in the sheet titled "Calc. and Data" and is supplemented by a few logical functions and data retrieval in the "Output" sheet.  The cost outputs include capital costs, incremental O&M costs, and downtime (in weeks).

The data fields requested in the "User Inputs" sheet (see Figure 1 below) come from questions in the 2000 industry technical questionnaires sent to facilities plus a few basic observations about the intake, such as a judgment about the degree of debris loading at the intake: "high" or "low."  The program reproduces the methodology the Agency utilized to develop final costing decisions to determine which technology would best suit a particular intake.

If multiple sets of intake/plant data are to be run, the input data can be entered on separate lines in the "Macro Input" worksheet.  Then if the "AutoInput" macro is run, the corresponding output data is copied into the "Macro Output" worksheet.  For individual computations, data can be entered directly into the "User Inputs" worksheet and the calculated costs can be read directly from the "Output" worksheet.  Figure 1 presents a screen shot of the "User Inputs" page.

                                   Figure 1
                        Screenshot of User Inputs Sheet



Cost Tool Inputs

This section describes the inputs to the Cost Tool (see Figure 1), and defines the default values used.  The default values are used when input values are left blank.  Modifications to the previous Phase III version of the cost tool include the addition of the following input variables:

   * New Design Intake Flow (gpm)
   * ENR Construction Cost Index 
   * Compliance Screen Mesh (mm)
   * Screen Velocity for Module 3 (fps)
   * Maximum Acceptable Screen Velocity (fps)

The input variables in the current cost tool are described below:

Facility Type: This input value was added to allow for proper selection of default input values to the cost tool for different types of facilities ("3" = Manufacturer; "2" = Power Generation).  Facility type is a required input variable in the cost tool.

Cooling System Type: Used to identify whether the cooling system is once-through or recirculating.  In the current version of the tool, this input is not used in the active algorithms since intakes must meet impingement reduction requirements regardless of cooling type.

State Abbreviation: The two letter state abbreviation is used to identify the state where the intakes are located.  The state is used to assign state-specific capital cost factors developed for the Phase III Rule.  The state also is used to identify whether zebra mussels are a potential problem at a facility, requiring the use of more costly CuNi alloys in wedgewire screens.

Waterbody Type: The numeric values 1 through 5 represent the waterbody type for each intake's location.  These values are "1" = Ocean, "2" = Estuary, "3" = Great Lake, "4" = Fresh River, "5" = Lake/Reservoir.  This input variable affects technology selection and certain cost components.  Waterbody type is a required input variable in the cost tool.

Fuel Type: A value of "1" (one) indicates the intake is part of a nuclear facility and results in additional cost factors applied to both capital and O&M costs.  A value of "0" (zero) indicates the intake is non-nuclear.

Capacity Utilization Rate (CUR): In the current version of the tool, this input is not used in the active algorithms.  This percentage value reflects the ratio between the average annual net generation of power by the facility (in MWh) and the total net capability of the facility to generate power (in MW), multiplied by the number of hours during a year.

Intake Location: The numeric values 1 through 6 represent the location and description for each intake.  These values are "1" = shoreline intake (flushed, recessed), "2" = intake canal, "3" = embayment, bank, or cove, "4" = submerged offshore intake, "5" = near-shore submerged intake, "6" = shoreline submerged intake.  This input variable affects technology selection and certain cost components such as costs for longer fish returns.  Intake Location/Description is a required input variable in the cost tool.

Distance Offshore for Submerged Intakes: Submerged offshore intake distance affects construction and civil costs as well as O&M costs, and is a critical parameter for relocating intakes and adding wedgewire screens to existing offshore intakes.  The default distance of submerged offshore intakes is the median of all reported values from Phase II facilities by waterbody type as follows in Table 2:
                                       
     Table 2.  Default Values for Distance Offshore for Submerged Intakes
Waterbody
                                     Code
                          Distance Offshore (Meters)
Ocean
                                       1
                                      500
Estuaries/Tidal Rivers
                                       2
                                      125
Great Lakes
                                       3
                                      500
Rivers and Streams
                                       4
                                      125
Lakes/Reservoirs
                                       5
                                      125

Canal Length: This variable is used to determine the length of the fish return system.  The default value for the constructed canal length is the median of all reported values from Phase II facilities as follows in Table 3:
 
                   Table 3.  Default Values for Canal Length
Waterbody
                                     Code
                               Canal Length (Ft)
Ocean
                                       1
                                     3,370
Estuaries/Tidal Rivers
                                       2
                                     1,650
Great Lakes
                                       3
                                     1,460
Rivers and Streams
                                       4
                                      690
Lakes/Reservoirs
                                       5
                                      800

Navigation/Waterbody Use: In the current version of the tool, this input is not used in the active algorithms.  A value of "1" indicates the intake is located where boat/barge navigation near the intake is a consideration when making any modifications to the intake.  A value of "0" (zero) indicates navigation does not occur in the vicinity of the intake.
   
