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HomeMy WebLinkAbout2006-06-13; City Council; 18602 Attachment 1; Precise Development Plan and Desalination PlantCARLSBAD V<-> CHAMBER OF COMMERCE June 13,2006 Mayor Lewis & Councilmembers City of Carlsbad 1200 Carlsbad Village Drive Carlsbad, CA 92008 RE: Support of the Carlsbad Desalination Project Dear Mayor Lewis & Councilmembers: For the Carlsbad Chamber of Commerce, securing a reliable and affordable potable water supply is one of our top priorities. We urge your approval of the Planning Commission recommendation for certification of the Carlsbad Desalination Project EIR and local permits and applaud the City of Carlsbad for taking an important step towards finding water solutions for the region. In this regard, the Carlsbad desalination plant is the most important water infrastructure project in Carlsbad's history. The plant's developer, Poseidon Resources, will provide the region with a locally-controlled, high quality, affordable water supply that will ensure future growth can be accommodated in Carlsbad and San Diego County. Developing an environmentally responsible solution to the region's water needs is a key component to achieving our goal of water reliability. The EIR provides sufficient information to conclude that the desalination project could be constructed and operated in an environmentally responsible manner and does not identify any significant, and unavoidable impacts related to thirteen different areas studied including the marine environment. The City of Carlsbad's public-private partnership with Poseidon Resources makes an effort to address this critical need by building and operating a desalination plant, at no risk to the city and its taxpayers. This plant will provide enough water to meet the needs of the City of Carlsbad and surrounding communities, while reducing the burden on San Diego's water supply and our dependence on imported water. The Chamber is committed to fostering the growth of our economy and creating jobs for San Diegans. This project will increase economic activity in the form of jobs and spending throughout the region once the desalination plant is operational. We urge your approval of the staff recommendation and applaud the City of Carlsbad for taking an important step towards finding water solutions for the region. Sincerely, Ted President and CEO 5934 Priestly Drive • Carlsbad, California 92008 Phone: (760) 931-8400 • Fax: (760) 931-9153 • E-mail: chamber@carlsbad.org • Web: www.carlsbad.org STATE OF CALIFORNIA ARNOLD SCHWARZENEGGER, Governor CALIFORNIA STATE LANDS COMMISSION CRUZ M. BUSTAMANTE, Lieutenant Governor STEVE WESTLY, Controller MICHAEL C. GENEST, Director of Finance EXECUTIVE OFFICE 100 Howe Avenue, Suite 100-South Sacramento, CA 95825-8202 PAUL D. THAYER, Executive Officer (916) 574-1800 Fax (916) 574-1810 California Relay Service TDD Phone 1-800-735-2929 Voice Phone 1-800-735-2922 RESOLUTION BY THE CALIFORNIA STATE LANDS COMMISSION REGARDING ONCE-THROUGH COOLING IN CALIFORNIA POWER PLANTS WHEREAS, The California State Lands Commission (Commission) and legislative grantees of public trust lands are responsible for administering and protecting the public trust lands underlying the navigable waters of the state, which are held in trust for the people of California; and WHEREAS, the public trust lands are vital to the recreational, economic and environmental values of California's coast and ocean; and WHEREAS, the Commission has aggressively sought correction of adverse impacts on the biological productivity of its lands including, litigation over contamination off the Palos Verdes Peninsula and at Iron Mountain, the adoption of best management practices for marinas and litigation to restore flows to the Owens River; and WHEREAS, California has twenty-one coastal power plants that use once-through cooling, the majority of which are located on bays and estuaries where sensitive fish nurseries and populations exist for many important species, including species important to the commercial and recreational fishing industries; and WHEREAS, these power plants are authorized to withdraw and discharge approximately 16.7 billion gallons of ocean, bay and Delta water daily; and WHEREAS, once-through cooling significantly harms the environment by killing large numbers of fish and other wildlife, larvae and eggs as they are drawn through the screens and other parts of the power plant cooling system; and WHEREAS, once-through cooling also significantly adversely affects marine, bay and estuarine environments by raising the temperature of the receiving waters, and by killing and displacing wildlife and plant life; and WHEREAS, various studies have documented the harm caused by once-through cooling including one study that estimated that 2.2 million fish were annually ingested into eight southern California power plants during the late 1970s and another that estimated that 57 tons of fish were killed annually when all of the units of the San Onofre Nuclear Generating Station were operating; and WHEREAS, the public trust doctrine must be acknowledged and respected by the Commission in all of the Commission's work, thus, the least environmentally harmful pported by the Commission; and, WHEREAS, once-through cooling systems adversely affect fish populations used for subsistence by low-income communities and communities of color thereby imposing an undue burden on these communities and WHEREAS, regulations adopted under Section 316(b) of the federal Clean Water Act recognize the adverse impacts of once-through cooling by effectively prohibiting new power plants from using such systems, and by requiring existing facilities to reduce impacts by up to 90-95%; and WHEREAS, state law under the Porter-Cologne Water Quality Control Act requires the state to implement discharge controls that protect the beneficial uses of the waters and habitats affected by once-through cooling; and WHEREAS, alternative cooling technologies and sources of cooling water, such as the use of recycled water, are readily available, as witnessed by their widespread use at inland power plants and many coastal plants nationwide; and WHEREAS, the Governor's Ocean Action Plan calls for an increase in the abundance and diversity of aquatic life in California's oceans, bays, estuaries and coastal wetlands, -a^geaf-whfch can best-be-me^by-pfeh^M4ngrphaslflg out, or reducing to insignificance the impacts of once-through cooling; and WHEREAS, members of the California Ocean Protection Council have called for consideration of a policy at its next meeting to discourage once-through cooling; and WHEREAS, the California Energy Commission and the State Water Resources Control Board have authority and jurisdiction over the design and operation of power plants and are conducting studies into alternatives to once-through cooling, such as air cooling, cooling with treated wastewater or recycled water and cooling towers; and WHEREAS, in its 2005 Integrated Energy and Policy Report, the California Energy Commission adopted a recommendation to work with other agencies to improve assessment of the ecological impacts of once-through cooling and to develop a better approach to the use of best-available retrofit technologies; and WHEREAS, it is premature to approve new leases or extensions, amendments or modifications of existing leases to include co-located desalination facilities or other uses of once-through cooling water systems until first considering whether the desalination facility would adversely affect compliance by the power plant with requirements imposed to implement both the federal Clean Water Act Section 316(b) requirements and any "additional requirBmerf1^mpc^s^tiljy^rre~State~Water Resources Control Board and appropriate Regional Water Quality Control Board under state law and their delegated Clean Water Act authority; and WHEREAS, at many locations, there are alternative, feasible and available subsurface seawater intake technologies and practices for coastal desalination facilities that do not rely on surface seawater intakes used for once-through cooling; and WHEREAS, the elimination, or reduction to insignificance of the adverse environmental impacts, of once-through cooling technologies can be accomplished without threatening the reliability of the electrical grid; therefore, be it RESOLVED, by the California State Lands Commission that it urges the California Energy Commission and the State Water Resources Control Board to expeditiously develop and implement policies that eliminate the impacts of once-through cooling on the environment, from all new and existing power plants in California; and be it further RESOLVED, that as of the date of this Resolution, the Commission shall not approve leases for new power facilities that include once-through cooling technologies; and be it further RESOLVED, that the Commission shall not approve new leases for power facilities, or leases for re-powering existing facilities, or extensions or amendments of existing leases for existing power facilities, whose operations include once-through cooling, unless the power plant is in full compliance, or engaged in an agency-directed process to achieve full compliance, with requirements imposed to implement both Clean Water Act Section 316(b) and California water quality law as determined by the appropriate agency, and with any additional requirements imposed by state and federal agencies for the purpose of minimizing the impacts of cooling systems on the environment, and be it further RESOLVED, that the Commission shall include in any extended lease that includes once-through cooling systems, a provision for noticing the intent of the Commission to consider re-opening the lease, if the appropriate agency has decided, in a permitting proceeding for the leased facility, that an alternative, environmentally superior technology exists that can be feasibly installed, and that allows for continued stability of the electricity grid system, or if state or federal law or regulations otherwise require modification of the existing once-through cooling system; and, be it further RESOLVED, that the Commission calls on public grantees of public trust lands to implement the same policy for facilities within their jurisdiction; and be it further RESOLVED, that the Commission's Executive Officer transmit copies of this resolution to the Chairs of the State Water Resources Control Board, the California Energy Commission, and the California Ocean Protection Council, all grantees, and all current lessees of public trust lands that utilize once-through cooling. Adopted by the California State Lands Commission on April 17, 2006 /""^ /J CALIFORNIA OCEAN PROTECTION COUNCIL Mike Chrisman, Secretory far Resources, Council Chair Steve Westly, State Conrrolier Alan Lloyd, Secretory for Environment/Protection Sheila Kuehl, Store Senator, Ex cfftcto Member Pedro Nava, Stare Assembiymember. ex afffcto Member Resolution of the California Ocean Protection Council Regarding the Use of Once-Through Cooling Technologies in Coastal Waters Adopted April 20, 2006 - WHEREAS, tho California OceaR^reteetieR^e^maRdates that the Ocean Protection Council (OPC) coordinate and improve the protection of California's ocean and coastal resources; and the Governor's Ocean Action Plan calls for the OPC to play a leadership role in managing and protecting California's oceans, bays, estuaries and coastal wetlands, including integration of coastal water quality programs to increase their effectiveness; and WHEREAS, California currently has 21 coastal power plants that use once-through cooling technology to operate their plants, many of which are located on bays and estuaries, and these plants are collectively permitted to withdraw nearly 17 billion gallons of water per day; and WHEREAS, the OPC is committed to maintaining energy reliability in California, and also recognizes the need to improve coastal and estuarine water quality and protect species diversity and abundance; and WHEREAS, the U.S. Environmental Protection Agency (U.S. EPA) has determined, after a thorough review of the rulemaking record for implementation of section 316(b) of the Clean Water Act, that there are multiple types of undesirable and unacceptable environmental impacts associated with once-through cooling technology; and WHEREAS, The U.S. EPA has found these types of impacts to include entrainment and impingement; reductions of threatened and endangered species; damage to critical aquatic organisms, including impuilanl elements uf the food chain; diminishment of a population's compensatory reserve; losses to populations including reductions of indigenous species populations, commercial fisheries stocks, and recreational fisheries; and stresses to overall communities and ecosystems as evidenced by reductions in diversity or other changes in system structure and function; and WHEREAS, a recent report by the California Energy Commission found that, of the 21 Californian coastal power plants that use once-through cooling, only seven have recent studies of entrainment impacts that meet current scientific standards; and all these studies have found that adverse impacts occur due to entrainment of aquatic organisms; impingement and entrainment result in changes to community structure; thermal impacts from the discharge of cooling water may be significant, particularly in enclosed water bodies; and the possible cumulative impacts of entrainment and impingement are currently unknown; and 1416 Ninth Street, Suite 1311, Sacramento, CA 9S8M Phone:(914)653-5656 Fax:(916)453-8102 Email: COPCpubfic@resources.ca.gov h'ttp:// resources, co.gov/copc WHEREAS, the 2005 Integrated Energy and Policy Report to the California Legislature recommended the OPC work with other agencies to improve assessment of the ecological impacts of once-through cooling and to develop a better approach to implementing best technology available; and WHEREAS, on April 17, 2006, the California State Lands Commission passed a resolution urging the California Energy Commission and the State Water Resources Control Board to develop and implement policies that eliminate the impacts of once-through cooling on the environment; and WHEREAS, staff members of State Water Resources Control Board, California Energy Commission (CEC), California Coastal Commission, and Ocean Protection Council have met and found it extremely helpful to coordinate roles due to the complex nature of coastal power plant permitting. NOW, THEREFORE, the California Ocean Protection Council hereby: RESOLVES that, in agreement with U.S. EPA findings, the environmental impacts from once- through cooling technologies for coastal power plants can be significant, and resolves to urge the —State Water Resources Contrt)l-B^ard-ie>4mplement-Seetion 316(b) and more stringent state requirements requiring reductions in entrainment and impingement at existing coastal power plants and encourages the State to implement the most protective controls to achieve a 90-95 percent reduction in impacts; and FURTHER RESOLVES to encourage the State Water Resources Control Board's formation of a technical review group to ensure the required technical expertise is available to review each power plant's data collection proposals, analyses and impact reductions and fairly implement statewide data collection standards needed to comply with section 316(b); and FURTHER RESOLVES to establish an interagency coordinating committee composed of staffs from the Water Boards, California Energy Commission, the Public Utilities Commission, California Coastal Commission, and others to integrate agency actions and coordinate regulatory authorities; and FURTHER RESOL VES to fund a 6-month study that will analyze each of the existing coastal plant's conversion to alternative cooling technologies or installation of best technology available; and FURTHER RESOLVES to work with the Water Boards, California Energy Commission, the Public Utilities Commission, California Coastal Commission, and others to investigate possible " non-regulatory incentives that can accelerate desirable conversions of once-through cooling technologies, in addition to regulatory programs that can reduce the impact of once-through cooling technologies. Friday, July 9, 2004 Part H Environmental Protection Agency 40 CFR Parts 9, 122 et al. National Pollutant Discharge Elimination System—Final Regulations To Establish Requirements for Cooling Water Intake Structures at Phase n Existing Facilities; Final Rule 41576 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations ENVIRONMENTAL PROTECTION AGEN&Y 40 CFR Parts 9, 122,123,124, and 125 [FRL-7625-9] RIN 2040-AD62 National Pollutant Discharge Elimination System—Final Regulations to Establish Requirements for Cooling Water Intake Structures at Phase II Existing Facilities AGENCY: Environmental Protection Agency (EPA). ACTION: Final rule. SUMMARY: Today's final rule implements section 316(b) of the Clean Water Act (CWA) for certain existing power producing facilities that employ a cooling water intake structure and are designed to withdraw 50 million gallons per day (MGD) or more of water from rivers, streams, lakes, reservoirs, estuaries, oceans, or other waters of the United States for cooling purposes. This final rule constitutes Phase II of EPA's section 316(b) regulation development and establishes national requirements,_ and procedures for implementing those requirements, applicable to the location, design, construction, and capacity of cooling water intake structures at these facilities. The rule applies to existing facilities that, as their primary activity, both generate and transmit electric power or generate electric power but sell it to another entity for transmission. —^Hie-natioftalrequ-iFeiG&ntST-which will be implemented through National Pollutant Discharge Elimination System (NPDES) permits, are based on the best technology available to minimize the adverse environmental impact associated with the use of cooling water intake structures. Today's final rule establishes performance standards that are projected to reduce impingement mortality by 80 to 95 percent and, if applicable, entrainment by 60 to 90 percent. With the implementation of today's final rule, EPA intends to minimize the adverse environmental impact of cooling water intake structures by reducing the number of aquatic organisms lost as a result of water withdrawals associated with these structures. DATES: This regulation is effective September 7, 2004. For judicial review purposes, this final rule is promulgated as of 1 p.m. Eastern Standard Time (EST) on July 23, 2004, as provided in 40 CFR 23.2. ADDRESSES: The docket for today's final rule is available for public inspection at ThtTWater Docket in the EPA Docket Center, (EPA/DC) EPA West, Room B102, 1301 Constitution Ave., NW., Washington, DC. FOR FURTHER INFORMATION CONTACT: For additional technical information contact Martha Segall at (202) 566-1041 or Debra Hart at (202) 566-6379. The e- mail address for the above contacts is rule.316b@epa.gov. SUPPLEMENTARY INFORMATION: I. General Information A. What Entities Are Regulated by This Action? This final rale applies to Phase II existing facilities that are point sources; as their primary activity both generate and transmit electric power or generate electric power for sale to another entity for transmission; use or propose to use one or more cooling water intake structures with a total design intake flow of 50 million gallons per day (MGD) or more to withdraw water from waters of the United States; and use 25 percent of water withdrawn exclusively for cooling water purposes. This rule defines "existing facility" as any facility that commenced constructions on or before January 17, 2002, and any modification of, or any addition of a unit at such a facility that does not meet the definition of a new facility at §125.83, This rule defines the term "cooling water intake structure" to mean the total physical structure and any associated constructed waterways used to withdraw cooling water from waters of the United States. The cooling water intake structure extends from the point at which water is withdrawn from the surface water source up to, and including, the intake pumps. Category Federal State and Local Government ... Industry . .. Examples of regulated entities Steam electric generating point source dischargers that employ cooling water intake structures. Steam electric generating industrial point source dischargers that employ cool- ing water intake structures (this in- cludes utilities and nonutilities). Standard Industrial Classi- fication (SIC) codes 4911 and 493 4911 and 493 North American Industry Classification System (NAICS) codes 221112 221113 221119 221121, 221122 221112 221113 221119 221121, 221122 This exhibit is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be regulated by this action. This exhibit lists the types of entities that EPA is now aware could potentially be regulated by this action. Other types of -errtities-not listed-rrrthe exhibit cotrldr also be regulated. To determine whether your facility is regulated by this action, you should carefully examine the applicability criteria in § 125.91 of the rule. If you have questions regarding the applicability of this action to a particular entity, consult the person listed for technical information in the preceding FOR FURTHER INFORMATION CONTACT section. B. How Can I Get Copies of This Document and Other Related Information? 1. Docket EPA has established an official public docket for this action under Docket ID No. OW 2002-0049. The official public docket consists of the documents specifically referenced in this action, any public comments received, and other information related to this action. Although a part of the official docket, the public docket does not include information claimed as Confidential Business Information (CBI) or other information the disclosure of which is restricted by statute. The official public docket is the collection of materials that is available for public viewing at the Water Docket in the EPA Docket Center, (EPA/DC) EPA West, Room B102, 1301 Constitution Ave., NW., Washington, DC. The EPA Docket Center Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is (202) 566-1744, and the telephone number for the Water Docket is (202) 566-2426. To view docket materials, Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41577 please call ahead to schedule an appointment, Every user is entitled to copy 266 pages per day before incurring a charge. The Docket may charge 15 cents for each page over the 266-page limit plus an administrative fee of $25.00. 2. Electronic Access You may access this Federal Register document electronically through the EPA Internet under the "Federal Register" listings at http:// wH^v.epa.gov/fedrgstr/. An electronic version of the public —doeket is avftHabte-thretiglt-EPArs electronic public docket and comment system, EPA Dockets. You may use EPA Dockets at http://www.epa.gov/edocket/ to view public comments, access the index listing of the contents of the official public docket, and to access those documents in the public docket that are available electronically. Although not all docket materials may be available electronically, you may still access any of the publicly available docket materials through the docket facility identified in section I.B.I. Once in the system, select "search." then key in the appropriate docket identification number. C. Supporting Documentation The final regulation is supported by three major documents: 1. Economic and Benefits Analysis for the Final Section 316(b) Phase II Existing Facilities Rule (EPA-821-R- 04—005), hereafter referred to as the Economic and Benefits Analysis. This document presents the analysis of compliance costs, closures, energy supply effects, and benefits associated "witlrthe final rule. 2. Regional Analysis for the Final Section 316(b) Phase II Existing Facilities Rule (EPA-821-R-04-006), hereafter referred to as the Regional Analysis Document or the Regional Study(ies) Document. This document examines cooling water intake structure impacts and regulatory benefits at the regional level. 3. Technical Development Document for the Final Section 316(b) Phase II Existing Facilities Rule (EPA-821-R- 04-007), hereafter referred to as the Technical Development Document. This document presents detailed information on the methods used to develop unit costs and describes the set of technologies that may be used to meet the final rule's requirements. D. Table of Contents I. General Information A. What Entities Are Regulated By This Action? B. How Can I Get Copies Of This Document and Other Related Information? C. Supporting Documentation D. Table of Contents [. Scope and Applicability of the Final Rule A. What is an "Existing Facility" for Purposes of the Section 316(b) Phase II Rule B. What is "Cooling Water" and What is a "Cooling Water Intake Structure?" C. Is My Facility Covered if it Withdraws from Waters of the United States? D. Is My Facility Covered if it is a Point Source Discharger? E. What Cooling Water Use and Design Intake Flow Thresholds Result in an Existing Facility Being Subject to This ~ III. Legal Authority, Purpose, and Background of Today's Regulation A. Legal Authority B. Purpose of Today's Regulation C. Background IV. Environmental Impacts Associated With Cooling Water Intake Structures V. Description of the Final Rule VI. Summary of Most Significant Revisions to the Proposed Rule A. Data Updates B. Regulatory Approach, Calculation Baseline, and Measuring Compliance VII. Basis for the Final Regulation A. Why is EPA Establishing a Multiple Compliance Alternative Approach for Determining Best Technology Available for Minimizing Adverse Environmental Impact? B. Why and How Did EPA Establish the Performance Standards at These Levels? C. What Is the Basis for the Five Compliance Alternatives That EPA Selected for Establishing Best Technology Available? D. How Has EPA Assessed Economic Practicability? E. What are the Major Options Considered for the Final Rule and Why did EPA Reject Them? F. What is the Role of Restoration and Trading Under Today's Final Rule? VIII. Summary of Major Comments and Responses to the Proposed Rule and Notice of Data Availability (NODA) A. Scope and Applicability B. Environmental Impact Associated with Cooling Water Intake Structures C. Performance Standards D. Site-Specific Approach E. Implementation F. Restoration G. Costs H. Benefits I. EPA Legal Authority IX. Implementation A. When Does the Final Rule Become Effective? B. What Information Must I Submit to the Director When I Apply for My Reissued NPDES Permit? C. How Will tlie Director Determine the Appropriate Cooling Water Intake Structure Requirements? D. What Will I Be Required to Monitor? E. How Will Compliance Be Determined? F. What Are the Respective Federal, State, and Tribal Roles? G. Are Permits for Existing Facilities Subject to Requirements Under Other Federal Statutes? H. Alternative Site-Specific Requirements X. Engineering Cost Analysis A. Technology Cost Modules B. Model Facility Cost Development C. Facility Flow Modifications XI. Economic Analysis A. Final Rule Costs B. Final Rule Impacts XII. Benefits Analysis A. Introduction B. Regional Study Design C. The Physical Impacts of Impingement and Entrainment D. National Benefits of Rule E. Other Considerations XIII. Statutory and Executive Order Reviews A. Executive Order 12866: Regulatory Planning and Review B. Paperwork Reduction Act C. Regulatory Flexibility Act D. Unfunded Mandates Reform Act E. Executive Order 13132: Federalism F. Executive Order 13175: Consultation and Coordination With Indian Tribal Governments G. Executive Order 13045: Protection of Children From Environmental Health and Safety Risks H. Executive Order 13211: Actions that Significantly Affect Energy Supply, Distribution, or Use I. National Technology Transfer and Advancement Act J. Executive Order 12898: Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations K. Executive Order 13158: Marine Protected Areas L. Congressional Review Act II. Scope and Applicability of the Final Rule This rule applies to owners and operators of existing facilities, as defined in § 125.93 of today's rule that meet all of the following criteria: • The facility's primary activity is to generate electric power. The facility either transmits the electric power itself, or sells the electric power to another entity for transmission; • The facility is a point source that uses or proposes to use one or more cooling water intake structures, including a cooling water intake structure operated by an independent supplier that withdraws water from waters of the United States and provides cooling water to the facility by any sort of contract or other arrangement; • The cooling water intake structure(s) withdraw(s) cooling water from waters of the United States and at least twenty-five (25) percent of the water withdrawn is used exclusively for cooling purposes measured on an average annual basis; • The facility is a point source; and • The cooling water intake structures have a total design intake flow of 50 41578 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations per clayTMGTJ) or greater. In the case of a Phase II existing facility that is co-located with a manufacturing facility, only that portion of the cooling water flow that is used by the Phase II facility to generate electricity for sale to another entity will be considered when determining whether the 50 MGD and 25 percent criteria are met. Facilities subject to this final rule are referred to as "Phase II existing facilities." Existing facilities with design flows below the 50 MGD threshold, as well as most existing manufacturing facilities, offshore seafood processors, and offshore and coastal oil and gas extraction facilities are not subject to this rule. Those facilities have different characteristics as compared to the large, power- generating facilities subject to today's rule. If an existing facility is a point source and has or is required to have an NPDES permit, but does not meet the applicability thresholds in today's rule, it is subject to permit conditions 316(u) crt the CWA set by the permit director on a case-by-case basis, using best professional judgment. EPA expects to address at least some of these facilities in a separate rulemaking, referred to as Phase III. In the preamble to the proposed rule EPA indicated that its intent was to exclude from regulation under the Phase II rule existing facilities whose primary business is manufacturing. See, e.g., 67 FR 17124 (April 9, 2002). At the same time, in § 125.9l(a)(3) of the proposed rule, the applicability criteria covered facilities that both generate and transmit electric power, or generate electric power but sell it to another entity for transmission. Numerous commenters indicated concerns that, as proposed, § 125.91(a)(3) would not clearly exclude all existing manufacturing facilities from the Phase II rule since some facilities generate electric power primarily for their own use, but transmit or sell any surplus. Therefore, for the final rule, EPA revised § 125.91 so that nply tllQSP evistjng farjlitipg : an "ExistingTacility" for Purposes of the Section 316(bj Phase II Rule? In today's rule, EPA is defining the term "existing facility" to include any facility that commenced construction as described in 40 CFR 122.29(b)(4)l on or before January 17, 2002. EPA established January 17, 2002 as the date for distinguishing new facilities from existing ones because that is the effective date of the Phase I new facility rule. In addition, EPA is defining the term "existing facility" in this rule to include modifications and additions to such facilities, the construction of which commences after January 17, 2002, that do not meet the definition of a new facility at 40 CFR 125.83, the definition used to define the scope of the Phase I rule. That definition states: "New facility means any building, structure, facility, or installation that meets the definition of a 'new source' or 'new discharger' in [other NPDES regulations] and is a greenfield or stand-alone facility; commences construction after January 17, 2002; and uses either a newly constructed rnnlinp water iritatcR structure, nr an existing cooling water intake structure whose design capacity is increased to accommodate the intake of additional cooling water. New facilities include only 'greenfield' and 'stand- alone' facilities. A greenfield facility is a facility that is constructed at a site at which no other source is located or that totally replaces the process or production equipment at an existing facility (see 40 CFR 122.23(b)(l)(i) and (ii). A stand-alone facility is a new, separate facility that is constructed on property where an existing facility is located and whose processes are substantially independent of the existing facility at the same site (see 40 CFR 122.29(b)(l)(iii). New facility does not include new units that are added to a facility for purposes of the same general industrial operation (for example, a new peaking unit at an electrical generating station)." 2 that generate and transmit or sell electric power as their primary activity. The final rule does not apply to existing manufacturing facilities, including manufacturing facilities that generate power for their own use and transmit any surplus power, or sell it for transmission, provided the primary activity of the facility is not electric power generation. 1 Construction is commenced if the owner or operator lias undertaken certain installation and site preparation activities that are part of a continuous on-site construction program, and it includes entering into certain specified binding contractual obligations as one criterion (40 CFR 122.29(b)(4)). 2 The Phase I rule also listed examples of facilities that would be "new" facilities and facilities that would "not lie considered a 'new facility1 in two numbered paragraphs. These read as follows: "(1) Examples of'new facilities' include, but are not limited to: the following scenarios: (i) A new facility is constructed on a site that has never been used for industrial or commercial activity. It has a new cooling water intake structure for its own use. (ii) A facility is demolished and another facility is constructed in its place. The newly-constructed facility uses the original facility's cooling water intake structure, but modifies it to increase the design capacity to accommodate the intake of additional cooling water. (iii) A facility is constructed on the same property as an existing facility, but is a separate and The preamble to the final Phase I rule discusses this definition at 66 FR 65256; 65258-65259; 65285-65287, December 18, 2001. EPA included in its Phase II proposed rule a freestanding definition of "existing facility." That definition read as follows: "Existing facility means any facility that commenced construction before January 17, 2002; and (1) Any modification of such a facility; (2) Any addition of a unit at such a facility for purposes of the same industrial operation; (3) Any addition of a unit at such a facility for purposes of a different industrial operation, if the additional unit uses an existing cooling water intake structure and the design capacity of the intake structure is not increased; or (4) Any facility constructed in place of such a facility, if the newly constructed facility uses an existing cooling water intake structure whose design intake flow is not increased to accommodate the intake of additional cooling water." 67 FR 17221. Upon further consideration, EPA has decided that it would be clearest to define existing facility primarily by stating that any facility that is not a new facility under 40 CFR 125.83 is an existing facility for purposes of this subpart. Accordingly, the language in this final rule is intended to be clear and consistent with EPA's definition of new facility in the Phase I rule at 40 CFR 125.83. In addition, the definition in today's regulation is also intended to ensure that sources excluded from the definition of new facility in the Phase I rule are captured by the definition of existing facility for the purposes of today's rule. At the same time, EPA believes that the approach taken in independent industrial operation. The cooling water intake structure used by the original facility is modified by constructing a new intake bay for the use of the newly constructed facility or is otherwise modified to increase the intake capacity for the new facility. (2) Examples of facilities that would not be considered a 'new facility' include, but are not limited to, the following scenarios: (i) A facility in commercial or industrial operation is modified and either continues to use its original cooling water intake structure or uses a new or modified cooling water intake structure. (ii) A facility has an existing intake structure. Another facility (a separate and independent industrial operation), is constructed on the same property and connects to the facility's cooling water intake structure behind the intake pumps, and the design capacity of the cooling water intake structure has not been increased. This facility would not be considered a 'new facility' even if routine maintenance or repairs that do not increase the design capacity were performed on the intake structure." Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41579 today's rule is identical in terms of effect to the approach in the proposed rule. Thus, the approach taken in today's final rule is in no way intended to change the scope of the rule as compared with the proposal as far as the facilities treated as "existing" facilities under the rule. The change is in drafting technique, not in meaning. The facility encompassed by today's regulation is the point source that uses a cooling water intake structure to generate electric power. This is because l-^jTgn^nrerTr&rfts of LjWA-secrioiT~ol&tu; are implemented through NPDES permits, which are issued only to point source dischargers of pollutants to waters of the United States. A point source generating electric power would be subject to Phase I or Phase II even if the cooling water intake structure it uses is located elsewhere. Similarly, modifications or additions to the cooling water intake structure (or even the total replacement of an existing cooling water intake structure with a new one) does not convert an otherwise unchanged existing facility into a new facility, regardless of the purpose of such changes (e.g., to comply with today's rule or to increase capacity). Rather, the determination as to whether a facility is new or existing focuses on the power-generating point source itself, i.e., whether it is a greenfield facility or a stand-alone facility. This focus on the point source discharger is consistent with section 316(b), which by its express terms applies only to point sources. Under this rule, an existing power generating facility that uses a cooling water intake structure and repowersTTy either replacing or modifying an existing generating unit would remain subject to regulation as a Phase II existing facility, unless the existing facility were completely demolished and another facility constructed in its place that used either a new intake structure or the existing structure with an increased design capacity. For example, the following facility modifications or additions would result in a facility being characterized as an existing facility under today's rule: • An existing power generating facility undergoes a modification of its process short of total replacement of the process and concurrently increases the design capacity of its existing cooling water intake structures; • An existing power generating facility builds a new process at its site for purposes of the same industrial operation and concurrently increases the design capacity of its existing cooling water intake structures; • An existing power generating facility completely rebuilds its process but uses the existing cooling water intake structure with no increase in design capacity. Phase II existing facilities subject to today's rule include point sources that do not presently use, but propose to use, cooling water intake structures and do not meet the definition of new facility at § 125.83. This is appropriate because there may be some cases in which an existing facility historically withdrew i.ts-CQoling_water_fronx-a_rnunicipal or other source, but then decides to withdraw cooling water from a water of the United States. In these cases, the facility may not previously have met all of the criteria applicable to an existing facility under today's rule [i.e., the facility did not previously withdraw cooling waters from a water of the United States) but may make changes that would place the facility within the scope of today's rule. A comparable situation would be when a facility previously relied on units that do not require cooling water, and then adds or modifies a unit for purposes of the same industrial operation [i.e., power generation) such that cooling water is subsequently required. For example, an existing power generating facility that adds a new generating unit at the same site for purposes of repowering and concurrently increases the design capacity of its existing cooling water intake structure(s), or adds a new intake structure where it did not previously need one, for example when converting a gas turbine to a combined cycle unit, would be considered an existing facility. In the prpqrphle tn the Phqse I rule, EPA noted that it had defined "existing facility" in a manner consistent with existing NPDES regulations with a limited exception. EPA noted that it had generally deferred regulation of new sources constructed on a site at which an existing source is located until the Agency had completed analysis of its survey data on existing facilities. 66 FR 65286. Accordingly, the Phase I rule treated almost all changes to existing facilities for purposes of the same industrial operation as existing facilities. These included the addition of new generating units at the same site, even where they required an increase in cooling water intake structure design capacity or the construction of a new cooling water intake structure, as well as the complete demolition of an existing facility and its replacement with a new facility, so long as it did not increase the design capacity of the cooling water intake structure. The only exception was the demolition of an existing facility and its replacement with a new facility accompanied by an increase in design capacity of the cooling water intake structure. As the preamble explained: "The definition of a new facility in the final rule applies to a facility that is repowered only if the existing facility has been demolished and another facility is constructed in its place, and modifies the existing cooling water intake structure to increase the design intake capacity." /d.2a By contrast, the Phase I rule treated the addition of a new unit for purposes of a different industrial operation as an existing facility only if it used an existing cooling water intake structure whose design intake flow was not increased. The Phase II proposed rule continued this approach in its definition of "existing facility." It continued to treat all changes to existing facilities for purposes of the same industrial operation as an existing facility unless the change was a complete demolition and replacement of the facility accompanied by an increase in cooling water intake design capacity. It also continued to treat the addition of new units for purposes of a different industrial operation differently, only allowing them to be "existing facilities" if they used an existing cooling water intake structure and did not increase its design intake flow. 67 FR 17221. In putting forth this proposed definition, EPA noted that it had collected data from a variety of sources, including survey data, specifically relating to repowering facilities. Id. at 17131- 17135. It also made a point of explaining the wide variety of repowering activities that an existing facility could undertake under the proposed rule—anything short of demolition of an existing facility and its replacement with a new facility combined with increasing the design capacity of a cooling water intake structure—while still being regulated as an "existing facility" rather than a "new facility." Id. at 17128. On the basis of the analysis of the survey data and other information in the record, the Agency now has concluded that it should adhere to its provisional z»Because they are part of the same "industrial operation," such units ate not "stand-alone" facilities for purposes of the "new facility" definition. As the fifth sentence of the definition of "new facility" explains, they are categorically treated as "existing facilities" regardless of any other considerations unless they completely replace an existing facility and its cooling water design intake capacity is increased. Accordingly, there is thus no need to make a determination whether they are "substantially independent" of the existing facility at the same site under the fourth sentence of the definition in order to determine whether they are "existing" or "new facilities." The fifth sentence alone controls that question. 415«n Eedfird^egisIet/jyjQl,-.jBS^-ND,_1311Fjriday^_July--9, 2004/Rules and Regulations decision generally giving wide latitude to existing facilities to make changes or additions to their facilities at the same site. In particular, new units that are added to a facility for purposes of the same general industrial operation should be treated as existing facilities because limitations associated with an existing site make it inappropriate to subject such units to new facility requirements. These limitations include space, existing location on a waterbody, location in already congested areas which could affect (if Phase 1 requirements were applied) visibility impairment, highway and airport safety issues, noise abatement issues, salt drift and corrosion problems and additional energy requirements. Moreover, power generation facilities should not be discouraged from making any upgrade, modification, or repowering that would increase energy efficiency or supply out of concern that they would be considered a new facility for purposes of section 316(b). Additional benefits will be realized in terms of reducing "mcTusfrial sprawl if incremental power generation is not discouraged at existing power generation sites. These considerations counsel in favor of treating new units locating at existing sites as existing rather than new facilities. EPA also noted when it promulgated the Phase I rule (see 66 FR 65286) that it is not feasible for the permit authority to judge whether the facility could have been located elsewhere for the purpose of determining whether the facility is subject to the new facility rules. Accordingly, EPA has decided to retain the Phase I definition's provision that a new facility does not include new units that are added to a facility for purposes of the same general industrial operation. As noted above, this decision is fully consistent with the approach to this issue laid out in the proposed Phase II rule. The final rule definition of "existing facility" is sufficiently broad that it encompasses facilities that will be addressed under the Phase III rule (e.g., existing power generating facilities with design flows below the 50 MGD "thresTTold, certain existing manufacturing facilities, seafood processors, and offshore and coastal oil and gas extraction facilities). EPA notes, however, that these facilities are not covered under this rule because they do not meet the requirements of § 125.91. B. What Is "Cooling Water" and What Is a "Cooling Water Intake Structure?" Today's rule adopts for Phase II existing facilities the same definition of a "cooling water intake structure" that applies to new facilities. A cooling water intake structure is defined as the total physical structure and any associated constructed waterways used to withdraw cooling water from waters of the United States. Under the definition in today's rule, the cooling water intake structure extends from the point at which water is withdrawn from the surface water source up to, and including, the intake pumps. Today's rule adopts the new facility rule's definition of "cooling water": Water used for contact or noncontact cooling, including water used for equipment cooling, evaporative cooling tower makeup, and dilution of effluent heat content. The definition specifies that the intended use of cooling water is to absorb waste heat rejected from the processes used, or auxiliary operations on the facility's premises. The definition also indicates that water used in a manufacturing process either before or after it is used for cooling is process water for both cooling and non-cooling purposes and would not be considered cooling water for purposes of determining whether 25 percent or more of the flow is cooling water. This clarification is necessary because cooling water intake structures typically bring water into a facility for numerous purposes, including industrial processes; use as circulating water, service water, or evaporative cooling tower makeup water; dilution of effluent heat content; equipment cooling; and air conditioning. EPA notes that this clarification does not change the fact that only the intake water used exclusively for cooling purposes is counted when determining whether the 25 percent threshold in § 125.91(a)(4) is met. This definition of "cooling water intake structure" differs from the definition provided in the 1977 Draft Guidance for Evaluating the Adverse Impact of Cooling Water Intake Structures on the Aquatic Environment: Section 316(b) P.L. 92-500 (U.S. EPA, 1977). The final rule definition clarifies that the cooling water intake structure includes the physical structure that "extends fiomrlhe poinl al which water is withdrawn from the surface water up to and including the intake pumps. Inclusion of the term "associated constructed waterways" in today's rule is intended to clarify that the definition includes those canals, channels, connecting waterways, and similar structures that may be built or modified to facilitate the withdrawal of cooling water. The explicit inclusion of the intake pumps in the definition reflects the key role pumps play in determining the capacity (i.e., dynamic capacity) of the intake. These pumps, which bring in water, are an essential component of the cooling water intake structure since without them the intake could not work as designed. C. Is My Facility Covered if It Withdraws From Waters of the United States? The requirements finalized today apply to cooling water intake structures that have the design capacity to withdraw amounts of water equal to or greater than the specified intake flow threshold from "waters of the United States." Waters of the United States include the broad range of surface waters that meet the regulatory definition at 40 CFR 122.2, which includes lakes, ponds, reservoirs, nontidal rivers or streams, tidal rivers, estuaries, fjords, oceans, bays, and coves. These potential sources of cooling water may be adversely affected by impingement and entrainment. Some facilities discharge heated water to cooling ponds, then withdraw water from the ponds for cooling purposes. EPA recognizes that cooling ponds may, in certain circumstances, constitute part of a closed-cycled cooling system. See, e.g., 40 CFR 125.83. However, EPA does not intend this rule to change the regulatory status of cooling ponds. Cooling ponds are neither categorically included nor categorically excluded from the definition of "waters of the United States" at 40 CFR 122.2. EPA interprets 40 CFR 122.2 to give permit writers discretion to regulate cooling ponds as "waters of the United States" where cooling ponds meet the definition of "waters of the United States." The determination whether a particular cooling pond is or is not a water of the United States is to be made by the permit writer on a case-by-case basis, informed by the principles enunciated in Solid Waste Agency of Northern Cook County (SWANCC) v. U.S. Army Corps of Engineers, 531 U.S. 159 (2001). Therefore, facilities that withdraw cooling water from cooling ponds that are waters of the United States and that meet today's other criteria for coverage (including the requirement that the facility has or will be required to obtain an NPDES permit) are subject to today's rule. The EPA and the U.S. Army Corps of Engineers have jointly issued jurisdictional guidance concerning the term "waters of the United States" in light of the Supreme Court's decision in Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers, 531 U.S. 159 (2001) (SWANCC). A copy of that guidance was published as an Appendix to an Advanced Notice of Proposed Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41581 Rulemaking on the definition of the phrase "waters of the U.S.," see 68 FR 1991 (January 15, 2003), and may be obtained at (http://ivww.epa.gov/owow/ wetlands /ANPRM-FR.pdf). Section 125.91(d) also provides, similar to the new facility rule, that facilities that obtain cooling water from a public water system or use treated effluent are not deemed to be using a cooling water intake structure for purposes of this D. 7s My Facility Covered if It Is a Point Source Discharger? Today's ride applies only to facilities that are point sources (i.e., have an NPDES permit or are required to obtain one) because they discharge or might discharge pollutants, including storm water, from a point source to waters of the Unites States. This is the same requirement EPA included in the Phase I new facility rule at 40 CFR 125.81(a)(l). Requirements for complying with section 316(b) will continue to be applied through NPDES permits.Based on the Agency's review of potential Phase II existing facilities that employ cooling water intake structures, the Agency anticipates that most existing power generating facilities that will be subject to this rule will control the intake structure that supplies them with cooling water, and discharge some combination of their cooling water, wastewater, and storm water to a water of the United States through a point source regulated by an NPDES permit. In this scenario, the requirements for the cooling water intake structure will be specified in the facility's NPDES permit. In the event that a Phase II existing facility's only NPDES permit is a general permit for storm water discharges, the Agency anticipates that the Director would write an individual NPDES permit containing requirements for the facility's cooling water intake structure. Alternatively, requirements applicable to cooling water intake structures could be incorporated into general permits. If requirements are placed into a general permit, they must meet the criteria set out at 40 CFR 122.28. The Agency also recognizes that some facilities that have or are required to have an NPDES permit might not own and operate the intake structure that supplies their facility with cooling water. For example, electric power- generating facilities operated by separate entities might be located on the same, adjacent, or nearby property (ies); one of these facilities might take in cooling water and then transfer it to other facilities prior to discharge of the cooling water to a water of the United States. Section 125.91(c) of today's rule addresses such a situation. It provides that use of a cooling water intake structure includes obtaining cooling water by any sort of contract or arrangement with one or more independent suppliers of cooling water if the supplier or suppliers withdraw water from waters of the United States but that is not itself a Phase II existing facility. This provision is intended to prevent facilities from circumventing the requirements of today's rule by creating arrangements to receive cooling water from an entity that is not itself a Phase II existing facility. In addressing facilities that have or are required to have an NPDES permit that do not directly control the intake structure that supplies their facility with cooling water, section 125.91(d) also provides, similar to the new facility rule, that facilities that obtain cooling water from a public water system or use treated effluent are not deemed to be using a cooling water intake structure for purposes of this rule. As EPA stated in the preamble to the final Phase I rule (66 FR 65256 December 18, 2001), the Agency encourages the Director to closely examine scenarios in which a facility withdraws significant amounts of cooling water from waters of the United States but is not required to obtain an NPDES permit. As appropriate, the Director should apply other legal requirements, such as section 404 or 401 of the Clean Water Act, the Coastal Zone Management Act, the National Environmental Policy Act, the Endangered Species Act, or similar State or Tribal authorities to address adverse environmental impact caused by cooling water intake structures at those facilities. E. What Cooling Water Use and Design Intake Flow Thresholds Result in an Existing Facility Being Subject to This Rule? This final rule applies to existing facilities that are point sources and use cooling water intake structures that (1) withdraw cooling water from waters of the United States and use at least twenty-five (25) percent of the water withdrawn exclusively for cooling purposes, and (2) have a total design intake capacity of 50 MGD or more measured on an average annual basis (see § 125.91). Today's rule further provides that where a Phase II existing facility is co-located with a manufacturing facility, only that portion of the cooling water intake flow that is used by the Phase II facility to generate electricity for sale to another entity will be considered for purposes of determining whether the 50 MGD and 25 percent criteria have been exceeded. EPA chose the 50 MGD threshold to focus the rule on the largest existing power generating facilities. EPA estimates that the 50 MGD threshold will subject approximately 543 of 902 (60 percent) existing power generating facilities to this final rule and will address approximately 90 percent of the total flow withdrawn by these facilities. EPA established the 50 MGD threshold because the regulation of existing facilities with flows of 50 MGD or greater in Phase II will address those existing power generating facilities with the greatest potential to cause or contribute to adverse environmental impact. In addition, EPA has limited data on impacts at facilities withdrawing less than 50 MGD. Deferring regulation of such facilities to Phase III provides an additional opportunity for the Agency to collect impingement and entrainment data for these smaller facilities. Similarly, because Phase II existing facilities typically use far more than 25 percent of the water they withdraw for cooling purposes, EPA established the 25 percent threshold to ensure that nearly all cooling water and the largest existing facilities using cooling water intake structures are addressed by today's requirements. As in the Phase I rule, water used for both cooling and non-cooling purposes does not count towards the 25 percent threshold. Thus, the rule does not discourage the reuse of cooling water as process water or vice versa. Water that serves as cooling water but is either previously or subsequently used as process water is not considered cooling water for purposes of determining the percentage of the water withdrawn that is used for cooling and whether that percentage equals or exceeds 25 percent. Water withdrawn for non-cooling purposes includes water withdrawn for warming by liquified natural gas facilities and water withdrawn for public water systems by desalinization facilities. III. Legal Authority, Purpose, and Background of Today's Regulation A. Legal Authority Today's final rule is issued under the authority of sections 101, 301, 304, 308, 316, 401, 402, 501, and 510 of the Clean Water Act (CWA), 33 U.S.C. 1251, 1311, 1314, 1318, 1326, 1341, 1342, 1361, and 1370. This rule partially fulfills the obligations of the U.S. Environmental Protection Agency (EPA) under a consent decree in Riverkeeper, Inc. v. Leavitt, No. 93 Civ. 0314, (S.D.N.Y). 41582 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations B. Purpose of Today's Regulation Section 316(b) of the CWA provides that any standard established pursuant to section 301 or 306 of the CWA and applicable to a point source must require that the location, design, construction, and capacity of cooling water intake structures reflect the best technology available (BTA) for minimizing adverse environmental impact. Today's rule establishes requirements reflecting the best technology available for minimizing adverse environmental impact, applicable to the location, design, construction, and capacity of cooling water intake structures at Phase II existing power generating facilities that have the design capacity to withdraw at least fifty (50) MGD of cooling water from waters of the United States and use at least twenty-five (25) percent of the water they withdraw exclusively for cooling purposes. C. Background I. The Clean Water Act The Federal Water Pollution Control Act, also known as the Clean Water Act (CWA), 33 U.S.C. 1251 et seq., seeks to "restore and maintain the chemical, physical, and biological integrity of the nation's waters." 33 U.S.C. 1251(a). The CWA establishes a comprehensive regulatory program, key elements of which are (1) a prohibition on the discharge of pollutants from point sources to waters of the United States, except as authorized by the statute; (2) authority for EPA or authorized States or Tribes to issue National Pollutant Discharge Elimination System (NPDES) permits that regulate the discharge of pollutants; (3) requirements for limitations in NPDES permits based on effluent limitations guidelines and standards and water quality standards. Today's rule implements section 316(b) of the CWA as it applies to "Phase II existing facilities" as defined in this rule. Section 316(b) addresses the adverse environmental impact caused by the intake of cooling water, not discharges into water. Despite this special focus, the requirements of section 316(b) are closely linked to several of the core elements of the NPDES permit program established under section 402 of the CWA to control discharges of pollutants into navigable waters. For example, while effluent limitations apply to the discharge of pollutants by NPDES-permitted point sources to waters of the United States, section 316(b) applies to facilities subject to NPDES requirements that withdraw water from waters of the United States for cooling and that use a cooling water intake structure to do so. Section 402 of the CWA provides authority for EPA or an authorized State or Tribe to issue an NPDES permit to any person discharging any pollutant or combination of pollutants from a point source into waters of the United States. Forty-five States and one U.S. territory are authorized under section 402 (b) to administer the NPDES permitting program. NPDES permits restrict the types and amounts of pollutants, including heat, that may be discharged from various industrial, commercial, and other sources of wastewater. These permits control the discharge of pollutants primarily by requiring dischargers to meet effluent limitations —establisEed-pursuant-to-section 301 or section 306. Effluent limitations may be based on promulgated Federal effluent limitations guidelines, new source performance standards, or the best professional judgment of the permit writer. Limitations based on these guidelines, standards, or best professional judgment are known as technology-based effluent limits. Where technology-based effluent limits are inadequate to ensure attainment of water quality standards applicable to the receiving water, section 301(b)(l)(C) of the Clean Water Act requires permits to include more stringent limits based on applicable water quality standards. NPDES permits also routinely include monitoring and reporting requirements, standard conditions, and special conditions. In addition, NPDES permits contain conditions to implement the requirements of section 316(b). Section 301 of the CWA prohibits the discharge of any pollutant by any person, except in compliance with specified statutory requirements, including section 402. Section 510 of the Clean Water Act provides, that except as provided in the _Clfian^Waier_Act^nothing-in-the Act shall (1) preclude or deny the right of any State or political subdivision thereof to adopt or enforce any requirement respecting control or abatement of pollution; except that if a limitation, prohibition or standard of performance is in effect under the Clean Water Act, such State or political subdivision may not adopt or enforce any other limitation prohibition or standard of performance which is less stringent than the limitation prohibition or standard of performance under the Act. EPA interprets this to reserve for the States authority to implement requirements that are more stringent than the Federal requirements under state law. PUD No. 1 of Jefferson County. Washington Dep't of Ecology, 511 U.S. 700, 705 (1994). Sections 301, 304, and 306 of the CWA require that EPA develop technology-based effluent limitations guidelines and new source performance standards that are used as the basis for technology-based minimum discharge requirements in wastewater discharge permits. EPA issues these effluent limitations guidelines and standards for categories of industrial dischargers based on the pollutants of concern discharged by the industry, the degree of control that can be attained using various levels of pollution control technology, consideration of various economic tests appropriate to each level of control, and other factors identified in sections 304 and 306 of the CWA (such as non-water quality environmental impacts including energy impacts). EPA has promulgated regulations setting effluent limitations guidelines and standards under sections 301, 304, and 306 of the CWA for more than 50 industries. See 40 CFR parts 405 through 471. EPA has established effluent limitations guidelines and standards that apply to most of the industry categories that use cooling water intake structures (e.g., steam electric power generation, iron and steel manufacturing, pulp and paper manufacturing, petroleum refining, and chemical manufacturing). Section 316(b) states, in full: Any standard established pursuant to section 301 or section 306 of [the Clean Water) Act and applicable to a point source shall require that the location, design, construction, and capacity of cooling water intake structures reflect the best technology available for minimizing adverse environmental impact. The phrase "best technology available" in CWA section 316(b) is not defined in the statute, but its meaning can be understood in light of similar phrases used elsewhere in the CWA. See Riverkeeperv. EPA, slip op. at 11 (2nd Cir. Feb. 3, 2004) (noting that the cross- reference in CWA section 316(b) to CWA section 306 "is an invitation to look to section 306 for guidance in discerning what factors Congress intended the EPA to consider in determining the 'best technology available' " for new sources). In sections 301 and 306, Congress directed EPA to set effluent discharge standards for new sources based on the "best available demonstrated control technology" and for existing sources based on the "best available technology economically achievable." For new sources, section 306(b)(l)(B) directs EPA to establish "standards of performance." The phrase "standards of performance" under section 306(a)(l) is defined as being the effluent reduction that is Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41583 "achievable through application of the Section 316(b) expressly refers to best available demonstrated control section 301, and the phrase "best technology, processes, operating technology available" is very similar to —methods-of-ether-alternativea-*—*—V1 J1be«Heelm01ogy-avmiable-~wi-that This is commonly referred to as "best available demonstrated technology" or "BADT." For existing dischargers, section 301(b)(l)(A) requires the establishment of effluent limitations based on "the application of best practicable control technology currently available." This is commonly referred to as "best practicable technology" or "BPT." Further, section 301(b)(2)(A) directs EPA to establish effluent limitations for certain classes of pollutants "which shall require the application of the best available technology economically achievable." This is commonly referred to as "best available technology" or "BAT." Section 301 specifies that both BPT and BAT limitations must reflect determinations made by EPA under Clean Water Act section 304. Under these provisions, the discharge of pollutants from point sources is based not on the impact of the discharge on the receiving waters, but instead upon the capabilities of the equipment or "control technologies" available to control those discharges. The phrases "best available demonstrated technology"; and "best available technology"—like "best technology available" in CWA section 316(b)—are not defined in the statute. However, section 304 of the CWA specifies factors to be considered in establishing the best practicable control technology currently available, and best available technology. For best practicable control technology currently available, the CWA directs EPA to consider the total c:ost of application of technology in relation to the effluent reduction benefits to be achieved from such application, and shall also take into account the age of the equipment and facilities involved, the process employed, the engineering aspects of the application of various types of control techniques, process changes, non-water quality environmental impact (including energy requirements), and such other factors as [EPA] deems appropriate. 33 U.S.C. 1314(b)(l)(b). For "best available technology," the CWA directs EPA to consider: section. These facts, coupled with the brevity of section 316(b) itself, prompted EPA to look to section 301 and, ultimately, section 304 for guidance in determining the "best technology available to minimize adverse environmental impact" of cooling water intake structures for existing Phase II facilities. By the same token, however, there are significant differences between section 316(b) and sections 301 and 304. See Riverkeeper, Inc. v. United States Environmental Protection Agency, slip op. at 13, (2nd Cir. Feb. 3, 2004) ("not every statutory directive contained [in sections 301 and 306 ] is applicable" to a section 316(b) rulemaking). Section 316(b) requires that cooling water intake structures reflect the best technology available for minimizing adverse environmental impact. In contrast to the effluent limitations provisions, the object of the "best technology available" is explicitly articulated by reference to the receiving water: To minimize adverse environmental impact in the —waters-ftera-wfeieh-eeeHng-water is withdrawn. This difference is reflected in EPA's past practices in implementing sections 301, 304, and 316(b). While EPA has established effluent limitations guidelines based on the efficacy of one or more technologies to reduce pollutants in wastewater in relation to cost without necessarily considering the impact on the receiving waters, EPA has previously considered the costs of technologies in relation to the benefits of minimizing adverse environmental impact in establishing 316(b) limits which historically have been done on a case-by case basis. In Re Public Service Co. of New Hampshire, 10 ERG 1257 (June 17, 1977); In Re Public Service Co. of New Hampshire, 1 BAD 455 (Aug. 4, 1978); Seacoast Anti-Pollution League v. Costle, 597 F. 2d 306 (1st Cir. 1979). For this Phase II rulemaking, EPA therefore interprets CWA section 316(b) as authorizing EPA to consider not only technologies but also their effects on and benefits to the water from which the cooling water is withdrawn. Based on these two considerations, EPA hasthe age of equipment and facilities involved, -they occss empteyedrthe-eagmeeriftg astakUshed4r^odayVFiil&4iational aspects * * * of various types of control techniques, process changes, the cost of achieving such effluent reduction, non-water quality environmental impacts (including energy requirements), and such other factors as [EPA] deems appropriate. 33 U.S.C. 1314(b)(2)(B). requirements for facilities to install technology that is technically available, economically practicable, and cost- effective while at the same time authorizing a range of technologies that achieve comparable reductions in adverse environmental impact. 2. Consent Decree Today's final rule partially fulfills EPA's obligation to comply with a consent decree, as amended. The Second Amended Consent Decree, which is relevant to today's rule, was filed on November 25, 2002, in the United States District Court, Southern District of New York, in Riverkeeper, Inc. v. Leavitt, No. 93 Civ 0314, a case brought against EPA by a coalition of individuals and environmental groups. The original Consent Decree, filed on October 10, 1995, provided that EPA was to propose regulations implementing section 316(b) by July 2, 1999, and take final action with respect to those regulations by August 13, 2001. Under subsequent interim orders, the Amended Consent Decree filed on November 22, 2000, and the Second Amended Consent Decree, EPA has divided the rulemaking into three phases and is working under new deadlines. As required by the Second Amended Consent Decree, on November 9, 2001, EPA took final action on a rule governing cooling water intake structures used by new facilities (Phase I). 66 FR 65255 (December 18, 2001). The Second Amended Consent Decree requires that EPA take final action by February 16, 2004, with respect to Phase II regulations that are "applicable to, at a minimum: (1) Existing utilities (i.e., facilities that both generate and transmit electric power) that employ a cooling water intake structure, and whose intake flow levels exceed a minimum threshold to be determined by EPA during the Phase II rulemaking process; and (2) existing nonutility power producers (i.e., facilities that generate electric power but sell it to another entity for transmission) that employ a cooling water intake structure, and whose intake flow levels exceed a minimum threshold to be determined by EPA during the Phase II rulemaking process." The consent decree further requires that EPA propose regulations governing cooling water intake structures used, at a minimum, by smaller-flow power plants and facilities in four industrial sectors (pulp and paper making, petroleum and coal products manufacturing, chemical and allied manufacturing, and primary metal manufacturing) by November 1, 2004, and take final action by June 1, 2006 (Phase III). 3. What Other EPA Rulemakings and Guidance Have Addressed Cooling Water Intake Structures? In April 1976, EPA published a final rule under section 316(b) that addressed cooling water intake structures. 41 FR 41584 Federal Register /Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 17387 (April 26, 1976), see also the proposed rule at 38 FR 34410 (December 13, 1973). The rule added a new §401.14 to 40 CFR Chapter I that reiterated the requirements of CWA section 316(b). It also added a new part 402, which included three sections: (1) §402.10 (Applicability), (2) §402.11 (Specialized definitions), and (3) § 402.12 (Best technology available for cooling water intake structures). Section 402.10 stated that the provisions of part 402 applied to "cooling water intake structures for point sources for which effluent limitations are established pursuant to section 301 or standards of performance are established pursuant to — withdrew part 402. 44 FR 32956 (June 7, 1979). The regulation at 40 CFR 401.14, which reiterates the statutory requirement, remains in effect. Since the Fourth Circuit remanded EPA's section 316(b) regulations in 1977, NPDES permit authorities have made decisions implementing section 316(b) on a case-by-case, site-specific basis. EPA published draft guidance addressing section 316(b) implementation in 1977. See Draft Guidance for Evaluating the Adverse Impact of Cooling Water Intake Structures on the Aquatic Environment: Section 316(b)P.L. 92-500 (U.S. EPA, 1977). This draft guidance described the studies recommended for evaluating the impact of cooling water intake structures on the aquatic environment and recommended a basis for determining the best technology defined the terms "cooling water intake structure," "location," "design," "construction," "capacity," and "Development Document." Section 402.12 included the following language: The information contained in the Development Document shall be considered in determining whether the location, design, construction, and capacity of a cooling water intake structure of a point source subject to standards established under section 301 or 306 reflect the best technology available for minimizing adverse environmental impact. In 1977, fifty-eight electric utility companies challenged those regulations, arguing that EPA had failed to comply with the requirements of the Administrative Procedure Act (APA) in promulgating the rule. Specifically, the utilities argued that EPA had neither published the Development Document in the Federal Register nor properly incorporated the document into the rule by reference. The United States Court of Appeals for the Fourth Circuit agreed and, without reaching the merits of the regulations themselves, remanded the rule. Appalachian Power Co. v. Train, available for minimizing adverse environmental impact. The 1977 section 316(b) draft guidance states, "The environmental-intake interactions in question are highly site-specific and the decision as to best technology available for intake design, location, construction, and capacity must be made on a case- by-case basis." (Section 316(b) Draft Guidance, U.S. EPA, 1977, p. 4). This case-by-case approach was also consistent with the approach described in the 1976 Development Document referenced in the remanded regulation. The 1977 section 316(b) draft guidance suggested a general process for developing information needed to support section 316~(b) decisions and presenting that information to the permitting authority. The process involved the development of a site- specific study of the environmental effects associated with each facility that uses one or more cooling water intake structures, as well as consideration of that study by the permitting authority in determining whether the facility must make any changes for minimizing adverse environmental impact. Where adverse environmental impact is present, the 1977 draft guidance suggested a stepwise approach that considers screening systems, size, location, capacity, and other factors. Although the draft guidance described the information that should be developed, key factors that should be considered, and a process for supporting section 316(b) determinations, it did not establish uniform technology-based national standards for best technology available for minimizing adverse environmental impact. Rather, the guidance left the decisions on the appropriate location, design, capacity, and construction of cooling water intake "Structureyto-the-pei'iiiiUiiig anthority. Under this framework, the Director determined whether appropriate studies have been performed, whether a given facility has minimized adverse environmental impact, and what, if any, technologies may be required. 