
                                  MEMORANDUM



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

TO:		Paul Shriner and Lisa Biddle, EPA
FROM:	John Sunda 
DATE: 	August 23, 2012

SUBJECT:	IM Technology Cost Drivers

This memo discusses the assumptions used in developing the IM compliance costs for the purposes of identifying which assumptions are potentially cost drivers that can lead to (significant) over/under-estimation of costs. In general, a capital costs difference of 10% results in a total rule cost change of less than 1% (because a 7% interest rate amortized for 20 years has a .093 annualized factor.)  Therefore, both prevalence and costs differential are considered. The results of this review are provided in the table below.



                                       
                     IM Technology Assumption Cost Drivers
                                  Assumption
                                Sensitivity[1]
                                 Prevalence[2]
                                     Notes

                                       
                               Generator Intakes
                             Manufacturer Intakes

Reported through-screen of <=0.5 fps in a facility survey is assumed IM compliant.
                                     High
                                      16%
                                      18%
20% of generator intakes are >=0.3 and <=0.7 (+-40%). For those that reported such data, 43% of intakes reported velocity at critical low flow and 57% reported velocity at mean flow.
Depth of water at the withdrawal point is an approximation of the wetted depth of intake screens at the reported through-screen velocity.
                                     High
                                     High
                                     High
Costs for New intake (Module 3 and 10.2) and Ristroph Traveling Screens (Module 1 and 10.3) are indirectly proportional to the assumed water depth. 
Use the default (median) intake water depth where data was not reported.
                                     High
                                      39%
                                      25%
Estimated screen width may be unrepresentative of actual intake screen width. Counts are for intakes with values equal to default and may include some actual values.
Facilities that did not report screen velocity data had values equal to the default median.
                                     High
                                      14%
                                      50%
Estimated screen width may be unrepresentative of actual intake screen width. Some unreported velocities may be <0.5 fps.
Facilities with intakes without traveling screens and velocities >0.6 will comply by building larger intakes with <=0.5 fps traveling screens or by installing wedgewire screens.
                                     High
                                      11%
                                      38%
Other less costly technology options may be available on a site-specific basis.
Facilities with intakes with traveling screens with a screen velocity >2.5 fps will comply by building larger intakes with <=0.5 fps traveling screens or by installing wedgewire screens.
                                     High
                                      9%
                                      4%
Note that 2.5 fps is based on BPJ. The value is more related to issues regarding debris especially with respect to fine mesh. 5% of generator intakes and 2% of manufacturer intakes are in the >2.5 to 3.0 fps range.
That non-IM compliant intakes without traveling screens or velocities >2.5 fps will not use a technology option with lower cost than a 0.5 fps larger intake or wedgewire screens. 
                                     High
                                      13%
                                      26%
Technology options are very site-specific and there are no lower cost modules that apply to non-traveling screen intakes.
Facilities will schedule construction activities to coincide with routine maintenance downtime, and that the estimated technology construction downtime is based on the median downtime value that may be incurred.
                                     High
                                      Low
                                   Moderate
Most power generators have scheduled downtime to coincide with construction especially for traveling screens. Some manufacturing intakes must operate continuously and low downtime estimates for manufacturers (even for traveling screens) have been questioned in public comments.
That traveling screens without the full complement of modified Ristroph features must replace and upgrading screen to achieve compliance. 
                                   Moderate
                                      59%
                                      32%
Prevalence values include non-compliant intakes with traveling screens and velocity >0.6 fps. Many existing screens with partial Ristroph features may require replacement because they are not designed for continuous operation.
That intakes without the full complement of modified Ristroph features will require a new separate fish return.
                                   Moderate
                                      27%
                                      9%
Prevalence values include all intakes that reported a fish conveyance system (not just those with traveling screens). Only 3-4% reported separate fish and debris returns. Could eliminate added costs for fish return for intakes with existing fish return or conveyance system.
That the technology mix reported in 2000 technical survey is representative of current conditions.
                                   Moderate
                                   Moderate
                                   Moderate
The general trend is for facilities to install more protective technology over time. Improvements made in last 12 years are not reflected in costs.
That nuclear facilities will incur capital and O&M costs that are 1.8 and 1.33-1.44 times those costs for non-nuclear facilities, respectively.
                                   Moderate
                                      8%
                                      0%

That the maximum reported intake flow for the years 1996, 1997, 1998, is representative of the design flow for technologies that do not involve replacement of existing traveling screens (e.g., new larger intake and wedgewire screens).
                                   Moderate
                                      34%
                                      35%
Difference in total flow for all intakes was 7% for generator intakes and 26% for manufacturing intakes. Prevalence values are intakes where maximum reported flow was < DIF.
That fish barrier nets are needed at all intakes on ocean and estuarine waterbodies in addition to replacement traveling screens or new larger intakes with traveling screens.
                                      Low
                                      13%
                                      6%
Costs for barrier nets are relatively low. Inclusion of barrier nets at estuarine facilities did not significantly affect total rule costs.
That intakes with inlets submerged >500 ft offshore or has canal length >5,000 ft are representative of intakes that will have difficulty installing fish returns
                                      Low
                                      3%
                                      4%
Prevalence values are for intakes assigned added costs.
[1] The degree to which changes in the assumed value will affect changes in individual intake costs
[2] Intake percentages are unweighted approximations for all intakes - not just those assigned technology costs


Some additional assumptions that may affect compliance costs include:
IM Compliance Assumptions
   * That intakes that meet the following are baseline IM compliant:
         o Are located in NY or coastal CA.
         o Reported that associated cooling systems at the facility were closed-cycle cooling using cooling towers.
   * That de minimis frequency is unknown, location is unknown, and at most roughly 5% of facilities. Technology costs will be overstated for those facilities.  These facilities have such low impingement rates that the estimated benefits for these facilities are likely small, and thus national level benefit estimates would not change as a result of these facilities being determine to be de minimis.
Technology Assignment Assumptions
   * That existing intakes with reported intake velocities <0.6 and >0.5 can comply using variable speed pumps alone. 
   * That the cost of the single technology options selected will be equal to or greater than the cost of multiple partially effective technologies (e.g., fish avoidance technologies, flow reduction, etc). Facilities will opt for such approaches where it is more cost effective to do so. 
   * That fish returns at intakes where fish returns are difficult to install can do so, but at additional costs. (Costs of fish returns increased in final analysis.)
   *  That facilities with intakes described above that have design intake flow  <10 MGD or water Depth at Intake >20 ft will select wedgewire screens instead of larger intakes, except for intakes on oceans or lakes.
Assumptions Related to Technology Module Costs
Some cost module components may be important drivers for total costs. A detailed evaluation of individual cost module development assumptions is not presented here. Below are some of the more general cost module assumptions and those related to missing design and input data from the technical survey. 
   * That the module capital and O&M costs estimates for each module are representative of the median national costs for that technology. 
   * That the assumed service life for each technology module is representative of the median national value.
   * That the reported design intake flow is a good approximation of the required combined cooling and process water flow requirement.
   * That the use of estimated median national costs will produce a reasonable estimate of national costs since actual costs that are higher and lower than the median will tend to be offset.
   * That traveling screen total intake well depths have an average freeboard of 30 ft for freshwater rivers, 20 ft for lakes, and 15 ft for all others. (Affects cost of traveling screens.)