Mean Intake Water Depth: This value is used for estimating total existing screen width and selecting compliance technologies.  Default values are shown in Table 4 below:
                                       
             Table 4.  Default Values for Mean Intake Water Depth
                                 Facility type
                                     Code
                         Mean Intake Water Depth (ft) 
                                       
                                       
                                DIF >= 50 MGD
                                DIF < 50 MGD
                              Electric Generating
                                       2
                                      15
                                      12
                                 Manufacturing
                                       3
                                      19
                                      16


Intake Well Depth: The intake well depth is the distance from the intake deck to the bottom of the screen well, and includes both water depth and distance from the water surface to the deck.  The intake well depth is used to select the total height of the required traveling screen.  For a given screen width, deeper screens result in higher capital costs.  If not entered, then screen well depth is calculated by adding the freeboard depths in the following Table 5 to the mean intake water depth:
                                       
                Table 5.  Default Values for Intake Well Depth
                                   Waterbody
                                     Code
         Assumed Distance from Mean Water Surface to Screen Deck (ft)
                                     Ocean
                                       1
                                      15
                            Estuaries/Tidal Rivers
                                       2
                                      15
                                  Great Lakes
                                       3
                                      15
                              Rivers and Streams
                                       4
                                      30
                               Lakes/Reservoirs
                                       5
                                      20

River Proportional Flow: This input value was used in selecting compliance requirements in previous rulemaking efforts.  In the current version of the tool, this input is not used in the active algorithms.  A value of "1" (one) indicates the design intake flow is greater than 5 percent of the mean annual flow of a freshwater river or stream.  A value of "0" (zero) indicates the design intake flow is less than or equal to 5 percent of the mean annual flow of a freshwater river or stream.

Existing Equipment Design Intake Flow (DIF): The DIF is the numerical value assigned during the facility's design to the total maximum volume of water withdrawn.  Design Intake Flow (DIF) is a required input variable in the cost tool.

New Design Intake Flow: This value is intended to represent current maximum intake flow requirements, as opposed to the DIF, which is based on maximum design flow capacities and may include pumping capacity no longer used or needed.  This value is used to develop costs for compliance technologies that do not involve upgrade or replacement of existing traveling screens (e.g., wedgewire screens, fish barrier nets, new intake, velocity cap).

Average Intake Flow (AIF): This input variable was added to allow for adjustment of the variable portion of the O&M costs to reflect actual equipment operating costs.  Average Intake Flow is a required input variable in the cost tool.

Existing Through-Screen Velocity: This input variable is used to estimate the existing screen width as well as for selecting the appropriate compliance technology.  The power generation default values shown in Table 6 below are the mean reported values for all electric generators with greater than 50 MGD design intake flow.  For manufacturing facilities, the default values are the mean reported values of Phase III Facilities.

         Table 6.  Default Values for Existing Through-Screen Velocity
                                       
                                 Facility Type
                                     Code
                           Screen Velocity (Ft/Sec)
                                       
                                       
                                DIF >= 50 MGD
                                DIF < 50 MGD
                              Electric Generating
                                       2
                                      1.5
                                      0.6
                                 Manufacturing
                                       3
                                      1.2
                                      0.8
 
Through-Screen Velocity Flow Basis: This input variable is used to identify the flow basis of the "Existing Through-Screen Velocity" and is used in the selection of the proper flow for calculation of existing screen width ("1" = Existing Equipment Design Intake Flow; "2" = New Design Intake Flow; "3" = Average Intake Flow).  If left blank, default is Existing Equipment Design Intake Flow ("1").
	
Water Type: A value of "1" indicates the water type is marine.  A value of "0" indicates the water type is freshwater.  The default is "0."

Debris Loading: This input variable is used to estimate O&M costs for wedgewire screens.  A value of "1" indicates high levels of debris and trash near the intake.  A value of "0" indicates debris is low or negligible.  The default is "1."

Impingement Technology In-Place: This input variable is used to select compliance technologies and baseline O&M costs.  A numerical value of 0 through 5 is used to indicate the intake has impingement technologies reported as in-place by the facility.  A value of "1" = Traveling Screens, "2" = Passive Intake (Velocity Cap, Porous Dam, Leaky Dike, etc.), "3" = Barrier Net, and "4" = Fish Diversion or Avoidance (Louvers, Acoustics, etc.).  The default is "0" (no controls). 