4. Phase I New Facility Rule On November 9, 2001, EPA took final action on regulations governing cooling water intake structures at new facilities. 66 FR 65255 (December 18, 2001). On December 26, 2002, EPA made minor changes to the Phase I regulations. 67 FR 78947. The final Phase I new facility rule (40 CFR Part 125, Subpart I) establishes requirements applicable to the location, design, construction, and capacity of cooling water intake structures at new facilities that withdraw at least two (2) million gallons per day (MGD) and use at least twenty- five (25) percent of the water they withdraw solely for cooling purposes. In the new facility rule, EPA adopted a two-track approach. Under Track I, for facilities with a design intake flow more than 10 MGD, the intake flow of the cooling water intake structure is restricted, at a minimum, to a level commensurate with that which could be attained by use of a closed-cycle, recirculating cooling system. For facilities with a design intake flow more than 2 MGD, the design through-screen intake velocity is restricted to 0.5 ft/s and the total quantity of intake is restricted to a proportion of the mean annual flow of a freshwater river or stream, or to maintain the natural thermal stratification or turnover patterns (where present) of a lake or reservoir except in cases where the disruption is beneficial, or to a percentage of the tidal excursions of a tidal river or estuary. If certain environmental conditions exist, an applicant with intake capacity greater than 10 MGD must select and implement appropriate design and construction technologies for minimizing impingement mortality and entrainment. (Applicants with 2 to 10 MGD flows are not required to reduce intake flow to a level commensurate with a closed-cycle, recirculating cooling system, but must install technologies for reducing impingement mortality at all locations.) Under Track II, the applicant has the opportunity to demonstrate that impacts to fish and shellfish, including important forage and predator species, within the watershed will be comparable to the reduction in impingement mortality and entrainment it would achieve were it to implement the Track I intake flow and velocity requirements. With the new facility rule, EPA promulgated national minimum requirements for the design, capacity, and construction of cooling water intake structures at new facilities. EPA believes that the final new facility rule establishes a reasonable framework that creates certainty for permitting of new facilities, while providing significant flexibility to take site-specific factors into account. 5. Proposed Rule for Phase II Existing Facilities On April 9, 2002, EPA published proposed requirements for cooling water intake structures at Phase II existing facilities to implement section 316(b) of the Clean Water Act. EPA proposed to establish requirements that gave facilities three different compliance options for meeting performance standards that vary based on waterbody Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41585 type, the percentage of the source waterbody withdrawn, and the facility capacity utilization rate. 67 FR 17122. EPA received numerous comments and data submissions concerning the proposal. 6. Notice of Data Availability On Wednesday, March 19, 2003, EPA published a Proposed Rule Notice of Data Availability (NODA). 68 FR 13522. This notice presented a summary of the data EPA had received or collected since proposal, an assessment of the relevance of the data to EPA's analysis, revisions to EPA's estimate of the costs and benefits of the proposed rule, new proposed compliance alternatives, and potential modifications to EPA's proposed regulatory approach. As part of the NODA, EPA also reopened the comment period on the complete contents of the proposed rule. 7. Public Participation EPA has worked extensively with stakeholders from the industry, public interest groups, State agencies, and —othet-Fedetai-ageneies in th^ development of this final rule. These public participation activities have focused on various section 316(b) issues, including issues relevant to development of the Phase I rule and Phase II rule. EPA conducted outreach to industry groups, environmental groups, and other government entities in the development, testing, refinement, and completion of the section 316(b) survey, which has been used as a source of data for the Phase II rule. The survey is entitled "Information Collection Request, Detailed Industry Questionnaires: Phase II Cooling Water Intake Structures & Watershed Case Study Short Questionnaire," September 3, 1999. In addition, EPA conducted two public meetings on section 316(b) issues. In June of 1998, in Arlington, Virginia, EPA conducted a public meeting focused on a draft regulatory framework for assessing potential adverse environmental impact from impingement and entrainment. 63 FR 27958 (May 21, 1998). In September of 1998, in Alexandria, Virginia, EPA ~ COlKrttGtGCl 8'pU.DilC IY1G61rRS~TOCttS'GUr~©R technology, cost, and mitigation issues. 63 FR 40683 (July 30, 1998). In addition, in September of 1998, and April of 1999, EPA staff participated in technical workshops sponsored by the Electric Power Research Institute on issues relating to the definition and assessment of adverse environmental impact. EPA staff have participated in other industry conferences, met upon request on numerous occasions with representatives of industry and environmental groups. In the months leading up to publication of the proposed Phase I rule, EPA conducted a series of stakeholder meetings to review the draft regulatory framework for the proposed rule and invited stakeholders to provide their recommendations for the Agency's consideration. EPA managers have met with the Utility Water Act Group, Edison Electric Institute, representatives from an individual utility, and with representatives from the petroleum refining, pulp and paper, and iron and steel industries. EPA conducted several meetings with environmental groups attended by representatives from 15 organizations. EPA also met with the Association of State and Interstate Water Pollution Control Administrators (ASIWPCA) and, with the assistance of ASIWPCA, conducted a conference call in which representatives from 17 States or interstate organizations participated. After publication of the proposed Phase I rule, EPA continued to meet with stakeholders at their request. Summaries cd"tht:sfcj niEtjlnigs ait; in the docket. EPA received many comments from industry stakeholders, government agencies, and private citizens on the Phase I proposed rule 65 FR 49059 (August 10, 2000). EPA received additional comments on the Phase I Notice of Data Availability (NODA) 66 FR 28853 (May 25, 2001). These comments informed the development of the Phase II proposal. In January, 2001, EPA also attended technical workshops organized by the Electric Power Research Institute and the Utilities Water Act Group. These workshops focused on the presentation of key issues associated with different regulatory approaches considered under the Phase I proposed rule and alternatives for addressing section 316(b) requirements. On May 23, 2001, EPA held a day- long forum to discuss specific issues associated with the development of regulations under section 316(b) of the Clean Water Act. 66 FR 20658 (April 24, 2001). At the meeting, 17 experts from industry, public interest groups, States, and academia reviewed and discussed cooling water intake structure technologies that are in place at existing facilities and the costs associated with the use of available technologies for reducing impingement and entrainment. Over 120 people attended the meeting. In August 21, 2001, EPA staff participated in a technical symposium sponsored by the Electric Power Research Institute in association with the American Fisheries Society on issues relating to the definition and assessment of adverse environmental impact under section 316(b) of the CWA. During development of the Phase I final rule and Phase II proposed rule, EPA coordinated with the staff from the Nuclear Regulatory Commission (NRC) to ensure that there would not be a conflict with NRC safety requirements, NRC staff reviewed the proposed Phase II rule and did not identify any apparent conflict with nuclear plant safety. NRC licensees would continue to be obligated to meet NRC requirements for design and reliable operation of cooling systems. NRC staff recommended that EPA consider adding language which states that in cases of conflict between an EPA requirement under this rule and an NRC safety requirement, the NRC safety requirement take precedence. EPA added language to address this concern in this final rule. In a concerted effort to respond to a multitude of questions concerning the data and analyses that EPA developed as part of the Phase II proposal, EPA held a number of conference calls with multiple stakeholders to clarify issues and generally provide additional information. To supplement these verbal discussions, EPA drafted three supporting documents: one that explained the methodology EPA used to calculate entrainment rates; and two others that provided specific examples of how EPA applied this methodology to calculate benefits for the proposed rule. In addition, EPA prepared written responses to all questions submitted by the stakeholders involved in the initial conference calls. Finally, EPA sponsored a Symposium on Cooling Water Intake Technologies to Protect Aquatic Organisms, held on May 6-7, 2003, at the Hilton Crystal City at National Airport in Arlington, Virginia. This symposium brought together professionals from Federal, State, and Tribal regulatory agencies; industry; environmental organizations; engineering consulting firms; science and research organizations; academia; and others concerned with mitigating harm to the aquatic environment by cooling water intake structures. Efficacy and costs of various technologies to mitigate impacts to aquatic organisms from cooling water intake structures, as well as research and other future needs, were discussed. These coordination efforts and all of the meetings described in this section are documented or summarized in the docket established for this rule. 41586 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations IV. Environmental Impacts Associated With Cooling Water Intake Structures With the implementation of today's final rule, EPA intends to minimize the adverse environmental impacts of cooling water intake structures by minimizing the number of aquatic organisms lost as a result of water withdrawals associated with these structures or through restoration measures that compensate for these losses. In the Phase I new facility rule and proposed Phase II existing facility rule, EPA provided an overview of the magnitude and type of environmental impacts associated with cooling water intake structures, including several illustrative examples of documented environmental impacts at existing facilities (see 65 FR 49071-4; 66 FR 65262-5; and 67 FR 17136-40), For the same reasons set forth in the preamble to the Phase I rule (66 FR 65256, 65291-65297), EPA has determined that there are multiple types of undesirable and unacceptable environmental impacts that may be associated with Phase II existing facilities, depending on conditions at the individual site. These types of impacts include entrainment and impingement; reductions of threatened and endangered species; damage to critical aquatic organisms, including important elements of the food chain; diminishment of a population's compensatory reserve; losses to populations including reductions of indigenous species populations, commercial fisheries stocks, and recreational fisheries; and stresses to overall communities and ecosystems as evidenced by reductions in diversity or , other changes in system structure and function. Similarly, based on the analyses and for the same reasons set forth in the preamble to the new facility rule (66 FR 65256, 65291-65297), EPA has selected reductions in impingement and entrainment as a quick, certain, and consistent metric for determining performance at Phase II existing facilities. Further, EPA considered the environmental impacts for this rule and found them to be acceptable at a national level. This section describes the environmental impacts associated with cooling water withdrawals and why they are of concern to the Agency. EPA estimates that facilities under the scope of today's final rule withdraw on average more than 214 billion gallons of cooling water a day from waters of the United States.2 A report by the U.S. Geological Survey estimates that the use of water by the thermoelectric power industry accounted for 47 percent of all combined fresh and saline withdrawals from waters of the United States in 1995.3 The withdrawal of such large quantities of cooling water in turn has the potential to affect large quantities of aquatic organisms including phytoplankton (tiny, free-floating photosynthetic organisms suspended in the water column), zooplankton (small aquatic animals, including fish eggs and larvae, that consume phytoplankton and other zooplankton), fish, and shellfish. Aquatic organisms drawn into cooling water intake structures are either impinged on components of the cooling water intake structure or entrained in the cooling water system itself. Impingement takes place when organisms are trapped against intake screens by the force of the water being drawn through the cooling water intake structure. The velocity of the water Twith"ctrawarby"the^cooling"water intake structure may prevent proper gill movement, remove fish scales, and cause other physical harm or death of affected organisms through exhaustion, starvation, asphyxiation, and descaling. Death from impingement ("impingement mortality") can occur immediately or subsequently as an individual succumbs to physical damage upon its return to the waterbody. Entrainment occurs when organisms are drawn through the cooling water intake structure into the cooling system. Organisms that become entrained are typically relatively small, aquatic organisms, including early life stages of fish and shellfish. Many of these small, fragile organisms serve as prey for larger organisms higher on the food chain which are commercially and recreationally desirable species. As entrained organisms pass through a facility's cooling system they may be subject to mechanical, thermal, and at times, chemical stress. Sources of such stress include physical impacts in the pumps and condenser tubing, pressure •ChallpS~CaTlSBd~by-TlrveMoirQf the cooling water into the plant or by the hydraulic effects of the condensers, sheer stress, thermal shock in the condenser and discharge tunnel, and chemical toxic effects from antifouling agents such as chlorine. Similar to impingement mortality, death from entrainment can occur immediately or subsequently as the individual succumbs to the damage from the stresses encountered as it passed through the cooling water system once it is discharged back into the waterbody. The environmental impacts attributable to impingement mortality and entrainment at individual facilities include losses of early life stages of fish and shellfish, reductions in forage species, and decreased recreational and commercial landings. EPA estimates that the current number of fish and shellfish, expressed as age 1 equivalents, that are killed from impingement and entrainment from cooling water intake structures at the facilities covered by this Phase II rule is over 3.4 billion annually. Expressing impingement mortality and entrainment losses as age 1 equivalents is an accepted method for converting losses of all life stages into individuals of an equivalent age and provides a standard metric for comparing losses among species, years, and facilities. The largest losses are in the mid-Atlantic, where EPA estimates 1.7 billion age 1 equivalents are lost annually due to impingement and entrainment.4 Although the number of age 1 equivalent fish killed by impingement and entrainment is very large, precise quantification of the nature and extent of impacts to populations and ecosystems is difficult. Population dynamics and the physical, chemical, and biological processes of ecosystems are extremely complex. While generally accepted as a simple and transparent method for modeling losses, the proportional methodology that EPA uses to estimate impingement and entrainment nationwide has uncertainties that may result in under or over estimating actual impingement and entrainment rates. Decreased numbers of aquatic organisms can disrupt aquatic food webs and alter species composition and overall levels of biodiversity. For example, a model that examined the effect of large entrainment losses of forage fish, such as bay anchovy, predicted subsequent reductions in predator populations (including commercially and recreationally important species such as striped bass, weakfish, and blue fish) as high as 25%.5 This is because forage species, which comprise a majority of 2 EPA 1939. Detailed Industry Questionnaires: Phase II Cooling Water Intake LStructures & Watershed Case Study Short Questionnaire. U.S. Environmental Protection Agency. Office of Wastewater Management. Washington. D.C. OMB Control No. 2040-0213. 3 Solley. W.B., R.R. Pierce and H.A. Perlman. 1998. Estimated Use of Water in the United States in 1995. U.S. Geological Survey Circular 1200. 4 For more information, please see Chapter D2: Evaluation of Impingement and Entrainment in the Mid-Atlantic Region in the Section 316(b) Existing Facilities Regional Studies. Part D: Mid-Atlantic. 5 Summers, J.K. 1989. Simulating the indirect effects of power plant entrainment losses on an estuarine ecosystem. Ecological Modelling, 49: 31- 47. Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41587 entrainment losses at many facilities, are often a primary food source for predator species. EPA is also concerned about the potential impacts of cooling water intake structures located in or near habitat areas that support threatened, endangered, or other species of concern (those species that might be in need of conservation actions, but are not currently listed as threatened or endangered under State or Federal law).6 In the San Francisco Bay-Delta Estuary, California, in the vicinity of the Pittsburg and Contra Costa Power Plants several fish species (e.g., Delta smelt, Sacramento splittail, chinook salmon, threatened or endangered by State and/ or Federal authorities. EPA evaluated facility data on impingement and entrainment rates for these species and estimated that potential losses of special status fish species at the two facilities may average 8,386 age 1 equivalents per year resulting from impingement and 169 age 1 equivalents per year due to entrainment.7 In another example, EPA is aware that from 1976 to 1994, approximately 3,200 threatened or endangered sea turtles entered enclosed cooling water intake canals at the St. Lucie Nuclear Generating Plant in Florida.8 The facility developed a capture-and-release program in response to these events. Most of the entrapped turtles were captured and released alive; however, approximately 160 turtles did not survive. An incidental take limit established by NMFS in a 2001 biological opinion for this facility has been set at no more than 1,000 sea turtles captured in the intake, with less than one percent killed or injured as a result of plant operations (only two of those killed or injured may be Kemp's —Ridley sea-tetlos and none-may-^>e --------- hawksbill or leatherback sea turtles).9 Although the extent to which threatened, endangered, and other special status species are taken by cooling water intake structures more generally is yet to be determined, EPA is concerned about potential impacts to such species. Examples of Environmental Impacts Caused by Cooling Water Intakes 1. Hudson River The power generation facilities on the Hudson River in New York are some of the most extensively studied in the nation. The fish populations in the Hudson River have also been studied extensively to measure the impacts of these power plants. Studies of entrainment at five Hudson River power plants during the 1980s predicted year- class reductions ranging from six percent to 79 percent, depending on the "fish species.1" A Draft Environmental Impact Statement (DEIS) prepared by industry of entrainment at three Hudson River facilities (Roseton, Bowline, and Indian Point) predicted year-class reductions of up to 20 percent for striped bass, 25 percent for bay anchovy, and 43 percent for Atlantic tomcod.11 The New York State Department of Environmental Conservation (NYSDEC) concluded that any "compensatory responses to this level of power plant mortality could seriously deplete any resilience or compensatory capacity of the species needed to survive unfavorable environmental conditions."12 In the DEIS, the facilities argue that their operation has not harmed the local aquatic communities, because all observed population changes are attributable to causes other than the operation of the power plants, such as water chestnut growth, zebra mussel invasion, changes in commercial fishing, increases in salinity and improved water quality in the New York Harbor. In contrast, the Final Environmental rmpacft Statement (FK15J prepared by NYSDEC for these three facilities concludes that impacts are associated with the power plants and notes that these impacts are more like habitat degradation than the "selective cropping" offish that occurs during regulated fishing because the entire community is impacted rather than msnore waters 01 i-ioriua. 9 Florida Power and Light Company, 2002. Florida Power & Light Company St. Lucie Plant Annual Environmental Operating Report 2002. 10Boreman J. and P. Goodyear. 1988. Estimates of entrainment mortality for striped bass and other fish species inhabiting the Hudson River Estuary. American Fisheries Society Monograph 4:152-160. 11 Consolidated Edison Company of New York. 2000. Draft environmental impact statement for the state pollutant discharge elimination system permits for Bowline Point, Indian Point 2 & 3. and Roseton steam electric generating stations. 12 New York State Department of Environmental Conservation (NYSDEC). 2000. Internal memorandum provided to the USEPA on NYDEC's position on SPDES permit renewals for Roseton, Bowline Point 1 & 2. and Indian Point 2 & 3 generating stations. specific species higher on the food chain.13 The multiple facilities on the Hudson River act cumulatively on the entire aquatic community. New York State's 2002 section 316(b) report lists the Hudson River downstream from the Federal dam at Troy, New York, as impacted by cooling water use by power plants due to the loss each year of a substantial percentage of annual fish production. The FEIS estimates, from samples collected between 1981 and 1987, that the average annual entrainment losses from these three facilities includes 16.9 million American shad, 303.4 million striped bass, 409.6 million bay anchovy, 468 million white perch, and 826.2 million river herring.14 In addition, related studies have found a small long-term decline in both species richness and diversity within the resident fish community. A commenter on the DEIS cited further evidence that Atlantic tomcod, Atlantic sturgeon, bluefish, weakfish, rainbow smelt, white perch and white catfish are showing long-term trends of declining abundance of 5 to 8% per annum.15 Declines in abundances of several species and changes in species composition have raised concerns about the overall health of the community. The FEIS concluded that additional technology was necessary to minimize the adverse environmental impact from these three once-through systems.16 The FEIS further concluded that entrainment at these facilities has diminished the forage base for each species so there is less food available for the survivors. This disruption of the food chain compromises the health of the entire aquatic community. The FEIS used, as a simplified hypothetical example, the loss of an individual bay anchovy that would ordinarily serve as prey for a juvenile striped bass. If this individual bay anchovy is killed via entrainment and disintegrated upon 13 New York State Department of Environmental Conservation (NYSDEC). 2003. Final Environmental Impact Statement: Concerning the Applications to Renew NYSPDES Permits for the Roseton 1 & 2, Bowling 1 & 2 and Indian Point 2 & 3 Steam Electric Generating Stations. Orange, Rockland and Westchester Counties. "Ibid. 15 Henderson. P.A. and R.M. Seaby. 2000. Technical comments on the Draft Environmental Impact Statement for the State Pollution Discharge Elimination System Permit Renewal for Bowline Point 1 & 2. Indian Point 2 & 3. and Roseton 1 & 2 Steam Generating Stations. Pisces Conservation Ltd. 18 New York State Department of Environmental Conservation (NYSDEC). 2003. Final Environmental Impact Statement: Concerning the Applications to Renew NYSPDES Permits for the Roseton 1 & 2, Bowline 1 & 2 and Indian Point 2 & 3 Steam Electric Generating Stations, Orange, Rockland and Westchester Counties. 41588 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations passage through a CWIS, it is no longer available as food to a striped bass, but rather it is only useful as food to lower trophic level organisms, such as detritivores (organisms that feed on dead organic material). Further, the bay anchovy would no longer be available to consume phytoplankton, which upsets the distribution of nutrients in the ecosystem.17 The Hudson River, like many waterbodies in the nation, has undergone many changes in the past few decades. These changes, which havft aft'ppffiH fish populations pither positively or negatively, include improvements to water quality as a result of upgrades to sewage treatment plants, invasions by exotic species such as zebra mussels, chemical contamination by toxins such as PCBs and heavy metals, global climate shifts such as increases in annual mean temperatures and higher frequencies of extreme weather events (e.g., the El Nino-Southern Oscillation), and strict management of individual species stocks such as striped bass.18 In addition, there are dramatic natural changes in fish populations on an annual basis and in the long term due to natural phenomena because the Hudson River, like many waterbodies, is a dynamic system with many fundamental, fluctuating environmental parameters—such as flow, temperature, salinity, dissolved oxygen, nutrients, and disease—that cause natural variation in fish populations each year.19 The existence of these interacting variables makes it difficult to determine the exact contribution of impingement and entrainment losses on -a-pepukition^-felativo health-. Nonetheless, as described later in this section, EPA is concerned about the potential for cumulative impacts resulting from multiple facility intakes that collectively impinge and/or entrain aquatic organisms within a specific waterbody. 2. Mount Hope Bay Environmental impacts were also studied in another recent permit reissuance for the Brayton Point Station in Somerset, Massachusetts, where EPA is the permitting authority. EPA determined that, among other things, the facility's cooling water system had contributed to the collapse of the fishery and inhibited its recovery despite stricter commercial and recreational fishing limits and improved water quality due to sewage treatment upgrades. The facility currently withdraws nearly one billion gallons of water each day and the average annual losses of aquatic organisms due to impingement and entrainment are estimated in the trillions, including 251 million winter flounder, 375 million windowpane flounder, 3.5 billion tautog and 11.8 billion bay anchovy. A dramatic change in the fish populations iu Mount Hope Bay is apparent after 1984 with a decline by more than 87 percent, which coincides with a 45 percent increase in cooling water ~-witrrdrawaHrimrthe4jay-du€rto the modification of Unit 4 from a closed- cycle recirculating system to a once- through cooling water system and a similar increase in the facility's thermal discharge.2021 The downward trend of f'infish abundance in Mount Hope Bay is significantly greater than declines in adjacent Narragansett Bay that is not influenced by the operation of Brayton Point Station.22 Despite fishing restrictions, fish stocks have not recovered. 3. Southern California Bight At the San Onofre Nuclear Generating Station (SONGS), in a normal (non-El Nino) year, an estimated 57 tons offish were killed per year when all units were in operation.23 The amount lost per year included approximately 350,000 juveniles of white croaker, a popular sport fish; this number represents 33,000 adult equivalents or 3.5 tons of adult fish. In shallow water, densities of queenfish and white croaker decreased 60 percent within one kilometer of SONGS and 35 percent within three 4a-lenneters-fr0m-S©NGS-as-eompared to densities prior to facility operations. Densities of local midwater fish decreased 50 to 70 percent within three kilometers of the facility. In contrast, relative abundances of some bottom- dwelling species in the same areas were higher because of the enriched nature of the SONGS discharge, which in turn supported elevated numbers of prey items for bottom-dwelling fish. 17 Ibid. "Ibid. 111 Ibid. 20 Ibid. 21 T Gibson. M. 1935 (revised 1996). Comparison of trends in the finfish assemblages oi'Mt. Hope Bay and Narragansett Bay in relation to operations for the New England Power Brayton Point station. Rhode Island Division of Fish and Wildlife, Marine Fisheries Office. "EPA-New England. 2002. Clean Water Act NPDES Permitting Determinations for Thermal Discharge and Cooling Water Intake from Brayton Point Station in Somerset, MA (NPDES Permit No. MA 0003654). July 22, 2002. "Murdoch, W.W., R.C. Fay, and B.J. Mechalas. 1989. Final Report of the Marine Review Committee to the California Coastal Commission. August 1989, MRC Document No. 80-02. 4. Missouri River In contrast to these examples, facilities sited on waterbodies previously impaired by anthropogenic activities such as channelization demonstrate limited entrainment and impingement losses. The Neal Generating Complex facility, located near Sioux City, Iowa, on the Missouri River is coal-fired and utilizes once- through cooling systems. According to a ten-year study conducted from 1972—82, the Missouri River aquatic environment near the Neal complex was previously heavily impacted by channelization and very high flow rates meant to enhance barge traffic and navigation.24 These anthropogenic changes to the natural river system resulted in significant losses of fish habitat. At this facility, there was found to be little impingement and entrainment by cooling water intakes. Studies like those described in this section provide only a partial picture of the range of environmental impacts associated with cooling water intake structures. Although numerous studies were conducted to determine the environmental impacts caused by impingement and entrainment at existing facilities, many of them are based on limited data that were collected as long as 25 years ago. EPA's review of available facility impingement and entrainment studies identified a substantial number of serious study design limitations, including data collections for only one to two years or limited to one season and for a subset of the species affected by cooling water intakes; limited taxonomic detail (i.e., many losses not identified to the species level); a general lack of statistical information such as inclusion of variance measures in impingement and entrainment estimates; and the lack of standard methods and metrics for quantifying impingement and entrainment, which limits the potential for evaluating cumulative impacts across multiple facilities. Further, in many cases it is likely that facility operating conditions and/or the state of the waterbody itself has changed since these studies were conducted. Finally, the methods for monitoring impingement and entrainment used in the 1970s and 1980s, when most section 316(b) evaluations were performed, were often inconsistent and incomplete, making quantification of impacts difficult in some cases. Recent advances in environmental assessment techniques 24Tondreau, R.. J. Hey and E. Shane, Morningside College. 1982. Missouri River Aquatic Ecology Studies: Ten Year Summary (1972-1982). Prepared for Iowa Public Service Company, Sioux City, Iowa, Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41589 provide new and in some cases better tools for monitoring impingement and entrainment and quantifying the current magnitude of the impacts.2526 EPA is also concerned about the potential for cumulative impacts related to cooling water withdrawal. Cumulative impacts may result from (1) multiple facility intakes impinging and/ or entraining aquatic organisms within a specific waterbody, watershed, or species; (2) the existence of multiple stressors within a waterbody/watershed, including cooling water intake withdrawals; and (3) long-term occurrences of impingement and/or entrainment losses that may result in the diminishment of the compensatory reserve of a particular fishery stock. Historically, environmental impacts related to cooling water intake structures have been evaluated on a facility-by-facility basis. These historical evaluations do not consider the potential for a fish or shellfish species to be concomitantly impacted by cooling water intake structures belonging to other facilities that are located within the same waterbody or watershed in which the species resides or along the coastal migratory route of a particular species. The potential cumulative effects of multiple intakes located within a specific waterbody or along a coastal segment are difficult to quantify and are not typically assessed. (One relevant example is provided for the Hudson River; see discussion earlier in this section.) Nonetheless, EPA "anaTyses suggest that almost a'quarteFoT all Phase II existing facilities are located on a waterbody with another Phase II existing facility (DCN 4-4009). Thus, EPA is concerned that although the potential for aquatic species to be affected by cooling water withdrawals from multiple facility intakes is high, this type of cumulative impact is largely unknown and has not adequately been accounted for in evaluating impacts. However, recently the Atlantic States Marine Fisheries Commission (ASMFC) was requested by its member States to investigate the cumulative impacts on commercial fishery stocks, particularly overutilized stocks, attributable to cooling water intakes located in coastal regions of the Atlantic.27 Specifically, the ASMFC study will evaluate the 2a Schmitt, R.J. and C.W. Osenberg. 1096. Detecting Ecological Impacts. Academic Press. San Diego. CA. 2BEPRI 19(19. Catalog of Assessment Methods for Evaluating the Effects of Power Plant Operations on Aquatic Communities. TR-112013. EPRI. Palo Alto. CA.27 Personal communication. D. Hart (EPA) and L. Kline (ASMFC), 2001. potential cumulative impacts of multiple intakes on Atlantic menhaden stock 2S which range along most of the U.S. Atlantic coast with a focus on revising existing fishery management models so that they accurately consider and account for fish losses from multiple intake structures. Results from these types of studies, although currently unavailable, will provide significant insight into the degree of ~ rmpacraTtributarjie"to intake™ withdrawals from multiple facilities. EPA also considered information suggesting that impingement and entrainment, in conjunction with other factors, may be a nontrivial stress on a waterbody. EPA recognizes that cooling water intake structures are not the only source of human-induced stress on aquatic systems. Additional stresses to aquatic systems include, but are not limited to, nutrient, toxics, and sediment loadings; low dissolved oxygen; habitat loss; and stormwater runoff. Although EPA recognizes that a nexus between a particular stressor and adverse environmental impact may be difficult to establish with certainty, EPA believes stressors that cause or contribute to the loss of aquatic organisms and habitat such as those described above, may incrementally impact the viability of aquatic resources. EPA analyses suggest that over 99 percent of all existing facilities with cooling water withdrawal that EPA surveyed in its section 316(b) survey of existing facilities are located within two miles of waters that are identified as •lTnj5aTre^l35ra~STaW"orTrirJelsee 66 FR 65256, 65297). Thus, the Agency is concerned that to the extent that many of the aquatic organisms subject to the effects of cooling water withdrawals reside in impaired waterbodies, they are potentially more vulnerable to cumulative impacts from an array of physical and chemical anthropogenic stressors. Finally, EPA believes that an aquatic population's potential compensatory ability—the capacity for a species to increase its survival, growth, or reproduction in response to reductions sustained to its overall population size—may be compromised by impingement and entrainment losses in conjunction with all the other stressors encountered within a population's natural range, as well as impingement and entrainment losses occurring consistently over extended periods of time. As discussed in the Phase I new facility rule (see 66 FR 65294), EPA is concerned that even if there is little evidence that cooling water intakes alone reduce a population's compensatory reserve, the multitude of stressors experienced by a species can potentially adversely affect its ability to recover.29 Moreover, EPA notes that the opposite effect or "depensation" (decreases in recruitment as stock size declines30) may occur if a population's size is reduced beyond a critical threshold. Depensation can lead to further decreases in population abundances that are already seriously depleted and, in some cases, recovery of the population may not be possible even if the stressors are removed. In fact, there is some evidence that depensation may be a factor in some recent fisheries collapses.313233 Another problem associated with assessing the environmental impact of cooling water intakes is that existing fishery resource baselines may be inaccurate.34 There is much evidence that the world's fisheries are in general decline,35 3B however, many fishery stocks have not been adequately assessed. According to a 2002 study, only 23 percent of U.S. managed fish stocks have been fully assessed and of these, over 40 percent are considered depleted or are being fished beyond sustainable levels.37 Another study estimated that more than 70 percent of commercial fish stocks are fully 28 Personal communication, D. Hart (EPA) and L. Kline (ASMFC). 2003. 29Hutchings. [.A. and R.A. Myers. 1994. What can be learned from the collapse of a renewable resource? Atlantic cod, Gadus morhus, of Newfoundland and Labrador. Canadian Journal of Fisheries and Aquatic Sciences 51:2126-2146. 30Goodyear, C.P. 1977. Assessing the impact of power plant mortality on the compensatory reserve offish populations. Pages 186-195 in W. Van Winkle, ed., Proceedings of the Conference on Assessing the Effects of Power Plant Induced Mortality on Fish Populations. Pergamon Press, New York, NY. 31 Myers, R.A., N.J. Barrowman, J.A. Hutchings, and A.A. Rosenburg. 1995. Population dynamics of exploited fish stocks at low population levels. Science 26:1106-1108. 32 Hutchings. [.A. and R.A. Myers. 1994. What can be learned from the collapse of a renewable resource? Atlantic cod, Gadus morhus. of Newfoundland and Labrador. Canadian Journal of Fisheries and Aquatic Sciences 51:2126-2146. '•'Liermaun, M. and R. Hilborn. 1997. Depensation in fish stocks: A hierarchic Bayesian meta-analysis. Can. J. Fish. Aquatic. Sci. 54:1976- 1085. 34 Watson, R. and D. Pauly. 2001. Systematic distortions in world fisheries catch trends. Nature 414:534-536. "Ibid. 36 Pew Oceans Commission. 2003. America's Living Oceans: Charting a course for sea change. Summary Report. May 2003. Pew Oceans Commission, Arlington, VA. 37 U.S. Commission on Ocean Policy. 2002. Developing a National Ocean Policy: Mid-Term Report of the U.S. Commission on Ocean Policy. Washington. DC. 41590 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations exploited, overfished or collapsed.38 Another estimated that large predatory fish stocks are only a tenth of what they were 50 years ago.39 Most studies of fish populations last only a few years, do not encompass the entire life span of the species examined, and do not account for cyclical environmental changes such as ENSO events, and other long term cycles of oceanographic productivity.40 Although a clear and detailed picture of the status of all our fishery resources does not exist,41 it is undisputed that fishermen are struggling to sustain their livelihood despite strict fishery management restrictions which aim to rebuild fish populations. EPA shares the concerns expressed by expert fishery scientists that historical overfishing has increased the sensitivity of aquatic ecosystems to subsequent disturbance, ~rrrakirrg~trrem more vulnerable lu other stressors, including cooling water intake structures.In conclusion, EPA's mission includes ensuring the sustainability of communities and ecosystems. Thus, EPA must comprehensively evaluate all potential threats to resources and work towards eliminating or reducing identified threats. As discussed in this section, EPA believes that impingement and entrainment losses attributable to cooling water intakes do pose a threat to aquatic organisms and through today's' rule is seeking to minimize that threat. V. Description of the Final Rule Clean Water Act section 316(b) requires that any standard established pursuant to section 301 or section 306 of the CWA and applicable to a point source shall require that the location, design, construction, and capacity of cooling water intake structures reflect the best technology available for minimizing adverse environmental impact. Today's final rule establishes national performance requirements for Phase II existing facilities that ensure such facilities fulfill the mandate of section 316(b). This rule applies to Phase II existing facilities that use or propose to use a cooling water intake structure to withdraw water for cooling purposes from waters of the United States and that have or are required to have a National Pollutant Discharge Elimination System (NPDES) permit issued under section 402 of the CWA. Phase II existing facilities include only those facilities whose primary activity is to generate and transmit electric power and who have a design intake flow of 50 MGD or greater, and that use at least 25 percent of the water withdrawn exclusively for cooling purposes (see § 125.91). Applicability criteria for this rule are discussed in detail in section II of this preamble. Under this final rule, EPA has established performance standards for the reduction of impingement mortality and, when appropriate, entrainment (see § 125.94). The performance standards consist of ranges of reductions in impingement mortality and/or entrainment (e.g., reduce impingement mortality by 80 to 95 percent and/or entrainment by 60 to 90 percent). These performance standards reflect the best technology available for minimizing adverse environmental impacts determined on a national categorical basis. The type of performance standard applicable to a particular facility (i.e., reductions in impingement only or impingement and entrainment) is based on several factors, including the facility's location (i.e., source waterbody), rate of use (capacity utilization rate), and the proportion of the waterbody withdrawn. Exhibit V-l summarizes the performance standards based on waterbody type. In most cases, EPA believes that these performance standards can be met using design and construction technologies or operational measures. However, under the rule, the performance standards also can be met, in whole or in part, by using restoration measures, following consideration of design and construction technologies or operational measures and provided such measures meet restoration requirements (see §125.94(c)). As noted earlier in this section, today's rule generally requires that impingement mortality of all life stages of fish and shellfish must be reduced by 80 to 95 percent from the calculation baseline; and for some facilities, entrainment of all life stages of fish and shellfish must be reduced by 60 to 90 percent from the calculation baseline (see §125.94(b)). EXHIBIT V-1 .—PERFORMANCE STANDARD REQUIREMENTS Waterbody type Tidal river Estuary or Ocean Great Lakes Capacity utilization rate Less than 15% Equal to or greater than 15%. Less than 15% Equal to or greater than 15%. Less than 1 5% Equal to or greater than 15%. Design intake flow N/A1 5% or less mean annual flow. Greater than 5% of mean annual flow. N/A1 N/A .... N/A N/A .... Type of performance standard only. Impingement mortality only. Impingement mortality and entrainment. only. entrainment. only. entrainment. 38Broad. W.J. and A.C. Revkin. 2003. Has the Sea Given Up its Bounty':1 The New York Times. July 29. 2003. 30Myers, R.A. and B. Worm. 2003. Rapid worldwide depletion of predatory fish mminuiiities. Nature 423: 2HO-2B3. "> lackson, [.B.C., M.X. Kirby, W.H. Berger, K.A. Bjorndal. L.VV. Botsford. B.J. Bourque, R.H. Bradbury. R. Cooke,). Erlandson, J.A. Estes, T.P. Hughes.'s. Kidwell. C.B. Lange. H.S. Lenihan, J.M. Pandolti. C.H. Peterson. R.S. Steneck, M.J. Tegner. and R.R. Warner. 2001. Historical overfishing and the recent collapse of coastal ecosystems. Science 293(55301:629-638. 41 National Marine Fisheries Service (NMFS). 2002. Annual Report to Congress on the Status of U.S. Fisheries—2001. U.S. Dep. Commerce, NOAA, Natl. Mar. Fish. Serv., Silver Spring, MD, 142 pp. Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41591 EXHIBIT V-1 .—PERFORMANCE STANDARD REQUIREMENTS—Continued Waterbody type Capacity utilization rate N/A Design intake flow Increase in design intake flow must not disrupt thermal stratification ex- cept where it does not adversely affect the management of fisheries. Type of performance standard only. 1 Determination of appropriate compliance reductions is not applicable. This final rule identifies five Facilities that meet the velocity alternatives a Phase II existing facility requirements would only need to may use to achieve compliance with the submit application studies related to requirements for best technology determining entrainment reduction, if a variable tor minimizing acTverse environmental impacts associated with cooling water intake structures. Four of these are based on meeting the applicable performance standards and the fifth allows the facility to request a site-specific determination of best technology available for minimizing adverse environmental impacts under certain circumstances. EPA has established these compliance alternatives for meeting the performance standards to provide a significant degree of flexibility to Phase II existing facilities, to ensure that the rule requirements are economically practicable, and to provide the ability for Phase II existing facilities to address unique site-specific factors. Application requirements vary based on the compliance alternative selected and, for some facilities, include development of a Comprehensive Demonstration Study. Application requirements are discussed later in this section. The five compliance alternatives are described in the following paragraphs. Under §125.94(a)(l)(i) and (ii), a Phase II existing facility may demonstrate to the Director that it has already reduced its flow commensurate with a closed-cycle recirculating system or that it has already reduced its design intake velocity to 0.5 ft/s or less. If a facility can demonstrate to the Director that it has reduced, or will reduce, flow commensurate with a closed-cycle recirculating system, the facility is deemed to have met the performance standards to reduce impingement mortality and entrainment (see § 125.94 (a)(l)(i)). Those facilities would not be required to submit a Comprehensive Demonstration Study with their NPDES application. If the facility can demonstrate to the Director that is has reduced, or will reduce maximum through-screen design intake velocity to 0.5 ft/s or less, the facility is deemed to have met the performance standards to reduce impingement mortality only. subject to the performance standards for entrainment. Under § 125.94(a)(2) and (3), a Phase II existing facility may demonstrate to the Director, either that its current cooling water intake structure configuration meets the applicable performance standards, or that it has selected design and construction technologies, operational measures, and/or restoration measures that, in combination with any existing design and construction technologies, operational measures, and/or restoration measures, meet the specified performance standards in §125.94(b) and/or the requirements in § 125.94(c). Under § 125.94(a)(4), a Phase II existing facility may demonstrate to the Director that it has installed and is properly operating and maintaining a rule-specified and approved design and construction technology in accordance with § 125.99(a). Submerged cylindrical wedgewire screen technology is a rule- specified design and construction technology that may be used in instances in which a facility's cooling water intake structure is located in a freshwater river or stream and meets other criteria specified at § 125.99(a). In addition, under this compliance alternative, a facility or other interested person may submit a request to the Director for approval of a different technology. If the Director approves the technology, it may be used by all facilities with similar site conditions under his or her jurisdiction if allowed under the State's administrative procedures. Requests for approval of a technology must be submitted to the Director and include a detailed description of the technology; a list of design criteria for the technology and site characteristics and conditions that each facility must possess in order to ensure that the technology can consistently meet the appropriate impingement mortality and entrainment performance standards in § 125.94(b); and information and data sufficient to demonstrate that all facilities under the jurisdiction of the Director can meet the relevant impingement mortality and entrainment performance standards in § 125.94(b) if the applicable design criteria and site characteristics and conditions are present at the facility. A Director may only approve an alternative technology following public notice and opportunity for comment on the approval of the technology (§125.99(b)). Under §125.94(a)(5) (i) or (ii), if the Director determines that a facility's costs of compliance would be significantly greater than the costs considered by the Administrator for a like facility to meet the applicable performance standards, or that the costs of compliance would be significantly greater than the benefits of meeting the applicable performance standards at the facility, the Director must make a site- specific determination of best technology available for minimizing adverse environmental impact. Under this alternative, a facility would either compare its projected costs of compliance using a particular technology or technologies to the costs the Agency considered for a like facility in establishing the applicable performance standards, or compare its projected costs of compliance with the projected benefits at its site of meeting the applicable performance standards of today's rule (see section IX.H). If in either case costs are significantly greater, the technology selected by the Director must achieve an efficacy level that comes as close as practicable to the applicable performance standards without resulting in significantly greater costs. During the first permit term, a facility that chooses compliance alternatives in § 125.94(a)(2), (3), (4), or (5) may request that compliance with the requirements of this rule be determined based on the implementation of a Technology Installation and Operation Plan indicating how the facility will install and ensure the efficacy, to the extent practicable, of design and construction 41592 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations technologies and/or operational measures, and/or a Restoration Plan (§ 125.95(b)(5)). The Technology Installation ancTOperation Plan musfEe developed and submitted to the Director in accordance with §125.95(b)(4](ii). The Restoration Plan must be developed in accordance with § 125.95(b)(5). During subsequent permit terms, if the facility has been in compliance with the construction, operational, maintenance, monitoring, and adaptive management requirements in its TIOP and/or Restoration Plan during the preceding permit term, the facility may request that compliance during subsequent permit terms be based on its remaining in compliance with its TIOP and/or Restoration Plan, revised in accordance with applicable adaptive management requirements if the applicable performance standards are not being met. Three sets of data are required to be submitted 180 days prior to expiration of a facility's existing permit by all facilities regardless of compliance alternative selected (see § 122.21(r)(2)(3) and (5)). These are: • Source Water Physical Data: A narrative description and scaled drawings showing the physical configuration of all source waterbodies used by the facility, including areal dimensionsTdepThs, salinity and temperature regimes, and other documentation that supports your determination of the waterbody type where each cooling water intake structure is located; identification and characterization of the source waterbody's hydrological and geomorphological features, as well as the methods used to conduct any physical studies to determine the intake's area of influence and the results of such studies; and locational maps. • Cooling Water Intake Structure Data: A narrative description of the configuration of each of its facility's cooling water intake structures and where it is located in the waterbody and in the water column; latitude and longitude in degrees, minutes, and seconds for each of its cooling water intake structures; a narrative description of the operation of each of its cooling water intake structures, including design intake flows, daily hours of operation, number of days of the year in operation, and seasonal changes, if applicable; a flow distribution and water balance diagram that includes all sources of water to the facility, recirculating flows, and discharges; and engineering drawings of the cooling water intake structure. • Cooling Water System Data: A narrative description of the operation of each cooling water system, its relationship to the cooling water intake structures, proportion of the design intake flow that is used in the system, the number of days of the year the system is in operation, and seasonal changes in the operation of the system, if applicable; and engineering calculations and supporting data to support the narrative description. In addition to the specified data facilities are require to submit, some facilities are also required to conduct a Comprehensive Demonstration Study. Specific requirements for the Comprehensive Demonstration Study vary based on the compliance alternative selected. Exhibit II summarizes the Comprehensive Demonstration Study requirements for each compliance alternative. Specific details of each Comprehensive Demonstration Study component are provided in section IX of this preamble. ^ — SUMMARY OFCOM?REHENSIVE DEMONSTRATION STUDY REQUIREMENTS FOR COMPLIANCE ALTERNATIVES Compliance alternative (§ 125.94(b))Comprehensive demonstration study requirements (§125.95(b)) 1—Demonstrate facility has reduced flow commensurate with closed- cycle recirculating system. 1—Demonstrate facility has reduced design intake velocity to < 0.5 ft/s 2—Demonstrate that existing design and construction technologies, operational measures, and/or restoration measures meet the per- formance standards. 3—Demonstrate that facility has selected design and construction tech- nologies, operational measures, and/or restoration measures that will, in combination with any existing design and construction tech- nologies, operational measures, and/or restoration measures, meet the performance standards. 4—Demonstrate that facility has installed and properly operates and maintains an approved technology. None. No requirements relative to impingement mortality reduction. If subject to entrainment performance standard, the facility must only address entrainment in the applicable components of its Comprehensive Demonstration Study, based on the compliance option selected for entrainment reduction. Proposal for Information Collection. Source Waterbody Flow Information. Impingement Mortality and/or Entrainment Characterization Study (as appropriate). Technology and Compliance Assessment Information —Design and Construction Technology Plan —Technology Installation and Operation Plan Restoration Plan (if appropriate). Verification Monitoring Plan. Proposal for Information Collection. Source Waterbody Flow Information. Impingement Mortality and/or Entrainment Characterization Study (as appropriate). Technology and Compliance Assessment Information —Design and Construction Technology Plan —Technology Installation and Operation Plan Restoration Plan (if appropriate). Verification Monitoring Plan. Technology Installation and Operation Plan. Verification Monitoring Plan. Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41593 EXHIBIT V-2.—SUMMARY OF COMPREHENSIVE DEMONSTRATION STUDY REQUIREMENTS FOR COMPLIANCE ALTERNATIVES—Continued Compliance alternative (§125.94(b))Comprehensive demonstration study requirements (§125.95(b)) 5—Demonstrate that a site-specific determination of BTA is appropriate Proposal for Information Collection. Source Waterbody Flow Information. Impingement Mortality and/or Entrainment Characterization Study (as appropriate). Technology Installation and Operation Plan. Restoration Plan (if appropriate). Information to Support Site Specific Determination of BTA including: —Comprehensive Cost Evaluation Study (cost-cost test and cost-ben- efit test); —Valuation of Monetized Benefits of Reducing IM&E (cost-benefit test only); —Site-Specific Technology Plan (cost-cost test and cost-benefit test); ~ "Verification- Monitoring Plan. The requirements in today's final rule are implemented through NPDES permits issued under section 402 of the CWA. Permit applications submitted after the effective date of the rule must fulfill rule requirements. However, facilities whose existing permit expires before [insert four years after date of publication in the FR], may request a schedule for submission of application materials that is as expeditious as practicable but does not exceed [insert three years and 180 days after date of publication in the FR], to provide sufficient time to perform the required information collection requirements. Phase II existing facilities must comply with this final rule when they become subject to an NPDES permit containing these requirements. Finally, today's rule preserves each State's right to adopt or enforce more stringent requirements (see § 125.90(d)). It also provides that if a State demonstrates to the Administrator that "irhas adoptelrtlternative~Tegulatory requirements in its NPDES program that will result in environmental performance within a watershed that is comparable to the reductions of impingement mortality and entrainment that would otherwise be achieved under § 125.94, the Administrator must approve such alternative regulatory requirements (§ 125.90(c)). VI. Summary of Most Significant Revisions to the Proposed Rule A. Data Updates Based on comments received, additional information made available, and the results of subsequent analyses, EPA revised a number of assumptions that were used in developing the engineering costs, the information collection costs, the economic analyses, and the benefits analyses. These new assumptions are presented below and were used in the analyses in support of this final rule. 1. Number of Phase II Facilities Since publishing the NODA, EPA continued to verify design flow information for facilities that had been classified as either Phase II (large, existing power production) or Phase III (smaller, power producing or manufacturing) facilities. This verification resulted in the following changes: One facility that was classified as a Phase II facility at proposal was reclassified as being out of scope of the section 316(b] regulation, as it ceased operating. Four facilities that were classified as Phase III facilities at proposal based on projected design intake flow were reclassified as Phase II facilities. As a result, the overall number of Phase II facilities increased from 540 to 543 facilities.42 For the final rule, all costs, benefits, and economic analyses are based on the updated set of Phase II Jacilities. Tile" reason forfKe change islhat the Agency revised the estimated design intake flows for facilities that responded to the short-technical questionnaire EPA used to collect information for this rule. The Agency has now adopted a more robust set of annual flow data (using all the years of data collected for the final rule, rather than only flows for 1998 as reported at proposal). This change altered the calculated design intake flows for the facilities that provided responses to the short-technical questionnaire that EPA used to collect 42 Note that these numbers are unweighted. [As with many surveys, EPA was able to obtain data from most, but not all of the facilities potentially subject to this rule. To estimate the characteristics for those facilities that were not surveyed, EPA assigned a statistically derived sample weight to those facilities for which data were collected.] On a sample-weighted basis, the number of Phase II facilities increased from 551 to 554. The number of Phase II facilities modeled by the Integrated Planning Model (IPM) increased from 531 to 535. data. Facilities that provided responses to the detailed questionnaire were unaffected, as the Agency collected maximum design intake flows directly through the detailed questionnaire. 2. Technology Costs Since publishing the NODA, EPA used new information to revise the capital and operation and maintenance (O&M) costs for several compliance technologies, including those used as the primary basis for the final rule. Overall, the cost updates resulted in the following changes: total capital costs decreased by 5 percent and total operation and maintenance costs decrease by 3 percent. These comparisons are based on the raw costs, adjusted to year-2002 dollars, which have not been discounted or annualized.43 The revised costing assumptions are discussed in detail in section VI.3. 3. Permitting and Monitoring Costs Since proposal, EPA made several corrections and revisions to its burden and cost estimates for implementing the information collection requirements of today's rule, based on comments received and additional analysis. The following corrections and revisions were made since proposal: • EPA corrected the hourly rates for the statistician and biological technician labor categories, which were inadvertently transposed at proposal. • EPA increased the burdens associated with impingement and entrainment monitoring for the Impingement Mortality and Entrainment Characterization Study. 43 Based on additional research conducted after NODA publication and prior to issuance of the final rule. EPA changed the projected compliance response for some facilities. These changes, together with the increase in the number of in-scope Phase II facilities, contributed to the change in total compliance costs. 41594 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations • EPA revised the pilot study costs to Rssume that only a subset of facilities which are projected to install new technologies will perform pilot studies, and to be proportional to the projected capital costs for installing these new technologies in order to comply with the rule. EPA also developed an alternative national cost estimate using slightly different assumptions with regard to pilot study costs (see section XI). • EPA adjusted the facility-level costs to account for facilities that were projected to demonstrate compliance through the installation of a wedge-wire screen in a freshwater river under the compliance alternative in 125.94(a)(4). 4. Net Installation Downtime for Non- recirculating Cooling Tower Compliance Technologies In developing the proposal for this rule, the Agency estimated that technologies other than recirculating cooling towers would not require installation downtime for construction. However, the Agency amended this outlook for the NODA and published revised estimates of net construction downtimes for complying facilities installing a subset of technologies analyzed and developed as candidates for best technology available (BTA). Based on comments received on the NODA, the Agency has conducted further research into the construction downtimes that it used in the NODA for certain technologies. For the final regulation analysis, the Agency has adopted minor revisions to the construction downtimes for certain technologies, with the general effect being an increase in the net construction downtimes for a few technologies that the Agency views as candidates for reducing entrainment. (Net downtime was estimated by subtracting 4 weeks from total downtime, based on an assumption that facilities will schedule construction downtime during a 4 week period of normal downtime unrelated to the rule, for example, for routine maintenance.) As such, the Agency projects that a significant number of facilities expected to comply with the entrainment reduction requirements of the rule will have increased downtime costs compared to the NODA and the proposal analyses. The final costs of this rule reflect these changes, which are further discussed in Section X and the Technical Development Document. B. Regulatory Approach, Calculation Baseline, and Measuring Compliance 1. Regulatory Approach EPA has largely adopted the proposed rule with some restructuring and one significant change: an additional compliance alternative, the approved technology option (§ 125.94(a)(4)) which was discussed in detail in the NODA (68 FR 13539). The restructuring of the rule language now makes the reduction of flow commensurate with a closed-cycle recirculating system a separate compliance alternative, such that the rule now includes five compliance alternatives. In addition, EPA has clarified that facilities may comply with the rule requirement in section 125.94 by successfully implementing the construction, operational, maintenance, monitoring, and adaptive management requirements in a Technology Installation and Operation Plan developed in accordance with § 125.95(b)(4)(ii) and/or a Restoration Plan developed in accordance with § 125.95(b)(5). These plans must be designed and adaptively managed to meet the applicable performance standards in § 125.94(b) and (c). The following discussion describes the regulatory approach of the final rule, as developed through the proposed rule and the NODA. EPA proposed requirements for the location, design, construction, and capacity of cooling water intakes based on the waterbody type and the volume of water withdrawn by a facility (67 FR 17122). EPA grouped waterbodies into five categories, as in the Phase I regulation—freshwater rivers and streams, lakes and reservoirs, Great Lakes, estuaries and tidal rivers, and oceans. In general, the more sensitive or biologically productive the waterbody, the more stringent were the requirements proposed. The proposed requirements also varied based on the percentage of the source waterbody withdrawn and the capacity utilization rate. Under the proposed rule, a facility could choose one of three compliance options: (1) Demonstrate that the facility currently meets the specified performance standards, (2) select and implement design and construction technologies, operational measures, or restoration measures that will, in combination with any existing design and construction technologies, operational measures, or restoration measures, meet the specified performance standards, and/or (3) demonstrate that the facility qualifies for a site-specific determination of best technology available, because its costs of compliance are significantly greater than those considered by EPA during the development of the proposed rule or the facility's costs of compliance would be significantly greater than the benefits of compliance with the proposed performance standards at the facility. A facility could also use restoration measures in addition to or in lieu of design and construction technologies and/or operational measures to achieve compliance under any of the compliance options. In the NODA, EPA sought comment on a proposed fourth compliance option (68 FR 13522, 1359-41). In response to comments expressing concern that the proposed Comprehensive Demonstration Study requirements (at § 125.95(b)) would impose a significant burden on permit applicants, EPA examined an additional, more streamlined compliance option under which a facility could implement certain specified technologies that have been predetermined by EPA or the permitting authority to be highly likely to meet applicable performance standards, in exchange for not having to perform most of the elements of the proposed Comprehensive Demonstration Study. Two variations were offered in the NODA: (1) EPA would evaluate the effectiveness of specific technologies in achieving an 80 to 95 percent reduction in impingement mortality and a 60 to 90 percent reduction in entrainment and then specify applicability criteria to ensure that the technology would meet the performance standards at facilities satisfying the criteria, or (2) EPA would establish the criteria and a process for States to pre-approve intake structure control technologies as likely to meet the performance standards. For facilities located on freshwater rivers and streams and meeting specified criteria, wedgewire screens would be expected to meet the proposed performance standards. EPA also recognized that these two variations are not mutually exclusive and either or both could be adopted in the final rule. To a large extent, EPA is adopting the regulatory framework put forth in the proposed rule and supplemented by the NODA. To the three compliance alternatives originally proposed, EPA has added an approved technology alternative discussed in the NODA and included reduction of flow commensurate with closed-cycle cooling as a distinct alternative. 2. Calculation Baseline Also, in response to comments that the proposed definition for the calculation baseline was overly vague, Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41595 EPA published in the NODA a series of additional considerations regarding the calculation baseline and a new definition of it taking these considerations into account (68 FR 13522, 13580-81). The specifications are as follows and the new definition is in today's final rule at § 125.93. • Baseline cooling water intake structure is located at, and the screen face is parallel to, the shoreline or another depth if this would result in higher baseline impingement mortality and entrainment than the surface. EPA believes it is appropriate to allow credit in reducing impingement mortality from screen configurations that employ angling of the screen face and currents to guide organisms away from the structure before they are impinged. • Baseline cooling water intake structure opening is located at or near the surface of the source waterbody. EPA believes it is appropriate to allow credit in reducing impingement mortality or entrainment due to placement of the opening in the water column. • Baseline cooling water intake structure has a traveling screen with the standard 3/8 inch mesh size commonly used to keep condensers free from debris. This allows a more consistent estimation of the organisms that are considered "entrainable" vs. "impingeable" by specifying a standard mesh size that can be related to the size of the organism that may potentially come in contact with the cooling water intake structure. • Baseline practices, procedures, and structural configurations are those that the facility would maintain in the absence of any structural or operational controls implemented in whole or in part for the purpose of reducing impingement mortality and entrainment. This recognizes and provides credit for any structural or operational controls, including flow or velocity reductions, a facility had adopted that reduce impingement mortality or entrainment. EPA also requested comment on allowing an "as built" approach under which facilities could choose to use the existing level of impingement mortality and entrainment as the calculation baseline if they did not wish to take credit for the previously adopted measures. This could significantly simplify the monitoring and calculations necessary to determine the baseline. In the NODA, EPA also discussed an approach to compliance under which facilities would have an "optimization period" during which they would not be required to meet performance standards but, rather, would install, operate and maintain the selected control technologies to minimize impingement mortality and entrainment. EPA suggested several possible durations for this optimization period, and also requested comment on not specifying the duration, but instead leaving it up to the Director. 68 FR 13586 (March 19, 2003). For the final rule, EPA adopted the NODA definition of calculation baseline with some modifications. More specifically, EPA clarified the calculation baseline to include consideration of intake depth other than at or near the surface in determining the baseline. EPA also adopted the "as built" approach for the calculation baseline, which allows facilities to use current levels of impingement mortality and entrainment as the calculation baseline if the facility is configured similarly to the criteria set up for the calculation baseline. Finally, EPA clarified how compliance with the requirements in § 125.94 should be determined. In particular, the final rule provides that compliance during the first permit term (and subsequent permit terms if specified conditions are met) may be determined based on compliance with the construction, operational, maintenance, monitoring, and adaptive management requirements in an approved Technology Installation and Operation Plan and/or an approved Restoration Plan, that has been developed in accordance with specified requirements to meet the applicable performance standards. 3. Measuring Compliance EPA has clarified how compliance will be measured. At proposal, EPA received comment from the industry that there were uncertainties associated "with how compliance wTfrruTeTproposed requirements, particularly the numeric impingement mortality and entrainment performance standards, would be determined. Under the proposed rule and NODA, determining compliance, while obviously dependent on the compliance alternative selected, would, in general, require the development of waterbody characterization data, including key criteria (species, parameters, etc.) to be measured and monitored; a determination of baseline environmental impacts; implementation of cooling water intake technologies (assuming the facility does not already meet applicable performance standards and pursues this alternative); monitoring the selected criteria; and an evaluation of compliance with the applicable numeric impingement mortality and/or entrainment permit standard. The industry stakeholders were concerned that using the performance standard to set enforceable performance requirements would require facilities to collect and analyze greater amounts of data than EPA projected to be able to account for the variability inherent in biological and efficacy data needed to support compliance determinations in spite of overall good technology performance. These stakeholders stated that setting enforceable performance standards would lead to greater administrative burdens and delays when determining numeric standards and monitoring requirements to determine compliance. They were also concerned that establishing numeric standards would stifle innovation because of fears that a technology would not perform as anticipated. These stakeholders suggested that the performance standards in the rule serve as a consistent basis for setting permit conditions and for identifying technologies; installing, operating, and maintaining the chosen technology; performing compliance monitoring; and refining or adjusting operation, maintenance, or other factors in light of initial monitoring. Today's rule allows facilities to develop and implement a Technology Installation and Operation Plan that would, when used, serve as the primary mechanism upon which compliance with the performance standard requirements of this rule is determined. EPA has established this compliance mechanism because it will ensure that Phase II existing facilities will continually be required to achieve a level of performance that constitutes, for them, best technology available for minimizing adverse environmental impact. For facilities that choose to comply with applicable requirements in whole or in part through the use of restoration measures, the Restoration Plan would serve a similar function. The Restoration Plan is discussed in detail in section IX. An existing facility that chooses to use a Technology Installation and Operation Plan must (1) select design and construction technologies, operational measures, and/or restoration measures that will meet the performance standards, and (2) prepare a Technology Installation and Operation Plan documenting what, how and when it will install, operate, maintain, monitor, assess, and adaptively manage the design and construction technologies and operational measures to meet the performance standards, including operational parameters and 41596 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations inspection schedules, etc. Each facility using a Technology Installation Operation Plan must specify key parameters regarding monitoring (e.g., parameters to be monitored, location, and frequency), optimization activities and schedules for undertaking them, ways of assessing efficacy (including adaptive management plan for revising design and construction technologies or operational measures) that ensure that such technologies and measures are effectively implemented, and revised as needed to meet performance standards. This plan must be reviewed and approved by the Director and evaluated for sufficiency and/or revised at each moving expeditiously toward attainment of the applicable performance standards. Once approved, each Phase II existing facility must implement the plan according to its terms. Compliance with the final rule's performance standards during the permit term will be assessed based on the terms of the plan. If a facility does not comply with the plan, the Director has discretion to implement the performance standards or requirements through specifying numeric impingement mortality and entrainment requirements or technology prescription (for the site-specific alternative) in the permit. In addition, a facility that is unable to meet the applicable performance standards using the Technology Installation and Operation Plan approach may request in a subsequent permit that the Director make a site-specific determination of best technology available in accordance with § 125. 