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MEMORANDUM


TO:	Steam Electric Rulemaking Record

FROM:	TJ Finseth, ERG
	Danielle Lewis, ERG
	Elizabeth Sabol, ERG

DATE:	January 30, 2013

SUBJECT:	Methodology for Estimating Impoundment Age, Capacity, and Reductions in Capacity Used to Estimate Benefits Associated with Avoided Impoundment Failures


Steam electric power plants manage combustion residuals such as flue gas desulfurization (FGD) solids, fly ash, and bottom ash using either wet or dry handling practices. For plants that use wet handling systems, the combustion residuals are typically sluiced to one or more surface impoundments (i.e., settling ponds), where the solids settle out of the water. In addition to solids, these impoundments typically contain water with high concentrations of pollutants originating from the combustion residuals, including dissolved metals.
Although the impoundments are subject to state regulations, events such as the failure of a combustion residual impoundment at the Tennessee Valley Authority's Kingston Fossil Plant in 2008, demonstrate the potential severity and cost of structural failures. In that case, over 5 million cubic yards of combustion residual was accidentally released, resulting in cleanup costs and other costs and damages exceeding $1 billion. Although the probabilities of catastrophic releases such as the Kingston's spill may be low, the high costs associated with these events mean that even very small risks entail significant costs to society. In addition, other smaller unintentional releases (e.g., spills) from surface impoundments may also result in substantial damages and incur large cleanup and other costs.
The operational changes prompted by the proposed effluent limitations guidelines and standards (ELGs) may cause some plant owners to reduce their reliance on impoundments to handle combustion residuals. These changes would affect the future probability of impoundment failures and, as a result, accidental, and sometimes catastrophic releases, of combustion residual solids and wastewater. Benefits arising from the reduced risk of impoundment failures include avoided cleanup costs, environmental damage, and litigation costs.
EPA quantified and monetized these benefits based on predictions about how future impoundment structural failures and other accidental releases from impoundments would be reduced by the proposed ELGs, and the commensurate avoided costs of spill cleanup, natural resource damages, and litigation expenses. The details of this analysis are described in Chapter 7 of the Benefit and Cost Analysis for the Proposed Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category.
The analysis used to estimate the benefits associated with these avoided impoundment failures takes into account the impoundment age, capacity (expressed as volume, in cubic feet), and the estimated reductions in impoundment capacity. Therefore, ERG used data reported in responses to the Questionnaire for the Steam Electric Power Generating Effluent Guidelines (Steam Electric Survey) to obtain these characteristics from each of the 1,070 coal combustion residual (CCR) impoundments considered in the scope of the Steam Electric ELGs. ERG also estimated how the future impoundment capacity for each impoundment would be reduced under each of the five regulatory options. For more information on the regulatory options considered as part of the rulemaking, see Section 8 of the Technical Development Document for the Proposed Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category.
Determining Surface Impoundment Age
ERG used data from Part A of the Steam Electric Survey to determine the age of CCR surface impoundments. Question A3-2, Table A-4, requested information on the initial year the impoundment was brought online for both active and inactive impoundments. ERG was able to obtain the year brought online for 1,059 of the 1,070 CCR impoundments from the Steam Electric Survey.
For the remaining 11 impoundments, ERG used the data from the 1,059 impoundments to calculate an average installation year associated with active impoundments and an average installation year associated with inactive impoundments.
ERG calculated the impoundment age by subtracting the year the impoundment was brought online from 2009. ERG used 2009 as the basis for the age because the data collected in the Steam Electric Survey represents 2009.
Determining Surface Impoundment Capacity
ERG determined the capacity, or volume, for all 1,070 CCR surface impoundments using data from Part D of the Steam Electric Survey. Table D-5 requested information on the original volume (in cubic feet) of the surface impoundment. From Table D-5, ERG was able to determine the volume for 893 impoundments.
For the remaining 177 surface impoundments, ERG estimated the volume of the impoundments using one of the following three prioritized estimation methods:
   1) For three of these impoundments, ERG determined the impoundment volume using the original surface area (in square feet), top elevation (in feet), and bottom elevation (in feet). ERG calculated the volume of the three impoundments using the following equation:

Volume (ft[3]) = Surface Area (ft[2]) x [Top Elevation (ft)  -  Bottom Elevation (ft)]

   2) For 111 of these impoundments, ERG estimated the impoundment volume using an average volume per flow rate into an impoundment (in cubic feet per gallons per day (gpd)) corresponding to status (active or inactive). Using Steam Electric Survey data for all combustion residual impoundments that reported both baseline flow rates into the impoundment and impoundment volume, ERG calculated an average volume per flow rate for each impoundment for which data were available and then averaged those ratios for all the impoundments to calculate a volume per flow factor, which was 600 ft[3]/gpd. See Section 3 for more information on how ERG calculated impoundment-specific flow rates entering the surface impoundments. ERG estimated the volume (in cubic feet) by multiplying the impoundment-specific flows rates, as described in Section 3, by the calculated volume per flow factor.