Qualified Impingement: This input variable identifies intakes that are already compliant with IM reduction requirements.  A value of "1" means the existing intake is compliant and will receive no costs.  A value of "0" or if left blank means IM compliance technology upgrades are needed.  For facilities with traveling screens, this input value indicates whether a fish return mechanism is in-place.  This in turn affects the cost module selected, as well as baseline O&M costs.  Qualified Impingement is a required input variable in the cost tool.

Entrainment Tech in-Place: This input value was used in selecting compliance requirements in previous rulemaking efforts.  In the current version of the tool, this input is not used in the active algorithms.

Qualified Entrainment: This input value was used in selecting compliance requirements in previous rulemaking efforts.  In the current version of the tool, this input is not used in the active algorithms. Users of the tool can still hardcode a entrainment technology for purposes of cost estimation.

Avg Annual Generation '96 - '99: This input value was used in estimating power generation downtime costs and "per MWh" costs in previous rulemaking efforts.  In the current version of the tool, this input is not used in the active algorithms.

Regional Cost Factor: This input value is used to adjust capital cost estimates to reflect regional labor and material cost considerations.  If left blank, a regional cost factor based on the reported state will be used.  A value of "1.0" should be entered if a national average value is desired.

Screen Velocity for Module 3:  This input variable selects the design screen velocity to be used for estimating the size of technology Module 3 (new larger intake), which in turn will affect costs of the new intake.  The default value is "1.0" fps.

Maximum Acceptable Screen Velocity:  This input variable is used for selecting compliance technologies and establishes the maximum existing velocity acceptable for continued use of existing traveling screens.  The referenced existing screen velocity is calculated based on the "New Design Intake Flow."  The default value is "2.51" fps.

Cost Tool Outputs

The cost tool outputs can be found on the "Output" worksheet or in the "Macro Output" worksheet if the macro is used for multiple entries.  Many of the values represent interim computations and only the following are extracted and used in economic impact analyses:
      
Assigned Costing Module: This output identifies the selected compliance technology module.

Costing Module Service Life: This output identifies the service life of the selected technology module and is the time period to amortize capital costs or calculate present value of annual O&M costs.

Baseline O&M: This output provides the estimated O&M cost of the existing compliance technology.

Gross Module O&M: This output provides the estimated total O&M of selected technology module.

Baseline O&M Fixed Factor: This output provides an estimate of the proportion of the baseline O&M costs that are fixed (i.e., do not vary regardless of intake use).

Gross Module O&M Fixed Factor: This output provides an estimate of the proportion of the gross module O&M costs that are fixed (i.e., do not vary regardless of intake use).

Compliance Tech Capital: This output provides an estimate of the total capital costs of the selected technology module.

Compliance Net Annual O&M: This output provides the net increase in O&M costs based on the difference between the Gross Module O&M and Baseline O&M.
      
All costs are adjusted using the ENR Construction Cost Index (CCI) value entered as a User Input.  The base costs derived for Phase II are in 2002 Dollars (ENR CCI = 6538), which is the default cost basis if no ENR CCI value is specified.
      
Cost Tool Limitations

The cost tool, with the exception of a few selected combinations, assumes that a single technology will be sufficient to meet compliance requirements, while in reality a combination of technologies may be necessary.  Compliance costs for such combinations can be developed by calculating costs for each intake or for multiple selected technology modules and aggregating the costs.  Care must be taken to avoid double counting baseline O&M costs (i.e., do not sum up net O&M costs).

The compliance costs for wedgewire screens were originally calculated for fine mesh requirements (1.75mm and 0.75mm), which were intended to provide for entrainment reduction in addition to impingement reduction.  Use of smaller mesh sizes results in a larger screen area requirement and thus either larger or more screens, which increases the costs compared to coarse mesh.  The impingement reduction technology requirements do not require screen sizes smaller than 9.5 mm; however, the cost tool modules involving wedgewire screens were not adjusted to account for different mesh sizes. Thus, the estimated screen sizes and costs for wedgewire screens may represent an overestimation of compliance costs if smaller mesh sizes are not required.

The purpose of the tool is to generate national level compliance costs. The industry questionnaire database contained only a limited amount of data and so the input options are limited as well.  Due to these limitations, the technologies selected by the cost tool may not actually be economically or technically feasible at the specified intake; the cost tool is not intended to assess financial conditions or feasibility of a technology at a site.  Recognizing these limitations, the compliance costs are derived for economic analyses using the cost tool, and are considered to represent model facility/intake costs that are representative of additional facilities with similar attributes.  These model facility costs are then extrapolated to the entire universe of facilities subject to the proposed rule.  For this reason, the user should not necessarily rely upon the technology selected by the cost tool as being the best fit.  Additionally, the estimated costs are intended to reflect average conditions and actual costs may differ considerably depending on local site conditions.