94(a)(5). Under these provisions, compliance is determined in terms of whether the facility is implementing, in accordance with the Technology Installation and" Operation Plan schedule, the technologies, measures and practices determined by the Director to be the best technologies available for minimizing adverse environmental impact for that facility. The Section 316(b) requirements for the facility are expressed non-numerically, which is analogous to the use of best management practices under other provisions of the CWA. See, e.g., sections 402(a) and 402(p). While EPA has been able to calculate ranges for national performance standards based on model technologies, EPA has insufficient data to determine — as it routinely can do in the context of effluent limitations guidelines and standards — that use of those model technologies will consistently result in achievement of those standards. The record persuades EPA that there is uncertainty associated with the application and long-term efficacy of these technologies at all facilities under the multitude of different site-specific factors and conditions under which these technologies might have to perform. In addition, even at a single site, there is substantial year-to-year variability in species abundance and composition, as well as other natural and anthropogenic factors, that may affect the performance of a particular technology installed at the facility and it is unclear how this would affect the efficacy of the technology. The Technology Installation and Operation — P-lan-pfevi&iaBs-afe-iH-teaded-to account for this. For example, meeting numerical reduction standards may not be possible at some sites either because hydrological conditions are not conducive to technological effectiveness, or due to species sensitivity. A Technology Installation and Operation Plan allows a facility, working with the Director, to identify, install, and adaptively manage technologies suited to its particular site conditions. In addition, measuring impingement mortality and entrainment reduction is difficult and would require a substantial amount of multi-year biological data and analysis is burdensome for the facility to develop, is often well beyond the type of information EPA can expect State Directors to be able to develop when monitoring compliance. A Technology Installation and Operation Plan simplifies enforcement: if a facility fails to meet the schedules and other terms of its plan, it is violating its section 316(b) requirements; there is no need to engage in extensive debate about the meaning of complex biological data. monitoring and assessment of success in meeting applicable performance standards is not important. If fact, it is critical to the compliance approach adopted in the rule in that it informs facilities and permit authorities when adaptive management, including revisions to the Technology Installation and Operation Plan, are needed to meet the performance standards. The Technology Installation and Operation Plan provisions also reflect that there is uncertainty about how long it would take a facility to adaptively manage the technology and determine the appropriate operating conditions for the technology to meet the applicable performance requirements. Data and comments available to EPA suggest that it is common for existing facilities to adjust technologies over time in order to achieve optimum performance and, therefore, an adaptive management approach as specified under a plan is appropriate. See documentation at DCN# 1-3019-BE, 4-1830, and 6-5001. EPA understands that adaptive management is going to be necessary for a number of facilities because there are relatively few rigorous evaluations of efficacy under different site and operating conditions. The available studies may also be limited in the numbers and types of species that they have evaluated and they may not show the long term demonstrated effectiveness (and/or consistency of effectiveness) of the technology with the added uncertainties associated with the variability of natural biological systems. By requiring facilities to employ adaptive management principles, EPA assures that the facility will be implementing, on an ongoing basis, the best array of technologies available to them. As noted above, the Technology Installation and Operation Plan provisions also simplify implementation because they identify the specific compliance requirements needed to meet the performance standard ranges and reduce some of the burden associated with measuring and enforcing compliance with these ranges for both existing facilities and Directors. Directors and facilities may find use of a Technology Installation and Operation Plan preferable because it is less feasible to develop and accurately evaluate biological monitoring data over a relatively short period, as would be required by measuring compliance against a numeric performance standard. Rather, the plan provisions allow implementation to be adaptive, and allow for data development and assessment to proceed in a manner that is appropriate for the facility, technology, and waterbody characteristics. EPA has the legal authority to express section 316(b) requirements in terms of design criteria, in addition to or in place of enforceable numeric performance standards. EPA employed a design criterion approach in the Phase I rule, when EPA was able to identify a single nationally available and economically practicable technology for the category of new facilities as a whole, in that case closed-cycle recirculating cooling technology. In this rule, EPA was not able to identify a uniform set of technologies that would be available and economically practicable for all existing facilities, but EPA was able to articulate a uniform nationally applicable principle in the form of the performance standards in § 125.94(b), by Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41597 which such technologies could be identified by the Director and implemented through the use of a Technology Installation and Operation Plan designed to achieve them. While the technology solution was different in Phase I and Phase II, the legal principle is the same. In addition, EPA has the legal authority to identify section 316(b) requirements as an evolving set of technologies, rather than a single technology array fixed in time. Section 316(b) requires that any technology selected under that section must be the best available to the facility. This term encompasses consideration of effectiveness, costs, non-water quality "Tmvtfofimentattmpacts, feasibility" issues and a host of other considerations relevant to existing facilities. See section 304(b)(2)(B). The record indicates that for some facilities, the question of what are available technologies and, among those, what is the best technology, may change over time. A Technology Installation and Operation Plan is intended to assure that at all times a facility is implementing a technology—or a technology plan—that reflects the best of all technologies consistent with uniform guiding principles in the form of performance standards available to them in light of their site-specific circumstances. Finally, EPA notes that the way in which performance standards guide technology selection and implementation varies slightly among the five compliance options. For facilities complying with §125.94(a)(l), the technologies identified are so effective that EPA is confident that any facility employing them will meet the performance standards, so a Technology . -Installation-and-Operation Plan_and performance monitoring are not required. Because these technologies are not available to all Phase II existing facilities, however, EPA has provided alternative compliance options. For facilities complying in accordance with § 125.94(a)(2), (3), or (4), compliance is generally achieved by implementation of a Technology Installation and Operation Plan designed to meet applicable performance standards. Finally, for facilities that comply in accordance with § 125.94(a)(5) for whom even compliance in accordance with § 125.94(a)(2), (3), or (4) is not available because of significantly higher costs, compliance is achieved by implementation of a Technology Installation and Operation Plan that achieves an efficacy as close as practicable to the applicable performance standards. 4. Site-Specific Requirements a. Costs Significantly Greater Than Costs Considered by the Administrator In today's final rule, a facility that demonstrates to the Director that the costs of compliance with the performance standards and/or restoration requirements would be significantly greater than the costs considered by the Administrator for a similar facility, will be given a site- specific determination of best technology available for minimizing adverse environmental impact. The standards of the rule have not changed since proposal, with the exception of one-darificatioiu Jn-the-finaLrule , the alternative site-specific requirements established by the Director must achieve an efficacy that is as close as practicable to the performance standards and/or restoration requirements specified in § 125.94(b) and (c). This was not specified in the proposed rule language. In addition, today's final rule also explains how a facility should calculate costs considered by the Administrator for a similar facility, for comparison with the costs of compliance for the facility. EPA details these steps in §125.94(a)(5)(i)(A)-(F).In the proposed rule, submittal requirements for facilities requesting a variance based upon a cost-cost test were identical to those for facilities requesting a variance based on a cost- benefit test. Thus, a facility requesting a site-specific determination based on a cost-cost comparison had to submit three studies: the Cost Evaluation Study, the Valuation of Monetized Benefits of Reducing Impingement and Emrainment, and the Site-Specific Technology Plan. In the final rule, by contrast, a facility must submit only the Specific Technology Plan. Under the Comprehensive Cost Evaluation Study detailed at proposal, a facility must submit detailed engineering cost estimates to document the costs of implementing the technologies and/or operational measures in the facility's Design and Construction Plan. In the final rule, the facility must provide, in addition to the engineering cost estimates, a demonstration that the costs significantly exceed the benefits of complying with the applicable performance standards. EPA did not make significant changes to the requirements under the Site-Specific Technology Plan. In summary, the major changes in the cost-cost analysis are as follows: • In the final rule, EPA has specified how a facility must "calculate costs considered by the Administrator" for comparison with the facility's estimate of the costs of compliance with the final rule, • Elimination of the requirement to submit a Valuation of Monetized Benefits of Reducing Impingement and Entrainment, and • Addition of the requirement to demonstrate that the costs significantly exceed the costs considered by the Administrator for a similar facility, under the Cost Evaluation Study. b. Costs Significantly Greater Than Benefits In today's final rule, a facility that demonstrates to the Director that the costs of compliance with the performance standards and/or restoration requirements would be significantly greater than the benefits will be given a site-specific determination of best technology available for minimizing adverse environmental impact. The standards of the rule have not changed since proposal, with the exception of one clarification: in the final rule, the alternative site-specific requirements established by the Director must achieve an efficacy that is as close as practicable to the performance standards and/or restoration requirements specified in § 125.94(b) and (c). This was not specified in the proposed rule language. In the final rule, as in the proposal, a facility requesting a site-specific determination based on a cost-benefit comparison must submit three studies: the Cost Evaluation Study, the Benefits Valuation Study (referred to in proposal as Valuation of Monetized Benefits of Reducing Impingement and Entrainment), and the Site-Specific Technology Plan. The final rule has both added and clarified requirements for the first two components relative to the proposal, but has provided no substantive changes in the requirements for the Site-Specific Technology Plan. Under the Comprehensive Cost Evaluation Study detailed at proposal, a facility must submit detailed engineering cost estimates to document the costs of implementing the technologies and/or operational measures in the facility's Design and Construction Plan. In the final rule, the facility must provide, in addition to the engineering cost estimates, a demonstration that the costs significantly exceed the benefits of complying with the applicable performance standards. Additional clarifications are found in the Benefits Valuation Study. In the proposed rule, a facility was required to submit (1) a description of the 41598 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations methodology used to estimate the benefits' value, (2) the basis for assumptions and quantitative estimates, and (3) an uncertainty analysis. In the final rule, EPA has retained the three submittal requirements. Under the first component, EPA has specified the categories of potential valuation estimates in the final rule, namely commercial, recreational and ecological benefits. EPA has added that a facility should include non-use benefits if applicable. To the second component, EPA has added that the basis may include a determination of entrainment "sufvivaTmhe Director appr"ovecTsuch a"' study. Requirements for the uncertainty analysis remain unchanged from proposal. In the final rule, EPA has added that a facility will be required to submit peer review of the items submitted (upon the Director's request) and a narrative description of non- monetized benefits that would result at the site if the facility was to meet applicable performance standards. In summary, the major changes in the cost-benefit analysis are as follows: • Facilities will be required to achieve an efficacy that is "as close as practicable" to performance standards and/ or restoration requirements, • Facilities will need to specifically demonstrate that costs are significantly greater than the benefits of compliance, and • Facilities will have additional requirements under the Benefits Valuation Study. VII. Basis for the Final Regulation A. Why Is EPA Establishing a Multiple Compliance Alternative Approach for Determining Best Technology Available for Minimizing Adverse Environmental Impact? Today's final rule authorizes a Phase II existing facility to choose one of five alternatives for establishing the best technology available for minimizing adverse environmental impacts at the facility. A facility may (1) demonstrate that it has reduced or will reduce its cooling water intake flow commensurate with a closed-cycle, recirculating system, and or that it has reduced, or will reduce, the maximum through- screen design intake velocity to 0.5 ft/ s or less; (2) demonstrate that its existing design and construction technologies, operational measures, and/or restoration measures meet the applicable performance standards and restoration requirements; (3] demonstrate that it has selected design and construction technologies, operational measures, and/or restoration measures that will, in combination with any existing design and construction technologies, operational measures, and/or restoration measures, meet the applicable performance standards and restoration requirements; (4) demonstrate that it will install or has installed and properly operates and maintains an approved design and construction technology; or (5) demonstrate that it has selected, installed, and is properly operating and maintaining, or will install and properly operate and maintain, design and construction technologies, operational measures, and/or restoration measures ~thartte~QirertOTii:as~dBtBrTmned to be the best technology available for the facility based on application of a specified cost-to-cost test or a cost-to- benefit test. The basis for each of the five compliance alternatives is explained in section VII.C. of this preamble. The rule establishes performance standards for the reduction of impingement mortality and entrainment. EPA established these performance standards in part based on a variety of technologies, but the rule does not mandate the use of any specific technology. These performance standards vary by waterbody type (i.e., freshwater river/stream, estuary/tidal river, ocean, Great Lake, or lake/ reservoir) and the capacity utilization rate of the facility. They may be met in whole or in part using restoration measures after demonstrating, among other things, that the facility has evaluated the use of design and construction technologies and operational measures at the site. The basis for the performance standards is explained in section VII.B. of this ~ "preamble and" Ihe basis fur the restoration requirements is explained at section VII.F. of this preamble. For a more detailed description of the rule, see sections V and IX of this preamble. These requirements reflect the best technology available for minimizing adverse environmental impact from cooling water intake structures. EPA adopted this regulatory scheme because it provides a high degree of flexibility for existing facilities to select the most effective and efficient approach and technologies for minimizing adverse environmental impact associated with their cooling water intake structures. This approach also reflects EPA's judgment that, given the wide range of various factors that affect the environmental impact posed by Phase II existing facilities, different technologies or different combinations of technologies can be used and optimized to achieve the performance standards. B. Why and How Did EPA Establish the Performance Standards at These Levels? I. Overview of Performance Standards The final rule establishes two types of performance standards, one that addresses impingement mortality and one that addresses entrainment. EPA used impingement mortality and entrainment as a metric for performance because these are primary and distinct types of harmful impacts associated with the use of cooling water intake structures (see also section IV). Both the impingement mortality and the entrainment performance standards apply to facilities demonstrating compliance under alternatives two, three, and four, described above (§125.94(a)(2), (3), and (4)). In addition, the Director's site-specific alternative requirements must be as close as practicable to the applicable performance standards under § 125.94. Performance standards for entrainment do not apply to facilities with low utilization capacity, those with a design intake flow of five percent or less of the mean annual flow of a freshwater river or stream, and those that withdraw cooling water from a lake (other than one of the Great Lakes) or reservoir because such facilities have a low propensity for causing significant entrainment impacts due to limited facility operation, low intake flow, or general waterbody characteristics. The impingement mortality performance standard requires a Phase II existing facility that complies under § 125.94(a)(2), (3), and (4) to reduce impingement mortality of all life stages of fish and shellfish by 80 to 95 percent from the calculation baseline. Both an entrainment performance standard and an impingement mortality standard apply to facilities with a capacity utilization rate of 15 percent or greater and that withdraw cooling water from a tidal river, estuary, ocean, one of the Great Lakes, as well as facilities that use cooling water from a freshwater river or stream and the design intake flow of the cooling water intake structure is greater than five percent of the mean annual flow because EPA believes that these facilities cause more significant entrainment impacts. The entrainment standard, where applicable, requires a Phase II facility to reduce entrainment of all life stages of fish and shellfish by 60 to 90 percent from the calculation baseline. 2. Basis for Performance Standards Overall, the performance standards that reflect best technology available under today's final rule are not based on a single technology but, rather, are Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41599 based on consideration of a range of technologies that EPA has determined to be commercially available for the industries affected as a whole and have acceptable non-water quality environmental impacts, except for some potential regional energy (reliability) impacts that will be minimized to the extent possible through flexible compliance options. Because the requirements implementing section 316(b) are applied in a variety of settings and to Phase II existing facilities ofrftffeTeTit1ypBS~aTrd~sT^res7Tr technology is most effective at all existing facilities, and a range of available technologies has been used to derive the performance standards. EPA developed the performance standards for impingement mortality reduction based on an analysis of the efficacy of the following technologies: (1) Design and construction technologies such as fine and wide- mesh wedgewire screens, as well as aquatic filter barrier systems, that can reduce mortality from impingement by up to 99 percent or greater compared with conventional once-through systems; (2) barrier nets that may achieve reductions of 80 to 90 percent; and (3) modified screens and fish return systems, fish diversion systems, and fine mesh traveling screens and fish return systems that have achieved reductions in impingement mortality ranging from 60 to 90 percent as compared to conventional once-through systems.Available performance data for entrainment reduction are not as comprehensive as impingement data. Ho-wevBn~atjttatic-fiiter-barrier-systemsi fine mesh wedgewire screens, and fine mesh traveling screens with fish return systems have been shown to achieve 80 to 90 percent or greater reduction in entrainment compared with conventional once-through systems. EPA notes that screening to prevent organism entrainment may cause impingement of those organisms instead. 3. Discussion of Key Aspects of Performance Standards The performance standards at § 125.94(b)(l),(2), and (3) are based on the type of waterbody in which the intake structure is located, the volume of water withdrawn by a facility, and the facility capacity utilization rate. Under the final rule, EPA has grouped waterbodies into five categories: (1) Freshwater rivers or streams, (2) lakes or reservoirs, (3) Great Lakes, (4) tidal rivers and estuaries, and (5) oceans. The Agency considers location, one aspect of which is waterbody type, to be an important factor in addressing adverse environmental impact caused by cooling water intake structures. Because different waterbody types have the potential for different adverse environmental impacts, the requirements to minimize adverse environmental impact vary by waterbody type. The reproductive strategies of tidal river and estuarine species, together with other physical and biological characteristics of those waters, make waterbodies to impacts from cooling water intake structures (66 FR 288857- 288859; 68 FR 17140). In contrast, many aquatic organisms found in non-tidal freshwater rivers and streams are less susceptible to entrainment due to their demersal (bottom-dwelling) nature and the fact that they do not typically have planktonic (free-floating) egg and larval stages (66 FR 28857; 68 FR 17T40). Comments on the proposed Phase II existing facility rule also acknowledge that waterbody type is an important factor in assessing the impacts of cooling water intake structures, although some commenters preferred a site-specific approach, and others maintained that all waters deserve the most rigorous technology. A number of States supported EPA's proposed approach. Absent entrainment control technologies, entrainment at a particular site is generally proportional to intake flow at that site. As discussed above, EPA believes it is reasonable to vary performance standards by the potential for adverse environmental impact in a -waterbody-typBT-EPA-rs-Hmiting the requirement for entrainment controls in fresh waters to those facilities that withdraw the largest proportion of water from freshwater rivers or streams because they have the potential to impinge and entrain larger numbers of fish and shellfish and therefore have a greater potential to cause adverse environmental impact. EPA is not requiring entrainment reductions in freshwater rivers or streams where facilities withdraw 5 percent or less of the source water annual mean flow because such facilities generally have a low propensity for causing significant entrainment impacts due to the low proportion of intake flow in combination with the characteristics of the waterbody. There are additional performance standards for facilities withdrawing from a lake (other than one of the Great Lakes) or a reservoir. If such a facility proposes to increase the design intake flow of the cooling water intake structure, the increase in total design intake flow must not disrupt the natural thermal stratification or turnover pattern of the source water except in cases where the disruption does not adversely affect the management of fisheries § 125.94(b)(3)(iii)). The natural thermal stratification or turnover pattern of a lake is a key characteristic that is potentially affected by the intake flow (which can alter temperature and/or mixing of cold and warm water layers) and location of cooling water intake structures within such waterbodies. Cooling water intake structures withdrawing from the Great Lakes are required to reduce fish and shellfish impingement mortality by 80 to 95 percent and to reduce entrainment by 60 to 90 percent. As described in the Phase I proposed rule (65 FR 49086) and NODA (66 FR 28858), EPA believes that the Great Lakes are a unique system that should be protected to a greater extent than other lakes and reservoirs. Similar to oceans, large lakes such as the Great Lakes can possess estuarine-like environments in the lower reaches of tributary streams. For example, within the U.S., a total of 1,370 distinct coastal wetlands fringe the Great Lakes and the channels that connect the lakes. (2- 016A Herdendorf, C.E. Great Lakes estuaries. Estuaries, 13(4): 493-503. 1990, pg. 493). The Agency is therefore specifying entrainment controls as well as impingement mortality controls for the Great Lakes. EPA has not applied the entrainment performance standard to lakes other than the Great Lakes because, in general, these waterbodies contain aquatic organisms that tend to be less impacted by entrainment than organisms in estuaries or fresh water rivers or streams. The performance standards for facilities with cooling water intake structures located in a tidal river or estuary and with a capacity utilization rate of 15 percent or greater are to reduce impingement mortality by 80 to 95 percent and entrainment by 60 to 90 percent for fish and shellfish. As discussed previously, EPA believes estuaries and tidal rivers are more susceptible than other waterbodies to adverse impacts from impingement and entrainment. The performance standards for facilities with cooling water intake structures located in an ocean are to reduce impingement mortality by 80 to 95 percent and entrainment by 60 to 90 percent for fish and shellfish. EPA is establishing requirements for facilities withdrawing from oceans that are similar to those for tidal rivers and estuaries because the coastal zone of oceans (from which coastal cooling water intake structures withdraw water) 41600 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations are highly productive areas for fish and shellfish. (See the Phase I proposed rule (65 FR 45060) and documents in the record for the Phase I new facility rule (Docket # W-00-03) such as 2-01 3 A through O, 2-019A-R11, 2-019A-R12, 2-019A-R33, 2-019A-R44, 2-020A, 3- 0059). EPA is also concerned about the extent to which fishery stocks that rely for habitat are overutilized and seeks to minimize the impact that cooling water intake structures may have on these species or forage species on which these fishery stocks may depend. Recent data demonstrate that approximately 78% of the fish stocks managed by the National Oceanic and Atmospheric Administration's National Marine Fishery Service (NMFS) are fully exploited, overfished, or collapsed (America's Living Oceans: Charting a Course for Sea Change, Pew Oceans Commission, June 4, 2003). (See 0/50 documents 2-019A-R11, 2-019A-R12, 2-019A-R33, 2-019A-R44, 2-020A, 2- 024A through O, and 3-0059 through 3- 0063 in the record of the Final New Facility Rule (66 FR 65256), Docket # W-00-03). In accordance with the Phase II rule, facilities that operate with a capacity utilization rate of less than 15 percent are subject to the performance standard for impingement mortality only. EPA is not requiring, in today's rule, that these facilities control entrainment. EPA has . several reasons fnr this. First, EPA has __ determined that entrainment control technology is not economically practicable in view of the reduced operating levels of these facilities. These facilities also tend to operate most often in mid-winter or late summer, which are times of peak energy demand but periods of generally low abundance of entrainable life stages of fish and shellfish. Finally, the total volume of water withdrawn by these facilities is significantly lower than for facilities operating at or near peak capacity, and as noted above, entrainment at a site is generally proportional to flow, absent entrainment controls. Consequently, EPA determined that it was neither necessary nor cost-effective for these facilities to reduce entrainment where the total volume of water withdrawn and the number of organisms that would be protected from entrainment is likely to be small. EPA is also allowing facilities with multiple, distinct cooling water intakes that are exclusively dedicated to different generating units to determine capacity utilization and applicable performance standards - -separatery-fereacfa mtake-fertfae-same- ------ As in the Phase I rule, EPA is setting performance standards for minimizing adverse environmental impact based on a relatively easy to measure and certain metric—reduction of impingement mortality and entrainment. Although adverse environmental impact associated with cooling water intake structures can extend beyond -TrrrphTgenrent^anTr emrairmrent, EPA has chosen this approach because impingement and entrainment are primary, harmful environmental effects that can be reduced through the use of specific technologies. In addition, where other impacts at the population, community, and ecosystem levels exist, these will also be reduced by reducing impingement and mortality. Using impingement mortality and entrainment as a metric provides certainty about performance standards and streamlines, and thus speeds, the issuance of permits. EPA is expressing the performance standard in the form of ranges rather than a single performance benchmark because of the uncertainty inherent in predicting the efficacy of any one of these technologies, or a combination of these technologies, across the spectrum of facilities subject to today's rule. The lower end of the range is being established as the percent reduction that EPA, based on the available efficacy data, expects all facilities could eventually achieve if they were to implement and optimize available de«grraTtd-corrstmdrorrtecrmologies and operational measures on which the performance standards are based. (See Chapter 4, "Efficacy of Cooling Water Intake Structure Technologies," of the Phase II Existing Facility Technical Development Document, EPA-821-R- 04-007, February 2004. Also, seeEPA's 316(b) technology efficacy database, DCN 6-5000.) The lower end of the range also reflects, in part, higher mortality rates at sites where there may be more fragile species that may not have a high survival rate after coming in contact with fish protection technologies at the cooling water intake structure (e.g., fine mesh screens). The higher end of the range is a percent reduction that available data show many facilities can and have achieved with the available technologies upon which the performance standards are based.In specifying a range, EPA anticipates that facilities will select the most cost- effective technologies or operational measures to achieve the performance level (within the stated range) based on conditions found at their site, and that Directors will review the facility's applica-tion-to-ensttre-ihat-appropriate alternatives were considered. Proper selection, operation, and maintenance of these technologies would serve to increase potential efficiencies of the technologies. EPA also expects that some facilities may be able to meet these performance requirements by selecting and implementing a suite (i.e., more than one) of technologies and operational measures and/or, as discussed in this section, by undertaking restoration measures. Several additional factors support EPA's expectation that the impingement mortality and entrainment reduction reflected in the performance standards can eventually be achieved by all facilities using the design and construction technologies and measures on which the standards were based. First, a significant portion of the available performance data reviewed is from the 1970s and 1980s (when section 316(b) was initially implemented) and does not reflect recent developments, innovations (e.g., aquatic filter barrier systems, sound barriers), or experience using these technologies. These data, developed during early implementation of the CWA, do not fully reflect today's improved understanding of both how the various control technologies work and the various factors that reflect what constitutes and how to measure healthy aquatic conditions. Second, these conventional barrier and return system technologies have not been optimized on a widespread level to date, as would be encouraged by this rule. Available information indicates that facilities that use these cooling water intake structure technologies often achieve better results from the technologies through adjusting which technologies are applied and how they are used. Such optimization, which also benefits from the advances in understanding noted above, would be promoted under this rule as facilities work to achieve the performance standards. Third, EPA believes that some facilities could achieve further reductions (estimated at 15-30 percent) in impingement mortality and entrainment by providing for seasonal flow restrictions, variable speed pumps, systems conversions to closed-cycle, recirculating systems, and other operational measures and innovative flow reduction alternatives. Such operational measures could be used to supplement design and construction technologies where necessary to meet the performance standards. Facilities also could benefit from combining inexpensive technologies as a "suite." For additional discussion, see chapter 4 in the Phase II Existing Facility Technical Development Document. The calculation baseline used to determine compliance with Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41601 performance standards is defined in § 125.93 as an estimate of impingement mortality and entrainment that would occur at a site assuming (1) the cooling -wat-er-systeflvh«d-heeft-designed-as-a once-through system; (2) the opening of the cooling water intake structure is located at, and the face of the standard3/a-inch mesh traveling screen is oriented parallel to, the shoreline near the surface of the source waterbody; and (3) the baseline practices and procedures are those that the facility would maintain in the absence of any operational controls, including flow or velocity reductions, implemented in whole or in part for the purposes of reducing impingement mortality and entrainment. In addition, the facility may choose to use the current level of impingement mortality and entrainment as the calculation baseline. EPA's definition also clarifies the range of available information sources for the baseline. The calculation baseline may be estimated using: historical impingement mortality and entrainment data from the facility or from another facility with comparable design, operational, and environmental conditions; current biological data collected in the waterbody in the vicinity of the facility's cooling water intak"e"structure; or current impingement mortality and entrainment data collected at the facility. Further, a facility may request that the calculation baseline be modified to be based on a location of the opening of the cooling water intake structure at a depth other than at or near the surface if it can demonstrate to the Director that the other depth would correspond to a higher baseline level of impingement mortality and/or entrainment. EPA decided to use this definition because it represents the most common default conditions the Agency could identify to give facilities credit for design and construction technologies, operational measures, and/or restoration measures that they have already implemented to minimize adverse environmental impact, while providing a clear and relatively simple definition. Based on comments received on the Phase II NODA, this calculation baseline definition includes additional criteria that EPA has added to provide clarity to the analysis. (Proposed changes to the calculation baseline were discussed in the Phase II NODA, see fi8 FR 1 3580). In many cases, existing technologies at the site show some reduction in impingement and entrainment when compared to this baseline. In such cases, impingement mortality and entrainment reductions (relative to the calculated baseline) achieved by these existing technologies should be counted toward compliance with the performance standards. In addition, operational --measures-such as-operation-of traveling screens, employment of more efficient return systems, and even locational choices should be credited for any corresponding reduction in impingement mortality and entrainment. See section IX of this preamble for a discussion of how the calculation baseline is used to compare facility performance with the rule's performance standards. C. What Is the Basis for the Five Compliance Alternatives That EPA Selected for Establishing Best Technology Available? I. Meeting Performance Standards Through Reducing Intake Flow Commensurate With a Closed Cycle Recirculating System or Reduced Design Intake Velocity Under § 125.94(a)(l)(i), any facility that reduces its flow to a level commensurate with a closed-cycle, recirculating cooling system meets the performance standards in today's rule because such a reduction in flow is deemed to satisfy any applicable impingement mortality and entrainment "~p~ei*foTnrrance~standards for^fr waterbodies. Facilities that select this compliance alternative either through the use of closed-cycle recirculating system technology at the plant, or by retrofitting their facility, will not be required to further demonstrate that they meet the applicable performance standards. Similarly, under 125.94(a)(l)(ii), any facility that reduces its design intake velocity to 0.5 ft/s or less is deemed to have met the performance standards for impingement mortality and is not required to demonstrate further that it meets the performance standards for impingement mortality. Available data described in Chapter 3 of the Phase II Existing Facility Technical Development Document suggest that closed-cycle, recirculating cooling systems (e.g., cooling towers or ponds) can reduce mortality from impingement by up to 98 percent and entrainment by up to 98 percent when compared with conventional once- through systems.44 Although closed- cycle, recirculating cooling is not one of the technologies on which the performance standards are based, use of a closed-cycle, recirculating cooling system would always achieve the performance standards and therefore, facilities that reduce their flow commensurate with closed-cycle, recirculating cooling systems are deemed to have met performance standards. The rule, at § 124.94(a)(l)(i), thus establishes a compliance alternative based on the use of a closed- cycle, recirculating cooling system. While EPA based the requirements of the new facility rule on the performance standards of closed-cycle recirculating systems, EPA has determined that this technology is not economically practicable for many existing Phase II facilities. EPA is nonetheless aware that some existing facilities have installed this highly effective technology and has thus provided a streamlined alternative for such facilities. Additionally, EPA established a compliance alternative that allows facilities to reduce intake velocity to meet the impingement mortality performance standards. As EPA discussed in the proposed rule at 67 FR 17151 and Phase I final rule at 66 FR 65274, intake velocity is one of the key factors that can affect the impingement of fish and other aquatic biota, since in the immediate area of the intake it exerts a direct physical force against which fish and other organisms must act to avoid impingement and entrainment. As discussed in that notice, EPA compiled data from three swim speed studies (University of Washington study, Turnpenny, and EPRI) and these data indicated that a 0.5 ft/s velocity would protect at least 96 percent of the tested fish. As further discussed, EPA also identified federal documents (Boreman, DCN 1-5003-PR; Bell (1990); and National Marine Fisheries Service (NMFS), (1997)), an early swim speed and endurance study performed by Sonnichsen et al. (1973), and fish screen velocity criteria that are consistent with this approach. 44 Reducing the cooling water intake structure's "capacity is oneTofthe nidsreffecTiveTmeans of educing entrainment (and impingement). For the raditional steam electric utility industry, facilities ocatecl in freshwater areas that have closed-cycle ecirculating cooling water systems can, depending n the quality of the make-up water, reduce water se by 96 to 98 percent from the amount they would use if they had once-through cooling water systems. Steam electric generating facilities that have closed-cycle, recirculating cooling systems using salt water can reduce water usage by 70 to 96 percent when make-up and blowdown flows are minimized. The lower range of water usage would be expected where State water quality standards limit chloride to a maximum increase of 10 percent over background and therefore require a 1.1 cycle of concentration. The higher range should be attainable where cycles of concentration up to 2.0 are used for the design. 41602 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 2. Meeting Performance Standards Construction Technologies, Operational Measures, and/or Restoration Measures Under the second and third compliance alternatives (§ 125.94(a)(2) and (3)), a facility may either demonstrate to the Director that the facility's existing design and construction technologies, operational measures, and/or restoration measures already meet the minimum performance standards specified under § 125.94(b) and (c), or that it has selected design and construction technologies, operational measures, and/or restoration measures or some combination thereof that will meet these performance standards. Available data indicate that, when considered as a suite of technologies, barrier and fish handling technologies are available on a national basis for use by Phase II existing facilities. These technologies exist and are in use at various Phase II facilities and, thus, EPA considers them collectively technologically achievable. In addition, 50 percent of the potentially regulated facilities that do not already have _____ closed-cycle cooling systems have some other technology in place that reduces impingement or entrainment. In turn, a large subset of these facilities (33 percent) also have fish handling or return systems that reduce the mortality of impinged organisms. The fact that these technologies are collectively available means that one or more technologies within the suite is available to each Phase II facility. EPA finds that the design and construction technologies necessary to meet the requirements are commercially available and economically practicable for existing facilities, because facilities can and have installed many of these technologies years after a facility began operation. Typically, additional design and construction technologies such as fine mesh screens, wedgewire screens, fish handling and return systems, and aquatic filter fabric barrier systems can be installed during a scheduled outage (operational shutdown). Referenced below are examples of facilities that installed these technologies after they initially started operating. facility (gas-fired steam), Lovett is located in Tomkins Cove, New York, along the Hudson River. The facility first began operations in 1949 and has three generating units with once- through cooling systems. In 1994, Lovett began the testing of an aquatic filter barrier system to reduce entrainment, with a permanent system being installed the following year. Improvements and —additions-were-made-to-the-system in 1997, 1998, and 1999, with some adjustments being accepted as improvements of this vendor's technology for all subsequent installations at other locations. Big Bend Power Station. Situated on Tampa Bay, Big Bend is a 1998 MW (coal-fired steam) facility with four generating units. The facility first began operations in 1970 and added generating units in 1973, 1976, and 1985. Big Bend supplies cooling water to its once-through cooling water systems via two intake structures. When the facility added Unit 4 in 1985, regulators required the facility to install additional intake technologies. A fish handling and return system, as well as a fine-mesh traveling screen (used only during months with potentially high entrainment rates), were installed on the intake structure serving both the new Unit 4 and the existing Unit 3. Salem Generating Station. A 2381 MW facility (nuclear), Salem is located on the Delaware River in Lower Alloways Creek Township, New Jersey. The facility has two generating units, hnth nf wbirb use nnrfi-thrmigh rnnling and began operations in 1977. In 1995, the facility installed modified Ristroph screens and a low-pressure spray wash with a fish return system. The facility also redesigned the fish return troughs to reduce fish trauma. Chalk Point Generating Station. Located on the Patuxent River in Prince George's County, Maryland, Chalk Point has a capacity of 2647 MW (oil-fired steam). The facility has four generating units and uses a combination of once- through and closed-cycle, recirculating cooling systems (two once-through systems serving two generating units and one recirculating system with a tower serving the other two generating units). In 1983, the facility installed a barrier net, followed by a second net in 1985, giving the facility a coarse mesh (1.25") outer net and a fine mesh (.75") inner net. The barrier nets are anchored to a series of pilings at the mouth of the intake canal that supplies the cooling water to the facility and serve to reduce both entrainment and the volume of trash taken in at the facility. 3. Meeting Performance Standards Through UseTot an Approved Design and Construction Technology Under the fourth compliance alternative, a facility can demonstrate that it meets specified conditions and that it has installed and properly operates and maintains a pre-approved technology. EPA is approving one technology at this time: submerged cylindrical wedgewire screen technology to treat the total cooling water intake flow. There are five conditions that must be met in order to use this technology to comply with the rule: (1) The cooling water intake structure is located in a freshwater river or stream; (2) the cooling water intake structure is situated such that sufficient ambient counter currents exist to promote cleaning of the screen face; (3) the through screen design intake velocity is 0.5 ft/s or less; (4) the slot size is appropriate for the size of eggs, larvae, and juveniles of any fish and shellfish to be protected at the site; and (5) the entire main condenser cooling water flow is directed through the technology (small flows totaling less than two MGD for auxiliary plant cooling uses are excluded). Directors are explicitly authorized in § 125.99 to pre- approve other technologies for use at facilities with other specified characteristics within their respective jurisdiction after providing the public with a notice and an opportunity to comment on the request for approval of the technology. The Director's authority to pre-approve other technologies is not limited to technologies for use by facilities located on freshwater rivers and streams. EPA has adopted this compliance alternative in response to comments that suggested that EPA provide an additional, more streamlined compliance option under which a facility could implement certain specified technologies that are deemed highly protective in exchange for reducing the scope of the Comprehensive Demonstration Study. (See 68 FR 13522, 13539; March 19, 2003). EPA evaluated the effectiveness of specific technologies using the impingement mortality and entrainment reduction performance standards as assessment criteria. The technology selected for the approved technology option has a demonstrated ability to reduce impingement mortality by 80 to 95 percent for fish and shellfish and, if required, reduce entrainment by 60 to 90 percent for any stages of fish and shellfish at facilities that meet the conditions specified in section 125.99(a). Thus, the technology has a demonstrated ability to meet the most stringent performance standards that would apply to any facility situated on a freshwater river or stream. (See DCN 1-3075, 1-5069, 1-5070, 3-0002, and 4- 4002B. Also see, DCN 6-5000 and Chapter 3 of the Technical Development Document.) Because cylindrical wedgewire screens are believed to be effective when deployed under the FHdBrat-Register/-Vuh-697"NDnr3±T'-Friciay7 jTily 9, 2004/Rules and Regulations 41603 specified conditions and properly maintained, facilities that select this compliance option are provided substantially streamlined requirements for completing the Comprehensive Demonstration Study. However, facilities selecting this option are still required to prepare a Technology Installation and Operation Plan to monitor the effectiveness of the technology at their site in meeting the performance standards. 4. Site-Specific Determination of Best Technology Available To Minimize Adverse Environmental Impact A facility may comply with the rule by seeking a site-specific demonstration of the best technology available to minimize adverse environmental impact by demonstrating, to the Director's satisfaction, that its cost of complying with the applicable performance standards would be significantly greater than the costs considered by EPA for a like facility when establishing such ~"peiformanctrstaTKtardsrtJi"that its costs would be significantly greater than the benefits of complying with such performance standards at the facility. (See sections 125.94(a)(5)(i) and (ii)). If a facility satisfies one of the two cost tests in § 125.94(a)(5), then the Director must establish site-specific alternative requirements based on design and construction technologies, operational measures, and/or restoration measures that achieve an efficacy that is, in the judgment of the Director, as close as practicable to the applicable performance standards without resulting in costs that are significantly greater than either the costs considered by the Administrator in establishing the applicable performance standards, or the benefits at the facility. In establishing the performance standards in 125.94(b) and the compliance alternatives in sections 125.94(a)(lH4), EPA considered several factors, including efficacy, availability, ease of implementation, indirect effects, the costs that EPA expects all existing facilities to incur (national costs) and the benefits if all existing facilities meet the performance standards (national benefits). This provision for alternative requirements is included in the rule to give facilities flexibility to demonstrate that the best technology available to minimize adverse environmental impact at their particular sites may be less stringent than would otherwise be achieved if the facility selected one of the compliance alternatives in sections 125.94(a)(l)-(4). (For a discussion of EPA's legal authority to authorize compliance with alternative requirements based on this cost-cost comparison, see Section VIII. I.). a. Basis of the Cost-Cost Test For a number of related reasons, EPA chose to use a comparison of a facility's actual costs to the costs EPA estimated that facility would incur to meet the national performance standards (a "cost- cost test") as a basis for obtaining a site- specific determination of best technology available. EPA's record for this rule shows that, for the category of existing facilities as a whole, today's rule is technically achievable and economically practicable. Although EPA collected more information for this rulemaking than is typical for an effluent limitation guideline rulemaking, detailed information on some factors important to the effectiveness and costs of the technologies, such as debris loading and the presence of navigational channels within the waterbody at which cooling water intakes are sited, was not requested. Moreover, the information EPA used to develop its costs was in some cases limited by the fact that, while EPA sent surveys to all facilities covered under today's rule, only 42% were sent detailed questionnaires. The remaining 58% only received a short technical questionnaire which requested minimal characterization information. Also, EPA may not have elicited information regarding characteristics of a particular facility that, if known would have either significantly changed EPA's national cost estimates or demonstrated that none of the technologies on which the categorical requirements are based are economically achievable by the facility. Similarly, existing facilities have less flexibility than new facilities in selecting the location of their intakes and technologies for minimizing adverse environmental impact, and therefore it may be difficult for some facilities to avoid costs much higher than those EPA considered when establishing the performance standards. The cost-cost site-specific alternative ensures that the overall rule remains economically practicable for facilities subject to today's rule. In short, for certain facilities EPA may not have anticipated some site-specific costs or the costs for retrofit may exceed those EPA considered. Despite EPA's best effort, such costs are difficult to estimate in a national rule. Because of the wide range of available technologies considered and a number of site-specific factors that may significantly affect the cost and practicability of installing particular technologies at particular sites, the site-specific uncertainty in the cost estimates is higher than for an effluent limitations guidelines rulemaking. Thus, EPA may not have anticipated all site-specific costs that a facility could incur. In addition, existing facilities have less flexibility than new facilities in selecting the location of their intakes and technologies for minimizing adverse environmental impact and, therefore, it may be difficult for some facilities to avoid costs much higher than those EPA considered when establishing the performance standards in the rule. For all of these reasons, EPA believes that the cost-cost site-specific compliance alternative is necessary to ensure that the rule is economically practicable for existing Phase II facilities. In order to ensure that this alternative provides only the minimum relaxation of performance standards that is needed to make the rule economically practicable, § 125.94(a)(5)(i) requires that the site-specific requirements achieve an efficacy that is as close as practicable to the applicable performance standards without resulting in costs that are significantly greater than those considered by the Administrator for a like facility when establishing the performance standards. b. Basis of the Cost-Benefit Test EPA decided to use a comparison of a facility's costs to the benefits of meeting the performance standards at the facility (a "cost-benefit test") as another basis for obtaining a site- specific determination of BTA to minimize adverse environmental impact. Section 316(b) authorizes consideration of the environmental benefit to be gained by requiring that the location, design, construction, and capacity of cooling water intake structures reflect the best economically practicable technology available for the purpose of minimizing adverse environmental impact. Accordingly, in determining that the technologies on which EPA based the compliance alternatives and performance standards are the best technologies available for existing facilities to minimize adverse environmental impact, EPA considered the national cost of those technologies in comparison to the national benefits— i.e., the reduction in impingement and entrainment that EPA estimated would occur nationally if all existing facilities selected one of the compliance options in sections 125.94(a)(l)-(4). While EPA believes that there is considerable value in promulgating national performance standards under section 316(b) based on what EPA determines, on a national basis, to be the best technology available to minimize adverse environmental impacts, EPA also recognizes that, at 41604 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations times, determining what is necessary to minimize adverse environmental impacts can necessitate a site-specific inquiry. EPA's comparison of national costs to national benefits may not be applicable to a specific site due to variations in (1) the performance of intake technologies and (2) characteristics of the waterbody in which the intake(s) are sited, including the resident aquatic biota. For example, there may be some facilities where the absolute numbers offish and shellfish impinged and entrained is so minimal that the cost to achieve the required percentage reductions would be significantly greater than the benefits of achieving- the-reqtitred-reditetietts-at-tliat" particular site. More specifically, because of the location of the intake, the characteristics of a particular waterbody, or the behavioral patterns of the fish or shellfish in that particular waterbody, there may be little or no impingement mortality or entrainment occurring at the site (see Neal Generating Complex facility example provided in section IV of this preamble]. For such a facility, the cost of reducing an already small amount of impingement mortality and entrainment by 80 to 95 percent and 60 to 90 percent, respectively, may be significantly greater than the benefits. In short, it may not be cost-effective and, therefore may be economically impracticable for a facility to achieve percentage reductions when attempting to save a small number of fish or shellfish. Thus, in a waterbody that is already degraded, very few aquatic organisms may be subject to impingement or entrainment, and the costs of retrofitting an existing cooling water intake structure may be significantly greater than the benefits of "cToing soTB^equTrmg be¥tntecrmology available to minimize adverse environmental impact, section 316(b) invites a consideration of both technology and of environmental conditions, including the potential for adverse impacts, in the receiving waterbody. EPA believes it is a reasonable interpretation of the statute to allow the Director to consider the results of meeting the performance standards in terms of reducing environmental impacts (i.e., the benefits) in cases where the costs of installing the technology are significantly greater than the reduction in environmental impacts would warrant. As with the cost-cost site- specific provision, EPA also wants to ensure that any relaxation of the performance standards be the minimum necessary to ensure that the costs are not significantly greater than the benefits. Section 125.94(a)(5)(i) thus provides that alternative site-specific requirements must achieve an efficacy that is as close as practicable to the applicable performance standards without resulting in costs that are significantly greater than the benefits of meeting the performance standards at the facility. D. How Has EPA Assessed Economic Practicability? The legislative history of section 316(b) indicates that the term "best technology available" should be interpreted as "best technology avatteble-eemmereially-at-afl economically practicable cost."45 This position reflects congressional concern that the application of best technology available should not impose an impracticable and unbearable economic burden. Thus, EPA has conducted extensive analyses of the economic impacts of this final rule, using an integrated energy market model (the IPM45). For a complete discussion of this analysis, please refer to section XI. B.I of this preamble or Chapter B3 of the Economic and Benefits Analysis (EBA) in support of this final rule (DCN 6-0002). EPA believes that the requirements of this rule reflect the best technology available at an economically practicable cost. EPA examined the effects of the rule's compliance costs on capacity, generation, variable production costs, prices, net income, and other measures, both at the market and facility levels. In addition, the other economic analyses conducted by EPA showed that the costs for this rule are economically practicable. consideration of the relationship of costs to environmental benefits is an important component of economic practicability. As discussed in section VIII.C of the proposed Phase I rule (65 FR 49094) EPA has long recognized that there should be some reasonable relationship between the cost of cooling water intake structure control technology and the environmental benefits associated with its use. As the preamble to the 1976 final rule implementing section 316(b) stated, neither the statute nor the legislative history requires a formal or informal cost-benefit assessment (41 FR 17387; April 26, 1976). 43 See lltt CONG. REG 33,762 (1972). reprinted in 1 Legislative History of the Water Pollution Control Act Amendments of 1072, at 264 (1973) (Statement of Representative Don H. Clausen). E. What Were the Major Options Considered for the Final Rule and Why Did EPA Reject Them? EPA considered a number of options for determining the best technology available to minimize adverse environmental impact at Phase II existing facilities and assessed these options based on overall efficacy, availability, economic practicability, including economic impact and the relationship of costs with benefits, and non-water quality environmental impacts, including energy impacts. Under the options EPA considered, facilities would be allowed to implement restoration measures to meet the performance standards. Similarly, any options considered also would allow facilities to request alternative, less stringent, requirements if the Director had determined that data specific to the facility indicated that compliance with the relevant requirement would result in compliance costs significantly greater than those EPA considered in establishing the applicable requirement, or compliance costs significantly greater than the benefits of complying with the applicable performance standards. The alternative requirements would be no less stringent than justified by the significantly greater cost or the significant adverse impacts on local air quality or local energy markets. EPA also considered several site-specific approaches to establishing best technology available. These include the site-specific sample rule discussed at 67 FR 17159, an alternative based on EPA's 1977 Draft Guidance, and alternatives suggested by the Utility Water Act Group (UWAG) and Public Service Electric and Gas Company (PSEG), respectively (see 67 FR 17162). EPA's reasons for not adopting these site specific alternatives are discussed in section VILE.5 of this preamble. The five major technology options EPA considered but did not select for the final rule are discussed in greater detail in the next section. Finally, the costs and benefits presented below are those developed at proposal because these estimates are most useful for purposes of comparison. Subsequent analyses, such as those presented in the NODA, have resulted in higher cost estimates in general, but did not alter the relative ranking of these options as EPA made determinations regarding the final rule. Rather, these analyses indicated that the costs for options that would have required more extensive retrofitting efforts than the final rule are even higher relative to the costs of the final Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41605 rule than they were estimated to be at proposal. 1. Intake Capacity Commensurate With Closed-Cycle, Recirculating Cooling System for All Facilities EPA considered a regulatory option that would have required Phase II existing facilities with a design intake flow 50 MGD or more to reduce the total design intake flow to a level, at a minimum, commensurate with that which can be attained by a closed-cycle recirculating cooling system using minimized make-up and blowdown flows. In addition, facilities in specified circumstances (e.g., located where additional protection is needed due to concerns regarding threatened, endangered, or protected species or habitat; or regarding migratory, sport or commercial species of concern) would have had to select and implement additional design and construction technologies to minimize impingement mortality and entrainment. This option would not have distinguished between facilities on the basis of the waterbody type from which they withdraw cooling water. Rather, it would have required that the same stringent controls be the nationally applicable minimum for all waterbody types. This is the basic regulatory approach EPA adopted for new facilities at 40 CFR 125.80. EPA did not select a regulatory scheme based on the use of closed- cycle, recirculating cooling systems at existing facilities based on its generally high costs (due to conversions), the fact that other technologies approach the performance of this option, concerns for energy impacts due to retrofitting existing facilities, and other considerations. Although closed-cycle, recirculating cooling water systems serve as the basis for requirements applied to Phase I new facilities, for Phase II existing facilities, a national requirement to retrofit existing systems is not the most cost-effective approach and at many existing facilities, retrofits may be impossible or not economically practicable. EPA estimates that the total capital costs for individual high-flow plants (i.e., greater than 2 billion gallons per day) to convert to wet towers generally ranged from $130 to $200 million, with annual operating costs in the range of $4 to $20 million (see TDD; DCN 6-0004). For purposes of general comparison, EPA estimated that capital and installation costs for cooling towers under the Phase I rule would range from approximately $170,000 to $12.6 million per plant (annualized), depending on flow. At proposal, EPA estimated that the total social cost of compliance for this option for Phase II existing facilities would be approximately $3.5 billion per year.It is significant to note, however, that EPA's estimates did not fully incorporate costs associated with acquiring land needed for cooling towers and, therefore, these estimates may not fully reflect the costs of the option. For example, based on a survey conducted by one industry commenter, EPA learned that 31 out of 56 plants surveyed said that they would need to acquire additional property to accommodate cooling towers, if required by today's rule. EPA recognizes . lliat lhis,£Qiilibe_fl_signifkant .cost. EPA also recognizes that there may be impediments, irrespective of costs, to acquiring land for cooling towers. Land upon which to construct cooling towers may be difficult or impossible to obtain, especially in urban areas; some facilities might even turn to displacement of wetlands as a solution. The Agency did not include these potential costs in its analysis for the NODA or proposal. In contrast to new facilities, which can take into account the Phase I requirements when choosing where to situate their structures (including cooling towers), existing facilities have far less flexibility and incur far greater costs. EPA believes that this is a special problem for existing facilities that is relevant to determining whether, as a national categorical matter, closed-cycle cooling is the best technology available for existing facilities for minimizing adverse environmental impacts associated with cooling water intake structures. EPA received retrofit cost estimates from a number of commenters that indicate that such costs could be at least twice those projected by EPA. Another issue concerns the energy impacts of cooling towers. EPA examined the information it received after publication of the proposed rule and NODA, and agrees that the energy penalty associated with cooling towers, together with other factors, indicates that this technology is not the best technology available for existing facilities for minimizing adverse environmental impacts associated with cooling water intake structures. In reaching this conclusion, EPA relied on energy penalty information provided by the U.S. Department of Energy. EPA worked closely with the U.S. Department of Energy in preparing today's rule because of their expertise in power plant operations and engineering. The U.S. Department of Energy pointed out to EPA that existing fossil-fuel facilities converting from once-through cooling water systems to wet-cooling towers would produce 2.4 percent to 4.0 percent less electricity even while burning the same amount of coal. For at least one nuclear power plant, which provides 78% of the electricity consumed by the State of Vermont, the energy penalty associated with converting to cooling towers was estimated to be 5.3 percent. Expressed differently, DOE estimated that nationally, on average 20 additional 400-MW plants might have to be built to replace the generating capacity lost by replacing once-through cooling systems with wet cooling towers if such towers were required by all Phase II facilities. This energy penalty leads to other negative consequences. Because this deficit is predicted to occur during the summer months (when energy demand is highest), the net effect would be more consumption of fossil fuel, which in turn increases the emission of sulfur dioxide, NOx, particulate matter, mercury and carbon dioxide. Increasing fuel consumption at existing coal power plants yields the largest increase in air emissions because existing systems are less efficient at producing power (and therefore burn more coal) and because they generally have less air pollution control equipment in place. EPA believes that it is reasonable to consider these non-water quality environmental impacts and the additional costs associated with controlling these increased emissions in making today's decision. EPA further believes that it is authorized to do so because of the links between § 316(b) and sections 301 and 306, which require EPA to consider both the energy impacts and the air pollution impacts of technologies when identifying technologies in the effluent guidelines context. See CWA section 304{b)(2)(B) (cross-referenced in § 301); CWA section 306(b)(l)(B) (new source performance standards). Some commenters also assert that EPA underestimated the down time that the facility would experience as it converts to cooling towers. This, again, is not an impact that would be experienced by new facilities. EPA agrees that such down time can be significant. Indeed, one of the four retrofit case studies EPA developed indicated a down time of 10 months, and EPA believes it is reasonable to infer that many other facilities would experience the same loss. EPA also agrees with the commenters who assert that the empirical data base of four retrofit cases to which EPA compared cooling tower retrofit costs and engineering characteristics is not representative of the broader population of facilities and could be too narrow a set from which to develop national costs that would be applicable to a wide range 41606 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations of facilities. Of the four retrofits EPA studied, two were in a single state (South Carolina), none were located along a coast, and only one generated more than 500 MW of electricity. EPA also recognizes that all of these conversions were performed before 1992. While it is true that the vast majority of the new, greenfield utility aiidnon-utTlity combined cycle plants built in the past 20 years have wet cooling towers, EPA believes that it is significant that so few existing facilities retrofitted to the technology during the same period. The rarity of this technology as a retrofit further indicates that it is not economically practicable for the vast majority of existing facilities. EPA also considered several additional points made by commenters in rejecting this option. Some commenters asserted that certain facilities with closed-cycle, recirculating cooling systems often need to address the impacts of cooling tower plumes, and subsequent fog and icing in metropolitan areas, and noise abatement. Commenters also asserted that the costs of retrofitting and operating such systems at facilities which do not now have them is disproportionate to the potential benefits derived, particularly given the similarity in the level of protection provided under this option (all facilities required to reduce flow commensurate system) and the final rule. Finally, they stated that the need for flexibility in a rule pertaining to existing facilities is critical to allow facility owners a range of options to meet the fish protection requirements. EPA does not agree that in all cases the costs of retrofitting a closed-cycle cooling water system is disproportionate to the benefits derived. Nevertheless, EPA recognizes that these concerns have merit for many facilities and that the validity and extent of such concerns often must be assessed on a case-by-case basis. Each of these factors has a cost and an economic impact that EPA believes is appropriate to consider when evaluating whether cooling towers are the best technology available for existing facilities for minimizing adverse environmental impacts associated with cooling water intake structures. The capital costs estimated by EPA at proposal are already very high; when costs reflecting reasonable changes to EPA's assumptions are added to them, the total capital cost investment and associated economic impact is simply '16o"hTg^aT-ffl'sTTme"tbTEP^rfo~rjrar5le ----- to justify selecting cooling towers as a required technology for all existing Phase II facilities. EPA further compared the efficacy of closed-cycle, recirculating cooling systems with that estimated for design and construction technologies. Although not identical, the ranges of impingement and entrainment reduction are similar under both ' "optionsTsuchrtrianhe reductions estimated for the design and construction technologies, particularly when optimized, approach those estimated for closed-cycle, recirculating cooling systems. Therefore, the use of design and construction technologies as the basis for this rule is supported since they can approach closed-cycle, recirculating systems at less cost with fewer implementation problems. EPA considered this similarity in efficacy, along with the economic practicability and availability of each type of technology, in determining that a closed-cycle, recirculating cooling system is not the required technology for all Phase II existing facilities. 