   3) For 63 of these impoundments (53 active and 10 inactive impoundments), ERG calculated the average volume for active and inactive impoundments based on the 896 impoundments for which ERG had impoundment volumes reported in the Steam Electric survey (893 impoundments) or ERG calculated the volume based on impoundment dimensions (3 impoundments, identified in bullet 1). These 896 impoundments account for 832 active and 64 inactive impoundments. The average volume for active impoundments was 49,400,000 ft[3] and the average volume for inactive impoundments was 48,700,000 ft[3].

Estimating Reduction in Impoundment Capacity
ERG estimated the reduction in impoundment capacity for all 1,070 CCR surface impoundments for each of the regulatory options. Each of the five regulatory options will result in a decrease in the wastewater entering the impoundments either by reducing or eliminating the volume of wastewater sent to the impoundment. ERG estimated that the impoundment capacity would decrease by the percent reduction in flow into each impoundment. While the reduction in flow entering the pond will not necessarily decrease the size of the impoundment unless the plant closes portions of the impoundment after the implementation of the ELGs, the impoundment will receive less combustion residual solid waste and therefore, will be less likely to have a breach of the impoundment. Furthermore, any breach or spill that does occur would likely be less severe since the impoundment would contain less combustion residual solids or wastewater.
ERG used information from Part A, Section 3 of the Steam Electric Survey to determine the types of combustion residual waste contained in each of the 1,070 CCR impoundments. ERG determined which impoundments received FGD wastewater, fly ash transport water, and bottom ash transport water. The Steam Electric Survey did not require plants to differentiate between CCR leachate from impoundments versus CCR leachate from landfills. For this reason, ERG was unable to evaluate which impoundments contained combustion residual landfill leachate and therefore, leachate was not included in the analysis.
ERG then calculated a baseline flow associated with each impoundment. As described in EPA's Incremental Costs and Pollutant Removals for Proposed Effluent Limitation Guidelines and Standards for the Steam Electric Generating Point Source Category Report (DCN SE01957), ERG estimated the amount of FGD, fly ash, and bottom ash wastewater discharged by each plant for use in baseline and post-compliance pollutant loadings calculations. ERG used these waste-specific baseline flow rates to calculate the total baseline flow for each impoundment. ERG assumed each impoundment would receive the total volume of any combustion residual waste generated that is contained in the impoundment. For example, if an impoundment contains FGD wastewater and fly ash transport water, ERG calculated the baseline flow into the impoundment as the volume of FGD wastewater generated plus the volume of fly ash transport water generated. Additionally, if the plant operates two ponds in series, ERG assumed that the flow entering the first pond is equivalent to the flow entering the second pond (if no wastewater is sent only to the second pond).
ERG then calculated the reduction in flow into the impoundment for the five regulatory options. ERG calculated post-compliance flows for each impoundment based on the types of combustion residual contained in the impoundment and the effect of the regulatory option. For example, if an impoundment contains FGD wastewater and fly ash transport water, for Option 1, the post-compliance flow would include only the fly ash transport water and for Option 3, the post-compliance flow would be zero. ERG then calculated the flow reduction by subtracting the post-compliance flow from the baseline flow for each impoundment.
ERG calculated the percent reduction in flow using the following equation:
  Percent Reduction = (Baseline Flow  -  Post-Compliance Flow)/ Baseline Flow

As stated previously, ERG assumed that the percent reduction in flow is equivalent to the percent reduction in impoundment capacity because the impoundment will no longer have to handle or treat this percentage of flow.
After calculating the percent reduction in flow, ERG multiplied this percent reduction by the baseline volume calculated in Section 2 to estimate the reduced capacity for each impoundment under each regulatory option. ERG calculated a reduced capacity for each regulatory option using the following equation:
              Option Volume = Baseline Volume * Percent Reduction

Results
The age, baseline capacity, and reduced capacity for each of the 1,070 CCR impoundments under the five regulatory options are presented in the document entitled "Estimated Impoundment Age, Capacity, and Reductions in Capacity" (DCN SE01826).