2. Intake Capacity Commensurate With Closed-Cycle, Recirculating Cooling Systems Based on Waterbody Type EPA also considered an alternate technology-based option in which closed-cycle, recirculating cooling systems would have been required for all facilities on certain waterbody types. Under this option, EPA would have grouped waterbodies into the same five ^categories as nrto~dtiy 's nrrerfl") Freshwater rivers or streams, (2) lakes or reservoirs, (3) Great Lakes, (4) tidal rivers or estuaries; and (5) oceans. Because oceans, estuaries and tidal rivers contain essential habitat and nursery areas for the vast majority of commercial and recreational important species of shell and finfish, including many species that are subject to intensive fishing pressures, these waterbody types would have required more stringent controls based on the performance of closed-cycle, recirculating cooling systems. EPA discussed the susceptibility of these waters in a Notice of Data Availability (NODA) for the Phase I rule (66 FR 28853, May 25, 2001) and invited comment on documents that may support its judgment that these waters are particularly susceptible to adverse impacts from cooling water intake structures. In addition, the NODA presented information regarding the low susceptibility of non-tidal freshwater rivers and streams to impacts from entrainment from cooling water intake structures. "" 'UndeTth is^lternatl veToptmn, facilities that operate at less than 15 percent capacity utilization would, as in today's final rule, only be required to have impingement control technology. Facilities that have a closed-cycle, recirculating cooling system would have required additional design and construction technologies to increase the survival rate of impinged biota or to further reduce the amount of entrained biota if the intake structure was located within an ocean, tidal river, or estuary where there are fishery resources of concern to permitting authorities or fishery managers. Facilities with cooling water intake structures located in a freshwater (including rivers and streams, the Great Lakes and other lakes) would have had the same requirements as under today's final rule. If a facility for which closed- cycle recirculating technology was required chose to comply with alternative requirements, then the facility would have had to demonstrate that alternative technologies would reduce impingement and entrainment to levels comparable to those that would be achieved with a closed-loop recirculating system (90% reduction). If such a facility chose to supplement its alternative technologies with restoration measures, it would have had to demonstrate the same or substantially similar level of protection. (For additional discussion see the Phase I final rule 66 FR 65256, at 65315 columns 1 and 2.) At proposal, EPA estimated that there would be 109 46 facilities located on oceans, estuaries, or tidal rivers that do not have a closed-cycle, recirculating cooling system and would need to reduce intake flow to a level commensurate with that which can be attained by a closed-cycle, recirculating cooling system or upgrade design and construction technology (e.g., screens) in order to meet performance standards for reducing impingement mortality and entrainment. Although EPA estimated the costs of this option to be less expensive at the national level than an option based on closed-cycle, recirculating cooling systems everywhere, EPA did not select this option based on total social costs estimates of greater than $1 billion per year and its lack of cost-effectiveness, as well as on concerns regarding potential energy impacts. Facilities located on oceans, estuaries, and tidal rivers would incur high capital and operating and maintenance costs for conversions of their cooling water systems. Furthermore, since impacted facilities would be concentrated in coastal regions, EPA is concerned that there is 6 Sample-weighted. Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41607 the potential for short term energy impacts and supply disruptions in these areas if multiple facilities retrofit time-frame, as would be required by these regulations. 3. Intake Capacity Commensurate With Closed-Cycle, Recirculating Cooling System Based on Waterbody Type and Proportion of Waterbody Flow EPA also considered a variation on the above approach that would have required only facilities withdrawing very large amounts of water from an estuary, tidal river, or ocean to reduce their intake capacity to a level commensurate with that which can be attained by a closed-cycle, recirculating cooling system. For example, for facilities with cooling water intake structures located in a tidal river or estuary, if the intake flow is greater than 1 percent of the source water tidal excursion, then the facility would have had to meet standards for reducing impingement mortality and entrainment based on the performance of wet cooling towers. These facilities would instead have had the choice of reducing cooling water intake flow to a level commensurate with wet cooling towers nr nf using alternative technologies to _____ meet reduction standards based on the performance of wet cooling towers. If a facility on a tidal river or estuary had intake flow equal to or less than 1 percent of the source water tidal excursion, the facility would have only had to meet the same impingement and entrainment performance standards as in the final Phase II rule. These standards were developed based on the performance of technologies such as fine mesh screens and traveling screens with well-designed and operating fish return systems. The more stringent, closed-cycle, recirculating cooling system-based requirements would have also applied to a facility that has a cooling water intake structure located in an ocean with an intake flow greater than 500 MGD. This option also would impose much higher costs on a subset of facilities than the final rule. Based on an analysis of data collected through the detailed industry questionnaire and the short technical questionnaire, at proposal, EPA estimated there were potentially 109 Phase II existing facilities located nn pstiiaripg Hrlal rivers, nr finnans _____ which would incur capital costs under this option. Of these 109 facilities, EPA estimated that 51 would exceed the applicable flow threshold and be required to meet performance standards for reducing impingement mortality and entrainment based on a reduction in intake flow to a level commensurate with that which can be attained by a closed-cycle recirculating system. Of the . 58^?- faeilities~estimated-to fall below the applicable flow threshold, 10 facilities already meet these performance standards and would not require any additional controls, whereas 48 4a facilities would require entrainment or impingement controls, or both. Because this option would only require cooling tower-based performance standards for facilities located on tidal rivers, estuaries or oceans where they withdraw saline or brackish waters, EPA does not believe that this option would raise any significant water quantity issues. At proposal, EPA estimated the total social cost of compliance for the waterbody/capacity-based option to be approximately $0.97 billion per year. EPA did not select this option because it was not determined to be the most cost-effective approach on a national basis. While the national costs of this option are slightly lower than those of requiring wet cooling towers-based performance standard for all facilities located on oceans, estuaries and tidal rivers, the cost for facilities to meet these standards are still substantial. opportunity to seek alternative requirements to address locally significant air quality or energy impacts, EPA does not believe a framework such as this provides sufficient flexibility to ensure effective implementation and to minimize non-water quality (including energy) impacts. In addition, as noted above for the other cooling tower based options that EPA rejected, facilities can achieve almost the same level of impingement mortality and entrainment reductions using the technologies on which this final rule is based as they can using cooling towers, but at substantially lower cost. 4. Impingement Mortality and Entrainment Controls Everywhere At proposal, EPA evaluated an option that required impingement mortality and entrainment controls for all facilities. This option did not allow for the development of best technology available on a site-specific basis. This alternative based requirements on the percent of source water withdrawn and, like today's final rule, also restricted disruption -&f the-4iatural- thermal stratification of lakes or reservoirs. It also imposed entrainment performance requirements on Phase II existing facilities located on freshwater rivers or 47 Not sample-weighted. 48 Not sample-weighted. streams, and lakes or reservoirs where EPA has determined in today's final rule that such controls are not necessary. Finally, under this alternative, restoration could be used, but only as a supplement to the use of design and construction technologies or operational measures. This option established clear performance-based requirements that were based on the use of available technologies to reduce adverse environmental impact. Such an alternative would be consistent with the focus on use of best technology required under section 316(b). However, as indicated above, this option lacks the flexibility of the final rule in applying the necessary and appropriate available technology and therefore would be less effective in addressing the specific cooling water intake structure impacts posed by Phase II facilities in their various environmental settings. At proposal, total social cost of compliance for this option was estimated at approximately $300 million per year. EPA did not select this option because other options were more cost- effective, in part because this option requires entrainment controls in freshwater rivers, streams, and lakes. The benefits of the final rule are almost the same as those for this option but a lower cost (since lakes and reservoirs, and for design intake flows below 5% in freshwater rivers and streams are die least likely to provide significant benefits). 5. Site-Specific Options as Best Technology Available To Minimize Adverse Environmental Impact In the proposed rule EPA also considered several site-specific approaches to establishing best technology available. These include the site-specific sample rule discussed at 67 FR 17159, an alternative based on EPA's 1977 Draft Guidance (67 FR 17161), and alternatives suggested by UWAG and PSEG, respectively (see 67 FR 17162). EPA did not adopt any of these site- specific regulatory options for several reasons. None of these site-specific approaches would have established national performance standards for best technology available to minimize adverse environmental impact. EPA believes that such national performance standards promote the consistent application of the best technology available to minimize adverse environmental impact. In addition, based on contact with States (see Phase I NODA, 66 FR 28865, Phase II proposal 67 FR 17152-3) and anecdotal 41608 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations information49 EPA believes that each of these site-specific options would have resulted in higher administrative burdens being imposed on applicants and permit writers relative to the final rule. As EPA has discussed in the preamble to the proposal (see 67 FR 17167), these administrative burdens can be associated with the need to determine in each case whether adverse impacts are occurring, the nature and level of any such impacts, and which design and construction technologies constitute the best technology available to minimize adverse environmental impacts, including a consideration of costs and benefits. Further, all of the proposed site-specific options increase the likelihood that each significant cooling water intake permitting issue would become a point of contention between the applicant and permit writer, which EPA's experience indicates slows the permitting process, makes it more resource intensive, and makes it more costly. Finally, because the final rule provides facilities with the option of selecting from five compliance alternatives, including a site-specific compliance alternative, the final rule provides facilities with flexibility comparable to that of a site-specific rule. The site-specific alternative in the final rule provides clear standards for eligibility (the cost-cost and cost-benefit tests), and clear standards on which to base the alternative requirements that they achieve an efficacy as close as practicable to the national performance standards without exceeding the cost- test or benefits-test thresholds. EPA believes that structuring a site-specific compliance alternative in this way will significantly reduce the potential areas of disagreement between permit writer and applicant that are inherent in the other site-specific approaches that it rejected, while still providing facilities with appropriate flexibility. Through the multiple compliance alternatives specified in this rule, EPA has sought to balance the statutory requirements of section 316(b) and the need for reasonable limits on the administrative burden imposed on both applicants and permit writers against the need for 49 For example, a site-specific determination tor Brayton Point, Rhode Island, has required resources tor greater than two hill time equivalents (FTEs) over three years for permitting and support staff, as well as approximately $400,000 in contractor costs to address technical issues and applicant experts. Similarly, development of a permit for Salem has required resources for greater than two full time equivalents (FTEs) over three years for permitting and support staff, as well as approximately $340.000 in contractor costs to address technical issues and applicant experts. existing facilities to have flexibility in implementing the requirements. 6. Flow Reduction Commensurate With the Level Achieved by Dry Cooling Systems Based on Waterbody Type EPA conducted a full analysis for the Phase I rule and concluded that dry cooling was not an economically practicable option for new facilities on a national basis. Dry cooling systems use either a natural or a mechanical air draft to transfer heat from condenser tubes to air. In conventional closed- cycle recirculating wet cooling towers, cooling water that has been used to cool the condensers is pumped to the top of a recirculating cooling tower; as the heated water falls, it cools through an evaporative process and warm, moist air rises out of the tower, often creating a vapor plume. Hybrid wet-dry cooling towers employ both a wet section and dry section and reduce or eliminate the visible plumes associated with wet cooling towers. For the Phase I rule, EPA evaluated -zero-or-nearly^ero-rntafce-fkrw regulatory alternatives, based on the use of dry cooling systems. EPA determined that the annual compliance cost to industry for this option would be at least $490 million. EPA based the costs on 121 new facilities having to install dry cooling. For the Phase II proposal, EPA estimated that total social costs for dry cooling based on waterbody type were $2.1 billion per year (or roughly double the costs for wet towers). Thus, this option would be more expensive than dry cooling for new facilities. The cost for Phase II existing facilities to install dry cooling would be significantly higher than the cost for new facilities to do so due to the complexities of retrofitting both the dry cooling equipment and components of the cooling system. At proposal, EPA estimated that 550 Phase II existing facilities would be subject to Phase II regulation. The cost would be significantly higher because existing facilities have less flexibility, thus incurring higher compliance costs (capital and operating) than new facilities. For example, existing facilities might needlo upgrade or modify existing turbines, condensers, and/or cooling water conduit systems, which typically imposes greater costs than use of the same technology at a new facility. In addition, retrofitting a dry cooling tower at an existing facility would require shutdown periods during which the facility would lose both production and revenues, and decrease the thermal efficiency of an electric generating facility. The disparity in costs and operating efficiency of dry cooling systems compared with wet cooling systems is considerable when viewed on a nationwide or regional basis. For example, under a uniform national requirement based on dry cooling, facilities in the southern regions of the United States would be at an unfair competitive disadvantage compared to those in cooler northern climates because dry cooling systems operate more efficiently in colder climates. Even under a regional subcategorization strategy for facilities in cool climatic regions of the United States, adoption of a minimum requirement based on dry cooling would likely impose unfair competitive restrictions for steam electric power generating facilities because of the elevated capital and operating costs associated with dry cooling. Adoption of requirements based on dry cooling for a subcategory of facilities under a particular capacity would pose similar competitive disadvantages for those facilities. As explained in the preamble to the proposal, EPA does not consider performance standards based on dry cooling a reasonable option for a national requirement, nor for subcategorization under this rule, because the technology of dry cooling carries costs that would potentially cause significant closures for Phase II existing facilities. Dry cooling technology would also have a significant detrimental effect on electricity production by reducing the energy efficiency of steam turbines. Unlike a new facility that can use direct dry cooling, an existing facility that retrofits for dry cooling would most likely use indirect dry cooling which is much less efficient than direct dry cooling. In contrast to direct dry cooling, indirect dry cooling does not operate as an air-cooled condenser. In other words, the steam is not condensed within the structure of the dry cooling tower, but instead indirectly through a heat exchanger. Therefore, the indirect dry cooling system would need to overcome additional heat resistance in the shell of the condenser compared to the direct dry cooling system. Ultimately, the inefficiency (i.e., energy penalty) of indirect dry cooling systems will exceed those of direct dry cooling systems in all cases. Although the dry cooling option is extremely effective at reducing impingement and entrainment, it is not economically practicable for existing facilities and would cause additional adverse environmental impacts and serious energy impacts. Although dry cooling technology uses extremely low- Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41609 level or no cooling water intake, thereby reducing impingement and entrainment of organisms to extremely low levels, section 316(b) does not require that adverse environmental impact be completely eliminated, but that it be minimized using the best technology available. [DOE energy penalty study; DCN 4-2512). EPA does not believe that dry cooling technology is "available" to most Phase II existing facilities. Although EPA has rejected dry and wet cooling tower technologies as a national minimum requirement, EPA does not intend to restrict the use of these technologies or to dispute that they may be the appropriate cooling technology for some facilities. For example, facilities that are repowering and replacing the entire infrastructure of the facility may find that dry cooling is an acceptable technology in some cases. This technology may be especially appropriate in situations where access -to- Goeling-water-4s4imitedr -Wet-cooling-— tower technology may be suitable where adverse effects of cooling water intakes are severe and where screening systems are impractical, or where thermal discharge impacts pose serious environmental problems. Under Clean Water Act section 510, a State may choose to impose more stringent standards than required by Federal regulations. States may continue to use this authority to require facilities to use dry or wet cooling systems. F. What Is the Role of Restoration and Trading Under Today's Final Rule? 1. What Is the Role of Restoration? EPA is providing facilities with the option to use restoration for compliance alternatives § 125.94(a)(2), (3), and (5) where the performance of the restoration measures (the production and increase of fish and shellfish in the facility's waterbody or watershed, including maintenance of community structure and function), is substantially similar to that which would have been achieved if the facility reduced impingement mortality and entrainment through the use of design and construction technologies and/or operational measures, to meet the applicable performance standards. (For a complete discussion of the legal analysis supporting restoration, see section VIII of this preamble.) The role of restoration under this rule is to provide additional flexibility to facilities in complying with the rule by eliminating or significantly offsetting the adverse environmental impact caused by the operation of a cooling water intake structure. Restoration measures that increase fish and shellfish in an impacted waterbody or watershed and result in performance substantially similar to that which would otherwise be achieved through reductions in impingement mortality and entrainment further the goal of minimizing adverse environmental impact while offering additional flexibility to both permitting authorities and facilities. Restoration measures may include such activities as removal of barriers to fish migration, reclamation of degraded aquatic organism habitat, or stocking of aquatic organisms. These are still technologies, within the meaning of that term as used in section 316(b) and as such are an appropriate means for meeting technology based performance standards. They are not analogous to water quality based effluent limitations on pollutant discharges because they are not designed to meet water quality standards or dependent on the condition of the receiving waterbody. _Ratlier_,.thaypro.vade_arL additional means to meet the same performance standards that guide the selection of design and construction technologies and operational measures. Restoration measures have been used at existing facilities as one of many tools to implement section 316(b) on a case- by-case, best professional judgment basis to compensate for the death and injury of fish and other aquatic organisms caused by the cooling water intake structure. Under today's rule, a Phase II existing facility may utilize restoration either in lieu of or as a supplement to design and construction technologies and/or operational measures. For example, a facility may demonstrate to the Director that velocity controls are the most feasible technology choice for the facility but that, when used on their own, the velocity controls are insufficient to meet the applicable performance standards at § 125.94(b). The facility may then, in conjunction with the use of velocity controls, implement restoration measures to increase the fish and shellfish productivity of the waterbody standards at § 125.94(b). Another facility might demonstrate to the Director that restoration measures alone achieve the greatest compliance with the performance standards. A facility may alternatively request a site-specific determination of best technology available under § 125.94(a)(5) and use restoration measures to meet the alternate requirements. Facilities that propose to use restoration measures must demonstrate to the Director that they evaluated the use of design and construction technologies and operational measures and determined that the use of restoration measures is appropriate because meeting the applicable performance standards or requirements through the use of other technologies is less feasible, less cost-effective, or less environmentally desirable than meeting the standards in whole or in part through the use of restoration measures. Facilities must also demonstrate that the restoration measures they plan to implement, alone, or in combination with design and construction technologies and/or operational measures, will produce ecological benefits (production of fish and shellfish) at a level that is substantially similar to the level that would be achieved through compliance with the applicable impingement mortality and/ or entrainment performance standards under § 125.94(b), or alternative site- specific requirements under § 125.94(a)(5). In other words, restoration measures must replace the fish and shellfish lost to impingement mortality and entrainment, either as a substitute or as a supplement to reducing impingement mortality and entrainment through design and control technologies and/or operational measures. While the species makeup of the replacement fish and shellfish may not be exactly the same as that of the impingement mortality and entrainment losses, the Director must make a determination that the net effect is to produce a level of fish and shellfish in the waterbody that is "substantially similar" to that which would result from meeting the performance standards through design and construction technologies and/or operational measures alone. The final rule requires that a facility use an adaptive management method for implementing restoration measures because the performance of restoration projects must be regularly monitored and potentially adjusted to ensure the projects achieve their objectives (see 67 FR 17146-17148 and 68 FR 13542). The final rule also requires that restoration projects which replace the lost fish and shellfish with a different species mix ("out of kind" restoration) be based on a watershed approach to restoration planning. The boundaries of a "watershed" should be guided by the cataloging unit of the "Hydrologic Unit Map of the United States" (USGS, 1980), although it may be appropriate to use another watershed or waterbody classification system developed at the state or local level if such a system compares favorably in level of detail. For example, in coastal systems that support migratory fish, a coastal 41610 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations waterbody that transects a number of watersheds may be the most appropriate unit for planning restoration. 2. What Is the Role of Trading in Today's Rule? In § 125.90(c), today's final rule provides that if a State demonstrates to the Administrator that it has adopted alternative regulatory requirements in its NPDES program that will result in environmental performance within a watershed that is comparable to the reductions of impingement mortality and entrainment that would otherwise be achieved under § 125.94, the Administrator must approve such alternative requirements. A trading program could be a part of these alternative regulatory requirements. At proposal, EPA sought comment on the potential role of trading in the cpntextjDf _the section 316(b] Phase II rulemaking and possible approaches for developing a trading program. Trading under other EPA programs has been shown to provide opportunities for regulatory compliance at reduced costs. The EPA Office of Water's Water Quality Trading Policy, published in January 2003 [DCN 6-5002], fully supports trading nutrients and sediment and adopts a case-by case approach to evaluating proposals to trade other pollutants. Trading in the context of section 316(b) raises many complex issues, for example, how to establish appropriate units of trade and, how to measure these units effectively given the dynamic nature of the populations of aquatic organisms subject to impingement mortality and entrainment. Should a State choose to propose a trading program under § 125.90[c), EPA will evaluate the State's proposal on a case- by-case basis to ensure the program complies with the regulatory requirement—that it will result in environmental performance within a watershed that is comparable to the reductions of impingement mortality and entrainment that would otherwise be achieved under the requirements established at § 125.94. Some commenters suggested that EPA adopt a trading program that would allow trading between aquatic organisms and pollutant discharges. EPA is concerned that such a program would introduce comparability and implementation challenges that would be difficult to overcome and therefore, EPA does not expect that such a program would work within the framework of today's final rule. In addition, EPA does not believe that it is possible at this time to quantify with adequate certainty the potential effects on ecosystem function, community structure, biodiversity, and genetic diversity of such trades, especially when threatened and/or endangered species are present. Based on the current state of the science in aquatic community ecology and ecological risk assessment, States wishing to develop trading programs within the context of 316(b) would be best off focusing on programs based on metrics of comparability between fish and shellfish gains and losses among trading facilities, rather than the much more complex metrics that would be necessary for comparability among fish and shellfish losses on the one hand, and pollutant reductions on the other. VIII. Summary of Major Comments and Responses to the Proposed Rule and Notice of Data Availability (NODA) A. Scope and Applicability ~T. Pliase irExisrmg^'acilityDeTinition Numerous commenters supported limiting the scope of the Phase II rule to existing facilities that generate and transmit electric power, or generate and sell such power to another entity for transmission, but suggested that EPA has not sufficiently limited the rule to only these facilities. Commenters noted that the proposed definition of "Phase II existing facility" does not adequately exempt existing manufacturing facilities that may occasionally transfer power off-site during peak load events. Some commenters suggested that EPA clarify the Phase II rule to specify that it does not apply to facilities whose primary business is not power generation. Some suggested limiting applicability to specified SIC codes (e.g., provided that the rule only applies to facilities in SIC 4911). Examples of facilities identified by commenters that they believe should be excluded from Phase II include manufacturers that produce electricity by co-generation, power generating units that predominantly support a manufacturer, e.g., iron and steel, but ..also _expoxtsorne__p_QweL_and facilities that generate power for internal use. Commenters requested that EPA further clarify when repowering is subject to existing facility requirements. For example, some commenters viewed as inconsistent the fact that the addition of a generating unit at an existing single unit site could increase intake flows by 100% and meet the existing facility definition, while a replacement facility that increases intake flows by a much lesser amount (e.g., 25%) would not meet the existing facility definition. These commenters suggested that EPA consider a facility as an existing facility unless changes to the facility result in new environmental impacts. In §125.91(a){3) of today's rule, an existing facility is subject to this rule if its primary activity is either to generate and transmit electric power, or to generate electric power that it sells to another entity for transmission. This provision was included in the rule in response to comments such as those described previously in this section. EPA believes that this criterion—the primary activity being the generation of electric power—sufficiently clarifies and limits the scope of this rule to existing facilities whose primary business is power generation. As discussed in Section II of this preamble, the final rule does not apply to existing manufacturing facilities, including manufacturing facilities that generate power for their own use and transmit any surplus power, or sell it for transmission, provided the primary activity of the facility is not electric power generation. For example, in the case of a facility that operates its own power generating units and such units predominantly support that facility's manufacturing operation, its primary activity remains manufacturing, even if the facility exports some power. Whether a facility's primary activity is to generate electric power will need to be determined on a case-by-case basis. Section II also makes clear that a manufacturing facility is not covered by this final rule just because it is co- located with another Phase II facility. EPA considered specifying SIC or NAIC codes to clarify the scope of the rule beyond that proposed in § 125.9l(a)(3), but did not do so because it believes the changes in the final rule are sufficient to address many issues raised in comments and because of concerns that SIC and NAIC codes may change over time, which could unintentionally alter the scope of the rule. With regard to repowering, section II of today's notice discusses the scope of the final rule and specifically discusses the repowering issue. Section II also addresses other Phase I versus Phase II classification issues. 2. Thresholds Some commenters supported use of the 50 MGD design intake flow threshold and the 25 percent cooling water use criteria in § 125.91(a)(2) and (4), respectively. Some suggested that facilities agreeing to limit their actual intake to less than 50 MGD should be excluded from the rule's requirements or be allowed to request an exemption. Other commenters maintained that permitted or actual flows should be used rather than design flows. Some commenters asked that EPA clarify that, Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41611 when applicable, the lesser design value of an intake facility and conveyance structure versus the design volume of intake pumps should be used to determine the 50 MGD threshold for applicability. Alternatively, others asserted that EPA should provide guidance that a facility's design intake flow is not necessarily the flow associated with that of the intake pumps. Several commenters stated that emergency cooling water and emergency service water intakes should be exempt from the 50 MGD design intake flow threshold. These commenters recommended that EPA distinguish between primary cooling water intakes and emergency service water intakes, for ^el<ample","a"t nuclear iacfrffiesTTriey reasoned that emergency service water systems, which can have a large design capacity (i.e., design capacity greater than 50 MGD), generally use an intake that normally operates a nominal amount of time to ensure that the system is in working order. Such back- up systems are required for safety, but under normal conditions do not increase the operational capacity of the facility. Thus, these commenters maintain that rarely used emergency service water should not count towards 50 MGD. With regard to the criterion that a Phase II existing facility must use at least 25 percent of the water it withdraws exchisively for cooling, some commenters indicated that proposed §125.9l(d), which describes how to measure whether 25 percent of water withdrawn is used for cooling, was ambiguous. Commenters asserted that EPA should not require monthly determinations of applicability of the Phase II rule. One commenter suggested that EPA should assess the 25 percent cooling water use on an annual basis" since such an approach would provide a high degree of certainty. As discussed in the proposed rule (67 FR 17129-17130), EPA chose the design intake flow 50 MGD threshold to focus on the largest existing power generating facilities, which the Agency believes are those with the greatest potential to cause or contribute to adverse environmental impact. EPA estimates that the 50 MGD threshold would subject approximately 543 of 902 (60 percent) of existing power generating facilities to this rule and would address 90 percent of the total flow withdrawn by existing steam electric power generating facilities. The 25 percent threshold ensures that nearly all cooling water and the most significant facilities using cooling water intake structures are addressed by these requirements. EPA notes that Phase II existing facilities, which are limited to facilities whose primary activity is power generation, typically use far more than 25 percent of the water they withdraw for cooling. Yet, as in the new facility rule, cooling water that is used in a manufacturing process either before or after it is used for cooling would not count towards calculating the percentage of a facility's intake flow that is used for cooling purposes. EPA has retained in the final rule the 50 MGD threshold based on design intake flow, rather than actual flow, for several reasons. Design intake flow is a fixed value based on the design of the facility's operating system and the "capacTFy ot the" circulating~alfd other water intake pumps employed at the facility. This approach provides clarity—-the design intake flow does not change, except in those limited circumstances when a facility undergoes major modifications or expansion, whereas actual flows can vary significantly over sometimes short periods of time. EPA believes that an uncertain regulatory status is undesirable because it impedes both compliance by the permittee and regulatory oversight, as well as achievement of the overall environmental objectives. Further, using actual flow may result in the NPDES permit being more intrusive to facility operation than necessary since facility flow would be a permit condition and adjustments to flow would have to be permissible under such conditions and applicable NPDES procedures. It also would require additional monitoring to confirm a facility's status, which imposes additional costs and information collection burdens, and it would require additional compliance monitoring and inspection methods and evaluation criteria^ focusing on operational aspects of a facility. With regard to intake versus pump capacity, EPA notes that under § 125.93 of the final rule, design intake flow means the value assigned (during the cooling water intake structure design) to the total volume of water withdrawn from a source waterbody over a specific time period. Because numerous aspects of a cooling water intake or system can limit a facility's intake flow, and because flow is a critical factor that affects the impacts posed by each facility's cooling water intake structures, EPA has determined that it is more appropriate for the final rule to focus on a facility's total designed volume of water withdrawn over a period of time, rather than to condition applicability of the rule on more specific parameters, such as intake capacity or pump design, which individually do not fully determine total design intake flow. The final rule does not explicitly exclude emergency cooling water and emergency service water intakes from consideration in determining which facilities are in-scope. Although EPA does not have detailed data on emergency cooling water and emergency intakes, based on other available data EPA does not believe that including consideration of emergency intakes within this rule significantly alters the scope of the rule. EPA's survey of all existing electric utilities and non- utilities indicated that 84 percent of surveyed facilities have an average flow that equals or exceeds 50 MGD. These facilities would by necessity have a design intake flow that also equals or exceeds 50 MGD. Moreover, EPA assumes that this average flow data represent normal operating conditions and does not include emergency cooling water use. Consequently, EPA believes that relatively few facilities are potentially affected by this issue. Finally, § 125.91(a)(4), which describes how a facility must determine whether it meets the 25 percent cooling water use criterion has been changed in the final rule and provides that the percent of cooling water used be measured on an average annual basis. EPA believes this approach is more appropriate than making this determination on an average monthly basis, primarily because the annual average is an easier measurement to make. Furthermore, because all Phase II existing facilities generate power, most of the water will be used for cooling, rendering monthly evaluation of this value unnecessary. The final rule does not specify how often the facility must measure flow for this annual average. The facility is encouraged to consult the Permit Director to determine what level of data collection is needed. B. Environmental Impact Associated With Cooling Water Intake Structures Many comments addressed adverse environmental impact, questioning the definition and quantification of adverse environmental impacts. Several suggested defining adverse environmental impact exclusively at the population, community, or ecosystem levels, and believe that numbers of impinged and entrained organisms should not be a measure of adverse environmental impact. Some commenters argued that, if a facility can prove it does not cause adverse environmental impact at the population level, then it should be exempt from section 316(b) regulations. Commenters 41612 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations cited numerous studies to illustrate whether cooling water intake stractures cause adverse environmental impacts and claimed that where abundance or biomass falls, it was usually the result of some other stressor (overfishing, pollution, etc). These commenters asserted that populations are able to thrive despite high rates of impingement and entrainment because of density- dependence and compensation. Numerous other commenters disagreed with limiting the definition of adverse environmental impact to the population, community or ecosystem levels, and contended that any measure of impingement and entrainment constitutes-adverse-ettv-iroMnental ------------- impact. They asserted that power plants contribute to fish kills directly by impingement and entrainment, and indirectly by habitat loss. These commenters maintained that the results of population or ecosystem studies are highly subjective, and have no place in determining BTA, as once such impact levels are reached, recovery is often impossible. Regardless of the severity of adverse environmental impact, these commenters argued that section 316(b) requires minimization of adverse environmental impact. They maintained that cooling water intake structures contribute to fishery collapse and vast reductions in fish biomass and abundance that are measurable at the species level. These commenters suggested that actual national impacts due to cooling water intake structures are vastly underestimated due to poor data collection methodologies utilized when the majority of the studies were performed and because studies performed on impinged and entrained organisms overlooked the vast majority of affected species. not to define adverse environmental impact. EPA believes that it is reasonable to interpret adverse environmental impact as the loss of aquatic organisms due to impingement and entrainment. For a further discussion of this issue, see Section IV above. With regard to the relationship between intake flow and adverse environmental impact, some commenters asserted that the relationship of impingement and entrainment to flow is such that catch rates increase non-linearly (exponentially) in relation to the volume of water withdrawn, with entrainment rates being more strongly correlated to flow than impingement. Environmental commenters advocated for flow reduction technologies, such as retrofitting closed-cycle cooling technologies, as the most direct means of reducing fish kills from power plant intakes; they assert that reducing intake by up to 98 to 99 percent would result in a similarly high reduction of impinged and entrained organisms. Other commenters insisted that there is no statistically significant relationship between catch rate and flow, and the mathematical models that evaluate this relationship are inaccurate.EPA believes the record contains ample evidence to support the proposition that entrainment is related to flow (see DCN 2-013L-R15 and 2- 013J) while impingement is related to a combination of flow, intake velocity and --fish-s wim-apeed-.(see- DCN- 2-0 29). Larger withdrawals of water may result in commensurately greater levels of entrainment. Entrainment impacts of cooling water intake structures are closely linked to the amount of water passing through the intake structure because the eggs and larvae of some aquatic species are free-floating and may be drawn with the flow of cooling water into an intake structure. Swim speeds of affected species as well as intake velocity must be taken into account to predict rates of impingement in relation to flow in order to account for the ability of juvenile and adult lifestages of species to avoid impingement. Due to this relationship, EPA agrees that reducing intake by installing flow reduction technologies will result in a similarly high reduction of impinged and entrained organisms, but EPA believes that other technologies that do not necessarily reduce flow but that do reduce the number of aquatic organisms impinged and entrained will also minimize adverse environmental impact associated with cooling water intake structures. As such, today's rule provid«s--for-t:lex-ibility4n-meet-ing the performance standards. C. Performance Standards The performance standards promulgated today are expressed as reductions of impingement and entrainment measured against a calculation baseline. The purpose of a calculation baseline is to properly credit facilities that have installed control technologies prior to the promulgation of the rule. EPA received numerous comments on the performance standards and the calculation baseline. 1. Appropriate Standards Many commenters discussed the appropriateness of the performance standards. While many commenters acknowledged that the performance range may be attained at some facilities (using certain technologies and in appropriate conditions), several commenters stated that the technical justification for the performance standards was insufficient and may be biased towards higher performing examples of each technology. Many commenters submitted that some technologies will perform at some sites, but that no technology will meet the standards at all sites. Another commenter supported the concept of the performance standards, as long as sufficient flexibility was retained through the use of restoration measures and cost tests. Some commenters suggested allowing permit writers the flexibility to create site-specific performance standards. EPA has selected performance standards to facilitate a more streamlined permitting process, and to provide consistent national standards. EPA has chosen to express the targets by reference to a percentage reduction in impingement and entrainment because, as discussed above, these losses can easily be traced to cooling water intake structures. Therefore, this is a convenient indicator of the efficacy of controls in reducing environmental impact. As discussed in more detail below, it is also a useful basis against which to consider the efficacy of restoration technologies, which focus on the replacement of fish and shellfish as an alternative means of minimizing adverse environmental impact of intake structures. Additional documentation has been collected and reviewed by EPA to further support the percent reductions contained in the performance standards. EPA has added this information to the Technology Efficacy database (DCN 6— 5000), which EPA has expanded to allow users to query and compare basic data on technology performance and applicability. EPA recognizes that some may disagree with basing the performance standards on the wide range of data available in the database. While many documents do show a level of success in reducing impingement mortality or entrainment, other studies have shown the deployed technology to be unsuccessful or at best inconclusive. EPA does not view the varying degrees of success with regards to a specific technology as indicative that the performance standards cannot be met, but rather as evidence that some technologies work in some applications but not in others. It is for this reason that performance standards, rather than prescriptive technologies, were chosen. By opting for performance standards instead of requiring the deployment of specified technologies, EPA maintains a desired Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41613 flexibility in the implementation of the rule, thus allowing a facility to select measures that are appropriate to the site conditions and facility configuration. EPA believes that there are technologies available (including restoration measures) that can be used to meet the performance standards at the majority of facilities subject to the final Phase II rule. EPA believes that it will likely be the exceptional case where no technology or suite of technologies will be able to achieve the performance standards. This is not to say, however, that the technologies are always economically practicable to implement; there may be situations where the costs are not justified and it is for those situations that EPA has provided for ~sTfevsp~e^^ic"llle1el'minationV5ft)esT available technology for minimizing adverse environmental impact. 2. Application of the Performance Standards Commenters generally noted that the application of the performance standards would be very difficult, for a number of site-specific reasons. Several commenters noted that the performance standards are not sufficiently defined to make a full evaluation of their applicability. For example, EPA has not defined the performance standards as being measured using all species or selected species, or by counting individuals versus measuring biomass. Some commenters noted that each of the methods discussed by EPA could have merit at a given facility, and that flexibility would be needed to evaluate compliance at a variety of intake configurations. Another commenter further noted that it is inappropriate for EPA to state that the performance standards are achievable when the standards are undefined. One commenter suggested that EPA has not ~ s howrrthal tire pyilurii can be met at a reasonable cost. Other commenters stated that reductions may be achievable for only some species of life stages and that this approach may not account for natural fluctuations in population. These commenters claim that implementing a uniform, nationwide performance standard would be exceedingly complex and subject to site-specific factors that could significantly affect the performance of the control technology. Several commenters noted that, for these reasons, EPA should strongly consider a site-specific approach to implement 316(b), including a risk assessment- based approach as suggested by one commenter. A number of commenters stated that the performance standards would be best implemented as a set of goals or as a best management practice. These commenters contended that in view of the wide variety of environmental conditions at facilities, including natural fluctuations in populations, compliance with a national performance standard will be difficult. They claimed that by using the standards as a goal instead of a condition in the permit, a facility can have greater certainty as to its compliance status. Similarly, several commenters suggested that the permit contain conditions requiring proper technology selection, installation, maintenance, and adjustments instead of requiring compliance with the performance standards. Commenters were divided over the standards. Some commenters supported the range, arguing that a facility can achieve some reduction within the range and still be compliant, and others were opposed, claiming that a range of performance promotes uncertainty in determining compliance. Some commenters also noted that, by giving a facility a range of performance, EPA is encouraging performance in the lower end of the range and therefore not meeting the definition of "best technology available." Several commenters noted that consideration of entrainment mortality is important to correctly determine compliance. One commenter also noted that natural events will affect compliance, such as moribund fish being swept into an intake or heavy debris loads following a storm. As in the Phase I rule, EPA is setting performance standards for minimizing adverse environmental impact based on a conceptually simple and certain metric-reduction of impingement mortality and entrainment. EPA recognizes however, that there are challerrges-a^socrateth/vitlTiTieasuring such reduction due to fluctuations in waterbody conditions (species abundance, composition, etc.) over time. While it is relatively straightforward to measure impingement mortality and entrainment reductions relative to past levels, it is more difficult to determine reductions relative to what would have occurred in the absence of control technologies if waterbody conditions change after the technologies are installed. Data provided with the proposed rule (DCN 4-0003) indicate that there is substantial variability over time in the numbers and species mix of impinged and entrained organisms at any given facility. While changes in operational practices and sampling methods account for some of this variability, the data indicate that there may be substantial natural variability in waterbody conditions as well. This natural variability and the changes to species composition over time may affect the ability of these technologies to perform consistently at a certain level. This is one reason why EPA has provided a compliance determination alternative under which facilities comply with the construction, operational, maintenance, monitoring, and adaptive management requirements of a Technology Installation and Operation Plan (or Restoration Plan) designed to meet the performance standards, rather than having to demonstrate quantitatively that they are consistently meeting them, which may be difficult in the face of natural variability. Under this approach, if monitoring data suggest that performance standards are not being met despite full compliance with the terms of the Technology Installation and Operations Plan or the Restoration Plan, the Plan will need to be adjusted to improve performance. EPA has provided examples of facilities in different areas of the country sited on different waterbody types that are currently meeting or exceeding the performance standards promulgated today. The ability of these facilities to attain similar performance standards suggests that while site- specific factors can influence the performance of a given technology, it is the exceptional situation where no design or construction technology is capable of meeting the performance standards. EPA opted for performance ranges instead of specific compliance thresholds to allow both the permittee and the permitting authority a certain degree of flexibility in meeting the obligations under the final Phase II rule. EPA does not believe that performance ranges promote uncertainty. Instead, EPA has selected performance ranges out of the recognition that precise results may not be able to be replicated in different waterbody types in different areas of the country. EPA disagrees with the comment that it has not shown that the performance standards can be met at a reasonable cost. The cost and economic impact analysis for the final rule supports EPA's determination that the final rule, including the performance standards, are economically practicable at a national level. In addition, the final rule includes a site-specific compliance alternative to address any potential situation where meeting the performance standards, when evaluated on a facility-specific • basis, would result in costs that are significantly greater than the costs 41614 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations considered by EPA, for a like facility in establishing the standards, or that are significantly greater than the benefits of compliance with the applicable performance standards at the facility. Thus, the final rule ensures that the costs of the rule are economically practicable to the extent required by section 316(b). In developing the final rule, EPA identified and examined a broad range of cooling water intake structure technologies and determined, at a national level, that these technologies support the final performance standards. EPA notes that, although the performance standards address all life stages offish and shellfish, the Director has significant discretion as to how the performance standards are applied in the permit. For example, the Director may determine that all species must be considered or that only representative species are to be considered. With regard to natural fluctuations in fish and shellfish populations, and the Technology Installation and Operation Plau compliance scheme discussed above addresses the concern that natural fluctuations could impact the level of impingement mortality and entrainment at a given facility over time. Further, the Director is given considerable discretion to determine, based on the facility's Comprehensive Demonstration Study, the appropriate averaging period and precise metric for determining impingement mortality and entrainment reductions. Generally, averaging over longer time periods (i.e., a full five year permit term) can substantially reduce the impact of natural variability on the determination of whether the performance standards are being met. 3. Requirements by Waterbody Type As stated in section C. 2, different performance standardlfwouTcl apply for facilities located upon different waterbody types. Comments were received both in support of and against basing performance standards in part on waterbody type. Some commenters did not support the withdrawal threshold of 5 percent of the mean annual flow for facilities on freshwater rivers, as the organisms at an intake may not be subject to entrainment or may not be evenly distributed. Some State commenters supported the withdrawal threshold for freshwater rivers, and another suggested correlating the intake flow requirements with the total flow of the waterbody to better protect smaller flow rivers. One State commenter generally opposed all of the proposed thresholds on freshwater rivers as being arbitrary and stated that the regulations would be more effective by considering the impacts to the population within the waterbody. For lakes and reservoirs, one commenter opposed the requirement to not disturb the thermal stratification of the waterbody, stating that the requirement has not been defined in sufficient detail, that EPA has presented no evidence that the disruption is always detrimental, or presented any discussion of technologies that might mitigate any thermal disturbances. Some commenters did not support additional controls on the Great Lakes, stating that the Lakes are not unique and do not require greater protection. Another State commenter suggested that additional requirements be __ implemented for any impaired waterbody. EPA considers location to be an important factor in addressing adverse environmental impact and one expressly included in the language of section 316(b). When cooling water is withdrawn from sensitive biological areas, there is a heightened potential for adverse environmental impact, since these areas typically have higher concentrations of impingeable and entrainable aquatic organisms. Therefore, the final rule includes performance standards that vary, in part, by waterbody type. For example, estuaries and tidal rivers have a higher potential for adverse impact because they contain essential habitat and nursery areas for a majority of commercial and recreational species of fish and shellfish. Therefore, EPA believes that these areas warrant a higher level of control that includes both impingement and entrainment controls. EPA also included performance standards for other waterbody types. Facilities withdrawing greater than 5% of the mean annual flow from freshwater rivers and streams will have additional requirements. As described in the Phase I proposed rule (65 FR 49060) and the Phase II NODA (66 FR 28853), the withdrawal threshold is based on the concept that absent any other controls, withdrawal of a unit volume of water from a waterbody will result in the entrainment of an equivalent unit of aquatic life (such as eggs and larval organisms) suspended in that volume of the water column. Thus, facilities withdrawing greater than 5% of the mean annual flow from freshwater rivers and streams may entrain equal proportions of aquatic organisms. Freshwater rivers and streams are somewhat less susceptible to entrainment than certain other categories of waterbodies and, therefore, the final rule limits the requirement for entrainment control in fresh waters to those facilities that withdraw the largest proportion of water from freshwater rivers or streams. EPA has promulgated special requirements for facilities withdrawing from lakes and reservoirs. Facilities tend to withdraw from the deeper portions of lakes and reservoirs, as these areas hold the coolest water. The rule specifies that the intake flows must not disturb the natural stratification (thermoclines) in the waterbody, as this may disrupt the composition of dissolved oxygen and adversely affect aquatic species. While such disruption is often detrimental, this additional performance standard does not apply where the disruption does not adversely affect the management of fisheries. Intake location, the volume of water withdrawn, and other design technologies can be used to address this requirement. Facilities located on the Great Lakes are also subject to additional requirements because these waterbodies have areas of high productivity and sensitive habitat and in this respect have an ecological significance akin to estuaries. 4. Approved Design and Construction Technology Option In response to comments on the burden to facilities and permit writers, EPA is including in the final rule an approved design and construction technology option (previously referred to as a "streamlined technology option" or "pre-approved technology option") for facilities in certain locations. Under this option, a facility installing a specified technology would be subject to reduced application requirements, including a reduced Comprehensive Demonstration Study. In addition, the final rule sets forth criteria that State Directors may use to identify and approve additional technologies. Nearly all commenters supported the concept of an approved design and construction technology option as a positive step in facilitating implementation of section 316(b). Several commenters added that this option should not preclude the use of cost tests, restoration measures or the use of other approaches. One commenter opposed the approved design and construction technology option, arguing that the selection of only one or two technologies oversimplifies the complexity of waterbodies, and that the approach would not be sufficiently protective. Some commenters agreed that the wedgewire screen should be an effective technology in certain situations and noted that EPA should specify screen slot openings in the approved design Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41615 and construction technology option. One of the commenters stated that research on the wedgewire screen suggests that the technology should easily meet the impingement requirements, but that further research may be necessary to confirm the effectiveness for entrainment reductions with varying slot openings. Some commenters offered suggestions for additional changes to the option, such as developing scientifically sound, peer-reviewed criteria for evaluating pre-approved technologies, identifying the technologies in technical guidance documents as opposed to the regulation, .. .and_cnntinuingJ.Q..allaw_jestDraliQji measures. Some commenters also suggested specifying that any monitoring performed would be informational in nature and not affect the facility's compliance status, or that facilities only be required to "substantially meet" the stated goals. Other commenters suggested expanding the scope of the approved design and construction technology option to include prescribed operational or restoration measures or preapproved technologies for intakes located on man- made cooling reservoirs. A facility that chooses to comply under the pre-approved technology option should not, in addition, need to employ restoration measures. The intent of the pre-approved technology compliance alternative is to provide a means to reduce the application and information collection requirements for facilities that are able to meet performance standards through a technology that is proven to meet performance standards for impingement mortality and entrainment in most cases. A facility that chooses to comply . by meeting the conditions specified at § 125.99(a), therefore, should be able to achieve the performance standards for both impingement mortality and entrainment. Facilities that propose an alternative technology for consideration as a pre-approved technology under § 125.99(b) are encouraged by EPA to propose technologies to the Director for approval that are capable of meeting performance standards for both impingement mortality and entrainment with a high degree of confidence. However, a situation could arise where a pre-approved technology only meets performance standards for impingement mortality or entrainment. In such cases, facilities that choose to comply using an approved design and construction technology that only met a subset of applicable performance standards could either employ other (1) design and construction technologies, operational measures and/or restoration measures or (2) request a site-specific requirements for the remaining performance standards based on either the cost-cost or cost-benefit test. Some commenters stated that EPA should specify the wedgewire screen slot opening size. EPA disagrees that it should specify a uniform screen slot opening size for all facilities that choose the approved design and construction technology alternative. The rule states in § 125.99(a)(l)(iv) that the screen slot size must be appropriate for the size of eggs, larvae, and juveniles of all fish and shellfish to be protected from entrainment at the site. Because the .. - .speciesJtD-hfi. pxolectfid_diffeiLamong locations, the slot sizes will need to be tailored to the sizes of the various assemblages of species at each site. EPA therefore has determined that the Director should determine the appropriate design criteria, such as wedgewire screen slot opening size, on a case-by-case basis. Since no impingement mortality and entrainment Characterization Study is required under this streamlined option, EPA expects that this determination would be based on available information regarding species and life-stage composition of organisms within the receiving waterbodies. Facilities may wish to assemble available data and propose a screen slot opening size for the Director's consideration. Some commenters stated that EPA should develop peer-reviewed criteria for evaluating pre-approved technologies other than the wedgewire screen technology described in § 125.99(a). EPA disagrees that it needs to develop specific criteria for evaluating pre-approved technologies. EPA believes that the Director is best appropriate technologies for approval in their jurisdictions, since these Directors are most familiar with the site- conditions and intake configurations of the facilities within their jurisdictions, and have physical access to the facilities. Under § 125.99, EPA has set forth a broad framework outlining the types of information that the permitting authority would need to evaluate specific technologies, including design criteria of the proposed technology, site characteristics and conditions necessary to ensure that the technology will meet the performance standards, and data to demonstrate that the facilities in the Director's jurisdiction with the proposed technology and site conditions will be able to meet the performance standards in § 125.94(b). EPA believes that the Directors will be able to evaluate the data and make determinations as to whether the proposed technologies are suitable for use as approved design and construction technologies in their jurisdictions. However, EPA is requiring that the Director take public comment on such determinations prior to finalizing them. In answer to comments that EPA should not require facilities choosing the approved design and construction compliance alternative to demonstrate through monitoring that they meet the applicable performance standards, EPA disagrees. EPA believes that verification monitoring is very important because, while the pre-approved technologies are designed to meet the performance standards in most cases, the actual efficacy of any technology will be affected by site-specific circumstances and conditions, as well as proper operation and maintenance of the technology. For this reason, EPA believes that it is necessary and appropriate for these facilities to prepare a Technology Installation and Operation Plan that describes how they will operate and maintain the technology and assess success in meeting the performance standards, as well as adaptive management steps they will take if the technology does not perform as expected. They must also propose a Verification Monitoring Plan to describe the monitoring they will perform to support their performance assessment. EPA notes that facilities that select the approved technology alternative have significantly reduced application and information collection requirements relative to facilities that comply under other alternatives. One commenter stated that the approved design and construction technology alternative will not be sufficiently protective given the complexity of waterbodies. While EPA does not agree with this comment, EPA recognizes that the efficacy of a given technology will be affected by site- specific conditions, such as biological and chemical factors in the waterbody. Because the efficacy of the technology will be affected by such site-specific conditions, EPA has required all facilities that choose to comply using the approved design and construction technology compliance alternative to submit a Technology Installation and Operation Plan and a Verification Monitoring Plan, and to determine if they are meeting the applicable performance standards through monitoring, and adjust their operations accordingly if they are not. EPA believes, based upon extensive research, that the majority of facilities with the appropriate site conditions, and that have installed and properly operated 41616 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations and maintained submerged cylindrical wedgewire screen technology, should be capable of meeting the performance standards set forth in § 125.94(b). For facilities that fail to meet performance standards through the approved design and technology alternative, the Director may amend the facility's permit to require the use of additional design and construction technologies, operational measures, and/or restoration measures, in order to meet the performance standards, or if appropriate, issue a site- speciFicHe'termination of BTA. 5. Capacity Utilization Threshold In the proposed rule, EPA introduced reduced requirements for facilities that are typically not operating year-round and would therefore bear a proportionately higher cost to comply with the rule. EPA proposed that facilities that operate less than 15% of the time (also known as peaking facilities) would only be subject to impingement reductions, regardless of the waterbody type upon which the facility is located. Generally, commenters supported the concept of reduced requirements for peaking facilities. However, commenters stated that EPA must further refine the definition of peaking facilities and in many cases suggested that EPA adopt the United States Department of Energy's definition of capacity utilization. Aspects of EPA's definition on which commenters requested clarification included how to measure the capacity rate (per intake, per facility, per generating unit, etc.), the time frame for determining historic utilization ""rates",""arrd"tliBTteftrrttlon of ''available" with respect to how to calculate the capacity utilization rate. One commenter further suggested that EPA allow an expanded definition (i.e., a higher capacity utilization rate) for facilities that typically operate in periods of low abundance of entrainable organisms. One commenter further requested that the reduced requirements for peaking facilities be extended to account for future operations at the plant as well. Another commenter expressed concern over the definition of the threshold, as the operational time for the facility could still coincide with periods of high abundances of organisms and therefore still result in significant entrainment, One commenter opposed the threshold, stating it could encourage facilities to reduce electricity production in order to have less stringent requirements and therefore impact energy production, prices, and energy supply nationwide. State commenters generally supported the concept, but were divided as to the threshold utilization rate; some States preferred a lower threshold and one mentioned that it would prefer a higher threshold. One State did not support the reduced requirements for peaking facilities, noting that the time frame in which the facility operates may be more important than the volume withdrawn. Another State suggested that restoration or mitigation also be required of peaking facilities. EPA has identified peaking facilities in the final Phase II rule as those laryiTrtTes'tfiardpefate at an overall capacity of less than 15 percent. EPA believes that facilities operating below 15% should be subject to less stringent compliance requirements relative to a typical base load facility. The threshold of 15% is based on these facilities' reduced operating levels, low potential for entrainment impacts, and consideration of economic practicability (see, 67 FR 17141). To address commenter concerns, EPA has modified the capacity utilization definition to say that the capacity utilization rate applies only to that portion of the facility that generates electricity for transmission or sale using a thermal cycle employing the steam water system as the thermodynamic medium. The Agency has amended the definition of the capacity utilization rate threshold to remove the term "available" from the definition, as requested by comments. Further, the Agency has allowed for calculation of the capacity utilization rate on an intake basis, when the intake is exclusively dedicated to a subset of the plant's generating units, and for determination of the capacity utilization 'raTeT5IsT33~on~a~5mding commitment of future operation below the threshold. Peaking facilities are typically older, less efficient generating units. Because the cost of operation is higher, peaking facilities are generally employed when generating demand is greatest and economic conditions justify their use. Such usage is typically a fraction of the unit's overall generating capacity and represents significantly less cooling water used when compared to the design intake capacity. This would appear to obviate the need for entrainment controls for the facility. Most peaking facilities are employed during the highest electrical demand period, typically mid-winter or mid- summer. It is generally accepted that while these seasons can sometimes be associated with a higher abundance of aquatic organisms or spawning events, mid-winter and mid-summer are not typically considered to be critical periods for aquatic communities. Given these operating conditions, generally entrainment controls would appear to be an unnecessary cost for these facilities because the losses, while they occur, would have minimal adverse environmental impact. D. Site-Specific Approach Past implementation of section 316(b) often followed the draft guidance document published in 1977, which promoted a largely site-specific approach. In this rulemaking, EPA is establishing national performance standards for best technology available for minimizing adverse environmental impacts in connection with cooling water intake structures. Many comments were received regarding a site-specific approach to implementation. 1. Approach Many commenters favored a site- specific approach in place of national performance standards. Many of the commenters cited a need for flexibility to comply with the regulations, and stated that only a site-specific approach can represent the best framework for addressing site-specific environmental impacts in a cost-effective manner. Commenters also favored an approach that resembles current practices for implementation of 316(b), in which site- specific determinations are made without reference to national performance standards. Some commenters did not support the concept of a site-specific rule. One commenter stated that it does not fulfill a national standard and allows a more lenient application for some facilities. Another commenter added that a site- specific approach favors industry, as the resources of the regulators and interested public groups to respond to information-intensive site-specific determinations are limited. Some States also expressed concern over a site- specific approach, as it could be less stringent than the present approach, as well as more burdensome. Some other States expressed support for site- specific approaches. In the final rule, EPA has established national performance requirements for the reduction of impingement mortality and entrainment that reflect best technology available to minimize adverse environmental impact for Phase II existing facilities, and has authorized five different compliance alternatives to achieve those standards, including a site-specific alternative. Thus, the Agency has provided both clear national standards of environmental protection and sufficient flexibility to allow for the selection of cost-efficient approaches to compliance and permit administration. In addition, under certain compliance alternatives, Phase II existing facilities Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41617 can use restoration measures, either in lieu of, or in combination with technologies and/or operational measures, when design and construction and/or operational measures alone are less feasible, less --Gosi-effeGtive-sr-less-eBvironniental-ly-— desirable. This provides additional flexibility to permittees and permitting agencies. Finally, as discussed in Section VII of this preamble, EPA does not agree that all aspects of certain site- specific approaches effectively fulfill the requirements of section 316(b). 2. Existing Programs and Determinations Several commenters stated that there is already a successful 30-year history of implementing section 316(b). Some commenters noted that many States currently implement 316(b) using a site- specific approach and that these programs should be allowed to continue, including any restoration or enhancement programs the States have established. Others stated that existing BTA determinations (conducted using a site-specific approach) should remain valid. EPA acknowledges that some States' existing programs and determinations have been successful in reducing adverse environmental impacts to waters of the United States associated --w-ith-eoottng^Wcrteri-rrtake-struetures: EPA disagrees, however, that all existing BTA determinations should remain valid. Some historical BTA decisions may be based on physical, chemical or biological conditions that are no longer relevant at the site, or reflect BTA technology that is outdated and would not meet the performance standards set forth in today's final rule. However, the final rule provides for EPA approval of alternative State program requirements where such State NPDES requirements will result in environmental performance within a watershed that is comparable to the reductions of impingement mortality and entrainment that would otherwise be achieved under § 125.94. (see § 125.90(c)). Thus, this rule provides a reasonable degree of flexibility for States to implement existing effective programs. In § 125.94(e), States are also allowed to establish more stringent BTA requirements if necessary to comply with State, tribal, or other federal law. E. Implementation 1. Calculation Baseline Numerous commenters indicated that they were unclear as to how to calculate the baseline conditions for impingement mortality and entrainment. Some commenters suggested that the calculation baseline should reflect unrestricted operation at full design capacity year-round to avoid continually changing the baseline, since maintenance and operational schedules -change-over-time^Anothet-commenter added that the baseline definition must specify that data be based upon maximum operation of a given facility, to avoid allowing a facility to withdraw more water than it has been permitted for (based on an averaged flow). Other commenters claimed that the use of a calculation baseline was problematic due to the difficulties of extrapolation between localities and waterbody types. One commenter asserted that the calculation baseline should reflect current local environmental conditions, not historical or hypothetical future conditions and should specify the level of operation that would be maintained in the absence of operational controls implemented for reducing impingement and entrainment. Many commenters supported an "As Built" alternative approach where a facility would calculate entrainment reduction based on historical measurements before installation of new technology or sampling immediately in front of the new technology and enumerating the organisms of a size that will pass through a standard 3/a-inch --Screen-SeiteraLcommenters-agreed that the use of historical data would aid in estimating the calculation baseline while others cautioned against the use of historical data that may not be relevant to the current conditions. One commenter disagreed with EPA's statement that the baseline could be estimated by evaluating existing data from a nearby facility; the commenter asserted that site-specific factors determine whether an organism will interact with a cooling water intake structure and/or survive the interaction. Overall, most commenters recommended that EPA allow the Director broad discretion and flexibility in evaluating the calculation baseline due to varying site conditions. The calculation baseline provides a standard intake configuration by which facilities can determine relative reductions in impingement and entrainment. EPA acknowledges the numerous comments on the proposed definition and has refined the definition to provide more clarity in implementing this concept. For example, the definition in the proposed rule incorporated a shoreline intake structure. In the final rule, the definition has been clarified to specify a %-inch mesh traveling screen at a shoreline intake structure. Based on available data that indicate this is a common intake structure configuration at Phase II existing facilities, EPA designated a 3/a- inch screen as the standard mesh size against which reductions will be calculated. Similarly, the assumption of no impingement or entrainment controls in the definition in the proposed rule has been clarified to describe an intake where the baseline operations do not take into include any procedures or technologies to reduce impingement or entrainment. EPA recognizes that some facilities may have control technologies in place that already reduce impingement or entrainment; the final calculation baseline would allow credit for such reductions. Additionally, EPA further clarified the definition to include the potential data sources that may be used in defining the calculation baseline, such as historical data, data collected at nearby locations, or data collected at the facility. EPA is authorizing the use of existing biological data in determining the calculation baseline to minimize the impacts to facilities, provided that the data are representative of current facility and/or waterbody conditions (as applicable) and were collected using appropriate quality control procedures. EPA has further clarified the definition to provide that the calculation baseline may be based on an intake structure located at a depth other than a surface intake if the facility can demonstrate that the standard definition (i.e., a shoreline surface intake) would correspond to a higher baseline level of impingement mortality and/or entrainment. EPA chose not to incorporate operating capacity into the calculation baseline, as the definition is not dependent upon intake flow volumes. EPA has chosen to adopt the "as built" approach: as stated in § 125.93, a facility may choose to use the current level of impingement mortality and entrainment as the calculation baseline. EPA recognizes that this definition cannot address the variety of intake configurations and other conditions at all facilities and therefore cannot define the calculation baseline in all settings. However, EPA believes that the calculation baseline in the final rule is clear and straightforward to implement, and allows for proactive facilities (i.e., those with control technologies, operational procedures, or restoration measures already in place) to take credit for existing measures. 2. How Will Attainment of the Standards Be Measured? At the time of the NODA, EPA was evaluating several approaches for 41618 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations measuring success in meeting demonstrations simpler and somewhat performance standards. EPA therefore less expensive so long as the taxonomic requested comments on whether identity of collected organisms is not performance should be measured based required. The commenter noted that this -on-an-assesament-el-th-e-iHipaets-te-ftll -wotild-nofr-be-appropriate-, however, in fish and shellfish species ("all-species cases where taxonomic identification is approach") or to fish and shellfish from needed, such as where eggs and larval only a subset of species determined to be representative of all the species that have the potential to be impinged or entrained ("representative species approach"). These comments are addressed under section 2. a below. Several terms to describe the representative species approach have been used historically. To avoid confusion among the terms "representative indicator species," "representative important species," and "critical aquatic organisms," EPA is adopting the term "representative species" for the purpose of simplicity in this section. EPA also requested comment as to whether enumeration of organisms or biomass should be used as the metric for measuring success in meeting the performance standards. These comments are addressed in section 2. b below. With regard to counting absolute numbers of organisms, EPA also requested comment on the option of counting undifferentiated organisms (i.e.,at^speetfying-taxon»m-ie reductto; stages are converted to age-1 equivalents. As part of the representative species inquiry, EPA also requested comment on whether 10 to 15 species might be an appropriate number of representative species to protect all species and ecosystem functions at a facility. One commenter responded, stating that 15 was too large a number. This commenter suggested that a demonstration should focus on the four or five species and add to the list only if there was another species of special concern. In response to the commenter who suggested that EPA should evaluate factors other than reduction in numbers of organisms impinged or entrained, EPA has selected several means by which to determine compliance with section 316(b) requirements. For facilities that choose to demonstrate compliance with the performance standards, the metric that will be used to evaluate compliance with the performance standards is the facility's Hngemeatflwrtality and identification). After attempting to select optimal approaches for both the scope and metric to use in determining attainment of the performance standards, EPA has determined site-specific factors such as biological assemblage at the site, intake location, and waterbody type must be factored into decisions regarding how to evaluate attainment. EPA has therefore decided that, in its Verification Monitoring Plan (I25.95(b)(7)), the facility must propose, among other things, the parameters to be monitored for determining attainment. The Director will be best suited to review and approve proposed parameters for each facility on a case-by-case basis. a. Scope of Evaluation: All-Species Consideration vs. Representative Species Several commenters supported the use of a representative species evaluation, as opposed to the all-species evaluation, as the most practical approach in many cases. Another commenter stated that even with the entrainment through the installation of design and control technologies and/or operational measures. For these facilities, compliance may then be measured against a facility's calculation baseline, which the facility estimates and submits with its permit application package. The calculation baseline is defined at § 125.93. For facilities that choose to use compliance with the terms of a Technology Installation and Operation Plan or Restoration Plan to determine compliance, the degree of success in meeting performance standards is still an important criteria for determining if adaptive management is needed, but it would not be the basis for determining compliance. For facilities that choose to use restoration measures, attainment of performance standards will be based upon whether the production of fish and shellfish from the restoration measures is substantially similar to the level of fish and shellfish the facility would achieve by meeting the applicable impingement and/or entrainment requirements. If a facility has been approved for a site-specific repfes&ntative-^peGies-approaGh-r-factors—determ-mat-ion-flf-best-technology other than simply numeric reduction in impingement mortality and entrainment must be considered when determining attainment. On the other hand, one commenter stated that an "all species" approach could make compliance available, the Director will establish alternate requirements accordingly. EPA expects that a variety of factors will be considered in determining the appropriate compliance option for a facility, such as waterbody type, intake location, percentage withdrawal of mean annual flow of rivers or streams, capacity to upset thermal stratification in lakes, a facility's calculation baseline, and the appropriateness of existing or proposed protective technologies or measures. EPA agrees that a single approach may not be optimal in all cases. The Agency has therefore not prescribed the methods (including a metric) for assessing success in meeting performance standards in today's final rule. Rather, the Director must determine whether a clearly defined all- species approach or representative species approach is appropriate on a case-by case basis, based upon the information and proposed methods presented by the facility. The Director may choose to require evaluation of all species or of certain representative species. In response to comments regarding EPA's suggested number of representative species, the facility will propose the number of species to monitor, as well as decisions regarding species and life stages to monitor, for review and approval by the Director as part of Verification Monitoring Plan (125.95(b)(7)), Technology Installation and Operation Plan (I25.95(b)(4)(ii)), and, if applicable, the Restoration Plan required at 125.95(b)(5). As such, in cases where the representative species approach is applied, the Director may approve the number of representative species proposed by the facility, based upon the specifics of the waterbody from which the facility is withdrawing, the percentage volume of water withdrawn relative to the freshwater river or stream (as applicable), and other factors. b. Metric: Absolute Counts vs. Biomass EPA requested comment as to whether species impinged or entrained may be measured by counting the total number of individual fish and shellfish, or by weighing the total wet or dry biomass of the organisms. In response to the use of absolute counts of organisms or biomass (weight) for determining compliance, commenters offered a variety of views. Regarding the use of biomass as a metric, one commenter expressed that measuring either biomass or total undifferentiated numbers of species would be appropriate for cases where restoration was the chosen option, since restoration will never result in one-for-one species compensation. Several commenters pointed out a disadvantage of counting numbers of organisms: early life stages will dominate the numbers and thereby dominate the compliance Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41619 determination, even though most of them would have suffered large natural mortality losses even without entrainment. To correct for this, a few commenters_suggested identifying^the organisms and converting tHem to an equivalent unit to ensure that each life stage is appropriately weighed. Specifically, one commenter suggested converting to equivalent juveniles, when measuring organisms by biomass, to correct for the fact that the count will be dominated by later larval stages even though the number of these organisms per unit weight will be small compared to eggs and larvae. This commenter continued that this approach would be useful for forage species, since biomass is an appropriate measure of the organisms that serve as a food source for commercial and recreational species. EPA received many comments regarding the need for flexibility in determining the appropriate metric to use to determine attainment of performance standards. Several commenters asserted that the rule should allow flexibility in the approach and the choice of metric should factor in whether one is assessing impingement mortality, entrainment or both; species and life stages affected, and compliance option. EPA has decided to give the Director "Tli^lfulhofify to revTew~ancTapproVe methods of determining compliance proposed by the facility as part of the Verification Monitoring Plan. (125.95(b)(7)), Technology Installation and Operation Plan (125.95(b)(4)(ii)), and, if applicable, the Restoration Plan required at 125.95(b)(5). Thus, the facility will propose, and the Director will review and approve, species and life stages of concern. The Director may choose to require evaluation of all species or of certain indicator species; or the Director may elect to verify attainment of performance standards using biomass as a metric. EPA believes that as each situation will be somewhat unique, it should be left to the facility to propose and the Director approve the appropriate unit, biomass or actual counts. c. Other Means of Determining Attainment of Performance Standards Several commenters also suggested that EPA should allow for the use of existing data for measuring attainment in lieu of requiring existing facilities to collect and develop new data. CdmmenTers also suggesTedTKaTTf"a facility currently implements the best technology available to minimize adverse environmental impact, it should be found in compliance even if the newly promulgated performance standards are not being met. Other commenters expressed that a facility should be considered in compliance even during occurrences of unavoidable episodic impingement and entrainment events. These commenfers stated that in such unusual circumstances, the facility should be provided with an exemption from any regulatory actions. EPA agrees with commenters that under certain circumstances, facilities' historical data may be sufficient to verify that they are meeting performance standards, as long as the historical data is reflective of current operation of the facility and of current biological conditions at the site. For example, under compliance alternative 2, a facility may use historical data to demonstrate that existing design and construction technologies, operational or restoration measures, meet the performance standards. EPA also believes that some historical data may be appropriate for determining the calculation baseline and for characterizing the nature of impingement and entrainment at the site, and therefore has given the Director the discretion to determine whether historical data are applicable to current conditions (see 125.95(b)(l)(ii), 125.95(b)(2)(i), and 125.95(b)(3)(iii)). In addition, a facility that proves, using " ¥xisTing~dafal^triarffTias reduced its intake capacity commensurate with closed-cycle recirculating systems would be considered to be in compliance, and therefore would not be required to meet the performance standards for either impingement mortality or entrainment. After the first permit term, facilities may submit a request for reduced information collection activities to their Director. Facilities that are able to demonstrate that conditions at their facility and in the waterbody from which their facility withdraws surface water are substantially unchanged since their previous permit application will qualify for reduced requirements (§ 125.95(a)[3)). In all these cases, historical data are used and required to measure success in meeting performance standards. However, facilities required to submit a Verification Monitoring Plan must still submit verification monitoring data for at least two years following implementation of technologies and/or operational measures. Other commenters argued that a ~TacTliTyT:haTis~ implementing permit conditions reflecting a historical determination of the best technology available should be considered in compliance with today's final rule even if the facility is not meeting performance standards. EPA disagrees that a historical determination of the best technology available is appropriate for complying with the requirements set forth by today's rule. Many historical determinations of the best technology available are less protective of aquatic organisms and ecosystems than the standards set by today's rule, and would undermine the national performance standards that EPA has determined reflect the current best technology available for minimizing adverse environmental impact. Furthermore, biological, chemical and physical conditions at the facilities may have changed since the earlier determinations were made, and the best technology available determinations may no longer apply. Many of the historical best technology available determinations are twenty years old or older and may not correspond with current waterbody or operating conditions. The question whether a facility should be considered in compliance even during occurrences of unavoidable episodic impingement and entrainment events is left to the Director. At the Director's discretion, facilities that are generally in compliance, but that experience an unusual peak of impingement mortality and/or entrainment, may be considered to still be in compliance on the basis of past good performance. Moreover, the inclusion of a compliance determination alternative based on a Technology Installation and Operations Plan in the final rule also addresses these episodic issues. d. Monitoring One commenter stated that monitoring frequencies should be established to address the inherent variability in the rates in impingement and entrainment over the seasons of the year. Monthly or biweekly monitoring is probably appropriate in many cases. The same commenter stated that standard statistical procedures could be followed to establish sample sizes needed to establish appropriate levels of precision in the estimates (e.g., 95% confidence intervals within 15-25% of the mean). In contrast, another commenter pointed out that weekly sampling would be necessary to determine compliance, as had been necessary for the Salem facility. Another commenter suggested that the most cost- effective way of conducting studies would be over the periods of peak abundance. Some commenters stated that facilities should be allowed to cease monitoring following achievement of the performance standards. Some 41620 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations suggested that facilities meeting performance standards through a closed-cycle cooling system should be exempt from monitoring. Another commenter disagreed with the two-year .. ________ EPA has determined that a uniform averaging period would not be appropriate; rather, the Director will be best suited to make all such determinations by evaluating these and other factors for each facility on a case- by-case basis. The Director will be able to make determinations regarding averaging periods based upon site- specific factors, such as biological assemblage at the site, annual and diel fluctuations in concentration and populations present, and the selected compliance alternative. EPA disagrees that a facility should cease monitoring once performance standards are achieved, as site-specific conditions at any facility are bound to change with time, affecting a facility's ability to achieve performance standards. EPA agrees that facilities meeting performance standards through flow reductions commensurate with closed- cycle cooling should be exempt from monitoring (see § 125.94(a)(l)(i)). Finally, EPA believes that the two-year monitoring requirement is appropriate so that any site-specific variability in impingement and entrainment rates can be detected. e. Timing Some States favored flexibility in implementation including delaying the effective date for permits to be renewed soon after the rule is finalized. Some commenters suggested that the requirements of the rule must be timed so that facilities are not forced into a period of noncompliance because of the time needed to determine, design, and install new intake technology. One commenter expressed that implementation schedules are too strict. Along the same vein, another commenter suggested that EPA should build flexibility into the implementation schedule so that facilities are not forced into periods of noncompliance. Commenters generally wanted to see flexibility in the averaging periods (time increments for determining success in meeting the percent reduction or production specified by the performance standards and restoration requirements in § 125.94,) and a way to tailor the sampling schedules to the needs of the site. These commenters ____ indicated that the monitoring should be frequent enough to provide useful information, but not so intensive as to make the program unnecessarily costly or time-consuming. Furthermore, several recommended that a compliance schedule be written into the permits, to allow facilities to install and test new equipment. Several commenters agreed that different facilities might require _. different amounts. o£timej_as_ dictated by where they are in the cycle and what their circumstances are. EPA has provided for time to comply with permitting requirements. A facility whose permit expires more than four years after the date of publication of this final rule must submit the required information 180 days before the expiration of their permit. A facility whose permit expires within four years of the date of publication of this final rule may request that the Permit Director establish a schedule for submission of the permit application. Such submission should be as expeditiously as practicable, but no later than three and one-half years from the date of publication of this final rule. It is expected that the time that facilities need to comply with permitting requirements will be variable, ranging from one year for those not needing to do an impingement mortality and entrainment study to over three years for those needing to collect more than one years worth of impingement and entrainment data. EPA has also provided that facilities may opt to comply with the Technology installation and Operations Plan compliance scheme that allows facilities who properly implement the Technology Installation and Operations Plan (or Restoration Plan, as applicable) to be considered in compliance with the requirements of § 125.94. As indicated above, the final rule provides the Director the flexibility to establish an appropriate averaging period to meet the particular situation present in the waterbody within which the facility is located. 3. Entrainment Survival EPA invited comment on whether to allow Phase II existing facilities to incorporate estimates of entrainment survival when determining compliance with the applicable performance standards. Commenters responded with numerous comments regarding survival with respect to the performance standards as well as comments regarding EPA's assumption of zero percent entrainment survival (100 percent mortality) in the benefits assessment for today's rule. Some commenters opposing the zero percent survival assumption argued that in the event a facility can demonstrate entrainment survival, it should be awarded credits towards meeting performance standards. EPA disagrees. Today's final rule sets performance standards for reducing entrainment rather than reducing entrainment mortality. EPA chose this approach because EPA does not have sufficient data to establish performance standards based on entrainment survival for the technologies used as the basis for today's rule. If EPA had incorporated entrainment survival into any of its conclusions regarding the appropriate performance standards, then the actual performance standard would most likely have been higher. Many commenters argued that in many cases organisms survive entrainment and the zero percent survival assumption was too conservative. Some commenters suggested that EPA was biased in its approach to entrainment survival. For example, one commenter stated that EPA was biased as a result of relying heavily on old entrainment survival literature. Based on its review of all entrainment survival studies available to the Agency, EPA believes that its assumption of zero percent survival in the benefits assessment is justified. The primary issue with regard to the studies EPA reviewed is whether the results can support a defensible estimate of survival substantially different from the value zero percent survival assumed by EPA. The review of the studies has shown that while organisms are alive in some of the discharge samples, the proportion of the organisms that are aiive in the samples is highly variable and unpredictable on a national basis. In addition, some studies contain various sources of potential bias that may cause the estimated survival rates to be higher than the actual survival rates. For these reasons, EPA believes the current state of knowledge does not support reliable predictions of entrainment survival that would provide a defensible estimate for entrainment survival above zero at a national level. However, today's final rule does allow facilities to use the results of a well-constructed, sites- specific entrainment survival study, approved by the Director, in their benefits assessments when seeking site- specific entrainment requirements. The permitting authority must review and accept the study before the results may be incorporated into the benefits assessments. In cases where there is uncertainty in the survival rates, permitting authorities may want to specify that benefits be presented as a range that reflects this uncertainty. Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41621 4. Comprehensive Demonstration Study (CDS) a. Requirements and Burden The majority of commenters .-expressed-two-eoncems-regar ding- the CDS: (1) it was too burdensome and costly, and the volume of information required was too overwhelming, and (2) several components required clarification. These commenters generally suggested that the costs of such a study were underestimated, and many indicated that the cost estimates for completing the CDS contained misleading or incorrect information. Commenters indicated that the information required for completing the CDS was similar to the data that would be needed for implementing a purely site-specific approach and was therefore overly burdensome. Commenters suggested that EPA require a more simplified demonstration study or waive the requirement for facilities that select one of the approved technologies. Some commenters suggested, in general, that costs could be greatly reduced by streamlining this process, for example, by exempting facilities from certain components based on (1) facilities that have proven that they are not harming the aquatic community, and (2) facilities for which there exists relevant historical -data,- Several States anticipated that the majority of their facilities were likely to choose the site-specific compliance alternative, and indicated that a rule that requires cost/benefit analyses for many decisions would be difficult to administer and require significant resources to implement. They claimed that the site-specific performance standards compliance option would impose a substantial review burden and would require specialized expertise. Some States questioned whether existing permitting staff resources over the first 5 years will be sufficient to review material and develop permit requirements. Many commenters suggested that EPA could lower costs by streamlining the CDS, exempting facilities that are not causing adverse environmental impact or have historical data, and waiving the monitoring components for facilities that have installed approved technologies. EPA believes that many efficiencies have been added to the rule since the proposal and the NODA to address -ceneerns-4h-afr4he-GDS4s-too burdensome and costly. First, EPA has provided five compliance alternatives to choose from, one of which allows a facility to install an approved design and construction technology with minimal CDS requirements. In addition, facilities with design intake flow commensurate with closed-cycle recirculating systems are exempt entirely from the CDS; facilities may - •only-have-to-submit-partiar-eDS information if they have reduced their design intake velocity to less than or equal to 0.5 feet per second and are only required to meet requirements as they relate to reductions in entrainment. In addition, requiring an early submission of the Proposal for Information Collection allows the Director to potentially minimize the amount of information required by the facility. Also, by allowing the use of historical data, EPA has minimized costs for many facilities. In the cases where new studies are required, EPA has given the permittee and the Director discretion to set conditions for the studies which will not be overly burdensome. Facilities may also reduce costs incurred through the information collection process in subsequent permit terms by submitting, one year prior to expiration of the existing permit, a request for reduced permit application information based on conditions of their cooling water intake structure and waterbody remaining substantially unchanged since the previous permit issuance. One commenter expressed concern -tfaariiistortcal-data should-not be allowed in the development of the CDS, as it may not accurately reflect current conditions. EPA believes that some historical data may be appropriate for determining the calculation baseline and for characterizing the nature of impingement and entrainment at the site, and therefore has given the Director the discretion to determine whether historical data are applicable to current conditions. EPA expects to provide guidance to Directors to help them make determinations about historical data submitted by facilities. Historical data will not be used to determine attainment of performance standards; this will be verified through a monitoring program approved by the Director. b. Timing of Submitting Information Commenters submitted a variety of opinions about timing. Generally, most favored limiting the submittal of CDS components to a frequency equal to or greater than once every five years (one permitting cycle) to reduce burden. Another commenter argued that there is no-reason-te-mandate-tifFting-r-and that approval of the Director should not be necessary. Other commenters suggested that a time frame is necessary, and that the information should be submitted with the renewal application for a NPDES permit. Numerous commenters asserted that consultation activities should occur prior to development of the Comprehensive Demonstration Study; that schedules and requirements should be specified in the permit for various data collection, analysis, and application submission activities; implementation schedules are too strict; and monitoring requirements need clarification. Yet another commenter suggested to "start the clock" with the issuance of the renewed permit. Commenters also indicated that anywhere from one year to several years might be necessary to verify success in meeting the performance standards. Several commenters suggested that given the nature of cooling water intake impacts and the proposed requirements, section 316(b) permit and BTA determinations should not be made every five years. Instead, they suggested that one-time determinations should suffice, or that facilities should be allowed to rely on previous section 316(b) demonstrations if conditions remain essentially unchanged. There was also some general confusion as to when the rule would actually become effective. In response to the comment that EPA should not request submittal of CDS components more frequently than every five years or more, EPA has included a provision whereby a facility may be granted reduced CDS submittal requirements if it can prove that conditions at the facility and in the waterbody have not substantially changed. Facilities will be required to review whether conditions, such as biological, chemical or physical conditions, have substantially changed at each permit renewal cycle. If conditions have changed, facilities will be required to submit all of the relevant CDS components (those that would be affected by the changed conditions when they submit the application for permit renewal. One commenter stated that the CDS should be a one-time submittal. EPA disagrees that all components of the CDS should only be researched and submitted a single time for the lifetime of the facility, regardless of potential changes in the plant and/or waterbody, because the natural and anthropogenic changes that occur in waterbodies over time may affect a facility's ability to meet performance standards using the current design and construction technologies, operational measures, and/or restoration measures in place. In response to comments that timing was not clear in previous versions of the rule, EPA agrees, and has clarified timing issues in today's final rule. A 41622 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations facility whose permit expires more than four years after the date of publication of this final rule must submit the required information 180 days before the-expiration-oi41reir-perrrtit-.~A-facility whose permit expires within four years of the date of publication of this final rule may request that the Permit Director establish a schedule for submission of the permit application, but that such submission should be as expeditiously as practicable, but no later than three and one-half years from the date of publication of this final rule. It is expected that the time that facilities need to comply with permitting requirements will be variable, ranging from one year for those not needing to do an impingement mortality and entrainment study to over three years for those needing to collect more than one years worth of impingement and entrainment data. Some commenters felt that decisions about the timing of the CDS submittal should be left to the Director. EPA agrees and has provided only that the proposal for information collection should be submitted prior to the start of information collection activities, but that the facility may initiate information collection prior to receiving comment from the Permit Director. All other - cornponerrts-of the Comprehensive Demonstration Study must be submitted 180 days prior to permit expiration except as noted above for the first, permit term following promulgation of the rule. 5. State Programs Many States requested that existing State section 316(b) programs be allowed to be used to meet the requirements of Phase II. One commenter asserted that the Phase II rule should not overturn past State section 316(b) decisions at existing facilities that were made on a site- specific basis and that examined the impacts of the cooling water intake structure in relation to the specific biological community. Several commenters stated that EPA did not sufficiently recognize the work already done by the States in implementing section 316(b). Several commenters do not believe that a State should have to demonstrate that its program is "functionally equivalent" to today's rule (i.e., that its alternative regulatory requirements achieve environmental •-performance-within-a-watershed-thaHs— comparable to the reductions of impingement mortality and entrainment that would otherwise be achieved under §125.94). In response to comments about existing State section 316(b) programs, EPA believes that § 125.90(c) in today's rule, by allowing alternative State programs, acknowledges the work already done by States. In response to the-comment that a State-should not have to prove that its program achieves environmental performance comparable to those that would be achieved under § 125.94, EPA disagrees. While EPA is giving significant flexibility to permitting agencies at the State level to determine how and what each facility must protect and monitor, it believes it is important to set uniform national performance standards. F. Restoration In the proposed rule EPA requested comments on the use of restoration measures by facilities within scope of the rulemaking (67 FR 17146). EPA received diverse comments. Many commenters supported a role for restoration measures. Several commenters stated that allowing restoration provides additional flexibility to those who must comply with the section 316(b) requirements, and may provide a more cost-effective means of minimizing adverse environmental impact than operational measures or design and construction technologies. Other commenters stated -thatresterat4on4s-a-weil-aeeepted concept that should have a voluntary role in section 316(b) determinations and constitutes an appropriate means for reducing the potential for causing adverse environmental impact. Several commenters felt that restoration could provide significant benefits in addition to compensating for impingement and entrainment losses. A number of commenters requested flexibility in the implementation of restoration projects. Some commenters stated that restoration should not be limited to supplementing technology or operational measures, but should instead be allowed as a complete - substitute for such measures. However, other commenters stated that restoration measures should only be used once every effort has been made to use technology to avoid impacts. Commenters further stated that restoration should not be mandatory and that EPA lacks authority under section 316(b) to require it, but also asserted that it should have an important role in section 316(b) permitting decisions. Commenters also -statedrthat-restoratiori-frheuld-not be considered the best technology available for minimizing adverse environmental impact because it is not a technology that addresses the location, design, construction, or capacity of a cooling water intake structure. However, one commenter argued that past restoration measures should be considered during a regulator's determination of whether or not adverse environmental impact is occurring from a cooling water intake structure. Other commenters felt restoration should have a limited role or no role in the context of section 316(b). One commenter wrote that restoration measures, in the context of section 316(b), are generally unworkable and that the only measurable restoration method would be offsetting, in which an applicant stops use of an older intake facility that does more harm than the proposed one. One commenter stated that restoration methods must reproduce the ecological value of lost organisms and that they have not seen restoration projects adequately successful in this manner in their region of the country. Many commenters pointed out uncertainties associated with compensating for those organisms impacted by a cooling water intake structure through restoration. Some commenters suggested that, if restoration is allowed, there should be consultation with other State and Federal resource agencies to avoid inconsistent approaches and to provide useful information on the affected waterbody. Several commenters remarked on EPA's proposal to include requirements for uncertainty analysis, adaptive management plans, and peer review in the final rule. Some commenters were in favor of the requirements and felt that they would enhance restoration measure certainty and performance. Some commenters were concerned that the requirements would be overly burdensome or would overly restrict the restoration measure options available to permit applicants. EPA has retained restoration in the final rule and believes that the restoration requirements strike an appropriate balance between the need for flexibility and the need to ensure that restoration measures achieve ecological results that are comparable to other technologies on which the performance standards are based. Facilities that propose to use restoration measures, in whole or in part, must demonstrate to the Director that they have evaluated the use of design and construction technologies and/or operational measures and found them to be less feasible, less cost-effective, or less environmentally desirable than meeting the applicable performance standards in whole or in part through the use of restoration measures. The requirement to look at design and construction technologies and/or Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41623 - -eperatienal^Heaswes-ffl-er-der- te-ensure- that facilities give due consideration to the technologies on which the performance standards are based. Facilities must also demonstrate that the use of restoration measures achieves performance levels that are substantially similar to those that would be achieved under the applicable performance standards. To address concerns regarding the uncertainty of restoration measures, EPA has included, among other things, requirements for uncertainty analysis, adaptive management plans, monitoring, and peer review, if requested by the Director. Finally, EPA does not believe the requirements for restoration measures are overly burdensome or prescriptive as there is a need to ensure that these types of measures achieve the anticipated environmental benefit. Moreover, under the rule, facilities are provided at least three and one-half years to submit their restoration plan and complete the required studies. G. Costs 1. Facility-Level Costs Generally, commenters were split regarding the national costs of the rule. Industry commenters stated that the cost analysis presented in the proposal underestimated the compliance costs in several facets of the analysis, including capital costs of the technology, the site- specific contingencies associated with retrofitting, and facility down time. Several commenters stated that EPA underestimated the costs for the monitoring requirements for both the characterization study in the permit application and for verification monitoring. Other commenters generally stated the opposite, arguing that EPA overestimated the compliance costs, especially for installing cooling towers. Some commenters stated that costs should not be a consideration in section 316(b) determinations. The Agency significantly revised the approach to developing costs for the NODA. Those revisions incorporated some of the comments on the costing methodology for technologies that reduce impingement and entrainment. EPA's approach to estimating the costs cif-Uie^reqmrementS-of-ihe final-rule reflect the NODA comments on the revised methodology, and additional analyses. EPA, however, did not revise its estimates for cooling towers subsequent to the NODA because it decided not to further pursue this regulatory option for the reasons outlined more specifically in Section VII. EPA believes that our costing of cooling tower technology is appropriate as-it-is-based on-vender-and-engineering firm experience in developing costs for Phase II facilities. 2. Market-Level Impacts Numerous industry commenters stated that EPA significantly underestimated the impacts to generators, consumers, reliability, and energy supply. EPA disagrees with these commenters. EPA performed an analysis of facility- and market-level impacts (including impacts to generators, consumers, reliability, and energy supply) using the Integrated Planning Model (IPM®), which has been widely used in air quality regulations and in other public policy arenas affecting the electric power generation industry. One commenter stated that the IPM analysis does not account for the economic impacts of other regulatory programs. EPA disagrees with this assertion. The IPM base case accounts for costs associated with current federal and state air quality requirements, including future implementation of SO2 and NOx requirements of Title IV of the Clean Air Act and the NOX SIP call as implemented thrmigh a nap and trade program. Because of its relative newness, it does not account for costs associated with the Phase I facility regulations. One commenter stated that EPA justified the rule by using a cost-to- revenue comparison and that this comparison neither measures profitability nor represents the most efficient economic solution for each facility. As discussed in Section VII. above, the economic practicability of the Phase II regulation is based on the electricity market model analyses using the IPM, not the cost-to-revenue ratio. The cost-to-revenue ratio is only one of several additional measures EPA used to assess the magnitude of compliance costs. Some commenters stated that EPA did not properly take account of differences between utilities, which own and operate rate-based facilities, and nonutilities, which own and operate competitive generating facilities. EPA disagrees with this comment. EPA believes that in a deregulated market, the distinction between utilities and j.ionutilitiesJs-no-Ionger-xelevant. While such a distinction may have been important in the past, when only a few unregulated nonutilities competed with regulated utilities, this is no longer the case. The share of Phase II facilities that are owned by unregulated entities has increased from 2 percent in 1997 to 31 percent in 2001. By the time the final rule will take effect, even more Phase II facilities that currently operate under a rate-based system will be operating in a competitive market. Furthermore, EPA does not believe that nonutilities will be differentially impacted compared to utilities, even in the case that deregulation might not have taken effect in all markets by the time this rule is implemented. Competitive pressures, even in regulated environments, will reduce the ability of utilities to pass on costs to their consumers. Some commenters stated that small or publicly owned facilities may be significantly affected. EPA disagrees with this statement. EPA's SBREFA analysis showed that this rule will not lead to a significant economic impact on a substantial number of small entities (See Section XIII.C below). While municipally owned facilities bear a relatively larger compliance cost per MW of generating capacity than do facilities owned by other types of entities, EPA's analyses show that these costs are not expected to lead to significant economic impacts for these facilities. Some commenters stated that even a requirement to convert all facilities to closed-cycle cooling would not significantly affect energy supply and that the costs to facilities and consumers is small and in some cases, overstated by EPA's analysis. EPA disagrees with this statement. EPA considered several options that would require some or all facilities to install closed-cycle recirculating systems and rejected them on the basis of economic practicability and technological feasibility. See Section VII. B for more detail on why EPA rejected closed-cycle recirculating systems. H. Benefits In its analysis for section 316(b) Phase II Proposal, EPA relied on nine case studies to estimate the potential economic benefits of reduced impingement and entrainment. EPA extrapolated facility-specific estimates to other facilities located on the same waterbody type and summed the results for all waterbody types to obtain national estimates. During the comment period on the proposed rule EPA received numerous comments on the valuation approaches applied to evaluate the proposed rule, including commercial and recreational fishing benefits, non-use benefits, benefits to threatened and endangered species (T&E), as well as on the methods used to extrapolate case study results to the national level. EPA tried to address concerns raised by commenters on the proposal in the revised methodology presented in the NODA and the final rule analysis. 41624 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations JAnalys is_ Design_ A number of commenters expressed concern about EPA's reliance on a few case studies and the extrapolation method used for estimating benefits at the national level for the proposed rule analysis. The commenters noted that even within the same waterbody type, there are important ecological and socioeconomic differences among different regions of the country. To address this concern, EPA revised the design of its analysis to examine cooling water intake structure impacts at the regional-scale. The estimated benefits were then aggregated across all regions to yield the national benefits estimate. These analytical design changes were presented in the NODA. No major- comments were received on EPA's regional benefit approach as described in the NODA. 2. Commercial Fishing Benefits During the comment period on the proposed rule EPA received a number of comments on the methods used to estimate producer surplus and consumer surplus in the commercial fehing~sectOT."CominenL«rs felt~thatthe~ methods overestimated benefits. The new methods used by EPA assume that producer surplus is 0% to 40% of gross revenues in the commercial fishing sector. EPA also now assumes that the Phase II rule will not create increases in commercial harvest large enough to impact prices. Thus, no consumer surplus impact is estimated. Commenters on the NODA noted these changes and agreed with them. 3. Recreational Fishing Benefits A number of comments were received on the recreational fishing benefits estimates EPA included in the proposal, which primarily relied on a benefits transfer approach. Benefit transfer involves adapting research conducted for another purpose in the available literature to address the policy questions in hand. For more detail on the valuation methods used in the final rule analysis, see Chapter A9 of the Regional Analysis document (DCN 6— 0003). For three of the nine case studies, this analysis was supplemented by original revealed preference studies. "Kevealecl preference methods use observed behavior to infer users' value for environmental goods and services. Examples of revealed preference methods include travel cost, hedonic pricing, and random utility models (RUM). For more detail on the revealed preference methods used in the final rule analysis, see Chapters A9 and All of the Regional Analysis document _.!D?N A-°P03)^ALthough .most commenters agreed that properly executed benefits transfer is an appropriate method for valuing nonmarket goods, they pointed out that original revealed preference studies that provide site-specific recreational fishing benefit estimates provide a superior alternative to benefits transfer. In response to these comments, EPA developed original or used available region-specific recreational angler behavior models, which provide site- specific estimates of willingness-to-pay for improvements in recreational fishing opportunities, to estimate recreational fishing benefits from reduced impingement and entrainment for seven of the eight study regions. Chapter Al 1 of the Regional Analysis document provides detailed discussion of the methodology used in EPA's RUM analysis (DCN 6-0003). Due to data limitations, EPA used a benefit transfer approach to value recreation fishing benefits from reduced impingement and entrainment in the Inland region. 4. Non-Use Benefits Numerous comments were received estimates. Most commenters agreed that non-use values are difficult to estimate and that EPA's estimates of non-use benefits using the 50% rule was inappropriate because it relies on outdated studies. Commenters, however, disagreed as to whether EPA had vastly overstated or underestimated non-use benefits in the proposed Phase II rule analysis. Some commenters stated that EPA's approach to estimating non-use benefits of the proposed rule significantly overestimates total benefits and that ecological benefits of the section 316(b) regulation are negligible. Other commenters asserted that EPA's benefits estimates significantly undervalued the total ecological benefits (including use and non-use) of preventing fish kills. These commenters indicated that it would be impossible to claim that the value of the unharvested commercial and recreational and forage species lost to impingement and entrainment was equal to zero. Reasons some commenters gave for the underestimation of total benefits rhcTMell^nVe'TcTrowingrtoraTTdsses were underestimated by using outdated monitoring data for periods when population levels (and therefore impingement and entrainment) were much lower than the present; cumulative impacts were not sufficiently considered; recreational and commercial values were underestimated; commercial invertebrate species were ignored; ecological value of forage species was not considered; non-use benefits were underestimated; and secondary economic impacts were not included. Overall these commenters argued that a net benefit underestimation could be corrected by (1) assuming that non-use values were two times the estimated value of recreation, commercial and forage values; and (2) assuming that unharvested fish had a value greater than zero. In response to public comments regarding the analysis of non-use values in the proposed rule, EPA considered the results of several different approaches to quantifying non-use values. The Agency points out that none of the available methods for estimating either use or non-use values of ecological resources is perfectly accurate; all have shortcomings. EPA has determined that none of the methods it considered for assessing non- use benefits provided results that were appropriate to include in this final rule, and has thus decided to rely on a qualitative discussion of non-use benefits. The uncertainties and methodological issues raised in the approaches considered could not be resolved in time for inclusion in the rule. EPA continues to evaluate various approaches for evaluating non-use benefits of CWA rules. 5. Habitat Replacement Cost (HRC) Some commenters argued that the HRC methods are not legitimate valuation methods because they concern costs, not benefits. However, other commenters argued that although HRC analysis is not a benefit's analysis in the strict economic sense it can provide a practical approach to capturing the full range of ecosystem services and, thus, is appropriate for evaluating the benefits of this rule. These commenters further pointed out that "restoration cost is used as a measure of damages under CERCLA for Superfund sites, under the National Marine Sanctuaries Act, and under the oil spill provisions of the Clean Water Act. Use of restoration costs was explicitly upheld in the landmark Ohio vs. Interior court decision of 1989." EPA has removed the disputed results of the HRC analyses from its benefits estimates for the final rule. For the NODA, EPA revised the HRC analysis presented in the proposed rule (see 67 FR 17191). Instead of the costs of habitat replacement, EPA used estimated willingness-to-pay values for the resource improvements that would be achieved by the habitat replacement/ restoration equivalents. Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41625 NODA, EPA received a number of comments on the revised habitat-based valuation method. Specifically, several commenters questioned the appropriateness of using willingness to pay values for habitat restoration as a "proxy" for either the total value or the non-use value of the fishery resources that would be preserved due to reduced impingement and entrainment. EPA explored this approach to estimating non-use values for three case study regions: the North Atlantic, Mid- Atlantic, and Great Lakes Regions. However, due to limitations and uncertainties regarding the application of this methodology, EPA elected not to include benefits based on this approach in the costs and benefits analysis of the final section 316(b) rule. 6. Benefits to Threatened and Endangered Species. Similarly to the HRC approach, commenters strongly disagreed about the appropriateness of EPA using the societal revealed preference (SRP) method to value benefits from reducing impingement and entrainment nf threatened and endangered species because these methods concern costs not benefits. The SRP method uses (1) evidence of actions taken to benefit a resource that were developed, approved, and implemented voluntarily by government and quasi-government agencies and (2) data on anticipated and actual expenditures required to complete the actions. EPA has removed the disputed results of the societal revealed preference analyses from its benefits estimates for the final rule because the uncertainties and methodological issues raised in the approaches considered could not be resolved in time for inclusion in the rule. Some commenters argued that benefits transfer is the second best approach to estimating benefits from improved protection of threatened and endangered species if conducting an original stated preference study is not feasible. Specifically, the commenters recommended that EPA use benefits transfer for valuing improved protection of threatened and endangered species .. inste^d..of-thH. s o c ietaLi&v salad preference method. In response to these comments, EPA has explored a benefits transfer approach to valuing improved protection of threatened and endangered species due to the final section 316(b) regulation. For detail, see Chapters A13 and B6 of the Regional Analysis document (DCN 6-0003). EPA, however, notes that benefits based on this method were not included in the benefit cost analysis-oLthe-final-section-3-16(b) rule due to the uncertainties and limitations discussed in Section A13-6.1 of the Regional Study document (see DCN 6- 0003). 7. Timing of Benefits During the comment period on the proposed ride, EPA received a number of comments on the time at which benefits of the rule accrue to society. The commenters assert that the estimated commercial and recreational fishing benefits are overstated because timing of benefits was not taken into account. Specifically, the commenters argue that benefits could not be fully realized until installation of the cooling technology is completed and enough years pass after that first year of reduced impingement and entrainment mortality such that every fish avoiding impingement and entrainment in that year can be harvested by commercial and recreational fishermen. In response to public comments on the proposed rule analysis, EPA revised recreational and commercial fishing benefits analysis to account for a one-year -tonstraetion-period-required-to install CWIS technology to reduce impingement and entrainment, and a time lag between impingement and entrainment cessation and the time when recreational and commercial fish species will be large enough to be harvested. In accounting for a delay in benefits, EPA used both a three percent and a seven percent discount rate as recommended by OMB requirements. /. EPA Legal Authority 1. Authority To Set a National Standard for Cooling Water Intake Structures Some commenters challenged EPA's authority to set a national standard for cooling water intake structures, arguing that CWA section 316(b) requires EPA to provide a site-specific assessment of "best technology available to minimize adverse environmental impact." These commenters maintain that the language and legislative history of CWA section 316(b), the objectives of the CWA, and prior EPA practice of site-specific application of CWA section 316(b) preclude EPA from setting a national standard under this rule. EPA is authorized under section 501 (a) of the Clean Water Act "to prescribe such regulations as are necessary to carry out [its] functions" under the Clean Water Act. Moreover, EPA interprets CWA section 316(b) to authorize national requirements for cooling water intake structures. CWA section 316(b) applies to sources subject to CWA sections 301 and 306, which authorize EPA to promulgate national categorical effluent limitations guidelines and standards for direct dischargers of pollutants. The reference in CWA section 316(b) to these sections indicates that Congress expected that CWA section 316(b) requirements, like those of CWA sections 301 and 306, could be applied as a national, categorical standard. Cronin v. Browner, 898 F. Supp. 1052, 1060 (1995) ("EPA was also free to choose, as it did, to implement section 316(b) by issuing one overarching regulation that would apply to all categories of point source subject to sections 301 and 306 that utilize cooling water intake structures."); see also Virginia Electric Power Co. v. Costle, 566 F. 2d 446 (1977). 2. Authority To Consider Cost in Establishing Performance Standards and Compliance Options Some commenters objected to EPA's consideration of costs in the determination of BTA. These commenters note that CWA section 316(b) does not expressly mention compliance costs, in contrast to other technology-based provisions of the CWA, which explicitly direct EPA to consider such costs. If Congress had intended that EPA consider costs under section 316(b), they argue, it would have expressly directed the EPA to do so. EPA believes that it legitimately considered costs in establishing "best technology available" under CWA section 316(b). Although CWA section 316(b) does not define the term "available," it expressly refers to CWA sections 301 and 306—both of which require EPA to consider costs in determining the "availability" of a technology. Specifically, CWA section 301(b)(l)(A) requires certain existing facilities to meet effluent limitations based on "best practicable control technology currently available," which requires "consideration of the total cost of application of technology in relation to the effluent reduction benefits to be achieved from such application." 33 U.S.C. 1314(b)(l)(B). Similarly, CWA section 301(b)(2)(A) requires application of the "best available technology economically achievable," which in turn requires consideration of "the cost of achieving such effluent reduction." 33 U.S.C. 1314(b)(2)(B). Finally, CWA section 306(b)(l)(B), which governs the effluent discharge standards for new sources, expressly states that in establishing the "best available demonstrated control technology" the Administrator shall take into consideration "the cost of achieving such effluent reduction" 33 U.S.C. 1316(b)(l)(B). Although these standards 41626 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations are somewhat different, each mandates the consideration of costs in establishing the technology-based standard. Because CWA sections 301 and 306 are expressly cross-referenced in CWA section 316(b), EPA believes that it reasonably interpreted CWA section 316(b) as authorizing consideration of the same factors considered under CWA sections 301 and 306. including cost. EPA's interpretation of section 316(b) as authorizing a consideration of costs was explicitly upheld in litigation on the Phase I new facilities rule. Riverkeeper v. EPA, slip op. at 28 (2nd Cir., Feb. 3, 2004).EPA's interpretation is supported by the legislative history of CWA section 316(b): " 'best technology available' should be interpreted as best technology available at an economically practicable cost." See 118 Cong. Rec. 33,762 (1972), reprinted in 1 Legislative History of the Water Pollution Control Act Amendments of 1972. 93d Cong., 1st Sess. at 264 (Comm. Print 1973) (Statement of Representative Don H. Clausen). EPA's interpretation of CWA section 316(b) is also consistent with judicial interpretations of the section. See, e.g., Seacoast Anti-Pollution League v. Costle, 597 F.2d 306, 311 (1st Cir. 1979) ("The legislative history clearly makes cost an acceptable consideration in determining whether the intake design 'reflect[sl the best technology available' "); Hudson Riverkeeper Fund, Inc. v. Orange &• Rockland UtiL, Inc. 835 F. Supp. 160, 165-66 (S.D.N.Y. 1993). 3. Authority To Allow Site-Specific Determination of BTA To Minimize AEI Based on a Cost-Cost Comparison The final rule allows a facility to pursue a site-specific determination of "best technology available to minimize adverse environmental impact" where the facility can demonstrate that its costs of compliance under the compliance alternatives in §125.94(a)(2) through (4) would be significantly greater than the costs considered by the Administrator for a like facility in establishing the performance standard. Some commenters arguelEat CWA section 316(b) does not authorize EPA to provide for a site-specific assessment of "best technology available." These commenters argued that EPA was required under CWA section 316(b) to set a national standard for "best technology available" (BTA), at least as stringent as the national standard for "best available technology" (BAT) under CWA section 301. These commenters asserted that the similar wording of the BTA and BAT requirements, and the fact that CWA section 316(b) explicitly references CWA section 301 as the basis for its application, indicates legislative intent to equate BTA with BAT and thus requires a national—not site-specific— standard. EPA disagrees. The CWA section 316(b) authorizes a site-specific determination of BTA. Although, the CWA section 316(b) authorizes EPA to promulgate national categorical requirements, EPA also notes that the variety of factors to be considered in determining these requirements—such as location and design—indicate that site-specific conditions can be highly relevant to the determination of BTA to minimize adverse environmental impact. In addition to specifying "best technology available" in relation to a national categorical performance standard, today's rule also authorizes a site-specific determination of BTA when conditions at the site lead to a more costly array of controls than EPA had expected would be necessary to achieve the applicable performance standards. This site-specific compliance option is similar to the "fundamentally different factors" provision in CWA section 301(n), which authorizes alternative requirements for sources subject to national technology-based standards for effluent discharges, if the facility can establish that it is fundamentally different with respect to factors considered by EPA in promulgating the national standard. The fundamentally different factors provision was added to the CWA in 1987, but prior to the amendment, both the Second Circuit and the Supreme Court upheld EPA's rules containing provisions for alternative requirements as reasonable interpretations of the statute. NRDCv. EPA, 537 F.2d 642, 647 (2d Cir. 1976) ("the establishment of the variance clause is a valid exercise of the EPA's rulemaking authority pursuant to section 501(a) which authorizes the Administrator to promulgate regulations which are necessary and proper to implement the Act"); EPA v. National Crushed Stone Ass'n, 449 U.S. 64 (1980) (approving EPA's alternative requirements provision in a standard adopted pursuant to CWA section 301(b)(l), even though the statute did not expressly permit a variance.) EPA's alternative site-specific compliance option in this rule is similarly a reasonable interpretation of section 316(b) and a valid exercise of its rulemaking authority under CWA section 501. Based on this interpretation, EPA and State permitting authorities have been implementing CWA section 316(b) on a case by case basis for over 25 years. Such a case-by-case determination of BTA has been recognized by courts as being consistent with the statute. See Hudson Riverkeeper Fund v. Orange and Rockland Util, 835 F. Supp. 160, 165 (S.D.N.Y. 1993) ("This leaves to the permit writer an opportunity to impose conditions on a case by case basis, consistent with the statute"). Some commenters specifically challenged EPA's authority to consider costs in its site-specific assessment of best technology available. However, as discussed earlier, EPA reasonably interprets CWA section 316(b) to authorize it to consider costs of compliance in determining best technology "available." Therefore, where EPA fails to consider a facility's unusual or disproportionate costs in setting the national requirements for "best technology available," it reasonably authorizes permit authorities to set site-specific alternative limits to account for these costs. See Riverkeeper v. EPA, slip op. at 25 (2nd Cir. Feb. 3, 2004) (upholding site-specific alternative limits under the Phase I rule for new facilities where a particular facility faces disproportionate compliance costs.) In addition, EPA notes that—contrary to some commenters' assertions—the rale does not in fact authorize permitting authorities to consider a facility's "ability to pay" in its site- specific assessment of BTA. It only allows consideration of whether the facility has unusual or disproportionate compliance costs relative to those considered in establishing the performance standards—not whether the facility has the financial resources to pay for the required technology. Moreover, in setting the alternative BTA requirements, the permit authorities may depart from the rule's national technology-based standards only insofar as necessary to account for the unusual circumstances not considered by the Agency during its rulemaking. 4. Authority To Allow Site-Specific Assessment of BTA Where Facility's Costs of Compliance Are Significantly Greater Than Benefits of Compliance Some commenters objected to the second site specific regulatory option— authorizing a site-specific determination of best technology available where the facility can demonstrate that its costs of compliance under §125.94(a)(2) through (4) would be significantly greater than the benefits of complying with the applicable performance requirements at the facility. These commenters argue that a cost-benefit decision making criterion is not authorized under the CWA. Many of these commenters assert Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41627 that while it may be reasonable for EPA to exclude technologies if their costs are "wholly disproportionate" to the benefits to be achieved, EPA lacks the statutory authority to conduct a formal cost/benefit analysis to determine the best technology available on a site- specific basis. EPA believes that the Clean Water Act authorizes a site-specific determination of the best technology available to minimize adverse environmental impact where the costs of compliance with the rule's performance standards are significantly greater than its benefits. This authority stems from the statutory language of CWA section 316(b). As discussed in Section III above, Section 316(b) requires that cooling water intake structures reflect the best technology available for minimizing adverse environmental impact. The object of the ""besttechnotogy-avairabte—is-expHcitly articulated by reference to the receiving water: to minimize adverse environmental impact in the waters from which cooling water is withdrawn. In contrast, under section 301 the goal of BAT is explicitly articulated by reference to a different purpose, to make reasonable further progress toward the national goal of eliminating the discharge of all pollutants (section 30l(b)(2)(A)). Similarly, under section 304, the goal of BPT and BCT is explicitly articulated by reference to the degree of effluent reduction attainable, (section 304(b)(l)(A) and section 304(b)(4)(A)j. EPA has previously considered the costs of technologies in relation to the benefits of minimizing adverse environmental impact in establishing 316(b) limits, which historically have been done on a case- by-case basis. See, e.g., In Re Public Service Co. of New Hampshire, 10 ERG 1257 (June 17, 1977); In Re Public Service Co. of New Hampshire, 1 BAD 455 (Aug. 4, 1978); Seacoast Anti- Pollution League v. Costle, 597 F. 2d 306 (1st Cir. lEJ/gjJJnder CWA section^ 3T6[bT, EPA may'consider the"oenefits"~ that the technology-based standard would produce in a particular waterbody, to ensure that it will "minimize adverse environmental impact." EPA believes that the technology-based standards established in this final rule will, as a national matter, "minimize adverse environmental impact." However, the degree of minimization contemplated by the national performance standards may not be justified by site-specific conditions. In other words, depending on the circumstances of the receiving water, it may be that application of less stringent controls than those that would otherwise be required by the performance standards will achieve the statutory requirement to "minimize" adverse environmental impact, when considered in light of economic practicability. An extreme example is a highly degraded ship channel with few fish and shellfish, but such situations can only be identified and addressed through a site-specific assessment. For these reasons, EPA reasonably interprets the phrase "minimize adverse environmental impact" in section 316(b) to authorize a site-specific consideration of the benefits of the technology-based standard on the receiving water. EPA continues to believe that any impingement or entrainment would be an adverse environmental impact, but has determined that 316(b) does not require minimization of adverse environmental impact beyond that which can be achieved at a cost that is economically practicable. EPA believes that the relationship between costs and benefits is one component of economic practicability for purposes of section 316(b), and as noted previously, the legislative history indicates that economic practicability may be considered in determining what is best technology available for purposes of 316(b). EPA believes that allowing a relaxation of the performance standards when costs significantly exceed benefits, but only to the extent justified by the significantly greater costs, is a reasonable way of ensuring that adverse environmental impact be minimized at an economically practicable cost. This does not mean that there is a need to make a finding of "adverse environmental impact" before performance standard based CWA section 316(b) requirements would apply. Rather, EPA is authorizing an exception to performance standard based requirements on a site-specific basis in limited circumstances: when the costs of complying with the national performance standards are significantly greater than the benefits of compliance at a particular site. 5. Authority To Allow Restoration To Comply With the Rule Requirements The final rule authorizes the use of restoration measures that produce and result in increases of fish and shellfish in a facility's watershed in place of, or as a supplement to, installing design and control technologies and/or operational measures that reduce impingement mortality and entrainment. Restoration measures can include a wide range of activities including measures to enhance fish habitat and reduce stresses on aquatic life; creation of new habitats to serve as spawning or nursery areas, and creation of a fish hatchery and/or restocking of fish being impinged and entrained with fish that perform a substantially similar function in the aquatic community. While the Phase I rule also authorized use of restoration measures, today's rule includes additional regulatory controls on the use of restoration measures to ensure that they are used appropriately to comply with the applicable performance requirements or site specific alternative requirements. For example, restoration measures are authorized only after a facility demonstrates to the permitting authority that it has evaluated other design and construction technologies and operational measures and determined that they are less feasible, less cost- effective, or less environmentally desirable than meeting the performance standards or alternative site-specific requirements in whole or in part through the use of restoration measures. The facility must also demonstrate that the proposed restoration measures will produce ecological benefits (i.e., the production of fish and shellfish for the facility's waterbody or watershed, including maintenance of community structure and function) at a level that is substantially similar to the level a facility would achieve through compliance with the applicable performance standards or alternative site-specific requirements. Further, the permitting authority must review and approve the restoration plan to determine whether the proposed restoration measures will meet the applicable performance standards or site specific alternative requirements. Consequently, the restoration provisions of today's rule are designed to minimize adverse environmental impact to a degree that is comparable to the other technologies on which the rule is based. The use of restoration to meet the requirements of section 316(b) is consistent with the goals of the Clean Water Act: measures that restore fish and shellfish to compensate for those that are impinged and entrained further the objective of the Clean Water Act "to restore, maintain, and protect the biological integrity of the nation's waters." 33 U.S.C. 1251(a) (emphasis added). It is also consistent with EPA's and States' past practices in implementing section 316(b) in individual permit decisions. For at least twenty years, EPA and States have authorized existing facilities to comply with section 316(b) requirements, at least in part, through the use of restoration measures. For example, the Chalk Point Generating Station, located on the Patuxent River in Prince George's 41628 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations County, Maryland constructed a fish rearing facility in partial compliance of its 316(b) obligations (DCN-1-5023- PR). Although the United States Court of Appeals for the Second Circuit recently remanded the portion of EPA's Phase I new facility rule that authorized restoration measures to meet that rule's requirements, EPA believes that portion of the decision should not apply to this Phase II rulemaking. Indeed, the Second Circuit explicitly stated that "[i]n no way [does it] mean to predetermine the factors and standard applicable to Phase II and III of the rulemaking." Riverkeeper v. EPA, slip op. at 12, note 13 (2ndCir. Feb. 3, 2004). This is probably because there are important "dlffere"ncesTie"fween iiew~and'exisfing facilities that warrant interpreting section 316(b) more broadly to give existing facilities additional flexibility to comply with section 316(b). As noted above, restoration measures have been used to comply with section 316(b) limits at existing facilities for several years because of the more limited availability of other technologies for existing facilities. Costs to retrofit an existing facility to install a "hard" technology can be much higher than costs to install one at the time a facility is constructed, and those costs can vary considerably from site to site. Thus, the range of technologies that are "available" to existing facilities to meet the performance standards is narrower than the range of technologies available to new facilities.In recognition of the vast differences between existing and new facilities, Congress established separate sections in the Clean Water Act for establishing discharge limitations on existing and new facilities. Effluent limitations guidelines for existing facilities are established under sections 301 and 304, "whereas new source perfoffnance standards are established under section 306. Those sections set out two distinct sets of factors for developing effluent limitations guidelines for existing facilities and new source performance standards for new facilities. Notably, there are only two factors explicitly stated in section 306 for the Administrator to consider in establishing new source performance standards—cost and non-water quality impacts, whereas for existing facilities Congress calls upon EPA to consider a much broader range of factors in section 304(b)(2)(b): the age of equipment and facilities involved, the process employed, the engineering aspects ... of various types of control techniques, process changes, the cost of achieving such effluent reduction, non-water quality environmental impacts (including energy requirements), and such other factors as [EPA] deems appropriate. This list reflects the wide range of facility characteristics and circumstances that can influence the feasibility and availability of a particular technology across a particular industry. Existing facilities generally face more and different problems than new facilities because of the technological challenges and high costs associated with retrofitting as compared to building a new facility. Indeed, by including the phrase "and such other factors as [EPA] deems appropriate," Congress made certain that EPA would have sufficient flexibility in establishing limitations for existing facilities to consider all relevant factors. For several other reasons, EPA believes the Second Circuit decision is not binding on this Phase II rule. First, section 316(b) requires the design of a cooling water intake structure to reflect the best technology available to "minimize adverse environmental impact." The phrase "minimize adverse environmental impact "is not defined in section 316(b). For the Phase II rule, EPA interprets this phrase to allow facilities to minimize adverse environmental impact by reducing impingement and entrainment, or to minimize adverse environmental impact by compensating for those impacts after the fact. Section 316(b) does not explicitly state when the adverse environmental impact of cooling water structures must be minimized—that is whether they must be prevented from occurring in the first place or compensated for after the fact or where the minimization most occurs—at the point of intake or at some other location in the same watershed. Therefore, under Chevron, EPA is authorized to define "minimize" to authorize restoration at "existing tacTfi'fies to minimize the effects of adverse environmental impact. In another context under the Clean Water Act, EPA has interpreted authority to "minimize adverse effects" as including authority to require environmental restoration. Section 404 of the CWA authorizes the Army Corps of Engineers to issue permits for discharges of dredged or fill material into waters of the United States. EPA was granted authority to establish regulations containing environmental guidelines to be met by the Corps in issuing section 404 permits. See CWA section 404(b)(l). Current regulations, in place since 1980, prohibit a discharge unless, among other requirements, all practicable steps are taken to avoid, minimize and mitigate for the environmental effects of a discharge. See 40 CFR 230.10. Of particular relevance here, the regulations require that steps be taken to "minimize potential adverse effects of the discharge on the aquatic ecosystem" 40 CFR 230.10(d). EPA has specifically defined minimization steps to include environmental restoration. See 40 CFR 230.75(d) ("Habitat development and restoration techniques can be used to minimize adverse impacts and to compensate for destroyed habitat"). Moreover, at the time of the Phase I litigation, EPA had not interpreted the term "reflect" in section 316(b), and therefore, the Second Circuit did not consider its meaning in determining whether restoration could be used as a design technology to meet the Phase I rule requirements. Section 316(b) requires that "the location, design, construction, and capacity of cooling water intake structures reflect the best technology available for minimizing adverse environmental impact." (emphasis supplied). The term "reflect" is significant in two respects. First, it indicates that the design, location, construction and capacity of the cooling water intake structure itself must be based on the best technology available for such structures. This authorizes EPA to identify technologies that can be incorporated into the physical structure of the intake equipment. It also indicates that the choice of what actually is the best physical configuration of a particular cooling water intake structure can take into account, i.e., reflect, other technologies—and their effects—that are not incorporated into the structure itself. For example, barrier nets are not incorporated into the physical design of the cooling water intake structure, but their use—and effectiveness—influences the physical design of the cooling water intake structure. Another relevant example is the technology known as "closed-cycle" cooling. Although this technology is physically independent of the cooling water intake structure, it directly influences decisions regarding the design capacity of the cooling water intake structure: as more cooling water is recycled, less needs to be withdrawn. Both barrier nets and closed-cycle cooling are considered "design" technologies. Similarly, properly designed restoration measures can be best technologies available that can influence the design of the physical cooling water intake structure. To put it another way, for purposes of minimizing adverse environmental impact, requirements for cooling water intake structures reflect a variety of best technologies available, which EPA Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41629 construes to include restoration measures. A dry cooling system is another example of a technology that although physically independent of the cooling water intake structure is nonetheless considered an acceptable method to minimize adverse environmental impacts. In fact, since a dry cooling system uses air as a cooling medium, it uses little or no water, dispensing altogether with the need for a cooling water intake structure. EPA has discretion to characterize restoration measures as technologies for purposes of section 316(b). Section 316(b) does not define either the phrase term "technology" and, therefore, leaves their interpretation to EPA. EPA has defined the phrase cooling water intake structure in today's rule to mean the total physical structure and any associated waterways used to withdraw cooling water from waters of the United States. This definition embraces elements both internal and external to the intake equipment. EPA did not define the term technology in today's rule, but looked for guidance to section 304(b), which the Second Circuit has recognized can help illuminate section 316(b). Section 301(b)(2) best available technology limitations are based on factors set forth in section 304(b). Section 304(b), while not using the term technology, discusses the "application of the best control measures and practices achievable including treatment techniques, process and procedure innovations, operating methods, and other alternatives." This is a broad, non- exclusive list. Indeed, BAT effluent limitations guidelines under this authority have been based on a vast array of treatment techniques, operation substitution), and management practices. See 40 CFR Part 420 (effluent guidelines for concentrated animal feeding operations); 40 CFR Part 430, Subparts B & E (effluent guideline for pulp and paper industry); See also 62 FR 18504 (April 15, 1998). Employing this broad concept of technology, in today's rule EPA has determined that the design of cooling water intake structures may reflect technologies relating to the restoration of fish and shellfish in the waters from which cooling water is withdrawn. Restoration is not included in the definition of "design and construction technology" in today's rule so as to distinguish restoration from "hard" technologies for purposes of the rule. Under the regulatory scheme of the final rule, restoration is treated differently than other technologies for several purposes, all of which are to help ensure that restoration projects achieve substantially similar performance as design and construction technologies and/or operational measures. When these restoration technologies are used they must produce ecological benefits (the production offish and shellfish for a facility's waterbody or watershed, including maintenance of community structure and function) at a level that is substantially similar to the level the facility would achieve by using other design and construction technologies and/or operational measures to achieve the applicable performance standards or alternative site-specific performance ~~RequirementsfirT§T25.94. Ih^bther words, the operation of the cooling water intake structure together with these restoration technologies will achieve the overall performance objective of the statute: to minimize the adverse environmental impact of withdrawing cooling water. For facilities using this authority, their hardware decisions for the cooling water intake structure thus take into account—or reflect—the impacts of restoration technology. EPA acknowledges that in 1982, when Congress was considering substantial • amendments to the Clean Water Act, EPA testified in support of a proposed amendment to CWA section 316(b) that would have expressly authorized the use of restoration measures as a compliance option, suggesting that EPA may have interpreted section 316(b) at that time as not authorizing restoration measures to minimize the adverse environmental impact of cooling water intake structures. In EPA's view, the Second Circuit gave undue weight to that testimony, particularly because it -was provided-b&fore4fee-Supreme Court's decision in Chevron U.S.A. v. Natural Resources Defense Council, 467 U.S. 837 (1984), which gave administrative agencies latitude to fill in the gaps created by ambiguities in statutes the agencies have been charged by Congress to implement. For at least twenty years, EPA and States have authorized existing facilities to comply with section 316(b) requirements, at least in part, through the use of restoration measures. Additionally, since 1982 EPA has gathered substantially more data to inform its judgment regarding cooling water intake structures, the environmental impact resulting from them, and various technologies available to reduce impingement and entrainment. Finally, EPA notes that, in contrast to water quality based effluent limitations that are included in NPDES permits to meet water quality standards, the required performance of restoration measures under this final rule is not tied to conditions in the water body. Rather it is tied directly to the performance standards, just as is the performance of the other technologies that facilities may use to meet the standards. While the design and operation of restoration measures will necessarily be linked to conditions in the waterbody (as is also the case for "hard" technologies) the performance standards that restoration measures must meet are not. 6. Authority To Apply CWA Section 316(b) Requirements to Existing Facilities Some commenters argued that CWA §316(b) does not apply to existing facilities, but rather authorizes only a one-time, pre-construction review of cooling water intake structure location, design, construction and capacity. EPA disagrees with this assertion. CWA section 316(b) applies to "any standard established pursuant to section 1311 [CWA section 301) or section 1316 [CWA section 306]." CWA section 301 establishes the statutory authority for EPA to promulgate technology-based standards for effluent discharges from existing sources. Therefore, CWA section 316(b) requirements can, and indeed must, apply to existing facilities. Given that section 316(b) requirements apply to existing facilities, such requirements cannot reasonably be viewed as mandating only a one-time, pre-construction review. Moreover, as the court noted in Riverkeeper v. EPA, slip op. at 44-45 (2nd Cir. Feb. 3, 2004), "if Congress intended to grandfather in new or modified intake structures as well as the related point sources that discharge heat, it could have done so in section 316(c)." 7. Authority To Regulate "Capacity" of the "Intake Structure" Through Restrictions on Flow Volume Some commenters asserted that EPA was not authorized to require closed- cycle cooling systems, pointing out that CWA section 316(b) addresses cooling water "intake structures," not cooling systems or cooling operations. EPA's performance standards based on closed- cycle cooling, they argued, constitutes an impermissible restriction of the cooling system or operation, which is not part of the "intake structure" itself. Others asserted that the term "capacity," as used in CWA section 316(b), refers to the size of the cooling water intake structure, not the volume of flow through the intake. They therefore questioned EPA's authority to regulate flow volume by requiring the use of closed-cycle cooling systems. 41630 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations The rule does not in i'act require the use of closed-cycle cooling systems. Rather, the rule provides facilities with five different compliance options, only one of which is based on closed-cycle cooling technology. Moreover, EPA is authorized to set performance standards based on closed-cycle cooling technology, as it did in the Phase I rule, which was upheld in Riverkeeperv. EPA, slip op. (2nd Cir. Feb. 3, 2004). See also Section III. 8. Authority To Determine That Cooling Constitute "Best Technology Available To Minimize Adverse Environmental Impact" Many commenters asserted that closed-cycle cooling is the "best technology available to minimize adverse environmental impact," and that EPA must therefore require facilities to reduce their cooling water intake capacity to a level commensurate with closed-cycle cooling. According to these commenters, this rule violates CWA section 316(b) by adopting performance standards less protective than "best technology available." EPA reasonably rejected closed-cycle cooling systems as "best technology available" based on consideration of relevant factors, including the costs of closed-cycle cooling, the energy impacts, the relative effectiveness of closed-cycle cooling in minimizing impingement and entrainment in variable waterbodies, and the availability of other design and control technologies that can be effective in significantly reducing environmental impacts. As the court held in "Wv-er£eepeFvr:EP7rrslip op. arZDT2mr Cir. Feb. 3, 2004), "the Clean Water Act allows EPA to make a choice among alternatives based on more than impingement and entrainment." In short, EPA has discretion to consider a variety of factors besides the efficacy of technologies, including cost, and to compare the relative effectiveness of technologies that reduce impingement and entrainment. EPA's weighing of the factors is entitled to a high degree of deference. See also Section III and VII. 9. Authority To Require Implementation of CWA Section 316(b) Through NPDES Permits Some commenters argued that EPA lacks authority to include section 316(b) requirements in section 402 NPDES permits, because — unlike sections 301, 306, and 402 — section 316(b) regulates "intakes" and not "discharges." EPA disagrees with this comment. This rule properly requires implementation of CWA section 316(b) standards through CWA section 402 NPDES permits. CWA section 402(a)(l) authorizes the issuance of NPDES permits for discharges that comply with effluent guidelines limitations under CWA sections 301 and 306. CWA section 316(b) requirements can be implemented through CWA section 402 because they apply to all point sources subject to standards issued under CWA sections 301 and 306. See, U.S. Steel Corp v. Train, 556 F.2d 822, 850 (7th Cir. 1977) (finding that CWA section 402 implicitly requires that CWA section" 3 TBTb] T5e" impTein¥hte~d" through NPDES permits). EPA's choice of NPDES permits, which already reflect CWA sections 301 and 306 effluent limitations, is reasonable. 10. Authority To Implement CWA Section 316(b) Requirements Without Compensating Regulated Entities for "Taking" of Property Several commenters suggest that this rule authorizes an impermissible regulatory taking. Specifically, they argue that the rule requires facilities to limit their intake flows, thus impairing their property rights to the water and entitling them to compensation under the Fifth Amendment to the U.S. Constitution. EPA notes, however, that the rule does not in fact require a facility to limit its intake flows. Rather, it provides a facility with a variety of compliance options, only one of which is based on flow limitations. While a facility could choose to comply with the section 316(b) requirements by reducing its intake flow to a level commensurate with a closed-cycle cooling system (the "fir§t"coinpttance~optionj7lrc"ould also select one of the other compliance options that does not require flow restrictions. EPA therefore believes that this rule does not authorize a compensable "taking" of property within the meaning of the Fifth Amendment. IX. Implementation As in the Phase I rule, section 316(b) requirements for Phase II existing facilities will be implemented through the NPDES permit program. Today's final rule establishes application requirements in §§ 122.21 and 125.95, monitoring requirements in § 125.96, and record keeping and reporting requirements in § 125.97 for Phase II existing facilities. The final regulations also require the Director to review application materials submitted by each regulated facility and include monitoring and record keeping requirements in the permit (§ 125.98). EPA will develop a model permit and permitting guidance to assist Directors in implementing these requirements. In addition, the Agency will develop implementation guidance for owners and operators that will address how to comply with the application requirements, the sampling and monitoring requirements, and the record keeping and reporting requirements in these final regulations. In this final rule, an existing facility may choose one of five compliance alternatives for establishing best technology available for minimizing adverse environmental impact at the site: (1) Demonstrate that it will reduce or has reduced its intake flow commensurate with a closed-cycle recirculating system and is therefore deemed to have met the impingement mortality and entrainment performance standards, or that it will reduce or has reduced the design intake velocity of its cooling water intake structure to 0.5 feet per second (ft/s) and is therefore deemed to have met the impingement mortality performance standards; (2) Demonstrate that its existing design and construction technologies, operational measures, and/or restoration measures meet the performance standards and/or restoration requirements; (3) Demonstrate that it has selected and will install and properly operate and maintain design and construction technologies, operational measures, and/or restoration measures that will, in combination with any existing design and construction technologies, operational measures, and/or restoration measures, meet the specified performance standards and/or restoration requirements; (4) Demonstrate that it meets the applicability criteria for a rule-specified technology or a technology that has been pre-approved by the Director and that it has installed, or will install, and will properly operate and maintain the technology; or, (5) Demonstrate that it is eligible for a site-specific determination of best technology available to minimize adverse environmental impact and that it has selected, installed, and is properly operating and maintaining, or will install and properly operate and maintain design and construction technologies, operational measures, and/or restoration measures that the Director has determined to be the best technology available to minimize adverse environmental impact for the facility. The application, monitoring, record keeping, and reporting requirements for --federal-Register^Volr 69T-Ne7-l-31-/-Fr-idftyr-Jiily"9, 2004/Rules and Regulations 41631 each of the compliance alternatives are detailed in the following sections. A. When Does the Final Rule Become Effective? This rule becomes effective sixty (60) clays after the date of publication in the Federal Register. After the effective date of the regulation, existing facilities will need to comply when an NPDES permit containing requirements consistent with Subpart J is issued to the facility (see §125.92). Under current NPDES program regulations, this will occur when an existing NPDES permit is reissued or, when an existing permit is modified or revoked and reissued. Under today's rule, a facility that is required to comply with this rule within the first four years after the publication date of this rule may request that the Director approve an extended schedule for submitting its Comprehensive Demonstration Study. This schedule must be as expeditious as practicable and not extend beyond thi-pe years and 180 days after the publication date of the final rule. The Comprehensive Demonstration Study, once submitted, forms the basis for the Director's determination of specific requirements consistent with Subpart f to be included in the permit. EPA has included this provision to afford facilities time to collect information and perform studies, including pilot studies where necessary, needed to support the development of the Comprehensive Demonstration Study. Between the time the existing permit expires and the time an NPDES permit containing requirements consistent with this subpart is issued to the facility, permit requirements reflecting the best technology available to minimize adverse environmental impact will continue to be determined based on the Director's best professional judgement. B. What Information Must I Submit to the Director When I Apply for My Reissued NPDES Permit? The NPDES regulations governing the permit application process at 40 CFR 122.21 require that facilities currently holding a permit submit an application for permit renewal 180 days prior to the end of the current permit term, which is five years (see § 122.21(d)(2)). If you are the owner or operator of a facility that is subject to this final rule, you will be required to submit the information specified at 40 CFR 122.21(r)(2), (3), and (5) and all applicable sections of § 125.95, except for the Proposal for lafermatiGn-GolleGtion-with-your application for permit reissuance. The Proposal for Information Collection component of § 125.95 should be submitted to the Director for review and comment prior to the start of information collection activities. For a typical facility that plans to install a technology, it is estimated that a facility would need to submit this Proposal for Information Collection about fifteen (15) months prior to the submission of the remainder of the required information, which is about twenty-one (21) months prior to the expiration of your current permit. This approximate timing is based on the sequential Comprehensive Demonstration Study requirements and the estimated level of effort required to complete the studies and allow time for the Director's review and approval. The timing provided in this section is for illustrative purposes only and represents a schedule that the average facility may need to follow to meet the deadlines established in today's rule. Some facilities may require more, or less time to perform the studies and prepare the application requirements. All facilities, except those that choose to comply with the rule by reducing intake capacity to a level commensurate with a closed-cycle recirculating system in accordance with § 125.94(a)(l)(i), or by adopting a pre-approved technology in accordance with § 125.94(a)(4) must submit a Proposal for Information Collection for review and comment by the Director (§ 125.95(b)(l}). Facilities that comply with impingement mortality requirements by reducing intake velocity to 0.5 ft/s or less in accordance with § 125.95(a)(l)(ii) will only need to submit a Comprehensive Demonstration Study, including a Proposal for Information Collection, for entrainment reduction requirements, if applicable. The Proposal for Information Collection requirements are detailed later in this section. Figure 1 presents an example of a possible timeframe a facility may follow in preparing and submitting application components. BILLING CODE 6560-50-P 41632 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulationsc.« s•3 <a Q.8 s 8 co U)to E Q. ?!• o> :i <fi d> C OJ E Heo tu aa SA CO <U Son , Sis O < £9S£ is fiIiSi I S3|iIs II ft E S If re o13 Q.§! l* i liiia.*: >• >. Jits OJ ftJ O <U££§£ Following submission of the Proposal for Information Collection, the Director will review and provide comments on the proposal. During this time, the facility may proceed with planning, assessment, and data collection Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41633 activities in fulfillment of Comprehensive Demonstration Study requirements. The Director is encouraged to provide comments expeditiously (i.e., within 60 days) so the permit applicant can make responsive modifications to its information gathering activities.It is assumed that most facilities would need approximately one year to complete the studies outlined in the Proposal for Information Collection. These must be completed at least 180 days prior to the end of the current pefrnTrferm, by^which timeTKe remainder of required application information must be submitted. If the facility requires more than one year to complete studies described in the Proposal for Information Collection, the facility are encouraged to consult with the Director. Facilities are also encouraged to consult with the Director regarding their schedule for study completion.After the first permit containing requirements consistent with Subpart J is issued, facilities may submit a request to their Director soliciting a reduced information collection effort for subsequent permit applications in accordance with § 125.95(a)(3), which allows facilities to demonstrate that the conditions at their facility and within the waterbody in which their intake is located remain substantially unchanged since their previous permit application. The request for reduced cooling water intake structure and waterbody application information must contain a list and justification for each information item in §§ 122.21(r) and 125.95(b) that has not changed since the "previous permit application. The applicant must submit this request at least one year prior to the expiration of the current permit term and the Director is required to act on the request within 60 days.The Director must review and approve the information you provide in your permit application, confirm whether your facility should be regulated as an existing facility under these final regulations, or under Phase III regulations for existing facilities that will be developed in the future, or as a new facility under regulations that were published on December 19, 2001 (66 FR 65256), and confirm the compliance alternative selected (compliance alternatives 1, 2, 3, 4, or 5). Following review and approval of your permit application, the Director will develop a draft permit for public notice and comment. The comment period will allow the facility and other interested parties to review the draft permit conditions and provide comments to the Director. The Director will consider all public comments received on the draft permit and develop a final permit based upon the application studies submitted and other information submitted during the comment period, as appropriate. The Director will incorporate the relevant requirements for the facility's cooling water intake structure(s) into the final permit. Today's final rule modifies regulations at 40 CFR 122.2l(r) to require Phase II existing facilities to prepare and submit some of the same ""mTofmafiorrfequired tor newTacilities. Phase II existing facilities are required to submit two general categories of information when they apply for a reissued NPDES permit: (1) Physical data to characterize the source waterbody in the vicinity where the cooling water intake structures are located (40 CFR 122.21(r)(2)), and (2) data to characterize the design and operation of the cooling water intake structures (40 CFR 122.21(r)(3)). Unlike new facilities, however, Phase II existing facilities are not required to submit the Source Water Baseline Biological Characterization Data required under 40 CFR 122.21(r)(4). Today's final rule adds a new requirement at 40 CFR 122.21(r)(5) to require a facility to submit information describing the design and operating characteristics of its cooling water system(s) and how it/they relate to the cooling water intake structure(s) at the facility. In addition, today's final rule requires all Phase II existing facilities to submit the information required under § 125.95 consistent with the compliance *liIteFnativ~e~selecTe3rTfrgeneral7 the final application requirements in § 125.95 require most Phase II existing facility applicants to submit some or all of the components of a Comprehensive Demonstration Study (§ 125.95(b), see also Exhibit II in section V). As noted in section V, facilities that do not need to conduct a Comprehensive Demonstration Study are those that (1) reduce their flow commensurate with a closed cycle, recirculating cooling system, (2) install a rule-specified or Director-approved technology in accordance with § 125.99 (except that these facilities must still submit a Technology Installation and Operation Plan and Verification Monitoring Plan), or (3) reduce intake velocity to 0.5 ft/s or less (except that these facilities must still submit a Comprehensive Demonstration Study for entrainment requirements, if applicable). Each component of the Comprehensive Demonstration Study and its applicability is described later in this section. In addition, the requirements for each of the five compliance alternatives are detailed, with respect to which components are required for each alternative. 1. Source Water Physical Data (40 CFR 122.21(r)(2)) Under the final requirements at 40 CFR 122.21(r)(l)(ii), Phase II existing facilities subject to this final rule are required to provide the source water physical data specified at 40 CFR 122.21(r)(2) in their application for a reissued permit. These data are needed to characterize the facility and evaluate the type of waterbody and species potentially affected by the cooling water intake structure. The Director is expected to use this information to evaluate the appropriateness of the design and construction technologies, operational measures, and/or restoration measures proposed by the applicant. The applicant is required to submit the following specific data: (1) A narrative description and scaled drawings showing the physical configuration of all source waterbodies used by the facility, including areal dimensions, depths, salinity and temperature regimes, and other documentation that supports the facility's determination of the waterhody type where each cooling water intake structure is located; (2) an identification and characterization of the source waterbody's hydrological and geomorphological features, as well as the methods used to conduct any physical studies to determine the intake's area of influence within the waterbody and the results of such studies; and (3) locational maps. 2. Cooling Water Intake Structure Data (40CFRl22.21(r)(3)) Under the final requirements at 40 CFR 122.21(r)(l)(ii), Phase II existing facilities are required to submit the data specified at 40 CFR 122.21(r)(3) to characterize the cooling water intake structure which should assist in the evaluation of its potential for impingement and entrainment of aquatic organisms. Information on the design of the intake structure and its location in the water column, in conjunction with biological information, will allow the permit writer to evaluate which species, or life stages of a species, are potentially subject to impingement and entrainment. A diagram of the facility's water balance should be used to identify the proportion of intake water used for cooling, make-up, and process water. The water balance diagram also provides a picture of the total flow in and out of the facility, 41634 Federal Register / Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations allowing the permit writer to evaluate the suitability of proposed design and construction technologies and/or operational measures. The applicant is required to submit the following specific data: (1) A narrative description of the configuration of each of its cooling water intake structures and where they are located in the waterbody and in the water column; (2) latitude and longitude in degrees, minutes, and seconds for each of its cooling water intake structures; (3) a narrative description of the operation of each of the cooling water intake structures, including design intake flows, daily hours of operation, number of days of the year in operation, and seasonal operation schedules, if applicable; (4) a flow distribution and water balance diagram that includes all sources of water to the facility, recirculating flows, and discharges; and (5) engineering drawings of the cooling water intake structure(s). 3. Cooling Water System Data (40 CFR 122.2l(r)(5)J Under the final requirements at 40 CFR 122.22(r)(l)(ii), Phase II existing facilities are required to submit the cooling water system data specified at 40 CFR 122.21(r)(5) to characterize the operation of cooling water systems and their relationship to the cooling water intake structure(s) at the facility. Also required is a narrative description of the proportion of design intake flow that is used in the system, the number of days of the year that the cooling water system is in operation, and any seasonal changes in the operation of the system, if applicable. The facility must also submit design and engineering calculations prepared by a qualified expert, such as a professional engineer, and supporting data to support the narrative description. This information is expected to be used by the applicant and the Director in determining the appropriate standards that can be applied to the Phase II facility. 4. Comprehensive Demonstration Study Final requirements at § 125.95(b) require all existing facilities, except those deemed to have met the performance standards by reducing intake capacity to a level commensurate with the use of a closed-cycle, recirculating cooling water system, or by reducing intake velocity to 0.5 ft/s or less (impingement mortality standards only), or facilities that select an approved technology in accordance with § 125.94(a)(4), to perform and submit to the Director all applicable components of a Comprehensive Demonstration Study, including data and detailed analyses to demonstrate that they will meet applicable requirements in § 125.94(b). As noted in section V, Comprehensive Demonstration Study requirements vary depending on the compliance alternative selected. The Comprehensive Demonstration Study has seven components: • Proposal for Information Collection; • Source Waterbody Flow Information; • Impingement Mortality and/or Entrainment Characterization Study;• Technology and Compliance Assessment Information; • Restoration Plan; • Information to Support Site-specific Determination of Best Technology Available for Minimizing Adverse Environmental Impact; and • Verification Monitoring Plan.All Phase II existing facilities, except those mentioned above, are required to qiihmit at a minimum the following: a Proposal for Information Collection (§ 125.95(b)(l)); Source Waterbody Flow Information (§ 125.95(b}(2)); an Impingement Mortality and/or Entrainment Characterization Study (§ 125.95(b)(3)); and a Verification Monitoring Plan (§ 125.95(b)(7)). Note that facilities selecting restoration measures provide a monitoring plan as part of their Restoration Plan, in accordance with § 125.95(b)(5)(v), rather than a Verification Monitoring Plan in accordance with § 125.95(b)(7). The requirements in these two provisions are similar, but tailored specifically to the monitoring needs of restoration projects, and design and construction technologies and operational measures, respectively. Phase II existing facilities that have reduced their intake velocity to less than or equal to 0.5 ft/s but are still required to reduce entrainment (if the standard applies), must submit only those components of the Impingement Mortality and/or Entrainment Characterization Study pertaining to entrainment, in addition to the other required components of the ~-6om-pTehBrrsivB-Derntmstratron Study. Facilities that are required to meet only the impingement mortality reduction requirements in § 125.94(b), are required to submit a study only for the impingement reduction requirements. Facilities that comply with applicable requirements either wholly or in part through the use of existing or proposed design and construction technologies or in part through the use of existing or proposed design and construction technologies, and/or operational measures must submit the Technology and Compliance Assessment Information in §125.95(b)(4), consisting of a Design and Construction Technology Plan (§ 125.95(b)(4)(i)) and a Technology Installation and Operation Plan (§ 125.95(b)(4)(ii)). (Facilities that use a pre-approved technology in accordance with § 125.94(b)(4) need only submit the Technology Installation and Operation Plan.) The Technology Installation and Operation Plan explains how the facility intends to install, operate, maintain, monitor, and adaptively manage the selected technologies to meet the applicable performance standards or site-specific technology requirements, and in most cases will provide the basis for determining compliance with §125.94(b). Only those Phase II existing facilities that propose to use restoration measures wholly or in part to meet the performance standards in § 125.94(b) or site-specific requirements developed pursuant to § 125.94(a)(5) are required to submit the Restoration Plan (§ 125.95(b)(5)). This Plan serves an analogous function for restoration measures to that served by the Technology and Compliance Assessment Information for design and construction technologies and operational measures, in that it shows the design of the measures, explains how the facility will construct, maintain, monitor, and adaptively manage the measures to meet applicable performance standards and/or site specific requirements, and serves as a basis for determining compliance. Only those Phase II existing facilities who request a site-specific determination of the best technology available are required to submit Information to Support Site-specific Determination of Best Technology Available for Minimizing Adverse Environmental Impact (§125.95(b)(6)). Facilities that select the compliance alternative at § 125.94(a)(4) (Approved Technology), are required to submit only two items: the Technology Installation and Operation Plan (§ 125.95(b)(4)(ii)) and the Verification Monitoring Plan (§ 125.95(b)(7)). a. Proposal for Information Collection As a facility, you are required to submit to the Director for review and comment, a proposal stating what information will be collected to support the Comprehensive Demonstration Study (see § 125.95(b)(l)). This proposal must provide the following: • A description of the proposed and/ or implemented technology(ies) and/or restoration measures to be evaluated in the study (§ 125.95(b)(l)(i)); Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41635 • A list and description of any historical studies characterizing impingement and entrainment and/or the physical and biological conditions in the vicinity of the cooling water intake structures and their relevance to this proposed study (§ 125.95(b)(l)(ii)). If you propose to use existing data, you must demonstrate the extent to which the data are representative of current conditions and that the data were collected using appropriate quality assurance/quality control procedures; • A summary of any past, ongoing, or voluntary consultations with appropriate Federal, State, and Tribal fish and wildlife agencies that are relevant to this study and a copy of written comments received as a result of such consultation (§ 125.95(b)(l)(iii)); • A sampling plan for any new field studies you propose to conduct in order to ensure that you have sufficient data to develop a scientifically valid estimate of impingement and entrainment at your site (§125.95(b)(l)(iv)). The sampling plan must document all methods and quality assurance/quality control procedures for sampling and data analysis. The sampling and data analysis methods you propose must be appropriate for a quantitative survey and must take into account the methods used in other studies performed in the source waterbody. Also, the methods must be consistent with any methods required by the Director. The sampling plan must include a description of the study area (including the area of influence of the cooling water intake structure(s)), and provide taxonomic identifications of the sampled or evaluated biological assemblages (including all life stages offish and shellfish) to the extent this is known in advance and relevant to the development of the plan. In addition, the proposal should provide other information, where available, that would aid the Director in reviewing and commenting on your plans for conducting the Comprehensive Demonstration Study (e.g., information on how you plan to conduct a Benefits Valuation Study, or gather additional data to support development of a Restoration Plan). EPA recognizes that in some cases collection and analysis of information will be an iterative process and plans for information collection may change as new data needs are identified. For example, a facility may not be able to design a Benefits Valuation Study and determine what additional data are needed (e.g., quantified information on non-use benefits) until it has first collected and analyzed the data for its Impingement Mortality and/or Entrainment Characterization Study. While the Proposal for Information Collection is only required to be submitted once, EPA encourages permit applicants to consult with the Director as appropriate after the proposal has been submitted, in order to ensure that the Director has complete and appropriate information to develop permit conditions once the permit js submitted. As stated previously, the proposal for information collection must be submitted prior to the start of information collection activities and should allow sufficient time for review and comment by the Director, although facilities are permitted to begin data collection activities before receiving the Director's comments. Directors are encouraged to provide their comments expeditiously (;'.e., within 60 days) to allow facilities time to make responsive modifications in their information collection plans. Adequate time for data collection efforts identified in the proposal for information collection prior to the due date for the permit application should also be scheduled. b. Source Waterbody Flow Information Under the requirements at § 125.95(b)(2)(i), Phase II existing facilities (except those that comply with the rale under § 125.94(a)(l)(i) with cooling water intake structures that withdraw cooling water from freshwater rivers or streams are required to provide the documentation showing the mean Annual flow ofthe waterbody and any supporting docuTnentafion an3 engineering calculations that allow a determination of whether they are withdrawing less than or greater than five (5) percent ofthe annual mean flow. This will provide information needed to determine whether the entrainment performance standards of § 125.94(b)(2) apply to the facility. Two potential sources ofthe documentation are publicly available flow data from a nearby U.S. Geological Survey (USGS) gauging station or actual instream flow monitoring data collected by the facility. Representative historical data (from a period of time up to 10 years, if available) must be used to make this determination. Under § 125.95(b)(2)(ii), Phase II existing facilities with cooling water intake structures that withdraw cooling water from a lake (other than one of the Great Lakes) or reservoir and that propose to increase the facility's design intake flow are required to submit a narrative description of the thermal stratification of the waterbody and any supporting documentation and engineering calculations showing that the increased total design intake flow meets the requirement to not disrupt the natural thermal stratification or turnover pattern (where present) of the source water in a way that adversely impacts fisheries, including the results of any consultations with Federal, State, or Tribal fish or wildlife management agencies. Typically, this natural thermal stratification will be defined by the thermocline, which may be affected to a certain extent by the withdrawal of cooler water and the discharge of heated water into the system. If increased total design intake flow is proposed, and disruption ofthe natural thermal stratification is a positive or neutral impact, the facility should include this information with the data submitted in this section. c. Impingement Mortality and/or Entrainment Characterization Study (§125.95(b)(3)) The final regulations require that you submit the results of an Impingement Mortality and/or Entrainment Characterization Study in accordance with §125.95(b)(3). If your facility has reduced its design, through-screen intake velocity to less than or equal to 0.5 ft/s, you are not required to submit the impingement mortality component of this study (§ 125.94(a)(l)(ii)). Facilities whose capacity utilization rate is less than 15 percent, facilities that withdraw cooling water only from a lake or reservoir other than one of the Great Lakes, and those facilities that withdraw less than 5 percent of the mean annual flow of a freshwater river or stream would only be required to submit the impingement mortality component of this study because no performance standards for entrainment apply. This Impingement Mortality and Entrainment characterization must include the following: (1) Taxonomic identifications of all life stages of fish, shellfish, and any species protected under Federal, State, or Tribal Law (including threatened or endangered species) that are in the vicinity of the cooling water intake structure(s) and are susceptible to impingement and entrainment; (2) a characterization of all life stages of fish, shellfish, and any species protected under Federal, State, or Tribal Law (including threatened or endangered species) identified in the taxonomic identification noted above, including a description of the abundance and temporal and spatial characteristics in the vicinity of the cooling water intake structure(s), based on sufficient data to characterize annual, seasonal, and diel variations in impingement mortality and entrainment (e.g., related to climate and weather differences, spawning, feeding and water column migration); and (3) 41636 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations documentation of the current impingement mortality and entrainment of all life stages of fish, shellfish, and any species protected under Federal, State, or Tribal Law (including threatened or endangered species) identified above and an estimate of impingement mortality and entrainment to be used as the calculation baseline. The documentation may include historical data that are representative of the current operation of your facility and of biological conditions at the site. This information must be provided in sufficient detail to support development _of the._Qt_her_elejneiltS-of the Comprehensive Demonstration Study. Thus, while the taxonomic identification in item 1 will need to be fairly comprehensive, the quantitative data required in items 2 and 3 may be more focused on species of concern, and/or species for which data are available. Impingement mortality and entrainment samples to support the calculations required by the Design and Construction Technology Plan and Restoration Plan must be collected during periods of representative operational flows for the cooling water intake structure and the flows associated with the samples must be documented. EPA recommends that the facility coordinate a review of its list of threatened, endangered, or other protected species with the U.S. Fish and Wildlife Service, National Marine Fisheries Service, or other relevant agencies to ensure that potential impacts to these species have been evaluated. d. Technology and Compliance Assessment Information (§ 125.95(b)(4)) The Technology ancfCompliance Assessment Information required under § 125.95(b)(4) is comprised of two parts: (1) The Design and Construction Technology Plan; and (2) the Technology Installation and Operation Plan. If you plan to utilize the compliance alternative in § 125.94(a)(4), you need only submit the Technology Installation and Operation Plan. If you plan to utilize the compliance alternative in § 125.94(a)(2) or (3) using design and construction technologies and/or operational measures (either existing or new), you must submit both parts. Note that facilities seeking a site- specific determination of BTA_in accordance with § 125.94(a)(5), must submit a Site-Specific Technology Plan in accordance with § 125.95(b)(6)(iii) rather than a Design and Construction Technology Plan. The two plans contain similar requirements, but are tailored to the compliance alternative selected. Facilities seeking a site-specific determination of the best technology available must submit a Technology Installation and Operation Plan along with their Site-Specific Technology Plan. The Design and Construction Technology Plan must explain the technologies or operational measures selected by a facility to meet the requirements in § 125.94(a)(2) and (3). The Agency recognizes that selection of the specific technology or group of technologies for your site will depend on individual facility and waterbody eonditiens-Examples-of-apprepriate technologies may include, but are not limited to, wedgewire screens, fine mesh screens, fish handling and return systems, barrier nets, aquatic filter barrier systems, and enlargement of the cooling water intake structure to reduce velocity. Examples of operational measures include, but are not limited to, seasonal shutdowns or reductions in flow, and continuous or more frequent rotation of travelling screens. Information required as part of your Design and Construction Technology Plan includes the following: (1) capacity utilization rate for your facility (or for individual intake structures where appropriate) and supporting data, including average annual net generation of the facility in megawatt hours (MWh) as measured over a five-year period (if available) of representative operating conditions and the total net capacity of the facility in megawatts (MW) and calculations (§125.95(b)(4)(i)); (2) a narrative description of the design and operation of all design and construction technologies and/or operational measures that you have or will put into ^aceToTiieeTtne"pefIormance standards for reduction of impingement mortality of those species most susceptible to impingement, and information that demonstrates the efficacy of those technologies and/or operational measures for those species; (3) a description of the design and operation of all design and construction technologies or operational measures that you have or will put into place, to meet the performance standards for reduction of entrainment for those species most susceptible to entrainment, if applicable to your facility, and information that demonstrates the efficacy of those technologies and/or operational measures for those species; (4) calculations of the reduction in impingement mortality and/or entrainment of all life stages of fish and shellfish that would be achieved by the technologies and/or operational measures you have selected based on the Impingement Mortality and/or Entrainment Characterization Study in § 125.95(b)(3); and (5) design and engineering calculations, drawings, and estimates to support the narrative descriptions required in the Design and Construction Technology Plan prepared by a qualified expert such as a professional engineer. If your facility has multiple intake structures and each is dedicated exclusively to the cooling water needs of one of more generating units, you may calculate the capacity utilization rate separately for each structure, for purposes of determining whether entrainment reduction performance standards are applicable. Note that you would still be required to consider the total design intake flow at all structures combined in determining whether your design intake flow exceeds 5 percent of the mean annual flow of a freshwater river or stream. If your capacity utilization rate, for either a single intake structure or the facility as a whole, is 15 percent or greater based on the historical 5 year annual average, but you make a binding commitment to the Director to maintain your capacity utilization rate below 15 percent for the duration of the permit, you may base your capacity utilization rate determination on that commitment. In determining compliance with any requirements to reduce impingement mortality or entrainment, you must assess the total reduction in impingement mortality and entrainment against the calculation baseline developed under the Impingement Mortality and Entrainment Characterization Study (§ 125.95(b)(3)). The calculation baseline is defined at § 125.93 as an estimate of impingement mortality and entrainment that would occur at your site assuming (1) The cooling water intake system has been designed as a once-through system; (2) the opening of the cooling water intake structure is located at, and the face of the standard 3/a-inch mesh traveling screen is oriented parallel to, the shoreline near the surface of the source waterbody; and (3) the baseline practices, procedures, and structural configuration are those that the facility would maintain in the absence of any structural or operational controls, including flow or velocity reductions, implemented in whole or in part for the purposes of reducing impingement mortality and entrainment. You may also choose to use your facility's current level of impingement mortality and entrainment as the calculation baseline. EPA has previously referred to this as the "as-built approach." Reductions in impingement mortality and entrainment Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41637 from the calculation baseline as a result of any design and construction technologies and/or operational measures already implemented at your facility should be added to the reductions expected to be achieved by any additional design and construction technologies and operational measures that will be implemented in order to meet the applicable performance standards_(§_125.95(b)(4)(i)(C)):_Inthis case",~tne"calculatr6n~baseline couIcTTje estimated by evaluating existing data from a facility nearby without impingement and/or entrainment control technology [if relevant) or by evaluating the abundance of organisms in the source waterbody in the vicinity of the intake structure that may be susceptible to impingement and/or entrainment. Additionally, if a portion of the total design intake flow is water withdrawn fora closed-cycle, recirculating cooling system (but flow is not sufficiently reduced to satisfy the compliance option in § 125.94(a)(l)(i)), such facilities may use the reduction in impingement mortality and entrainment that is attributed to the reduction in flow in meeting the performance standards in § 125.94(b). The calculation baseline may be estimated using: historical impingement mortality and entrainment data from your facility or from another facility with comparable design, operational, and environmental conditions; current biological data collected in the waterbody in the vicinity of your cooling water intake qt-nirtiirp; nr nm-Rnt impingement mortality and entrainment data collected at your facility. A facility may request that the calculation baseline be modified to be based on a location of the opening of the cooling water intake structure at a depth other than at or near the surface if they can demonstrate to the Director that the other depth would correspond to a higher baseline level of impingement mortality and/or entrainment. The Technology Installation and Operation Plan is required for all facilities that choose the compliance alternative in § 125.94(a)(2), (3), (4), or (5), propose to use design and construction technologies and/or operational measures (either existing or new) to meet performance standards or site specific requirements. Such facilities must submit the following information to the Director for review and approval: (1) A schedule for the installation and maintenance of any new design and construction technologies; (2) a list of the operational parameters that will be monitored, including the location and the frequency at which you will monitor them; (3) a list of activities you will undertake to ensure to the degree practicable the efficacy of the installed design and construction technologies and operational measures, and the schedule for implementing them; (4) a schedule and methodology for assessing the efficacy of any installed design and construction technologies and operational measures in achieving applicable performance standards, including an adaptive management plan for revising design and construction technologies and/or operational technologies if your assessment indicates that applicable performance standards are not being met; and (5) for facilities that select a pre-approved technology in accordance with § 125.94(a)(4), documentation that appropriate site conditions (as specified by EPA or the Director in accordance with § 125.99) exist at your facility. In developing the schedule for installation and maintenance of any new design and construction technologies in item 1, you should schedule any downtime to coincide with otherwise necessary downtime [e.g., for repair, overhaul, or routine maintenance of the generating units) to the extent practicable. Where additional downtime is required, you may coordinate scheduling of this downtime with the North American Electric Reliability Council and/or other generators in your area to ensure that impacts to energy reliability and supply are minimized. The Director should _.appravajanyxeaaonablafLcheduling provision included for this purpose. Those facilities that propose to use restoration measures must submit the Restoration Plan required at §125.95(b)(5). Today's final rule requires the Director to evaluate, using information submitted in your application, bi-annual status reports, and any other available information, the performance of any technologies, operational measures, and/or restoration measures you may have implemented in previous permit terms. Additional or different design and construction technologies, operational measures, and/or restoration measures may be required if the Director determines that the initial technologies, operational measures, and/or restoration measures you selected and implemented will not meet the requirements of § 125.94(b) and (c), as provided in § 125.98(b)(l)(i). The rule also requires that your permit contain a condition requiring your facility to reduce impingement mortality and entrainment commensurate with the efficacy of the installed design and construction technologies and/or operational measures. This is designed to ensure that technologies are operated and maintained to ensure their efficacy to the degree practicable, and not merely to meet the low end of the applicable performance standard range, if better performance is practicable. The Technology Installation and Operation Plan is one of the most important pieces of documentation for implementing the requirements of this final rule. It serves to (1) guide facilities in the installation, operation, maintenance, monitoring, and adaptive management of selected design and construction technologies and/or operational measures; (2) provide a schedule and methodology for assessing success in meeting applicable performance standards and site-specific requirements; and (3) provide a basis for determining compliance with the requirements of § 125.94(a)(2)-(5). Facilities and Directors are encouraged to take appropriate care in developing, reviewing and approving the plan. Note that for facilities employing restoration measures, the Restoration Plan serves the same required functions. e. Restoration Plan (§ 125.95(b)(5)) EPA views restoration measures as part of the "design" of a cooling water intake structure, and considers restoration measures one of several technologies that may be employed, in combination with others, to minimize adverse environmental impact. The consideration of restoration measures is relevant to the section 316(b) determination of the requisite design of cooling water intake structures because restoration measures help minimize the adverse environmental impact attributable to such structures. Facilities may use restoration measures that produce and/or result in levels of fish and shellfish in the facility's waterbody or watershed that are substantially similar to those that would result through compliance with the applicable performance standards or alternative site-specific requirements. In order to employ restoration measures, the facility must demonstrate to the Director that it has evaluated the use of design and construction technologies and/or operational measures and determined that the use of restoration measures is appropriate because meeting the applicable performance standards or site-specific requirements through the use of design and construction technologies and/or operational measures alone is less feasible, less cost- effective or less environmentally desireable than meeting the standards in whole or in part through the use of restoration measures. Facilities must 41638 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations also demonstrate to the Director that the restoration measures, alone or in combination with any feasible design and construction technologies and/or restoration measures, will produce ecological benefits and maintain fish and shellfish in the waterbody, including community structure and function, at a substantially similar level to that__ __ _________ meeting the applicable performance standards at § 125.94(b) or the site- specific requirements developed pursuant to § 125.94(a)(5). The Director must approve any use of restoration measures. To help all parties review the proposed or existing restoration measures and to help ensure adequate performance of those measures, § 125.95(b)(5) requires facilities proposing to use restoration measures to submit a Restoration Plan with their applications to the Director for review and approval. In the submittal, the facility must address species identified, in consultation with Federal, State, and Tribal fish and wildlife management agencies with responsibility for fisheries and wildlife potentially affected by its the facility's cooling water intake structures, as species of concern. The level of complexity of the Restoration Plan likely will be commensurate with the restoration measures considered or proposed. First, the facility must demonstrate that it has evaluated the use of design operational measures and explain how it determined that the use of restoration measures would be more feasible, cost- effective, or environmentally desirable than meeting the applicable performance standards or site-specific requirements wholly through the use of design and construction technologies, and/or operational measures. Second, the facility must submit a narrative description of the design and operation of all restoration measures the facility has in place or has selected and proposes to implement to produce fish and shellfish. If the ecological benefits from an existing restoration project are required to compensate for some environmental impact other than the impact from impingement and entrainment by the cooling water intake structure (e.g., a wetland created to satisfy section 404 of the Clean Water Act requirements) , those ecological benefits should not be coimted towards meeting the applicable performance standards or site-specific requirements. The narrative description should identify the_species targeted under any restoration measures. Third, the facility must submit a quantification of the ecological benefits of the existing and/or proposed restoration measures. The facility must estimate the reduction in fish and shellfish impingement mortality and entrainment that would be necessary to comply with applicable performance standards or site-specific requirements, _ using JsfQnnaUpn_from_the Impingement Mortality and Entrainment Characterization Study and any other available and appropriate information. The facility must then calculate the production offish and shellfish from existing and proposed restoration measures. The quantification must also include a discussion of the nature and magnitude of uncertainty associated with the performance of the restoration measures and a discussion of the time frame within which ecological benefits are expected to accrue from the restoration project. Fourth, the facility must provide design calculations, drawings, and estimates documenting that the proposed restoration measures, in combination with design and construction technologies and/or operational measures, or alone, will meet the requirements for production of fish and shellfish. Production of fish and shellfish as a result of relevant restoration measures already implemented at the facility should be added to the production expected to be achieved by the additional restoration - measures^lf-therestoratioTiTneasures address the same fish and shellfish species identified in the Impingement Mortality and Entrainment Characterization Study (in-kind restoration), the facility must demonstrate that the restoration measures will produce a level of these fish and shellfish substantially similar to that which would result from meeting applicable performance standards or site-specific requirements. In this case, the calculations should include a site- specific evaluation of the suitability of the restoration measures based on the species that are found at the site. If the restoration measures address fish and shellfish species different from those identified in the Impingement Mortality and Entrainment Characterization Study (out-of-kind restoration), the facility must demonstrate that the restoration measures produce ecological benefits substantially similar to or greater than those that would be realized through in- kind restoration. Such a demonstration should be based on a watershed approach to restoration planning and consider applicable multi-agency watershed restoration plans, site- specific peer-reviewed ecological studies, and/or consultation with appropriate Federal, State, and Tribal natural resource agencies. While both in-kind and out-of-kind restoration require a quantification of the levels of fish and shellfish the restoration measures are expected to produce, out- of-kind restoration may include a qualitative demonstration that these ecological benefits are substantially similar to or greater than those that would be realized through in-kind restoration, because different species are being produced that may not be directly comparable to those identified in the Impingement Mortality and/or Entrainment Characterization Study. Fifth, the facility must submit a plan utilizing an adaptive management method for implementing, maintaining, and demonstrating the efficacy of the restoration measures it has selected and for determining the extent to which restoration measures, or the restoration measures in combination with design and construction technologies and operational measures, have met the applicable performance standards or site-specific requirements. Adaptive management is a process in which a facility chooses an approach for meeting a project goal, monitors the effectiveness of that approach, and then, based on monitoring and any other available information, makes any adjustments necessary to ensure continued progress toward the project's goal. This cycle is repeated as necessary until the goal is met. The adaptive management plan must include (l) A monitoring plan that includes a list of the restoration parameters that the facility will monitor, the frequency at which they will be monitored, and the success criteria for each parameter; (2) a list of activities the facility will undertake to ensure the efficacy of the restoration measures, a description of the linkages between these activities and the items described in the monitoring plan, and an implementation schedule for the activities; and (3) a process for revising the restoration plan as new information, including monitoring data, becomes available, and if the applicable performance standards or site-specific requirements are not being met.Sixth, the facility must submit a summary of any past or ongoing consultation with Federal, State, and Tribal fish and wildlife management agencies on its use of restoration measures, including any written comments received as a result of such consultations. Seventh, if requested by the Director, the facility must conduct a peer review Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41639 of items to be submitted as part of the Restoration Plan. Written comments from peer reviewers must be submitted to the Director and made available to the public as part of the permit application. Peer reviewers must be selected in consultation with the Director who may consult with EPA, Federal, State_and Tribal fish and wildlife management agencies with responsibility for fish and wildlife potentially affected by the facility's cooling water intake structure(s). Peer reviewers must have appropriate qualifications (e.g., in the fields of geology, engineering and/or biology) depending upon the materials to be reviewed. Finally, the facility must include in the Plan a description of information to be included in a status report to the Director every two years. The final regulations at § 125.98(b)(l)(ii) require that this information be reviewed by the Director to determine whether the proposed restoration measures, in conjunction with (or in lieu of) design and construction technologies and/or operational measures, will meet the applicable performance standards or site-specific requirements, or, if the restoration is out-of-kind, will produce ecological benefits (fish and shellfish) including maintenance or protection of community structure and function in your facility's waterbody or watershed. f. Compliance Using a Pre-approved facility. To qualify for compliance using the cylindrical wedgewire screen technology, your facility must meet the following conditions: (l) Your cooling water intake structure is located in a freshwater river or stream; (2) your cooling water intake structure is situated such that sufficient ambient If you choose to comply with the fourth compliance alternative, you must submit documentation to the Director that your facility meets the appropriate site conditions and you have installed and will properly operate and maintain submerged cylindrical wedgewire screen technology (as described in § 125.99(a)(l)) or other technologies as approved by the Director under § 125.99(b)). If you are subject to impingement mortality performance standards only, and plan to install wedgewire screens with a maximum through-screen design intake velocity of 0.5 ft/s or less, you should choose the compliance alternative in § 125.94(a)(l)(i), and do not need to demonstrate that you meet the other criteria in §125.99(a)(l) or prepare a Technology Installation and Operation Plan or Verification Monitoring Plan. Facilities subject to entrainment performance standards seeking compliance under this alternative must submit a Technology Installation and Operation Plan and a Verification Monitoring Plan that address entrainment reduction, and document that all of the appropriate site conditions in § 125.99(a)(l) exist at their counter-currents exist to promote cleaning of the screen face; (3) your maximum through-screen design intake velocity is 0.5 ft/s or less; (4) the slot size is appropriate for the size of eggs, larvae, and juveniles of all fish and shellfish to be protected at the site; and (5) your entire main condenser cooling water flow is directed through the technology. Note that small Hows totalling less than 2 MGD for auxiliary plant cooling do not necessarily have to be included. Facilities should demonstrate that they meet these criteria in the Technology Installation and Operation Plan. In addition, any interested person may submit a request that a technology be approved for use in accordance with the compliance alternative in § 125.94(a)(4). If the Director approves, the technology may be used by all facilities that have similar site conditions under the Director's jurisdiction. To do this, the interested person must submit the following as required by § 125.99(b): (1) A detailed description of the technology; (2) a list PiA^ffi^teria^.forJ.he_technplogy and site characteristics and conditions that each facility must have in order to ensure that the technology can consistently meet the appropriate impingement mortality and entrainment performance standards in § 125.94(b); and (3) information and data sufficient to demonstrate that all facilities under the jurisdiction of the Director can meet the applicable impingement mortality and entrainment performance standards in § 125.94(b) if the applicable design criteria and site characteristics and conditions are present at the facility. EPA has adopted this compliance alternative in response to comments suggesting that EPA provide an additional, more streamlined compliance option under which a facility could implement certain specified technologies that are deemed highly protective in exchange for reducing the scope of the Comprehensive Demonstration Study. (See, 68 FR 13522, 13539; March 19, 2003). g. Verification Monitoring Plan all Phase II existing facilities complying under §§ 125.94(a)(2), (3), (4), or (5) using design and construction technologies and/or operational measures, to submit a Verification Monitoring Plan to measure the efficacy of the implemented design and construction technologies and/or operational measures. The plan must include at least two years of monitoring to verify the full-scale performance of the proposed or already implemented design and construction technologies and/or operational measures. Note that verification monitoring is also required for restoration measures but the requirements for this monitoring are included as part of the Restoration Plan in § 125.95(b)(5)(v). Components of the Verification Monitoring Plan must include; (i) Description of the frequency and duration of monitoring, the parameters to be monitored, and the basis for determining the parameters and the frequency and duration of monitoring. The parameters selected and the duration and frequency of monitoring must be consistent with any methodology for assessing success in meeting applicable performance standards in your Technology Installation and Operation Plan as required by § 125.95(b)(4)(ii); (ii) A proposal on how naturally moribund fish and shellfish that enter the cooling water intake structure would be identified and taken into account in assessing success in meeting the performance standards in § 125.94(b); and, (iii) A description of the information to be included in a bi-annual status report to the Director. The facility and the Director will use the results of verification monitoring to assess the facility's success in meeting the performance standards for impingement mortality and entrainment reduction or alternate site-specific requirements and to guide adaptive management in accordance with the requirements in the facility's Technology Installation and Operation Plan. Restoration monitoring is discussed separately under §125.95(b)(5)(v). Verification monitoring is required to begin once the technologies and/or operational measures are implemented and continue for a sufficient period of time (but at least two years) to assess success in reducing impingement mortality and entrainment. C. How Will the Director Determine the Appropriate Cooling Water Intake Structure Requirements? Initially, the Director must determine whether the facility is covered by this rule. If the answer to all the following 41640 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations questions is yes, the facility will be required to comply with the requirements of this final rule (§125.91). • Is the facility a point source? ________ •_DQes_llie_facilityiis_e_QLpro.pose_to___ use a cooling water intake structure(s) with a total design intake flow of 50 million gallons per day (MGD) or more to withdraw cooling water from waters of the United States? • As its primary activity, does the facility both generate and transmit electric power or generate electric power but sell it to another entity for transmission? • Is at least 25 percent of the water withdrawn used solely for cooling purposes? In the case of a Phase II existing facility that is co-located with a manufacturing facility, only that portion of the cooling water intake flow that is used by the Phase II facility to generate electricity for sale to another entity will be considered for purposes of determining the 50 MGD and 25 percent criteria. Use of a cooling water intake structure includes obtaining cooling water by any sort of contract or arrangement with one or more independent suppliers of cooling water if the supplier withdraws water from waters of the United States [except as provided below) but is not _____ itself a Phase II existing facility. This provision is intended to prevent circumvention of these requirements by creating arrangements to receive cooling water from an entity that is not itself a Phase II existing facility. However, for purposes of this provision, a public water system or any entity that sells treated effluent to be used as cooling water is not a "supplier." Thus, obtaining cooling water from a public water system or treated effluent used as cooling water does not constitute use of a cooling water intake structure. This rule is not intended to discoxirage the beneficial reuse of treated effluent, nor is it intended to impose requirements on public water systems. Permit Application Review The Director must review the application materials submitted under § 122. 21 (r) and §125.95 and determine the appropriate performance standards to apply to the facility and approve a set of design and construction technologies, operational measures, and/or restoration measures to meet these standards. The Information Collection and determine if the technologies, operational measures, and/or restoration measures to be evaluated seem appropriate for the site and if the data gathering activities (including the sampling plan) seem adequate to support the development of the other components of the Comprehensive Demonstration Study, including impingement mortality and entrapment estimates_The_Director will also review any existing data submitted. The Director must review and provide comment on the Proposal for Information Collection; however, a facility may proceed with planning, assessment, and data collection activities in fulfillment of Comprehensive Demonstration Study requirements prior to receiving comments from the Director. The Director is encouraged to provide comments expeditiously (i.e., within 60 days) so the facility can make responsive modifications to its information collection plans. If a facility submits a request in accordance with § 125.95(a)(3) to reduce information about its cooling water intake structures and the source waterbody required to be submitted in its permit application (other than for the first permit term after promulgation of this rule, for which complete information is required), the Director must approve the request within 60 days if conditions at the facility and in the waterbody remain substantially unchanged since the facility's previous application The Director must also review all information submitted under § 122.21(r)(2), (3), and (5) and § 125.95, as appropriate, to determine appropriate permit conditions based on the requirements in this subpart. At each permit renewal, or more frequently as appropriate, the Director must assess success in meeting applicable performance standards, restoration requirements, and/or alternate site- specific requirements. At each permit renewal, the Director must review the application materials and monitoring data to determine whether additional requirements should be included in the permit to meet the applicable performance standards. Additional requirements may include, but are not limited to, additional design and construction technologies, operational measures, and/or restoration measures, improved operation and maintenance of existing technologies and measures, and/or increased monitoring. Permitting Requirements Hollowing, consideration- of_the information submitted by the Phase II existing facility in its NPDES permit application, the Director must determine the appropriate requirements and conditions to include in the permit based on the compliance alternatives in § 125.94(a) for establishing best technology available chosen by the facility. The following requirements must be included in each permit: (1) Cooling Water Intake Structure Requirements. Requirements that implement the applicable provisions of § 125.94 must be included in the permit conditions. To accomplish this, the Director must evaluate the performance of the design and construction technologies, operational measures, and/or restoration measures proposed and implemented by the facility and require additional or different design and construction technologies, operational measure, and/or restoration measures, and/or improved operation and maintenance of existing technologies and measures, if needed to meet the applicable impingement mortality and entrainment performance standards, restoration requirements for fish and shellfish production, or alternate site-specific requirements. In determining compliance with the performance, standards for facilities proposing to increase withdrawals of cooling water from a lake (other than a Great Lake) or a reservoir in § 125.94(b)(3), the Director must consider anthropogenic factors (those not considered "natural") unrelated to the Phase II existing facility's cooling water intake structures that can influence the occurrence and location of a thermocline. Anthropogenic factors may include source water inflows, other water withdrawals, managed water uses, wastewater discharges, and flow/level management practices (e.g., some reservoirs release water from deeper bottom layers). The Director must coordinate with appropriate Federal, State, or Tribal fish and wildlife agencies to determine if any disruption of the natural thermal stratification resulting from the increased withdrawal of cooling water does not adversely affect the management of fisheries. To develop appropriate requirements for the cooling water intake structure(s), the Director must do the following: (i) Review and approve the Design and Construction Technology Plan required in § 125.95(b)(4) to evaluate the suitability and feasibility of the design and construction technology and/or operational measures proposed to meet the performance standards of § 125.94(b), or site-specific requirements developed pursuant to § 125.94(a)(5); (ii) If the facility proposes restoration measures in accordance with § 125.94(c), review and approve the Restoration Plan required under § 125.95(b)(5) to determine whether the proposed measures, alone or in Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41641 combination with design and construction technologies and/or operational measures, will meet the requirements under § 125.94(c); ______ (iiil Jn^aach .reiasued-nermit JLn.du.de. a condition in the permit requiring the facility to reduce impingement mortality and entrainment (or to increase fish and shellfish production, if applicable) commensurate with the efficacy at the facility of the installed design and construction technologies, operational measures, and/or restoration measures; (iv) If the facility implements design and construction technologies and/or operational measures and requests that compliance with the requirements of § 125.94 be measured for the first permit (or subsequent permit terms, if applicable) employing the Technology Installation and Operation Plan in accordance with § 125.95(b)(4)(ii), the Director must review and approve the plan and require the facility to meet the terms of the plan including any revisions to the plan that may be necessary if applicable performance standards or site-specific requirements are not being met. If the facility implements restorations measures and requests that compliance with the requirements in § 125.94 be measured for the first permit term (or subsequent Restoration Plan in accordance with § 125.95(b)(5), the Director must review and approve the plan and require the facility to meet the terms of the plan including any revision to the plan that may be necessary if applicable performance standards or site-specific requirements are not being met. In determining whether to approve a Technology Installation and Operation Plan or Restoration Plan, the Director must evaluate whether the design and construction technologies, operational measures, and/or restoration measures the facility has installed, or proposes to install, can reasonably be expected to meet the applicable performance standards in § 125.94(b), restoration requirements in § 125.94(c)(2), and/or alternative site-specific requirements established pursuant to § 125.94(a){5), and whether the Technology Installation and Operation Plan and/or Restoration Plan complies with the applicable requirements of § 125.95(b). In reviewing the Technology Installation and Operation Plan, the Director must approve any reasonable scheduling Installation and Operation Plan and/or Restoration Plan, or the facility has not been in compliance with the terms of its current Technology Installation and _ Qperatian.ElaiLarid/or..Restorat.ion Plan during the preceding permit term, the Director must require the facility to comply with the applicable performance standards in § 125.94(b), restoration requirement in §125.94(c)(2), and/or alternative site-specific requirements developed pursuant to § 125.94(a)(5). In considering a permit application, the Director must review the performance of the design and construction technologies, operational measures, and/or restoration measures implemented and require additional or different design and construction technologies, operational measures, and/or restoration measures, and/or improved operation and maintenance of existing technologies and measures, if needed to meet the applicable performance standards, restoration requirements, and/or alternative site- specific requirements. (v) Review and approve the proposed Verification Monitoring Plan submitted under § 125.95(b)(7) (for design and construction technologies) and/or monitoring provisions of the Restoration Plan submitted under § 125.95{b)(5)(v) .jandj:equu'jaJhalJ:he_jnojiitaring continue for a sufficient period of time to demonstrate whether the design and construction technology, operational measures, and/or restoration measures meet the applicable performance standards in § 125.94(b), restoration requirements in § 125.94(c)(2) and/or site-specific requirements established pursuant to § 125.94(a)(5); (vi) If a facility requests requirements based on a site-specific determination of best technology available for minimizing adverse environmental impact, the Director must review the application materials submitted under § 125.95(b)(6) and any other information submitted, including quantitative and qualitative benefits, that would be relevant to a determination of whether alternative requirements are appropriate for the facility. If a facility submits a study to support entrainment survival at the facility, the Director must review and approve the results of that study. If the Director determines that alternative requirements are appropriate, the Director must make a site-specific determination of best technology that impacts to energy reliability and supply are minimized, in accordance with § 125.95(b)(4)(ii)(A). If the facility does not request that compliance with the requirements in § 125.94 be measured employing a Technology environmental impact in accordance with § 125.94(a)(5). The Director may request revisions to the information submitted by the facility in accordance with § 125.95(b)(6) if it does not provide an adequate basis to make this determination. Any site-specific requirements established based on new and/or existing design and construction technologies, operational measures, and/or restoration measures, must achieve an efficacy that is, in the Director's judgement, as close as practicable to the applicable performance standards without resulting in costs that are significantly greater than the costs considered by the Administrator for a like facility to achieve the applicable performance standards or the benefits of complying with the applicable performance standards in § 125.94(b); (vii) The Director must review information on the proposed methods for assessing success in meeting applicable performance standards and/ or restoration requirements submitted by the facility under § 125.95(b)(4)(ii)(D) and/or (b)(5)(v)(A), evaluate those and other available methods, and specify how success in meeting the performance standards and/or restoration requirements must be determined including the averaging period for determining the percent reduction in impingement mortality and entrainment and/or the production of fish and shellfish. Compliance for facilities who request that compliance be measured employing a Technology Installation and Operation Plan and/or Restoration Plan must be determined in accordance with §125.98{b)(l)(iv). (2) Monitoring Conditions. The Director must require the facility to perform monitoring in accordance with the Technology Installation and Operation Plan in § 125.95(b)(4)(ii), the Restoration Plan required by §125.95(b)(5), if applicable, and the Verification Monitoring Plan required by § 125.95(b)(7). In determining any additional applicable monitoring requirements in accordance with § 125.96, the Director must consider the monitoring facility's Verification Monitoring, Technology Installation and Operation, and/or Restoration Plans, as appropriate. The Director may modify the monitoring program based on changes in physical or biological conditions in the vicinity of the cooling water intake structure. (3) Record Keeping and Reporting. At a minimum, the permit must require the facility to report and keep records specified in §125.97. (4) Pre-Approved Design and Construction Technologies. Section 125.94(a)(4) offers facilities the choice of adopting a protective, pre-approved design and construction technology, and preparing a significantly streamlined Comprehensive Demonstration Study. Section 125.99 lists one pre-approved 41642 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations .. _. provides an opportunity for the Director to pre-approve other technologies. For a facility that chooses to demonstrate that they have installed and properly operate and maintain a design and construction technology approved in accordance with § 125.99, the Director must review and approve the information submitted in the Technology Installation and Operation Plan in § 125.95(b)(4)(ii) and determine if they meet the criteria in § 125.99. If a person/facility requests approval of a technology under § 125.99(b), the Director must review and approve the information submitted and determine its suitability for widespread use at facilities with similar site conditions in its jurisdiction with minimal study. The Director must evaluate the adequacy of the technology when installed in accordance with the required design criteria and site conditions to consistently meet the performance standards in § 125.94(b). The Director may only approve a technology following public notice and consideration of comment regarding suc_h_aj3groyaL "(5) Bi-Annual Status Report. The Director must specify monitoring data and other information to be included in a status report every two years. The other information may include operation and maintenance records, summaries of adaptive management activities, or any other information that is relevant to determining compliance with the terms of the facility's Technology Installation and Operation Plan and/or Restoration Plan. D. What Will I Be Required To Monitor? Section 125.96 of today's final rule provides that Phase II existing facilities must perform monitoring in accordance with the Verification Monitoring Plan required by § 125.95(b)(7), the Technology Installation and Operation Plan required by § 125.95(b)(4)(ii), if applicable, the Restoration Plan required by § 125.95(b)(5), and any additional monitoring specified by the Director to demonstrate compliance with the applicable requirements of § 125.94. In developing monitoring conditions, the Director should consider the needjOT biological monitoring data, including impingement and entrainment sampling data sufficient to assess the presence, abundance, life stages (including eggs, larvae, juveniles, and adults), and mortality of aquatic organisms (fish and shellfish or other organisms required to be monitored by the Director) impinged or entrained during operation of the cooling water intake structure. This type of data may beJ.isfidio_de.velap_permi_tCDnditions to implement the requirements of this rule. The Director should ensure, where appropriate, that any required monitoring will allow for the detection of any annual, seasonal, and diel variations in the species and numbers of individuals that are impinged or entrained. The Director may modify the monitoring program based on changes in physical or biological conditions in the vicinity of the cooling water intake structure. The Director may also require monitoring of operational parameters for facilities that employ a Technology Installation and Operation Plan or Restoration Plan to comply with the requirements of § 125.94. The Director must specify what monitoring or other data is to be included in a status report every two years. E. How Will Compliance Be Determined? This final ride will be implemented by the Director placing conditions consistent with the requirements of this part in NPDES permits. A facility may demonstrate compliance by meeting the performance standards in § 125.94(b) applicable to the facility. The application information, including components of the Comprehensive Demonstration Study, as appropriate, should demonstrate that the facility is already meeting the performance standards, or that it will install and properly operate and maintain design and construction technologies, operational measures, and/or restoration measures to meet the performance standards, or that a site-specific determination of best technology available is necessary. To support this demonstration, the facility should submit the following information to the Director: . Data submitted with the NPDES permit application to show that the facility meets location, design, construction, and capacity requirements consistent with the compliance alternative selected; • Data to demonstrate that the facility is meeting the performance standards consistent with the compliance alternative selected; • Compliance monitoring data and records as prescribed by the Director. The specifics of how success in meeting the performance standards shall be measured (i.e, the number of species, whether critical species or all species) and the method of measurement [e.g., total biomass, total counts, etc.) must be determined by the Director based on review of the proposed methodology submitted by the facility in its Technology Installation and Operation Plan and/or Restoration Plan, and any other methods the Director considers appropriate. Alternatively, the facility may request that compliance be determined based on whether it has complied with the construction, operational, maintenance, monitoring, and adaptive management requirements of its Technology Installation and Operation Plan (for design and construction technologies and/or operational measures) or Restoration Plan (for restoration measures). In this case, the facility must still assess success in meeting applicable performance standards or restoration requirements but this assessment serves to guide the adaptive management process rather than as a basis for determining compliance. After the first permit term following promulgation of this subpart, facilities are only eligible for this compliance determination alternative if they have been in compliance with the terms of their Technology Installation and Operation Plan and/or Restoration Plan during the preceding permit term. Under this compliance determination alternative, the Technology Installation and Operation Plan or Restoration Plan must specify construction, operational, maintenance, monitoring, and adaptive management requirements that can reasonably be expected to achieve success in meeting the applicable performance standards, restoration requirements and/or site-specific requirements. These construction, operational, maintenance, monitoring, and adaptive management requirements must also be approved by the Director, who will also specify what monitoring data and other information must be included in the facility's biannual status report. The required elements of the Technology Installation and Operation Plan include (1) a schedule for installation and maintenance of any new technologies; (2) operational parameters to be monitored; (3) activities to ensure the efficacy of technologies and measures; (4) a schedule and methodology for assessing the efficacy of installed technologies and measures in meeting the performance standards; (5) an adaptive management plan; and (6) for facilities using a pre-approved compliance technology, documentation that they meet the conditions for its use. The Restoration Plan requires corresponding information as appropriate for restoration measures. EPA believes that it is important for facilities to consider and document each of the components of the Technology Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41643 Installation and Operation Plan, regardless of which compliance determination approach is used. However, the level of detail appropriate for some of the components may be different for the two different approaches. For facilities that comply by demonstrating success in meeting performance standards, particularly in cases where they are already meeting the standards and no significant changes in technologies or operations are needed, brief summaries may be sufficient for most components, though they will still need detailed documentation of their schedule and methodology for assessing efficacy of installed technologies and measures for meeting the standards. Conversely, for facilities where compliance is determined based on whether they have complied with the construction, operation, maintenance, monitoring, and adaptive management approaches required in the Technology Installation and Operation Plan or Restoration Plan, a fairly detailed specification of these --r.equirements--wilLbe-appropriaie,-Xhe Director should ensure that the level of detail in the Technology Installation and Operation Plan or Restoration Plan is sufficient to support whichever compliance determination approach is selected. Section 125.97 requires existing facilities to keep records and report monitoring data and other information specified by the Director in a bi-annual status report although Directors may require more frequent reports. Facilities must also keep records of all data used to complete the permit application and show compliance with the requirements of § 125.94, any supplemental information developed under § 125.95, . and any compliance monitoring data submitted under § 125.96, for a period of at least three (3) years from date of permit issuance. The Director may require that these records be kept for a longer period. F. What Are the Respective Federal, State, and Tribal Holes? Today's final regulations amend 40 CFR 123.25(a)(36) to add a requirement that authorized State and Tribal programs have sufficient legal authority to implement today's requirements (40 CFR part 125, subpart f). Therefore, today's final rule affects authorized State and Tribal NPDES permit programs. Under 40 CFR 123.62(e), any existing approved section 402 permitting program must be revised to be consistent with new program requirements within one year from the date of promulgation, unless the NPDES-authorized State or Tribe must amend or enact a statute to make the required revisions. If a State or Tribe must amend or enact a statute to conform with today's final rule, the revision must be made within two years of promulgation. States and Tribes seeking new EPA authorization to implement the NPDES program must comply with the requirements when authorization is approved. This final regulation does not alter State authority under section 510 of the Clean Water Act. EPA recognizes that some States have invested considerable effort in developing and implementing section 316(b) regulatory programs. This final regulation allows States to use these programs to fulfill section 316(b) requirements where the State demonstrates to the Administrator that such programs will achieve comparable environmental performance. Specifically, the final rule allows any State to demonstrate to the Administrator that it has adopted alternative regulatory requirements in its-NPBES-program'thatrwiH-result in environmental performance within each relevant watershed that is comparable to the reductions in impingement mortality and entrainment that would otherwise be achieved under § 125.94. In addition to updating their programs to be consistent with today's final rule, States and Tribes authorized to implement the NPDES program are required under NPDES State program requirements to implement the cooling water intake structure requirements of subpart J following promulgation of the final regulations. The permit requirements in this final rule must be implemented upon the first issuance or reissuance of permits following promulgation. Duties of an authorized State or Tribe under this regulation may include: • Review and verification of permit application materials, including a permit applicant's determination of source waterbody classification and the flow of a freshwater river or stream at the point of the intake; • Determination of the performance standards in § 125.94(b) that apply to the facility; • Verification of a permit applicant's determination of whether it meets or exceeds the applicable performance standards; • Verification that a permit applicant's Technology and Compliance Assessment Information, including the Design and Construction Technology Plan and Technology Installation and Operation Plan, demonstrates that the proposed technologies and measures will reduce the impacts to fish and shellfish to levels required; • Verification that a permit applicant is eligible for site-specific requirements, and if so, development of site-specific requirements that achieve an efficacy as close as practicable to the applicable performance standards; • Verification that the Technology Installation and Operation Plan can reasonably be expected to meet performance standards or alternative site-specific requirements; • Verify that the facility meets the requirements of the approved compliance alternative it selected; • Verify that any Restoration Plan meets all applicable requirements; • Verify that the Verification Monitoring Plan is sufficient to assess technology efficacy; • Development of draft and final NPDES permit conditions for the applicant implementing applicable section 316(b) requirements pursuant to this rule including whether compliance with the requirements of § 125.94 will be determined based on success in meeting applicable performance standards or based on complying with a Technology Installation and Operation Plan or Restoration Plan; and, • Ensuring compliance with permit conditions based on section 316(b) requirements. EPA will implement these requirements where States or Tribes are not authorized to implement the NPDES program. EPA also will implement these requirements where States or Tribes are authorized to implement the NPDES program but do not have sufficient authority to implement these requirements. G. Are Permits for Existing Facilities Subject to Requirements Under Other Federal Statutes? EPA's NPDES permitting regulations at 40 CFR 122.49 contain a list of Federal laws that might apply to Federally issued NPDES permits. These include the Wild and Scenic Rivers Act, 16 U.S.C. 1273 et seq.; the National Historic Preservation Act of 1966, 16 U.S.C. 470 et seg.; the Endangered Species Act, 16 U.S.C. 1531 et seg.; the Coastal Zone Management Act, 16 U.S.C. 1451 et seq.; and the National Environmental Policy Act, 42 U.S.C. 4321 et seg. See 40 CFR 122.49 for a brief description of each of these laws. In addition, the provisions of the Magnuson-Stevens Fishery Conservation and Management Act, 16 U.S.C. 1801 et seg., relating to essential fish habitat might be relevant. Nothing in this final rulemaking authorizes activities that are not in compliance 41644 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations with these or other applicable Federal laws (e.g., Marine Mammal Protection Act, 16 U.S.C. 1361 et seq., and Migratory Bird Treaty Act, 16 U.S.C. 703 ef seq.). H. Alternative Site-Specific Requirements Under § 125.94(a)(5), an existing facility may demonstrate to the Director that it has selected, installed, and is properly operating and maintaining, or will install and properly operate and maintain, design and construction technologies, operational measures, and/or restoration measures that the Director determines to be the best technology available to minimize adverse environmental impact for the facility based on the cost-cost test specified in sub-section (a)(5)(i) or the cost-benefit test specified in (a)(5)(ii) of the rule. Section 125.94(a)(5)(i) provides that an existing facility may demonstrate that the costs of compliance under the compliance alternatives in §125.94(a)(2) through (4) of the rule would be -s+gni-fieantly-greeter-thaH-the-eeste considered by the Administrator for a like facility in establishing the applicable performance standards. In such cases, the Director must make a site-specific determination of the best technology available for minimizing adverse environmental impact. The Director must establish site-specific alternative requirements based on new and/or existing design and construction technologies, operational measures, and/or restoration measures that achieve an efficacy that is, in the judgment of the Director, as close as practicable to the applicable performance standards in §125.94(b)of therule. Section 125.94(a)(5)(ii) provides that an existing facility may demonstrate that the costs of compliance under alternatives in § 125.94(a)(2) through (4) of the rule would be significantly greater than the benefits of complying with the applicable performance standards at that facility. In such cases, the Director must make a site-specific determination of best technology available for minimizing adverse environmental impact. The Director must establish site- -speeifie-alt-eHftative-fequkemente- based- - on new and/or existing design and construction technologies, operational measures, and/or restoration measures that achieve an efficacy that, in the judgment of the Director, is as close as practicable to the applicable performance standards in § 125.94(b) of the rule. 1. Facility's Costs Significantly Greater Than Costs Considered by EPA If the Director determines that data specific to your facility indicate that the costs of compliance under § 125.94(a)(2) through (4) would be significantly greater than the costs considered by the Administrator for a facility like yours in establishing the applicable performance standards in § 125.94(b) you may request a site-specific determination of best technology available for minimizing adverse environmental impacts. A facility requesting this determination must submit a Comprehensive Cost Evaluation Study (§ I25.94(b)(6)(i)) and a Site Specific Technology Plan (§ 125.94(b)(6)(iii)). The Comprehensive Cost Evaluation Study must include engineering cost estimates in sufficient detail to document the costs of implementing design and construction technologies, operational measures, and/or restoration measures at the facility that would be needed to meet the applicable performance standards of § 125.94(b); a demonstration that the documented costs significantly exceed the costs considered by EPA for a facility like yours in establishing the applicable performance standards; and engineering cost estimates in sufficient detail to document the costs of implementing alternative design and construction technologies, operational measures, and/or restoration measures in the facility's Site-Specific Technology Plan developed in accordance with §125.95(b)(6)(iii). To make the demonstration that compliance costs are significantly greater than those considered by EPA, the facility must first determine its actual compliance costs. To do this, the facility first should determine the costs for any new design and construction technologies, operational measures, and/or restoration measures that would be needed to comply with the requirements of § 125.94(a)(2) through (4), which may include the following cost categories: The installed capital cost of the technologies or measures, the net operation and maintenance (O&M) costs for the technologies or measures -(that iSr-the-O&M-e&sts-for-the- final suite of technologies and measures once all new technologies and measures have been installed less the O&M costs of any existing technologies and measures), the net revenue losses (lost revenues minus saved variable costs) associated with net construction downtime (actual construction downtime minus that portion which would have been needed anyway for repair, overhaul or maintenance) and any pilot study costs associated with on-site verification and/ or optimization of the technologies or measures. Costs should be annualized using a 7 percent discount rate, with an amortization period of 10 years for capital costs and 30 years for pilot study costs and construction downtime net revenue losses. Annualized costs should be converted to 2002 dollars ($2002), using the engineering news record construction cost index (see Engineering News-Record. New York: McGraw Hill. Annual average value is 6538 for year 2002). Costs for permitting and post- construction monitoring should not be included in this estimate, as these are not included in the EPA-estimated costs against which they will be compared, as described below. Because existing facilities already incur monitoring and permitting costs, and these are largely independent of the specific performance standards adopted and technologies selected to meet them, EPA believes it is both simpler and more appropriate to conduct the cost comparison required in this provision using direct compliance costs (capital, net O&M, net construction downtime, and pilot study) only. Adding permitting and monitoring costs to both sides of the comparison would complicate the methodology without substantially changing the results. To calculate the costs that the Administrator considered for a like facility in establishing the applicable performance standards, the facility must follow the steps laid out below, based on the information in the table provided in Appendix A: Costs considered by EPA in Establishing Performance Standards. A sample of the table is provided below (see sample table). Note that those facilities that claimed the flow data that they submitted to EPA, and which EPA used to calculate compliance costs, as confidential business information (CBI), are not listed in the table provided in Appendix A, unless the total calculated compliance costs were zero. If these facilities wish to request a site-specific determination of best technology available based on significantly greater compliance costs, they will need to waive their claim of confidentiality prior to submitting the Comprehensive Cost Evaluation Study so that EPA can make the necessary data available to the facility, Director, and public. Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41645 OJooCM cr>3IDERED BY EPA IN ESTABLISHING PERFORMANCE STANDARDOO OC) 1aen H LU Q_ 2 CO O) W fl)Q rein, t coUj'S'o , T) <i-L 0> B ^ ^ £•& 3"<n -o^ (A J2 o CL <D c3 5 i r- CDIII!!| g c <n ° |s™s'fl-a c c £ "SS 0) CM= m 8 COO i "to8 2 Q.reO "•§ m Q.-J aili-i-« <n **- Q 0}j«: "c Q 'off Column 13Column 12Column 11Column 1J)Column 9 'Column 8Column 7Column 6in c "oO Tf C. "o0 CO c 'oo <M C 'o Column 1i- CM CD CD^ X.CO CO"H ^ 9 Q Q 9 T- CM CO CO O CJ O O oCo CO B CO ^U- LL LL LL LU .2.E< 0)0-£«|2w nJ Q> -C Q] Q) |™| cO ~ III = Isl | 0) Q-Q o £"0 « ° " m w c zj a) "o. •S ">£§s s'-sl Cf) -2 — 05c ,c c +., « jz S 0 | J§8 5 3 cni/j a. o> c"c5« Q) J= O CO C W1 Iff 1 mlp "cO 0) — -K "O-C >* 0) J5 CD 1 The design flow adjustment slope (m) represents the slope2 Discount rate = 7%3 Amortization period for capital costs = 10 years4 Amortization period for downtime and pilot study costs = 305 Depending on the data provided, some facilities with multipeach intake separately using the steps below and sum. Note ttakes, since it is difficult to determine how they would be assigr 41646 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations The data in Appendix A is keyed to both a facility name and survey ID number. Facilities should be able to determine their ID number from the survey they submitted to EPA during the rule development process. Step 1: Determine which technology EPA modeled as the most appropriate compliance technology for your facility (§ 125.94(a)(5)(i)(A)). To do this, use the code in column 12 of Appendix A to look up the modeled technology in Table 9-1 below. TABLE 9-1 .—TECHNOLOGY CODES AND DESCRIPTIONS technology (§ 125.94(a)(5)(i)(B)}. To do this, you should use the following formula, which is derived from the results of EPA's costing equations for a facility like yours using the selected technology: Tech- nology codes 5 6 7 8 9 10 11 12 13 14 Technology description Addition of fish handling and re- turn system to an existing traveling screen system. Addition of fine-mesh screens to an existing traveling screen system. Addition of a new, larger intake with fine-mesh and fish han- dling and return system in TfonTof an exTstTrTgTntaRe"sys- tem. Addition of passive fine-mesh screen system (cylindrical wedgewire) near shoreline with mesh width of 1.75 mm. Addition of a fish net barrier sys- tem. Addition of an aquatic filter bar- rier system. Relocation of an existing intake to a submerged offshore loca- tion with passive fine-mesh screen inlet with mesh width of 1.75 mm. Addition of a velocity cap inlet to an existing offshore intake. Addition of passive fine-mesh screen to an existing offshore intake with mesh width of 1.75 mm. [Module 10 not used]. Addition of dual-entry, single-exit traveling screens (with fine- mesh) to a shoreline intake system. Addition of passive fine-mesh screen system (cylindrical wedgewire) near shoreline with mesh width of 0.76 mm. Addition of passive fine-mesh screen to an existing offshore intake wltfrrriBBrrwtatfnsforTS" mm. Relocation of an existing intake to a submerged offshore loca- tion with passive fine-mesh screen inlet with mesh width of 0.76 mm. Step 2: Using EPA's costing equations, calculate the annualized capital and net operation and maintenance costs for a facility with your design flow using this Where: yf = annualized capital and net O&M costs using actual facility design intake flow, Xf = actual facility design intake flow (in gallons per minute), xepa = EPA assumed facility design intake flow (in gallons per minute) (column 3), yep* = Annualized capital and net O&M costs using EPA design intake flow (column 7),and m = design flow adjustment slope (column 13). Rather than providing the detailed costing equations that EPA used to calculate annualized capital and net O&M costs for facilities to use each of the 14 modeled technologies, EPA has provided the simplified formula above, ''wrncrrcoIlapsesTH6TesiiRs~of those equations for the particular facility and technology into a single result (yepj and then allows the facility to adjust this result to reflect its actual design intake flow, using a technology specific slope for a facility like yours that is derived from the costing equations. This allows facilities to perform the flow adjustment required by § 125.94(a)(5)(i)(B) in a straightforward and transparent manner. Facilities, Directors, or members of the public who wish to review the detailed costing equations should consult the Technical Development Document, Chapter 3. EPA has provided some additional information in Appendix A, beyond that which is needed to perform the calculations in § 125.95(a)(5)(ii), to facilitate comparison of the results obtained using formula 1 to the detailed costing equations in the TDD, for those who wish to do so. EPA does not expect facilities or permit writers to do this, and has in fact provided the simplified formula to preclude the need for doing so, but is providing the additional information to increase transparency. Thus, for informational purposes, the total capital cost (not annualized), baseline O&M cost, and post construction O&M cost from which the annualized capital and net O&M costs using EPA design intake flow (yspa in column 7) are derived are listed separately in columns 4 through 6. To calculate yepa, EPA annualized the total capital cost using a 7 percent discount rate and 10 year amortization period, and added the result to the difference between the post construction O&M costs and the baseline O&M costs. Note that some entries in Appendix A have NA indicated for the EPA assumed design intake flow in column 2. These are facilities for which EPA projected that they would already meet otherwise applicable performance standards based on existing technologies and measures. EPA projected zero compliance costs for these facilities, irrespective of design intake flow, so no flow adjustment is needed. These facilities should use $0 as their value for the costs considered by EPA for a like facility in establishing the applicable performance standards. EPA recognizes that these facilities will still incur permitting and monitoring costs, but these are not included in the cost comparison for the reasons stated above. Step 3: Determine the annualized net revenue loss associated with net construction downtime that EPA modeled for the facility to install the technology (§ 125.94(a)(5)(i)(C)) and the annualized pilot study costs that EPA modeled for the facility to test and optimize the technology (§ 125.94(a)(5)(i)(D)). The sum of these two figures is listed in column 10. For informational purposes, the total (not annualized) net revenue losses from construction downtime, and total (not annualized) pilot study costs are listed separately in columns 8 and 9. These two figures were annualized using a 7 percent discount rate and 30 year amortization period and the results added together to get the annualized facility downtime and pilot study costs in column 10. Step 4: Add the annualized capital and O&M costs using actual facility design intake flow (yf from step 2), and the annualized facility downtime and pilot study costs (column 10 from step 3) to get the preliminary costs considered by EPA for a facility like yours (§ 125.94(a)(5)(i)(E)). Step 5: Determine which performance standards in § 125.94(b)(l) and (2) (i.e., impingement mortality only, or impingement mortality and entrainmentj are applicable to your facility, and compare these to the performance standards on which EPA's cost estimates are based, listed in column 11 (§125.94(a)(5)(i)(F)). If the applicable performance standards and those on which EPA's cost estimates are based are the same, then the preliminary costs considered by EPA for a facility like yours are the final costs considered by EPA for a facility like yours. If only the impingement mortality performance standards are applicable to your facility, but EPA based its cost estimates on Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41647 impingement mortality and entrainment performance standards, then you should divide the preliminary costs by a factor of 2.148 to get the final costs. If impingement mortality and entrainment performance standards are applicable to your facility, but EPA based its cost estimates on impingement mortality performance standards only, then you should multiply the preliminary costs by 2.148 to get the final costs. In calculating compliance costs, EPA . . .- would be applicable to the facility based on available data. However, because of both variability and uncertainty in the underlying parameters that determine which performance standards apply (e.g., capacity utilization rate, mean annual flow), it is possible that in some cases the performance standards that EPA projected are not correct. The adjustment factor of 2.148 was determined by taking the ratio of median compliance costs for facilities to meet impingement mortality and entrainment performance standards over median compliance costs for facilities to meet impingement mortality performance standards only. While using this adjustment factor will not necessarily yield the exact compliance costs that EPA would have calculated had it had current information, EPA believes the results are accurate enough for determining whether a facility's actual compliance costs are "significantly greater than" the costs considered by EPA for a like facility in establishing the applicable performance standards. EPA believes it is preferable methodology for making this adjustment that yields reasonably accurate results, rather than a much more complex methodology that would be difficult to use and understand (for the facility, Director, and public), even if the more complex methodology would yield slightly more accurate results. The Site-Specific Technology Plan is developed based on the results of the Comprehensive Cost Evaluation Study and must contain the following information: • A narrative description of the design and operation of all existing and proposed design and construction technologies, operational measures, and/or restoration measures that you have selected in accordance with §125.94(a)(5); • An engineering estimate of the efficacy of the proposed and/or implemented design and construction technologies or operational measures, and/or restoration measures. This estimate must include a site-specific evaluation of the suitability of the technologies or operational measures for reducing impingement mortality and/or entrainment (as applicable) of all life stages of fish and shellfish based on representative studies (e.g., studies that have been conducted at cooling water intake structures located in the same waterbody type with similar biological characteristics) and, if applicable, site- specific technology prototype or pilot studies. If restoration measures will be used, you must provide a Restoration . Planjhatjncludeslhfi_alejiifints described in § 125.95 (b)(5); • A demonstration that the proposed and/or implemented design and construction technologies, operational measures, and/or restoration measures achieve an efficacy that is as close as practicable to the applicable performance standards of § 125.94(b) without resulting in costs significantly greater than either the costs considered by the Administrator for a facility like yours in establishing the applicable performance standards, or as appropriate, the benefits of complying with the applicable performance standards at your facility; and, • Design and engineering calculations, drawings, and estimates prepared by a qualified professional to support the elements of the Plan. 2. Facility's Costs Significantly Greater Than the Benefits of Complying With Performance Standards A facility demonstrating that its costs are significantly greater than the benefits of complying with performance standards must perform and submit a Comprehensive Cost Evaluation Study, a Benefits Valuation Study, and a Site- Specific Technology Plan. The Comprehensive Cost Evaluation Study is discussed in the previous section. It requires the same information for a cost-benefit site-specific determination as for a cost-cost site- specific determination, except that the demonstration in § 125.95(b)(6)(i)(B) must show that the facility's actual compliance costs significantly exceed the benefits of meeting the applicable performance standards at the facility. The Benefits Valuation Study requires that a facility use a comprehensive methodology to fully value the impacts of impingement mortality and entrainment at its site and the benefits of complying with the applicable performance standards. In addition to the valuation estimates, the benefit study must include the following: • A description of the methodology(ies) used to value commercial, recreational, and ecological benefits (including any non-use benefits, if applicable); • Documentation of the basis for any assumptions and quantitative estimates. If you plan to use an entrainment survival rate other than zero, you must submit a determination of entrainment survival at your facility based on a study approved by the Director; • An analysis of the effects of significant sources of uncertainty on the results of the study; • If requested by the Director, a peer review of the items you submit in the Benefits Valuation Study. You must choose the peer reviewers in consultation with the Director who may consult with EPA and Federal, State, and Tribal fish and wildlife management agencies with responsibility for fish and wildlife potentially affected by your cooling water intake structure. Peer reviewers must have appropriate qualifications depending upon the materials to be reviewed. • A narrative description of any non- monetized benefits that would be realized at your site if you were to meet the applicable performance standards and a qualitative assessment of their magnitude and significance. All benefits, whether expressed qualitatively or quantitatively, should be addressed in the Benefits Valuation Study and considered by the Director in determining whether compliance costs significantly exceed benefits. The benefits assessment should begin with an impingement and entrainment mortality study, which quantifies both the baseline mortality as well as the expected change from rule compliance. The benefits assessment should include a qualitative and/or quantitative description of the benefits that would be produced by compliance with the applicable performance standards at the facility site and, to the extent feasible, monetized (dollar) estimates of all significant benefits categories using well established and generally accepted valuation methodologies. The first benefit category to consider is use benefits, which includes such benefits as those to commercial and recreational fishermen. Well-established revealed preference and market proxy methods exist for valuing use benefits, and these should be used in all cases where the impingement and entrainment mortality study identifies substantial impacts to harvested or other relevant species. The second benefit category to consider is non-use benefits. Non-use benefits may arise from reduced impacts to ecological resources that the public considers important, such as threatened and endangered species. Non-use benefits can generally only be monetized through the use of stated 41648 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations preference methods. When determining whether to monetize non-use benefits, permittees and permit writers should consider the magnitude and character of the ecological impacts implied by the results of the impingement and entrainment mortality study and any other relevant information. • In cases where an impingement mortality and entrainment characterization study identifies substantial harm to a threatened or endangered species, to the sustainability of populations of important species of fish, shellfish or wildlife, or to the maintenance of community structure and function in a facility's waterbody or watershed, non-use benefits should be -monetized!511 --------------------------------- • In cases where an impingement mortality and entrainment characterization study does not identify substantial harm to a threatened or endangered species, to the sustainability of populations of important species of fish, shellfish or wildlife, or to the maintenance of community structure and function in a facility's waterbody or watershed, monetization is not necessary. Permittees should consult with their permitting authority regarding their plans for assessing ecological and non- use benefits, including whether they plan to conduct a stated preference study and if so, the basic design of the study, including such items as target population, sampling strategy, approximate sample size, general survey design, and other relevant information. When conducting quantitative benefits assessments, permittees should carefully review and follow accepted best practices for such studies. A discussion of best practices regarding valuation can be found in EPA's Guidelines for Preparing Economic 003, September 2000) and OMB Circular A— 4: Regulatory Analysis (September 17, 2003, www.whitehouse.gov/omb/ inforeg/circular_a4.pdfl. In their benefits assessment, the permittee should present the results, as well as clearly describe the methods used, the assumptions made, and the associated uncertainties. It is recommended that the permittee and Director seek peer review of the major biological and economic aspects of the final benefits assessment. The goal of the peer review process is to ensure that scientific and technical 5r)In cases where harm cannot be clearly explained to the public, monetization is not feasible because stated preference methods are not reliable when the environmental improvement being valued cannot be characterized in a meaningful way for survey respondents. work products receive appropriate levels of critical scrutiny from independent scientific and technical experts as part of the overall decision- making process. In designing and implementing peer reviews, permittees and permit writers can look to EPA's Science Policy Council Handbook—Peer Review (EPA 100-B-98-00, January 1998, wmv.epa.gov) for guidance. The Site-Specific Technology Plan is described in the previous section. It requires the same information for a cost- benefit site-specific determination as for a cost-cost site-specific determination, except that the demonstration in § 125.95(b)(6)(iii)(C) must show that the proposed and/or implemented TechnolopeTarid"rrieasures~ achieve an efficacy that is as close as practicable to the applicable performance standards without resulting in costs significantly greater than the benefits of complying with the applicable performance standards at your facility. X. Engineering Cost Analysis A. Technology Cost Modules In the Notice of Data Availability (NODA) (68 FR 13522, March 19, 2003), the Agency presented an approach for developing compliance costs that included a broad range of compliance technologies for calculating compliance costs as opposed to the approach used for the proposal, which was based on a limited set of technologies. In response to comments, EPA revised the costing modules that were presented in the NODA and used to develop the engineering costs for the final rule. Modifications made include adding a new set of costing modules to address the installation of fine-mesh wedgewire screens with open mesh sizes less than 1 mm in width; revising construction • down~trrrre~ neffdBau1o~reioca~te~cooling water intake structures offshore; and reconsidering the applicability of the double-entry, single-exit technology and its ability to compensate for through- screen velocity issues for fine-mesh applications. The following modules were used to develop compliance costs for the Agency's engineering cost analysis for the final rule: • Addition of fish handling and return system to an existing traveling screen system; • Addition of fine-mesh screens (both with and without a fish handling and return system) to an existing traveling screen system; • Addition of a new, larger intake in front of an existing intake screen system; • Addition of passive fine-mesh screen system (cylindrical wedgewire) near shoreline with mesh width of 1.75 mm; • Addition of passive fine-mesh screen system (cylindrical wedgewire) near shoreline with mesh width of 0.76 mm; • Addition of a fish net barrier system; • Addition of an aquatic filter barrier system; • Relocation of an existing intake to a submerged offshore location (with velocity cap inlet, passive fine-mesh screen inlet with mesh width of 1.75 mm, passive fine-mesh screen inlet with mesh width of 0.76 mm, or onshore traveling screens); • Addition of a velocity cap inlet to an existing offshore intake; • Addition of passive fine-mesh screen to an existing offshore intake with mesh width of 1.75 mm; • Addition of passive fine-mesh screen to an existing offshore intake with mesh width of 0.76 mm; • Addition or modification of a shoreline-based traveling screen for an offshore intake system; and • Addition of dual-entry, single-exit traveling screens (with fine-mesh) to a shoreline intake system. Further explanation and derivation of each of these costing modules and their application for the purposes of assessing costs is discussed in the Technical Development Document. For explanation of how the Agency applied these technology cost modules to determine compliance costs, see section X.B below. B. Model Facility Cost Development In order to implement the technology costing modules discussed in section X.A, the Agency used the same basic approach which was described in the NODA for the estimation of costs at the model facility level. This approach focuses as much as possible on site- specific characteristics for which the Agency obtained data through the section 316(b) questionnaires. In addition, EPA used available geographic information, including detailed topographic mapping and overhead satellite imagery, to better utilize site- specific characteristics of each model facility's intake(s) to determine the appropriate costing modules for that facility. The Agency also utilized facility-specific information collected for the regional benefits studies to further inform the selection of compliance technology at model facilities. The Technical Development Document provides the background and a more detailed explanation of the Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41649 Agency's approach to model facility level costing, which has not changed dramatically from that published in the NODA(68FR 13522). EPA's approach to model facility-level costing may be described as follows. In order to project upgrades to technologies as a result of compliance with today's final rule, the Agency utilized as much information as was available about the characteristics of the facilities expected to be within the scope of the rule. By incorporating as many site-specific features as possible into the design and implementation of its costing approach, the Agency has been able to capture a representative -Fange-of-eom-pliaHGe-Gost-s-at-what-it deems "model facilities." However, it is infeasible for the Agency to visit and study in detail all of the engineering aspects of each facility complying with this rule (over 400 facilities could incur technology-related compliance costs as a result of this rule). Therefore, although the Agency has developed costs that represent EPA's best effort to develop a site-specific engineering assessment for a particular facility, this assessment does not address any site-specific characteristics that only long-term study of each facility would reveal. Hence, the Agency refers to its approach as a "model" facility approach. In selecting technology modules for each model facility, EPA, to a degree departed from its traditional least cost approach. The least cost approach, traditionally utilized for estimating compliance technology choices, relies on the principle that the complying plant will choose to install the least cost technology that meets the minimum standard. While the Agency is confident that the suite of available technologies can achieve the performance standards sufficient data to determine the precise performance of each technology on a site-specific basis for over 400 different applications. The Agency thus selected, based on criteria published in the NODA, one of a set of best performing technologies (rather than the least costly technology) that was suitable for each model facility (or intake), in order to ensure that the technology on which costs were based would in fact achieve compliance at that model site. The criteria for selecting the best performing technology for a model facility (or intake) utilized questionnaire data as the primary tool in the assessment. For those facilities utilizing recirculating cooling systems in-place, the Agency assigned no compliance actions as they met the standards at baseline. The Agency then determined those intakes (facilities) that met compliance requirements with technologies in- place. These facilities received no capital or annual operating and maintenance compliance upgrade costs (although they may receive administrative or monitoring costs). The Agency categorized facilities according to waterbody type from which they withdraw cooling water. The Agency then sorted the intakes (facilities) within each waterbody type based on their configuration as reported in the questionnaires. Generally, the categories of intakes within one waterbody type are as follows: canal/channel, bay/ embayment/cove, shoreline, and offshore. Once the intake (facility) is dasslfredTdlTiTsTe^TOnhe^Agency examines the type of technology in- place and compares that against the compliance requirements of the particular intake (facility). For the case of entrainment requirements, the intake technologies (outside of recirculating cooling) that qualify to meet the requirements at baseline are fine mesh screen systems, and combinations of far- offshore inlets with passive intakes or fish handling/return systems. A small subset of intakes has entrainment qualifying technologies in-place at baseline (for the purposes of this costing effort). Therefore, in the case of entrainment requirements, most facilities with the requirement would receive technology upgrades. The methodology for choosing these entrainment technologies is explained further on in this discussion. For the case of impingement requirements, there are a variety of intake technologies that qualify (for the purposes of this costing effort) to meet the requirements at baseline. The intake types meeting impingement requirements at baseline JjlcIuji5_thejpnpjiangLbarrier_net (the only fish diversion system which qualifies), passive intakes (of a variety of types), and fish handling and return systems. A significant number of intakes (facilities) have impingement technology in-place that meets the qualifications for this costing effort. Therefore, some intakes (facilities) require no technology upgrades when only impingement requirements apply. For facilities that do not pre-qualify for impingement and/or entrainment technology in-place (for the purposes of this costing effort), the Agency focuses next on questionnaire data relating to the intake type—canal/channel, bay/ embayment/cove, shoreline, and offshore. Within each intake type, the Agency further classifies according to certain specific characteristics. For the case of bays, embayments, and coves, the Agency determined if the intake is flush, protruding, or recessed from shoreline. For the case of canals and channels, the Agency similarly focuses on whether the intake is flush, protruding, or recessed from a shoreline. For the case of shoreline intakes, the Agency necessarily assessed whether the intake is flush, protruding, or recessed. For the case of offshore intakes, the Agency examines whether or not the intake has an onshore terminus (or well) and assesses the characteristics of the onshore system. The information the Agency gathers up to this point is sufficient to narrow down the likely technology applications for each intake (facility). However, in order to determine the best technology application, the Agency also utilizes commercially available satellite images and maps where available. The use of the satellite images and maps aided the Agency in determining the potential for the construction of expanded intakes in- front of existing intakes and the potential for an intake modification to protrude into the waterbody (such as a near-shore t-screen) due to the degree of navigational traffic in the near vicinity of the intake and whether a protrusion might be tolerated, the possibility of installing a barrier net system, obvious signs of strong currents, the relative distance of a potentially relocated intake inlet, the possibility for fish return installations of moderate length, etc. The Agency was able to collect satellite images for most intakes (facilities) for which it required the resource. However, in some cases (especially those in the rural, mid-western U.S.), only maps were*available. Hence, for the case of a significant number facilities located near small freshwater rivers/ streams and lakes/reservoirs, the Agency utilized only the questionnaire data and the overhead maps available. Once the Agency gathered the intake (facility) specific information to this degree, the applicable list of technologies for each intake was small (and in some cases only one technology would apply). Therefore, the Agency examined any other sources of information, such as those obtained for the regional benefits studies, to further narrow down the best technology to meet the requirements of the rule for each model intake (facility). Often, the decision was between just two or three potential technologies. If there was no evidence in the Agency's possession to suggest that the least-cost technology would not function, then the Agency would select this technology. However, should evidence imply that the least cost technology not be able to function reliably or have a feasibility issue 41650 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations related to site deployment (for example, a barrier net across a navigable waterway or a fish handling and return system with an extremely long return trough), then the Agency departed from the "least-cost" decision process and assigned the "best-performing" technology. In cases where more than one technology still remained after ruling out a least-cost alternative due to evidence (which was a rare occurrence), then the Agency_atternjrjted_to balance "tEe'appIicatioh oT the remaining technologies about a median, thereby assigning moderately high costs for some cases and moderately low costs in others. Therefore, for the case of national costs, the Agency's application of technology cost modules reflect a reasonable national average. C. Facility Flow Modifications In developing costs and benefits for the NODA, the Agency revised intake flow information for a small subset of inscope facilities in an effort to ensure the accuracy and quality of the data. In developing costs and benefits for the final rule, the Agency has further refined the intake flow information used. Since the NODA, the Agency re- evaluated its original decision to use the reported 1998 (the most recent of three years collected) annual flows for Detailed Questionnaire (DQ) recipients for the calculation of benefits. This, in turn, had an impact on the development of estimated design intake flows for short-technical questionnaire (STQ) recipients. As presented in the NODA, the~Agency e'sttmated design intake" flows for STQ facilities using a statistical methodology based on linear regression of DQ recipients' annual intake flows and DQ recipients' design intake flows to assess the design intake flow information for facilities that responded to the short technical questionnaire. Because the Agency asked STQ respondents for only their actual annual intake flow for the 1998 reporting year only (or a typical operational year), it was necessary to calculate design intake flow information for the purpose of accurately assessing compliance costs. Therefore, for the NODA and proposal, the Agency calculated design intake flows for STQ facilities based on a model derived from only the 1998 DQ flow data. In retrospect, the Agency determined that a more robust approach would be to use all three years of annual DQ flows collected (1996—1998) and to take advantage of the statistical abilities afforded by the expanded data set (that is, to determine and exclude outliers). Hence, for this final rule, the Agency has estimated the costs and benefits of the rule using improved flow data over the NODA and proposal. For the case of STQ facilities, the Agency has utilized an improved data set for the calculation of design intake flows, and, in turn, the calculation of compliance costs. XI. Economic Analysis A. Final Rule Costs EPA estimates that the final rule will haue-lotaLannnalized -SO£iaL(pre-tax) costs of $389 million ($2002). Of this total, $385 million are direct costs incurred by facilities and $4 million are implementation costs incurred by State and Federal government. On a post-tax basis, direct costs incurred by facilities subject to the final rule are expected to be $249 million, including one-time technology costs of complying with the rule, a one-time cost of installation downtime, annual operating and maintenance costs, and permitting costs (initial permit costs, annual monitoring costs, and permit reissuance costs). These cost estimates include compliance costs for eight facilities that are projected to be base case closures.51 Excluding compliance costs for projected base case closure facilities would result in annualized pre-tax facility compliance costs of approximately $376 million and annualized post-tax facility compliance costs of approximately $244 million. The equivalent annualized post-tax facility compliance costs were $178 million at proposal and $265 million for the NODA preferred option. The cost difference between proposal and the NODA is due primarily to the expanded range of technology options considered for the NODA and the "best performing technology" selection criteria used to assign cost modules to model facilities (see section IV of the NODA, 68 FR 13522, 13526). In selecting technology modules for each model facility, EPA, to a degree departed from its traditional least cost approach. The least cost approach, traditionally utilized for estimating compliance technology choices relies on the principle that the complying plant will choose to install the least cost technology that meets the minimum standard. While the Agency is confident that the suite of available technologies can achieve compliance with the proposed performance requirements (60-90% reduction in entrainment and 80-95% reduction in impingement mortality relative to the calculation baseline), EPA lacks sufficient data and sl There are eight base case closures in 200B, the first model run year of the IPM. See section XI.B.I for further discussion of analyses using the IPM. resources to determine the precise performance of each technology on a site-specific basis for over 400 different applications. The Agency thus selected, for subset of sites where multiple technologies could be under consideration to meet the requirements, a best performing technology (rather than the least costly technology of the choices). The best performing technology concept, when necessary to apply, relied on assigning technologies about a median cost, with some choices above and below. Therefore, for each model facility (or intake), in order to ensure that the technology on which costs were based would in fact achieve compliance at that model site, the Agency could not rely on a one-size fits all, least-cost approach. The cost difference between the NODA and the final rule is primarily a result of decreases in capital and permitting cost estimates. Capital and O&M costs changed between NODA and final primarily due to three factors. The Agency revised its application of certain technology cost modules (especially the dual-entry, single-exist traveling screen module) between NODA and final, in response to comments received. The Agency revised its costs for some passive screen technology costs utilizing finer mesh screens, in response to comments received. In addition, the Agency credited facilities with far offshore intakes plus certain impingement controls in-place (such as fish handling or passive inlet screens) as having met the requirements for entrainment reduction at baseline. This final change was also in response to comments that recommended that the Agency correlate the benefits assessment more closely with the engineering cost estimates. The overall net result of these changes was to slightly decrease total capital and total O&M costs of the rule. However, on the basis of facilities expected to upgrade technologies to meet the rule requirements, the capital and O&M costs did increase slightly. There are many uncertainties surrounding any forecast. The national annualized costs estimated for today's rule were necessarily developed using several major assumptions which are subject to uncertainty. The Agency attempted to develop a plausible range of costs focusing on four major cost assumptions surrounding the direct private cost of $385 million that may be incurred when facilities implement this rule. Uncertainty factors were analyzed for the cost assumptions affecting technology capital, technology O&M, downtime for connection outages, initial permitting, and pilot studies. This Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41651 uncertainty analysis provided a range of costs for the national private (direct) annualized compliance costs of $377 to $437 million. This range was developed by examining the effect of capacity utilization assumptions on technology capital and O&M costs; the effects of annualization time frame for initial permitting and downtime connection outages; the effects of sampling frequency and data analysis on pilot study costs; and excluding costs for facilities that have partial recirculating systems. For more information on the Agency's analysis of this issue, see DCN 6-5045. Cost assumption Annualization time frame for initial permitting and downtime. Capacity utilization rate used to estimate tech- nology capital and O&M. Base case facility compliance cost estimate 30 years No Based on 2008 IPM Forecast Moderate sampling frequency Sensitivity estimate 20 years Yes Based on historic utilization High sampling frequency B. Final Rule Impacts 1. Energy Market Model Analysis At proposal and for the NODA, EPA used an electricity market model, the Integrated Planning Model (IPM®), to identify potential economic and operational impacts of various regulatory options considered for the —Phase- H-regurati oirr^-E-lectric terrabiiity -- impact analyses could not be performed using the IPM model. EPA does recognize that due to down time or connection outages estimated to install several of the technologies, and the number of facilities that will need to come into compliance over the first few years after today's rule is promulgated, there may be short-term electric reliability issues unless care is taken within each region to coordinate outages with the North American Electric Reliability Council (NERC) and where possible with normal scheduled maintenance operations. Noting this, EPA has provided flexibility in today's rule so that facilities can develop workable construction schedules with their permit writers and coordinate with NERC to appropriately schedule down times (see § 125.95(b)(4)(ii)). As noted in the NERC 2003 Long-term Reliability Assessment, the overall impact on reliability of any new environmental requirements will "* * * depend on providing sufficient time to make the ' necessary modifications and the commercial availability of control "teclmologies.™53 EFA conBuctecTimpact analyses at the market level, by NERC region,54 and for facilities subject to the 52 For a detailed description of the IPM see Chapter B3 of the Economic and Benefits Analysis (EBA) document in support of the proposed rule (DCN 4-0002; http://w\'\v.f-pa.gov/ost/316b/ Phase II regulation. Analyzed characteristics include changes in electricity prices, capacity, generation, revenue, cost of generation, and income. These changes were identified by comparing two scenarios: (1) The base case scenario (in the absence of any section 316(b) Phase I and Phase II regulation) and (2) the post compliance "scenario"latter ffie"im]51ementation of the new section 316(b) Phase II regulations). At proposal, EPA used the results of these comparisons to assess the impacts of the proposed rule and two of the five alternative compliance options considered by EPA: (1) The "Intake Capacity Commensurate with Closed-Cycle, Recirculating Cooling System based on Waterbody Type/ Capacity" option and (2) the "Intake Capacity Commensurate with Closed- Cycle, Recirculating Cooling System for All Facilities" option. For the NODA, EPA assessed the impacts of the preferred option and the "Intake Capacity Commensurate with Closed- Cycle, Recirculating Cooling System based on Waterbody Type/Capacity" option, making several changes to the analysis (major changes included changes in IPM model aggregation, capacity utilization assumptions, and treatment of installation downtime; see section V.A of the NODA). Since publication of the NODA, EPA has conducted further IPM analyses. The following sections present a discussion oFchariges toTEelfrialysis since the NODA and the results of the re-analysis of the final rule. 53 North American Electric Reliability Council (NERC). 2003. 2003 Long-term Reliability Assessment: The Reliability of Bulk Electric Systems in North America: prepared December 2003. 54 The IPM models the ten NERC regions that rover the continental U.S.: ECAR (East Central Area Reliability Coordination Agreement), ERCOT (Electric Reliability Council of Texas), FRCC (Florida Reliability Coordinating Council), MAAC (Mid-Atlantic Area Council), MAIN (Mid-America Interconnected Network. Inc.), MAPP (Mid- Continent Area Power Pool), NPCC (Northeast Power Coordination Council), SERC (Southeastern Electricity Reliability Council), SPP (Southwest Power Pool), and WSCC (Western Systems Coordinating Council). Electric generators in Alaska and Hawaii are not interconnected with these regions and are not modeled by the IPM. a. Changes to the IPM analyses since the NODA. EPA did not change its IPM assumptions and modeling procedures for this final rule. EPA continued to use the 2000 version of the IPM model to perform the final rule analysis. In the 2003 current version of the IPM, the model has been updated to include, among other things, effects of the State Multi-Pollutant regulations and the New Source Review settlements on environmental compliance costs associated with the IPM base case. Further, the 2003 version of the IPM model includes updated costs for existing facilities such as life extension costs. However, a few general changes affect the results presented in the following subsection. These changes are outlined in section VI.A and include the following: An increase in the estimated number of in-scope Phase II facilities from 551 to 554; revisions of technology, operating and maintenance, and permitting/monitoring costs; and changes to the assumption of construction downtimes for compliance technologies other than recirculating cooling towers. b. Revised results for the Final Rule. This section presents the revised impact analysis of the final rule. The impacts of compliance with the final rule are defined as the difference between the modeling results for the base case scenario and the modeling results for the post-compliance scenario. Two base case scenarios were used to analyze the impacts associated with the final rule. The first base case scenario was developed using EPA's electricity demand assumption. Under this assumption, demand for electricity is based on the Annual Energy Outlook (AEO) 2001 forecast adjusted to account for efficiency improvements not factored into AEO's projections of electricity sales. The second base case was developed using the unadjusted electricity demand from the AEO 2001. The results presented in this section use the first, EPA-adjusted base case. 41652 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations Results using the second base case are presented in the Appendix of Chapter B3 of the final EB A. EPA analyzed impacts of the final rule using data from model run year 2010. Model run year 2010 was chosen to represent the effects of the final rule for a typical year in which all facilities are expected to be in compliance (for this analysis, EPA assumed that facilities come into compliance between 2005 and 2009; in reality, compliance is expected to begin in 2008).55 The analysis was conducted at two levels: the market level including all facilities (by NER&regkm)-aHd-t4ie Phase-Jl facility level (including analyses of the in-scope Phase II facilities as a group and of individual Phase II facilities). The results of these analyses are presented in the following subsections. ;'. Market-level impacts of the Final Rule. The market-level analysis includes results for all generators located in each NERC region including facilities both in-scope and out-of-scope of the proposed Phase II rule. Exhibit XI—1 presents five measures used by EPA to assess market-level impacts associated with the final rule, by NERC region: (1) Incremental capacity closures, calculated as the difference between capacity closures under the final rule and capacity closures under the base ease;-(2-}-incremental-capacity closures as a percentage of baseline capacity; (3) post-compliance changes in variable production costs per MWh, calculated as the sum of total fuel and variable O&M costs divided by total generation; (4) post-compliance changes in energy price, where energy prices are defined as the wholesale prices received by facilities for the sale of electric generation; and (5) post-compliance changes in pre-tax income, where pre- tax income is defined as total revenues minus the sum of fixed and variable O&M costs, fuel costs, and capital costs. Additional results are presented in Chapter B3: Electricity Market Model Analysis (section B3-4.1) of the Economic and Benefits Analysis (EBA) in support of the final rule (DCN 6- 0002). Chapter B3 also presents a more detailed interpretation of the results of the market-level analysis. EXHIBIT xi-1 .—MARKET-LEVEL IMPACTS OF THE FINAL RULE (2010) NERC region ECAR ERGOT FRCC MAAC MAIN MAPP NPCC SERC SPP WSCC Total . Baseline ca- pacity (MW) 118,529 75,290 50,324 63,784 59,494 35,835 72,477 194,485 49,948 167,748 887,915 Incremental closures Capacity (MW) 94 58 152 % of baseline capacity -0.0 -0.0 -0.0 -0.0 0.2 -0.0 -0.0 -0.0 -0.0 0.0 0.0 Change in variable pro- duction cost per MWh (percent) 0.1 0.0 0.4 0.4 0.1 0 1 -0.5 0.0 -0.1 0.0 0.0 Change in en- ergy price per MWh (percent) 0.3 5.8 0.6 0.1 -0.3 03 -0.1 -0.1 -0.2 0.0 n/a Change in pre- tax income ($2002) (percent -0.8 -5.6 -3.0 -0.9 -0.3 0.1 -1 9 -0.5 -0.4 05 -1.0 Two of the ten NERC regions modeled, MAIN and WSCC, are estimated to experience economic closures of existing capacity as a result of-the-firkftl-fuleT-Tnese-elosiHes represent negligible percentages of regional baseline capacity (0.2% in MAIN and less than 0.1% in WSCC) and of total U.S. baseline capacity (less than 0.1%). EPA estimates that four NERC regions will experience increases in variable production costs per MWh, although the largest increase will not exceed 0.4 percent. In addition, four NERC regions will experience an increase in energy prices under the final rule. Of these, only ERGOT is estimated to experience an increase of more than 1.0 percent (5.8 percent). Pre-tax incomes are estimated to decrease in all but one region, but the majority of these changes will be less than 1.0 percent. ERGOT is estimated to experience the largest decrease in pre-tax income ( — 5.6 percent). Only one region, MAPP, will pre-tax income (0.1 percent). ii. Facility-level impacts of the Final Rule. The results from model run year 2010 were used to analyze impacts on Phase II facilities at two levels: (a) Potential changes in the economic and operational characteristics of the group of in-scope Phase II facilities as a whole and (b) potential changes to individual facilities within the group of Phase II facilities. Exhibit XI-2 presents five measures used by EPA to assess impacts to the group of Phase II facilities associated with the final rule, by NERC region: (1) Incremental capacity closures, calculated as the difference between capacity closures under the final rule and capacity closures under the base case; (2) incremental capacity closures as a percentage of baseline capacity; (3) post-compliance changes in variable production costs per MWh, calculated as the sum of total fuel and variable O&M costs divided by total generation; (4) post-compliance changes in electricity generation; and (5) post- compliance changes in pre-tax income, where pre-tax income is defined as total revenues minus the sum of fixed and variable O&M costs, fuel costs, and capital costs. Additional results are presented in section B3-4.2 of the final EBA. Chapter B3 also presents a more detailed interpretation of the results of the analysis of Phase II facilities as a group. 55 EPA also analyzed potential market-level impacts of the final rule for a year during which some Phase II facilities experience installation downtimes. This analysis used output from model run year 2008. See Chapter B3, section B3—J.3 of the final EBA for the results of this analysis. Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41653 EXHIBIT XI-2.— IMPACTS ON PHASE II FACILITIES OF THE FINAL RULE (2010) NERC region ECAR ERGOT . FRCC MAAC MAIN MAPP NPCC SERCspp wscc Total Baseline ca- pacity (MW) 82,313 43,522 27,537 34,376 36,498 15,749 37,651 107,450 20,471 28,431 433,998 Incremental closures Capacity (MW) 0 0 0 0 94 0 0 0 0 58 152 % of baseline capacity 0.0 0.0 0.0 0.0 0.3 0.0 0.0 0.0 0.0 0.2 0.0 Change in variable pro- duction cost per MWh (percent) 0.0 -0.7 0.3 0.0 0.1 -0.1 -1.7 -0.3 -0.4 -0.9 -0.6 Change in generation (percent) -0.2 -1.8 -0.8 0.2 -0.3 0.0 -3.6 -0.2 -0.7 -4.3 -0.8 Change in pre- tax income (percent) -1.0 -10.4 -4.0 -1.4 -0.6 -0.3 -4.3 -0.7 -1.0 -10.4 -1.8 Identical to the market-level results, EPA estimates that 152 MW, or less than ..OJl%.Lof^ajiacity._at_Phas_e_n_facilities_ will close as a result of the final rule. (If the AEO's higher demand forecast is utilized, it would result in a larger capacity of early closures of 493 MW or more than 0.1%. See EBA B3 appendix Table B3-A-3.) MAIN (94 MW) and WSCC (58 MW) are the only regions that are estimated to experience incremental capacity closures. In both regions, these incremental closures represent less than 0.3% of baseline capacity at Phase II facilities. Variable production costs per MWh at Phase II facilities increase in two regions and decrease in six regions under the final rule. No region experiences an increase in Phase II facility production costs that exceeds 0.5 percent, while Phase II facilities in NPCC and WSCC see reductions of 1.7 percent and 0.9 percent, respectively. Phase II facilities in three NERC regions are estimated to experience decreases in generation in excess of 1.0 percent as a result of the final rule. The largest is estimated to be in WSCC, where Phase II facilities experience a 4.3 percent reduction in generation. Overall, EPA estimates^hat jjre-tax income will decrease by 1.8 percent for the group of Phase II facilities. The effects of this change are concentrated in a few regions: WSCC and ERGOT each experience reductions in pre-tax income of 10.4 percent, which is driven by a reduction in revenues (not presented in this exhibit) rather than an increase in costs. NPCC and FRCC are estimated to experience a reduction of 4.3 and 4.0 percent, respectively. Results for the group of Phase II facilities as a whole may mask shifts in economic performance among individual facilities subject to this rule. To assess potential distributional effects, EPA analyzed facility-specific changes between the base case and the post-compliance case in (1) capacity utilization, defined as generation divided by capacity times 8,760 hours, (2) electricity generation, (3) revenue, (4) variable production costs per MWh, defined as variable O&M cost plus fuel cost divided by generation, and (5) pre- tax income, defined as total revenues minus the sum of fixed and variable O&M costs, fuel costs, and capital costs. Exhibit XI-3 presents the total number of Phase II facilities with estimated degrees of change due to the final rule. This exhibit excludes 17 in- scope facilities with estimated significant status changes in 2010: Ten facilities are base case closures, one facility is a full closure as a result of the final rule, and six facilities changed their repowering decision between the base case and the post-compliance case. These facilities are either not operating at all in either the base case or the post- compliance case, or they experience fundamental changes in the type of units they operate; therefore, the measures presented in Exhibit XI-3 would not be meaningful for these facilities. In addition, the change in variable production cost per MWh of generation could not be developed for 57 facilities with zero generation in either the base case or post-compliance scenario. For these facilities, the change in variable production cost per MWh is indicated as "n/a." EXHIBIT XI-3.—OPERATIONAL CHANGES AT PHASE II FACILITIES FROM THE FINAL RULE (2010)a Change in Capacity Utilization13 Change in Generation . . Change in Revenue Change in Variable Production Costs/MWh Change in Pre-Tax Income „ </=1% 6 4 83 38 115 Reduction" 1-3% 21 6 30 16 109 > 3% 25 46 45 9 213 </=1% 7 11 142 145 44 Increase 1-3% 7 5 8 11 11 > 3% 11 18 1617 15 No change 441 428 194 225 11 oo 0 57 0 "For all measures percentages used to assign facilities to impact categories have been rounded to the nearest 10th of a percent. "The change in capacity utilization is the difference between the capacity utilization percentages in the base case and post-compliance case. For all other measures, the change is expressed as the percentage change between the base case and post-compliance values. EPA estimates that the majority of Phase II facilities will not experience changes in capacity utilization or generation due to compliance with the final rule. Of those facilities with changes in post-compliance capacity utilization and generation, most will experience decreases in these measures. Exhibit XI-3 also indicates that the majority of facilities with changes in variable production costs will experience increases. However, about 85 41654 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations percent of those increases are estimated to be 1.0 percent or less. Changes in revenues at a majority of Phase II facilities will also not exceed 1.0 percent. The largest effect of the final rule is estimated to be on facilities' pre- tax income: the model projects that over 80 percent of facilities will experience a reduction in pre-tax income, with about 40 percent of the overall total experiencing a reduction of 3.0 percent or greater. 2. Other Economic Analyses EPA updated its other economic analyses conducted at proposal and for the NODA to determine the effect of changes made to the assumptions for the final rule on steam electric generating made to EPA's methodology and assumptions and presents the updated results. For complete results of this analysis, refer to Chapter B2 of the final EBA. For complete results of the proposal and the NODA analyses, refer to the chapters in Part B of the EBA document in support of the proposed rule at http://www.spa.gov/ waterscience/316b/econbtinefits/ and DCN 5-3004 of the NODA docket. It should be noted that the measures presented in this section are provided in addition to the economic impact measures based on the Integrated Planning Model (IPM®) analyses (see section XI.B.l). The following measures are used to assess the magnitude of compliance costs; they are not used to predict closures or other types of economic impacts on facilities subject to Phase II regulation. a. Cost-to-revenue measure. i. Facility-level analysis. EPA examined the annualized post-tax compliance costs of the final rule as a percentage of baseline annual revenues, for each of the 554 facilities expected to be subject to Phase IT ot the~section 316(b) regulation. This measure allows for a comparison of compliance costs incurred by each facility with its revenues in the absence of the Phase II regulation. The revenue estimates are facility-specific baseline projections from the IPM base case for 2008 (see section XI.B.l for a discussion of EPA's analyses using the IPM).56 Similar to the findings at proposal and for the NODA preferred option, EPA estimates that a majority of the facilities subject to the final rule, 413 out of 554 (75 percent), will incur annualized costs of less than one percent of revenues. Of these, 314 facilities incur compliance costs of less than 0.5 percent of revenues. In addition, 94 facilities (17 percent) are estimated to incur costs of between one and three percent of revenues, and 39 facilities (7 percent) are estimated to incur costs of greater than three percent. Eight facilities are estimated to be base case closures. ii. Firm-level analysis. The firms owning the facilities subject to Phase II regulation may experience greater impacts than individual in-scope facilities if they own more than one facility with compliance costs. EPA therefore also analyzed the cost-to- --re venue-ratios -at-the-firm-level. EPA identified the domestic parent entity of each in-scope facility and obtained their sales revenue from publicly available data sources (the Dun and Bradstreet database for parent firms of investor- owned utilities and nonutilities; and Form EIA-861 for all other parent entities). This analysis showed that 126 unique domestic parent entities own the facilities subject to Phase II regulation. EPA compared the aggregated annualized post-tax compliance costs for each facility owned by the 126 parent entities to the firms' total sales revenue. Since proposal, EPA has updated the parent firm determination for Phase II facilities. EPA also updated the average Form EIA-861 data used for this analysis from 1996-1998 (used at proposal) to 1997-1999 (used for the NODA) and 1999-2001 (used for the final rule). In addition, EPA made one modification to the sources of revenue data used in this analysis: At proposal, EPA used sales volume from Dun and Bradstreet (D&B) for any parent entity listed in the database. If D&B data were 5BEPA used 2008 rather than 2010 baseline revenues for this analysis because 2008 is the first model run year specified in the IPM analyses. EPA used the first model ru closely resembles the t: of in-scope facilities th facilities may be incree other than the Phase II year because it more rrent operating conditions n later run years (over time, ingly affected by factors emulation). database or the section 316(b) survey. For the NODA and final rule analyses, EPA used the D&B database for privately-owned entities only. For other entities, EPA used the EIA database. For the final rule analysis, EPA conducted additional research [e.g., Securities and Exchange Commission 10-K filings; company web sites) to collect revenue data for those firms whose revenue was not reported in either D&B or Form EIA 861. For the final rule, EPA estimates that of the 126 parent entities, 115 entities (91 percent) will incur annualized costs of less than one percent of revenues. Of these, 105 entities incur compliance costs of less than 0.5 percent of revenues. In addition, 10 entities (8 percent) are estimated to incur costs of between one and three percent of revenues, and only one entity (1 percent) is estimated to incur costs of greater than three percent. The highest estimated cost-to-revenue ratio for the final rule is 6.7 percent of the entities' annual sales revenue (for the proposed rule, this value was 5.3 percent; for the NODA preferred option, this value was 7.4 percent). b. Cost per household. EPA also conducted an analysis that evaluates the potential cost per household, if Phase II facilities were able to pass compliance costs on to their customers. This analysis estimates the average compliance cost per household for each North American Electricity Reliability Council (NERC) region,57 using two data inputs: (l) The average annual pre-tax compliance cost per megawatt hour (MWh) of total electricity sales and (2) the average annual MWh of residential electricity sales per household. For the proposal and NODA analyses, EPA used 2000 electricity sales information from Form EIA-861 (Annual Electric Power Industry Report); for the final rule, EPA updated the electricity sales information to 2001. The results of this analysis show that the average annual cost of the final rule per residential household is expected to range from $0.50 in Alaska to $8.18 in Hawaii. The U.S. average is estimated to be $1.21 per household. c. Electricity price analysis. EPA also considered potential effects of the final Phase II rule on electricity prices. EPA used three data inputs in this analysis: (1) Total pre-tax compliance cost incurred by facilities subject to Phase II regulation, (2) total electricity sales, based on the Annual Energy Outlook (AEO), and (3) prices by end use sector (residential, commercial, industrial, and transportation), also from the AEO. All three data elements were calculated by NERC region. For the proposal and NODA analyses, EPA used the AEO 2002; for the final rule, EPA updated the data with the AEO 2003. The results of the final rule analysis show that the annualized costs of complying (in cents per KWh sales) range from 0.007 cents in the SPP region to 0.019 cents in the NPCC region. To determine potential effects of these 37 There are twelve NERC regions: ASCC (Alaska Systems Coordinating Council), ECAR (East Central Area Reliability Coordination Agreement), ERCOT (Electric Reliability Council of Texas), FRCC (Florida Reliability Coordinating Council), HI (Hawaii), MAAC (Mid-Atlantic Area Council), MAIN (Mid-America Interconnected Network, Inc.), MAPP (Mid-Continent Area Power Pool), NPCC (Northeast Power Coordination Council), SERC (Southeastern Electricity Reliability Council), SPP (Southwest Power Pool), and WSCC (Western Systems Coordinating Council). Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41655 compliance costs on electricity prices, EPA compared the per KWh compliance cost to baseline electricity prices by end use sector and for the average of the sectors (the detailed results are presented in Chapter B2 of the final EBA). This analysis projects that the greatest increase in electricity prices will be in the WSCC region (0.3 percent). The average increase in electricity prices is estimated to be 0.16 percent (for the proposed rule, this value was 0.11 percent; for the NOD A preferred option, this value was 0.17 percent). XII. Benefits Analysis A." Tiifro'diicHon ..... This section presents EPA's estimates of the national environmental benefits of the final section 316(b) regulations for Phase II existing facilities. The assessed benefits occur due to the reduction in impingement and entrainment at cooling water intake structures affected by this ruiemaking. Impingement and entrainment kills or injures large numbers of all life stages of aquatic organisms. By reducing the levels of impingement and entrainment, today's final rule will increase the number of fish, shellfish, and other aquatic life in local aquatic ecosystems. This, in turn, directly and indirectly improves use benefits such as those associated with recreational and commercial fisheries. Other types of benefits, including ecological and non-use values, would also be enhanced. Section D provides an overview of the types and sources of benefits anticipated, how these benefits are estimated, the level of benefits achieved by the final rule, and how monetized benefits compare to costs. The analysis was based on impingement studies. Most of these studies counted losses offish species only and considered only a limited subset of the species impinged and entrained. To estimate the economic benefits of reducing impingement and entrainment at existing cooling water intake structures, all the beneficial outcomes need to be identified and, where possible, quantified and assigned appropriate monetary values. Estimating economic benefits is challenging because of the many steps necessary to link reductions in impingement and entrainment to changes in impacted fisheries and other aspects of relevant aquatic ecosystems, and then to link these ecosystem changes to the resulting changes in quantities and values for the associated environmental goods and services that ultimately are linked to human welfare. The methodologies used in the estimation of benefits of the final rule are largely built upon those used for estimating use benefits of the proposed rule (see 67 FR 17121) and the Notice of Data Availability (see 67 FR 38752). The Regional Analysis Document for the Proposed Section 316 (b) Phase II Existing Facilities Rule (see DCN 6-0003), hereafter known as the Regional Study or Regional Analysis, provides EPA's complete benefit assessment for the final rule. National benefit estimates for this rule are derived from a series of regional studies across the country from a range of waterbody types. Section XII.B provides detail on the regional study - design: Sectiori^XlW^iirougrrXII.E of this preamble describe the methods EPA used to evaluate impingement and entrainment impacts at section 316(b) Phase II existing facilities and to derive an economic value associated with any such losses. Regional benefits are estimated using a set of statistical weights for each in-scope facility that were developed as part of the survey design. National benefit estimates are obtained by summing regional benefits. B. Regional Study Design In its analysis for the section 316(b) Phase II proposal, EPA relied on case studies of 19 facilities grouped by waterbody type (oceans, estuaries/tidal rivers, lakes/reservoirs, and rivers/ streams) to estimate the potential economic benefits of reduced impingement and entrainment. For the proposal analysis, EPA extrapolated estimates of impingement and entrainment for each of the case study facilities to other facilities located on the same waterbody type, including those in different regions. However, a number of commenters expressed co neernrabout "this-method-of extrapolation, noting that there are important ecological and socioeconomic differences among different regions of the country, even within the same waterbody type. To address this concern, EPA revised the design of its analysis to examine cooling water intake structure impacts and regulatory benefits at the regional level. This involved the evaluation of impingement and entrainment data collected by the industry for another 27 facilities in addition to the 19 facilities evaluated for proposal (for a total of 46 facilities). Regional results were then combined to develop national estimates. The Agency evaluated the benefits of today's rule in seven study regions (North Atlantic, Mid Atlantic, South Atlantic, Gulf of Mexico, California, Great Lakes, and Inland) based on similarities in the affected ecosystems, aquatic species present, and characteristics of commercial and recreational fishing activities within each of the seven regions (see the background chapter of each study region in Parts B-H of the Regional Analysis Document for maps of the study regions). The five coastal regions (California, North Atlantic, Mid- Atlantic, South Atlantic, and Gulf of Mexico) correspond to those of the National Oceanographic and Atmospheric Association (NOAA) Fisheries. The Great Lakes region includes all facilities in scope of the Phase II rule that withdraw water from Lakes Ontario, Erie, Michigan, Huron, and Superior or are located on a waterway with open fish passage to a Great Lake and within 30 miles of the lake. The Inland region includes the remaining facilities that withdraw water from freshwater lakes, rivers, and reservoirs. Based on comments on the proposal about study gaps, EPA used available life history data to construct representative regional life histories for groups of similar species with a common life history type and groups used by NOAA Fisheries for landings data. Aggregation of species into groups facilitated evaluation of facility impingement and entrainment monitoring data. DCN 6-0003 provides a listing of the species in each life history group evaluated by EPA and tables of the life history data and data sources used for each group. To obtain regional impingement and entrainment estimates, EPA extrapolated losses from selected facilities with impingement and entrainment data to all other facilities within the same region. Impingement and entrainment data were extrapolated on the basis of operational flow, in millions of gallons per day (MGD), where MGD is the average operational flow over the period 1996-1998 as reported by facilities in response to EPA's Section 316(b) Detailed Questionnaire and Short Technical Questionnaire. Operational flow at each facility was scaled using factors reflecting the relative effectiveness of currently in-place technologies for reducing impingement and entrainment. DCN 6-0003 provides details of the extrapolation procedure. The goal of the analysis was to provide regional and national estimates, so although there may be variability in the actual losses (and benefits) per MGD across particular individual facilities, EPA believes that this method of extrapolation is a reasonable basis for developing an estimate of regional- and national-level 41656 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations benefits for the purppses_of this "" mlemaKingT C. The Physical Impacts of Impingement and Entrainment EPA's benefits analysis is based on facility-provided biological monitoring data. Facility data consist of records of impinged and entrained organisms sampled at intake structures. However, factors such as sampling methods and equipment, the number of samples taken, the duration of the sampling period, and the unit of time and volume of intake flow used to express impingement and entrainment, and other aspects of facility sampling programs, are highly variable. The data available covered organisms of all ages and life stages from newly laid eggs to mature adults. Therefore, EPA converted sampling counts into standardized estimates of the annual numbers of fish impinged or entrained and then expressed these estimates in terms of metrics suitable for the environmental assessment and economic benefits analysis. EPA notes that the facility studies evaluated may under or over estimate impingement anTenTrainmenrfalesrFdr" example, facility studies typically focus on only a subset of the fish species impacted by impingement and entrainment, resulting in an "undeFesTimafe~of theliumber of species and total losses. Studies often did not count early life stages of organisms that were hard to identify. In addition, most studies EPA found were conducted over 30 years ago, before activities under the Clean Water Act improved aquatic conditions. In those locations where water quality was degraded relative to current conditions, the numbers and diversity of fish may have been depressed during the monitoring period, resulting in low impingement and entrainment estimates. On the other hand, use of linear methods for projecting losses to fish and shellfish in the waterbody may overstate or understate impacts. Nevertheless, EPA believes that the data from the facility studies were sufficient for developing an estimate of the relative magnitude of impingement and entrainment losses nation-wide. Using standard fishery modeling techniques,58 EPA constructed models that combined facility-derived impingement and entrainment counts with relevant life history data to derive estimates of (1) age-one equivalent losTeTIthelSulnHeFoTTndTvicruals of different ages impinged and entrained by facility intakes expressed as age-one equivalents), (2) foregone fishery yield (pounds of commercial harvest and numbers of recreational fish and shellfish that are not harvested due to impingement and entrainment), and (3) foregone biomass production (pounds of impinged and entrained forage species that are not commercial or recreational fishery targets but serve as valuable components of aquatic food webs, particularly as an important food supply to other aquatic species, including commercial and recreational species). Estimates of foregone fishery yield include direct and indirect losses of impinged and entrained species that are harvested. Indirect losses represent the yield of these harvested species that is lost due to losses of forage species. Details of the methods used for these analyses are provided in Chapter A5 of Part A of the Regional Analysis document. For all analyses, EPA used the impingement and entrainment estimates provided by the facility and assumed 100% entrainment mortality based on the analysis of entrainment survival studies presented in Chapter A7 of Part A of the Regional Analysis document. Exhibit XIT-1 presents EPA's estimates of the current level of total annual impingement and entrainment in the study regions. EXHIBIT Xll-1.—TOTAL CURRENT ANNUAL IMPINGEMENT AND ENTRAINMENT, BY REGION Region North Atlantic Mid Atlantic South Atlantic . Gulf of Mexico Great Lakes Inland Total for 554 facilities11 Age-one equivalents (millions) 312.94 65.70 1,733.14 342.54 191.23 319.11 369 3 449 38 Foregone fish- ery yield (million Ibs) 2887 1.26 67.2 1834 35.81 359 3.53 164 97 Biomass pro- duction fore- gone (million Ibs) 4362 289 12 11090 28 31 48 12 19 34 122 0 717 07 • National totals are sample-weighted and include Hawaii. Hawaii benefits are calculated based on average loss per MGD in North Atlantic, Mid Atlantic, Gulf of Mexico, California and the total intake flow in Hawaii. Exhibit XII-2 presents EPA's estimates of annual combined impingement and entrainment reductions associated with the rule, by region. 5«Ricker. VV.E. 1975. Computation and interpretation of biological statistics offish populations. Fisheries Research Board of Canada. Bulletin-191: Hilborn. R. and CJ. Walters. 1992. Quantitative Fisheries Stock Assessment. Choice. Dynamics and Uncertainty. Chapman and Hall. London and New York.; Quinn, T.J., II. and R.B. Deriso. 199H. Quantitative Fish Dynamics. Oxford University Press. Oxford and New York; Dixon, D.A. 1999. Catalog of Assessment Methods for Evaluating the Effects of Power Plant Operations on Aquatic Communities. Final Report. Report number TR-112013. Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41657 EXHIBIT XII-2— REDUCTIONS IN ANNUAL IMPINGEMENT AND ENTRAINMENT, BY REGION Region California Mid Atlantic South Atlantic Great Lakes Total for 554 facilities" Age-one equivalents (millions) 66.39 19.34 846.37 76.67 89.55 159.52 11683 1.420.20 Foregone fish- ery yield (million Ibs) 6.10 037 3428 5.31 1384 1.73 1 06 64.92 Biomass pro- duction fore- gone (million Ibs) 9 19 8428 54 66 631 1650 851 20 90 217.09 "National totals are sample-weighted and include Hawaii. Hawaii losses are estimates based on average loss rates per MGD at mainland coastal facilities and the total intake flow of the Hawaii facilities. D. National Benefits of Rule 1. Overview EconomieiDeneftts-ef-teday's-r-ule can- be broadly defined according to categories of goods and services provided by the species affected by impingement and entrainment at cooling water intake structures (CWIS). The first category includes benefits that pertain to the use (direct or indirect) of the affected fishery resources. The direct use benefits can be further categorized according to whether or not affected goods and services are traded in the market. The "direct use" benefits of the 316(b) regulation include both "market" commodities (e.g., commercial fisheries) and "nonmarket" goods (e.g., recreational angling). Indirect use benefits also can be linked to either market or nonmarket goods and services—for example, the manner in which reduced impingement- and entrainment-related losses of forage species leads through the aquatic ecosystem food web to enhance the biomass of species targeted for commercial (market) and recreational (nonmarket) uses. The second category includes benefits that are independent of any current or anticipated use of the "resourceTThese are known "as"1Tlon-use""" or "passive use" values. Non-use benefits reflect human values associated with existence and bequest motives. The economic value of benefits is estimated using a range of valuation methods, with the specific approach being dependent on the type of benefit category, data availability, and other suitable factors. Commercial fishery benefits are valued using market data. Recreational angling benefits are valued using a combination of primary and secondary research methods. For four of the seven study regions, EPA developed original Random Utility Models (RUM) of recreational angling behavior to estimate changes in recreational fishing values resulting from improved fishing opportunities due to reductions in impingement and entrainment. For the -Temcrimng-three-stud-y-regions (Inland, North Atlantic, and South Atlantic), EPA used secondary nonmarket valuation data (e.g., benefits transfer of nonmarket valuation studies of the value of recreational angling). Because methodologies for estimating use values for recreational and commercial species are well developed, and some of these species have been extensively studied, these values are relatively straightforward to estimate. Sections XII.D.3 and XII.D.4 briefly summarize EPA's approaches to measuring direct use benefits. A detailed description of these approaches can be found in the 316(b) Regional Analysis document. Estimating benefits from reduced impingement and entrainment of forage species is more challenging because these species are not targeted directly by commercial or recreational anglers and have no direct use values that can be observed in markets or inferred from revealed actions of anglers. To estimate indirect use benefits from reducing impingement and entrainment losses to forage species, EPA used a simple trophic transfer model that translates "changesTnTnipingemenf anbT" entrainment losses of forage fish into changes in the harvest of commercial and recreational species that are subject to impingement and entrainment (i.e., not the whole food web). Agency benefits estimates are based on projected numbers of age 1 equivalent fish saved under the final rule. Neither forage species nor the unlanded portion of recreational and commercial species have direct uses; therefore, they do not have direct use values. Their potential value to the public is derived from two alternative sources: their indirect use as both food and breeding population for those fish harvested; and, the willingness of individuals to pay for the protection of fish based on a sense of altruism, stewardship, bequest, or vicarious consumption (non-use benefits). To estimate non-use benefits from reducing losses to forage species, and landed and unlanded commercial and recreational species, EPA explored benefits transfer from nonmarket valuation studies of non-use values of aquatic ecosystem improvements. EPA also explored the transfer of secondary nonmarket valuation data to value losses of threatened and endangered species. These efforts generated evidence that non-use values could occur as a result of this rule, but EPA was unable, by the time of publication of this final rule, to estimate reliable valuations for the resource changes associated with the expected results of this rule. EPA also investigated additional approaches to illustrate public willingness-to-pay for potential aquatic resource improvements that might occur because of this rule, but the Agency did not have sufficient time to fully develop and analyze these non-use benefit approaches for the final rule. Section XII.D.5 briefly summarizes the approaches EPA considered for measuring non-use benefits. Additional details about all approaches explored for estimating benefits can be found in Section XII.F and the 316(b) Regional Analysis document (DCN 6-0003). As a consequence of the challenges associated with estimating benefits, some benefits are described only qualitatively, because it was not feasible, by the time of publication of this final rule, to derive reliable quantitative estimates of the degree of impact and/or the monetary value of reducing those impacts at the national level. The remaining parts of Section XII.D below discuss details about discounting future benefits, valuation of recreational fishing, valuation of commercial fishing, 41658 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations potential non-use benefits, and estimation of national benefits. 2. Timing of Benefits Discounting refers to the economic conversion of future benefits and costs to their present values, accounting for the fact that individuals tend to value future outcomes less than comparable near-term outcomes. Discounting is important when benefits and costs occur in different years, and enables a comparison of benefits to costs across different time periods. For today's rule, benefits are discounted to calculate benefits in a manner that makes the timing comparable to the annualized cost estimates. The benefits of today's rule are estimated as the typical benefits expected once the rule takes effect. The need to discount arises from two different delays in the realization of -benefitsr First, facilities will not immediately achieve compliance. Facilities will face regulatory requirements once the rule takes effect, but it will take time to make the required changes. EPA has assumed, for the purpose of estimating benefits, that it will take one year from the date when installation costs are incurred by a facility until the required cooling water technology is operational. To account for this lag, all benefits are discounted by one year from the date when costs are incurred. Second, an additional time lag will result between the time of technology implementation and resulting increased fishery yields. This lag stems from the fact that one or more years may pass between the time an organism is spared impingement and entrainment and the time of its ultimate harvest. For example, a larval fish spared from entrainment (in effect, at age 0) may be caught by a recreational angler at age 3, meaning that a 3-year time lag arises between the incurred technology cost and the realization of the estimated recreational benefit. Likewise, if a 1-year -old-fish-i^spared-from impingement and is then harvested by a commercial waterman at age 2, there is a 1-year lag between the incurred cost and the subsequent commercial fishery benefit. To account for this growth period, EPA applied discounting by species groups in each regional study. EPA conducted this analysis using two alternative discount rates as recommended by OMB: 3% and 7%. The Agency notes that discounting was applied to recreational and commercial fishing benefits only. Non-use benefits are independent of fish age and size and, thus start as soon as impingement and entrainment ceases. 3. Recreational Fishing Valuation a. Recreational fishery methods for marine regions. For the five coastal regions, EPA's analysis of recreational fishing benefits from reduced impingement and entrainment is based on region-specific random utility models (RUM) of recreational anglers' behavior, combined with benefit function transfer. EPA developed original RUM models for four of the five coastal regions: California, the Mid- Atlantic, the South Atlantic, and the Gulf of Mexico. For the North Atlantic region, EPA used a model developed by the National Marine Fisheries Service (NMFS) by Hicks et al. (Hicks, Steinback, Gautam, and Thunberg, 1999. Volume II: The Economic Value of New England and Mid-Atlantic Sportfishing in 1994—DCN 5-1271). Chapter All of the Regional Analysis document -provides detailed-discussion of the methodology used in EPA's RUM analysis. The regional recreational fishing studies use information on recreational anglers' behavior to infer anglers' economic value for the quality of fishing in the case study areas. The models' main assumption is that anglers will get greater satisfaction, and thus greater economic value, from sites where the catch rate is higher due to reduced impingement and entrainment, all else being equal. This benefit may occur in two ways: first, an angler may get greater enjoyment from a given fishing trip when catch rates are higher, and thus get a greater value per trip; second, anglers may take more fishing trips when catch rates are higher, resulting in greater overall value for fishing in the region. EPA modeled an angler's decision to visit a site as a function of site-specific cost, fishing trip quality, and additional site attributes such as presence of boat launching facilities or fish stocking at the site. The Agency used 5-year historical catch rates per hour of fishing as a -measure o^bas-erine-fishmg-quality in the regional studies. Catch rate is one of the most important attributes of a fishing site from the angler's perspective. This attribute is also a policy variable of concern because catch rate is a function offish abundance, which is affected by fish mortality caused by impingement and entrainment. The Agency used the estimated model coefficients in conjunction with the estimated changes in impingement and entrainment in a given region to estimate per-day welfare gain to recreational anglers due to the final rule. For the North Atlantic region, EPA used model coefficients estimated by Hicks et al. (1999) (DCN 4-1603). To estimate the total economic value to recreational anglers for changes in catch rates resulting from changes in impingement and entrainment in a given region, EPA multiplied the total number of fishing days for a given region by the estimated per-day welfare gain due to the regulation. Because of data limitations, EPA was unable to estimate participation models for all regions. For the California and Great Lakes regions, the welfare estimates presented in the following section are based on the estimates of baseline recreational fishing participation provided by NOAA Fisheries. Thus, welfare estimates for these two regions presented in today's rule do not account for changes in recreational fishing participation due to the improved quality of the fishing sites; however, these changes are likely to be small based on results for other regions. For the North Atlantic, Mid-Atlantic, South-Atlantic, and Gulf regions, estimates are based on an average of baseline and predicted increased fishing days. For these regions, EPA also estimated a trip frequency model, which captures the effect of changes in catch rates on the number of fishing trips taken per recreational season. b. Recreational Fishery methods for the Great Lakes region. For the Great Lakes region, EPA developed an original RUM model for the state of Michigan, and transferred benefits to other Great Lakes states. EPA's RUM model for the Great Lakes used data from the 2001 Michigan Recreational Anglers survey, and information on historical catch rates at Michigan fishing sites on Lakes Michigan, Huron, Superior, and Erie provided by the Michigan Department of Natural Resources (MDNR, 2002, DCN 4-1863). For the Great Lakes, EPA estimated a single RUM site choice model for boat, shore, and ice-fishing modes. To transfer values from the Michigan study to other Great Lakes states, EPA used harvest information from state-level anglers' creel surveys, and participation information from the U.S. Fish and Wildlife Service's Annual Survey of Fishing, Hunting, and Wildlife-Related Recreation (U.S. Department of the Interior, 2001, DCN 1-3082-BE). c. Recreational fishery methods for the Inland region. For the Inland region, EPA used a benefit transfer approach to value post regulation recreational impingement and entrainment losses. EPA conducted this analysis for five aggregate species groups: panfish, perch, walleye/pike, bass, and anadromous gamefish. The panfish group includes Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41659 species commonly classified as panfish, except perch, and includes species that did not clearly fit in one of the other groups. Using estimates collected from ten studies, the Agency calculated measures of central tendency for the marginal value of catching one additional fish for each species group. For detail see Chapter H4, of the Regional Study Document, DCN 6-0003. The mean marginal value per additional fish caught is $2.55 for panfish, $0.38 for perch, $6.54 for walleye/pike, $4.18 for bass, and $11.95 for anadromous gamefish. EPA combined these marginal values per fish with estimates of recreational fishing losses that would be prevented by the regulation to calculate the value of post regulation recreational fishing benefits. d. Results. As noted earlier in this section, anglers will get greater satisfaction, and thus greater economic value, from sites where the catch rate is higher, all else being equal. Decreasing impingement and entrainment increases the number of fish available to be caught by recreational anglers, thus increasing angler welfare. Exhibit XII—3 shows the benefits that would result from reducing impingement and entrainment losses by installing cooling water intake technology under the final regulation. These values were discounted at a 3 percent discount rate and a 7 percent discount rate to reflect the fact that fish must grow to a certain size before they will be caught by recreational anglers and to account for the one-year lag between the date when installation costs are incurred and technology implementation. The greatest recreational fishing benefits from reducing impingement and entrainment losses occur in the Mid-Atlantic, South Atlantic, and Great Lakes regions. For more detailed information on the models and results for each region, see Chapter 4 in Parts B through H of the 316(b) Regional Analysis document. EXHIBIT XM-3.—POST REGULATION RECREATIONAL FISHING BENEFITS FROM REDUCING IMPINGEMENT AND ENTRAINMENT LOSSES Region California North Atlantic -Mtd-AHantie - — South Atlantic . Gulf of Mexico Great Lakes . Inland Total for 554 facilities3 Baseline rec- reational fishery losses (number of fish) 5,787,661 916,396 i -29,4687540- 4,314,983 3,854,850 4,743,384 3,188,097 44,513,814 Reduction in rec- reational fishery losses (number of fish) 1 ,735,668 267,536 — -9-,996,333- 985,769 1,201,806 2,283,896 930,610 17,908,496 Benefits of final rule (million 2002$) 0% Discount rate $3.01 1.59 47.69 7.49 6.79 15.51 3.34 87.83 3% Discount rate $2.45 1.38 43.37 6.85 6.18 13.95 2.98 79.34 7% Discount rate $1.91 1.17 38.48 6.17 5.53 12.21 2.58 69.96 a National totals are sample-weighted and include Hawaii. Hawaii benefits are calculated based on average loss per MGD in North Atlantic, Mid Atlantic, Gulf of Mexico, California and the total intake flow in Hawaii. The total for all regions, discounted at three percent, is $79.3 million; and the total for all regions, discounted at seven percent, is $70,0 million. e. Limitations and uncertainties. Because of the uncertainties and assumptions of EPA's analysis, the estimates of benefits presented in this section may understate the benefits to recreational anglers. In estimating the benefits of improved recreational angling for the California and Great Lakes regions, the Agency assigned a monetary benefit only to the increases in consumer surplus for the baseline number of fishing days. This approach omits the portion of recreational fishing benefits that arise when improved conditions lead to higher levels of participation. However, EPA's analysis of changes in recreational fishing participation due to the section 316(b) regulation for other coastal regions shows that the practical effect of this omission is likely to be very small with respect to the total recreational benefits assessment. 4. Commercial Fishing Valuation Reductions in impingement and entrainment at cooling water intake structures are expected to benefit the commercial fishing industry. The effect is straightforward: reducing the number of fish killed will increase the number of fish available for harvest. Measuring the benefits of this effect is less straightforward. The next section summarizes the methods EPA used to estimate benefits to the commercial fishing sector. The following section presents the estimated commercial fishing benefits for each region. a. Methods. EPA estimated commercial benefits by first estimating the value of total losses under current impingement- and- errtrairrnrent conditions (or the total benefits of eliminating all impingement and entrainment). Then, based on review of the empirical literature, EPA assumed that producer surplus is equal to 0% to 40% of baseline losses. Finally, EPA estimated benefits by applying the estimated percentage reduction in impingement and entrainment to the estimated producer surplus to obtain the estimated increase in producer surplus attributable to the rule. This methodology was applied in each region in the final analysis: the North Atlantic, Mid-Atlantic, South Atlantic, Gulf of Mexico, California, Great Lakes, and Inland. Additional detail on the methods EPA used for this analysis can be found in Chapter AlO "Methods For Estimating Commercial Fishing Benefits" in the Regional Analysis Document. The process used to estimate regional losses and benefits to commercial fisheries is as follows: 1. Estimate losses to commercial harvest (in pounds of fish) attributable to impingement and entrainment under current conditions. The basic approach is to apply a linear stock-to-harvest assumption, such that if 10% of the current commercially targeted stock were harvested, then 10% of the commercially targeted fish lost to impingement and entrainment would also have been harvested absent impingement and entrainment. The percentage of fish harvested is based on data on historical fishing mortality rates. 2. Estimate gross revenue of lost commercial catch. The approach EPA 41660 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations uses to estimate the value of the commercial catch lost due to impingement and entrainment relies on landings and dockside price ($/lb) as reported by NOAA Fisheries for the period 1991-2001. These data are used to estimate the revenue of the lost commercial harvest under current conditions (i.e., the increase in gross revenue that would be expected if all impingement and entrainment impacts were eliminated). 3. Estimate lost economic surplus. The conceptually suitable measure of benefits is the sum of any changes in producer and consumer surplus. The methods used for estimating the change in surplus depend on whether the physical impact on the commercial fishery market appears sufficiently small such that it is reasonable to assume there will be no appreciable price changes in the markets for the impacted fisheries. For the regions and magnitude of losses included in this analysis, it is reasonable to assume no change in price, which implies that the welfare change is limited to changes in producer surplus. The change in producer surplus is assumed to be equivalent to a portion of the change in gross revenues, as developed under step 2. EPA assumes a range of 0% to 40% of the gross revenue losses estimated in step 2 as a means of estimating the change in producer surplus. This is based on a review of empirical literature (restricted to only those studies that compared producer surplus to gross revenue) and is consistent with recommendations made in comments on the EPA analysis at proposal. 4. Estimate increase in surplus attributable to the Phase II regulations. Once the commercial surplus losses associated with impingement and entrainment under baseline conditions have been estimated according to the approaches outlined in steps 2 and 3, EPA estimates the percentage reduction in impingement and entrainment at a regional level. b. Results. Exhibit XII-4 presents the estimated commercial fishing benefits attributable to today's rule for each region. The results reported include the total reduction in losses in pounds of fish, and the value of this reduction discounted at 0%, 3%, and 7%. Total commercial fishing benefits for the U.S., applying a 3% discount rate, are estimated to range from $0 to $3.5 million. Applying a 7% rate they range from $0 to $3.5 million. EXHIBIT XI1-4.—ANNUAL COMMERCIAL FISHING BENEFITS3 Region0 California North Atlantic Mid Atlantic South Atlantic Gulf of Mexico Great Lakes Inland U S Total for 554 facilities Current (baseline) lost yield (million Ibs) 11.5 0.6 48.7 9.6 7.6 1.6 n/a 82.8 Reduction in lost yield (million Ibs) 2.4 0.2 25.3 3.5 3.6 0.8 n/a 37.0 Benefits (millions of 2002$) » 0% discount rate 0.7 0.1 1.8 0.2 0.8 0.2 n/a 4.1 3% discount rate 0.5 0.1 1.7 0.2 0.7 0.2 n/a 3.5 7% discount rate 0.4 0.0 1.5 0.2 0.6 0.2 n/a 3.0 a Benefits are upper bound benefits based on 40% of gross revenue. The lower bound is $0.b Discounted to account for lag in implementation and lag in time required for fish lost to I&E to reach a harvestable age. Assumed it will take one year from the date when installation costs are incurred to the date of installation. Thus, all benefits are discounted by one year from the date when installation costs are incurred.0 Regional totals are unweighted. National total estimates are weighted and include Hawaii. c. Limitations and uncertainties. Some of the major uncertainties and assumptions of EPA's commercial fishing analysis include: • Projected changes in harvest may be under-estimated because the cumulative impacfsWTmpingemenranH entrainment over time are not considered. • The analysis only includes individuals that are directly killed by impingement and entrainment, not their progeny, though given the complexities of population dynamics, the significance of this omission is not clear. • Projected changes in harvest may be too high or too low because interactions with other stressors are not considered. • EPA used impingement and entrainment data provided by the facilities. While EPA used the most current data available, in some cases these data are 20 years old or older. Thus, they may not reflect current conditions. • EPA assumes a linear stock-to- harvest relationship (i.e., a 13% change in stock would have a 13% change in landings); this may be low or high, depending on the condition of the stocks. Region-specific fisheries regulations aisrJwilTaTTe^Tthe validity of the linear assumption.• EPA assumes that NOAA Fisheries landings data are accurate and complete. However, in some cases prices and/or quantities may be reported incorrectly. • EPA currently estimates that the increase in producer surplus as a result of the rule will be between 0% and 40% of the estimated change in gross revenues. The research used to develop this range is not region-specific; thus the true value may be higher for some regions and species. 5. Non-Use Benefits As discussed by Freeman (1993), "Non-use values, like use values, have their basis in the theory of individual preferences and the measurement of welfare changes. According to theory, use values and non-use values are additive," and "* * * there is a real possibility that ignoring non-use values could result in serious misallocation of resources." This statement by Freeman aptly conveys the importance of non-use benefits outlined in EPA's own economic valuation guidance documents. A comprehensive estimate of total resource value should include both use and non-use values, so that the resulting appropriate total benefit value estimates may be compared to total social cost. It is clear that reducing impingement and entrainment losses of fish and shellfish may result in both use and non-use benefits. Of the organisms which are anticipated to be protected by the section 316(b) Phase II rule, it is projected that approximately 1.8 percent will eventually be harvested by commercial and recreational fishers and Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41661 therefore can be valued with direct use valuation techniques. The Agency's direct use valuation does not account for the benefits from the remaining 98.2% of the age 1 equivalent aquatic organisms estimated to be protected nationally under today's rule. A portion of the total benefits of these unharvested commercial, recreational, and forage species, can be derived indirectly from the estimated use values of the harvested animals. A percentage of these unlanded organisms become prey or serve as breeding stock in the production of those commercial and recreational species that will eventually be caught, therefore their indirect use value as biological input into the production process is represented in the estimated direct use values of the harvested fish. EPA was unable to value the non-use benefits associated with this rule. In order to provide an estimate of the quantified (but not monetized) effects of the rule, Exhibit XII-5 summarizes information about total impingement and entrainment losses, and Exhibit XII-6 presents estimates of reductions in impingement and entrainment losses under the final rule. EXHIBIT xil-5.—DISTRIBUTION OF BASELINE IMPINGEMENT AND ENTRAINMENT Region" California North Atlantic Mid Atlantic South Atlantic Gulf of Mexico Great Lakes Inland Total for 554 facilities3 Current I&E of annual age-one equivalents (millions) All species (total) 312.9 65.7 1,733.1 342.5 191.2 319.1 369.0 3,449.4 Forage species 170.6 49.7 1,115.6 208.1 53.5 L 300.8 284.8 2,255.8 Commercial and recreational spe- cies 142.3 16.0 617.6 134.5 137.8 18.3 84.2 1,193.6 Harvested com- mercial and rec-reational species 14.9 0.7 28.4 6.5 8.1 0.5 0.2 62.1 I&E of harvestedspecies as a per- centage of total I&E 4.8 1.0 1.6 1.9 4.2 0.2 0.1 1.8 a Regional totals are unweighted. National total estimates are weighted and include Hawaii. EXHIBIT XII-6— DISTRIBUTION OF REDUCTIONS IN IMPINGEMENT AND ENTRAINMENT Region8 California North Atlantic Mid Atlantic . South Atlantic Gulf of Mexico . Great Lakes Inland Total for 554 facilities Reductions in I&E of annual age-one equivalents (millions) All species (total) 66.4 19.3 846.4 76.7 89.5 159.5 116.8 1,420.2 Forage species 36.0 14.6 537.5 38.5 20.5 151.7 101.2 928.9 Commercial and recreational spe- cies 30.4 4.7 308.8 38.2 69.0 7.8 15.7 491.3 Harvested com- mercial and rec- reational species 3.2 0.2 13.9 1.6 3.6 0.2 0.1 23.7 Reduction in I&E of harvested spe- cies as a percent- age of total reduc- tion in I&E 4.8 1.0 1.6 2.0 4.0 0.1 0.1 1.7 a Regional numbers are unweighted. National totals are sample-weighted and include Hawaii. Lack of direct use values for the unharvested commercial, recreational and forage species means that EPA did not directly value a substantial percentage of the total age-one eqtrrvalenHmpingerrrent-ancV entrainment losses. Given that aquatic organisms without any direct uses account for the majority of cooling water intake structure losses and indirect valuation of these species may only represent a fraction of their total value, comprehensive monetization of the benefits of reduced impingement and entrainment losses is incomplete without developing a reliable estimate of non-use benefits. Although individuals do not use these resources directly, they may value changes in their status or quality. Both users {commercial and recreational fishermen) as well as non-users (those who do not use the resource) may have non-use values for these species. Non-use benefit valuation is challenging, but the existence and potential importance of -non=usB^benefits-is-stirjported"by EPA's Guidelines for Preparing Economic Analysis (EPA 240-R-00-003) and OMB Circular A-4, Regulatory Analysis, also available as Appendix D of Informing Regulatory Decisions: 2003 Report to Congress on The Costs and Benefits of Federal Regulations and Unfunded Mandates on State, Local and Tribal Entities, OMB, 2003, pp 118-165. Market valuation approaches are used to estimate use benefits. The theory and practice of nonmarket valuation is well developed, and typically plays a pivotal role in benefit-cost analysis conducted by public and private agencies. Non-use values are often considered more difficult to estimate. The preferred technique for estimating non-use values is to conduct original stated preference surveys, but benefit transfer of values from existing stated preference studies can be considered when original studies are not feasible. Stated preference methods rely on surveys, which ask people to state their willingness-to-pay for particular ecological improvements, such as increased protection of aquatic species or habitats with particular attributes. The Agency was not able to perform an original stated preference study for this regulation, so benefit transfer was explored as an alternative means to estimate non-use benefits. Benefits transfer involves adapting the findings from research conducted for another 41662 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations purpose to address the policy questions in hand. One of the specific benefit transfer techniques explored by EPA for estimation of non-use benefits in Phase II of the 316(b) rulemaking was meta regression analysis. Meta regressions are designed to statistically define the relationship between values and a set of resource, demographic and other characteristics compiled from original primary study sources. The resulting mathematical relationship allows the researcher to forecast estimates of non- use values specific to the resource changes projected to occur as a .xonsequencfi-oLthe final-rule. .EPA's Guidelines for Preparing Economic Analysis (EPA 240-R-00-003) discusses the use of meta-analysis and notes that this approach is the most rigorous benefit transfer exercise. The meta analysis conducted by EPA for this rule identifies a set of elements that may influence willingness-to-pay; the analysis found both statistically significant and intuitive patterns that appeared to influence non-use values for water quality improvements in aquatic habitats. However, the Agency encountered various limitations when trying to apply the meta analysis model to this final rule, and these limitations could not be thoroughly analyzed within the publication time-frame established for this rule. EPA therefore does not present estimates of non-use values for this final rule. Due to the various difficulties associated with estimating indirect and non-use benefits for this rule, final benefits do not reflect reduced impacts to a variety of potential ecological and public services that are a function, in part, of healthy fish stocks and other organisms affected by cooling water intake structures. Examples of other potential ecosystem services that may potentially be adversely affected by impingement and entrainment losses but which could not be monetized include: • Decreased numbers of ecological keystone, rare, or sensitive species; • Increased numbers of exotic or disruptive species that compete well in the absence of species lost to I&E; •__Disruption_of.ficologicaLniches and ecological strategies used by aquatic species; • Disruption of organic carbon, nutrient, and energy transfer through the food web; • Decreased local biodiversity; • Disruption of predator-prey relationships; • Disruption of age class structures of species; and • Disruption of public satisfaction with a healthy ecosystem. The existence and potential magnitude of each of these benefits categories is highly dependent on site- specific factors which could not be assessed. Today's rule may help preserve threatened and endangered species, but primary research, using stated preference methods, and data collection regarding threatened and endangered species impacts, could not be conducted for the final rule at the national level. As a result, EPA explored other methods for valuing threatened and endangered species. Details about possible non-use benefits valuation approaches are presented in the 316(b) Regional Analysis document (DCN 6-0003). 6. National Monetized Benefits Quantifying and monetizing reduction in impingement and entrainment losses due to today's final rule is extremely challenging, and the preceding sections discuss specific limitations and uncertainties associated with estimation of commercial and recreational benefits categories (presented in Exhibit XII—7), and non-use benefits. National benefit estimates are subject to uncertainties inherent in valuation approaches used for assessing the three benefits categories. The combined effect of these uncertainties is of unknown magnitude or direction (i.e., the estimates may over or under state the anticipated national- level benefits); however, EPA has no data to indicate that the results for each benefit category are atypical or unreasonable. Exhibit XII-7 presents EPA's estimates of the total monetized benefits from impingement and entrainment reduction of the final regulation. Although EPA believes non-use benefits exist, the Agency was not able to monetize them. The estimated impingement and entrainment reduction monetized benefits post regulation are $83 million (2002$) per year, discounted at three percent, and $73 million, discounted at seven percent. EXHIBIT Xil-7.—SUMMARY OF MONETIZED SOCIAL BENEFITS [Millions; 2002$] Region3 Commercial fish- ing benefits Recreational fish- ing benefits monetizable im- pingement and entrainment re- ductions'1 Evaluated at a 3 percent discount rate California North Atlantic .. .. Mid-Atlantic South Atlantic Gulf of Mexico . Great Lakes Inland .... •• Total for 554 facilities $0.5 0 1 1.7 0.2 07 02 3 5 $2.5 1 4 434 69 62 140 30 793 $301 5 45 1 7 1 6 9 14 2 30 825 Evaluated at a 7 percent discount rate North Atlantic . . . Mid-Atlantic . South Atlantic ... .. . . Gulf of Mexico .. . Great Lakes 04 00 1 5 0 2 0 6 0.2 1 9 1 2 385 62 55 12.2 2 3 1 2 40 0 6 4 6 1 1?4 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41663 EXHIBIT Xll-7 — SUMMARY OF MONETIZED SOCIAL BENEFITS—Continued [Millions; 2002$] Region3 Total for 554 facilities Commercial fish- ing benefits 30 Recreational fish- ing benefits 2.6 700 Total value of monetizable im- pingement and entrainment re- ductions6 26 730 "Regional benefit estimates are unweighted. National benefits are sample-weighted and include Hawaii.bThe monetized benefits of the final rule may be significantly under-estimated due to the inability to monetize the non-use values. E. Other Considerations This section presents two additional analyses that consider the benefits and costs of the final rule: (1) An analysis of the costs per age-one equivalent fish saved (equivalent to a cost-effectiveness analysis) and (2) a break-even analysis of the-mrnirrrum~ni3niise-benefits required for total annual benefits to equal total anmialized costs, on a per household basis. Each measure is presented by study region. I. Cost Per Age-One Equivalent Fish Saved—-Cost-Effectiveness Analysis EPA also analyzed the cost per organism saved as a result of compliance with the final rule. This analysis estimates the cost-effectiveness of the rule, by study region. Organisms saved-are-measured-as-1-' age-one equivalents." The costs used for the regional comparisons are the annualized pre-tax compliance costs incurred by facilities subject to the final rule, and the cost used for the national comparison is the total social cost of the final rule (including facility compliance costs and administrative costs). Exhibit XII-8 shows that the estimated cost per age-one equivalent ranges from $0.07 in the Mid Atlantic region to $1.46 in the Inland region. At the national level, the estimated average cost is $0.27 per age-one equivalent saved. EXHIBIT XII-8.—COST PER AGE-ONE EQUIVALENT SAVED Study region a California North Atlantic Mid Atlantic South Atlantic Gulf of Mexico . . Great Lakes Total for 554 facilities Annual social costb (millions; 2002$) $31.7 13.3 62.6 9.0 22 8 58.7 1704 3894 Age-one equiva- lents (millions) 66.4 193 8464 76.7 895 159.5 1168 1 420 Cost/age-one equivalent saved $048 069 007 0 12 0 25 037 1 46 027 1 Regional benefit and cost estimates are unweighted; total national estimates are sample-weighted and include Hawaii.h The regional costs include only annual compliance costs incurred by facilities. The national cost includes the total social cost of the final rule (facility compliance costs and administrative costs). 2. Break-Even Analysis Due to the uncertainties of providing estimates of the magnitude of non-use values associated with the final rule, •this sectran~pTrjvtdBS"arralteTnative approach of evaluating the potential relationship between benefits and costs. The approach used here applies a "break-even" analysis to identify what the unmonetized non-use values would have to be in order for the final rule to have benefits that are equal to costs. The break-even approach uses EPA's estimated or monetized, commercial and recreational use benefits for the rule annual compliance costs incurred by facilities subject to the final rule. The resulting "net cost" enables one to work backwards to estimate what the unmonetized non-use values would need to be (in terms of willingness-to- pay per household per year) in order for total annual benefits to equal annualized costs. Exhibit XII—9 provides this assessment for the seven study regions. The exhibit shows benefits values using a 3 percent social discount rate. Use of a 7% discount rate would produce somewhat higher breakeven numbers. Section XII.D. 5 presents undiscounted benefits and benefits discounted using a 7 percent discount rate. EXHIBIT Xll-9.—IMPLICIT NON-USE VALUE—BREAK-EVEN ANALYSIS [Million; 2002$] Study region • California North Atlantic Use benefits'" $30 1.4 Annual social costc $31 7 13.3 Annual non- use benefits necessary to break events $28 7 11.9 Number of households (millions)8 8 1 3.9 Annual break- even non-use WTP per household f $3 55 3.02 41664 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations EXHIBIT XII-9.—IMPLICIT NON-USE VALUE—BREAK-EVEN ANALYSIS—Continued [Million; 2002$] Study region a South Atlantic Great Lakes Inland Total for 554 facilities Use benefits'1 45.0 7.1 6.9 14.1 3.0 82.9 Annual social costc 62.6 9.0 22.8 58.7 170.4 389.4 Annual non- use benefits necessary to break events 17.5 1.9 15 9 44.6 167.4 306.5 Number of households (millions)" 96 3.8 54 8.6 20.9 604 Annual break- even non-use WTP per household f 1 82 050 2 92 5 17 801 507 ' Regional benefit and cost estimates are unweighted; total national estimates are sample-weighted and include Hawaii.b Benefits are discounted using a 3 percent discount rate.cThe regional costs include only annual compliance costs incurred by facilities. The national cost includes the total social cost of the final rule (facility compliance costs and administrative costs).d Annualized compliance costs minus annual use benefits. •= Millions of households, including anglers fishing in the region and households in abutting counties. From U.S. Census 2000 (BLS): http:// factfinder.census.gov. 'Dollars per household per year that, when added to use benefits, would yield a total annual benefit (use plus non-use) equal to the annualized costs. e Non-use benefits may also include unmonetized use benefits, i.e., improvements in bird watching. As shown in Exhibit XII—9, for total annual benefits to equal total annualized costs, non-use values per household would have to be $0.50 in the South Atlantic region and $8.01 in the Inland region. At the national level, the annual willingness-to-pay per affected household would have to be $5.07 for total annual benefits to equal total annualized costs. While this approach of backing out .the-"-break-even" non-iisR value per household does not answer the question of what non-use values might actually be for the final rule, these results do frame the question for policy-making decisions. The break-even approach poses the question: "Is the true per household willingness-to-pay for the non-use amenities (existence and bequest) associated with the final rule likely to be greater or less than the "breakeven" benefit levels displayed in Exhibit XII-9?" Unfortunately, the existing body of empirical research is inadequate to answer this question on behalf of the nation as a whole, but EPA is providing the analysis to aid policy makers and the public in forming their own judgment. XIII. Statutory and Executive Order Reviews A. Executive Order 12866: Regulatory Planning and Review Under Executive Order 12866 (58 FR 51735, October 4, 1993), the Agency must determine whether a regulatory action is "significant" and therefore subject to OMB review and the requirements" of the~Executi veTJFder The Order defines a "significant regulatory action" as one that is likely to result in a rule that may: 1. Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or Tribal governments or communities; 2. Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; „... 3. Materially alter the oudgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or 4. Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order. Pursuant to the terms of Executive Order 12866, it has been determined that this rule is a "significant regulatory action." As such, this action was submitted to OMB for review. Changes made in response to OMB suggestions or recommendations will be documented in the public record. B. Paperwork Reduction Act The Office of Management and Budget (OMB) has approved the information collection requirements contained in this rule under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. and has assigned OMB control number 2060.02, or DCN 6- 0001. Compliance with the applicable information collection requirements imposed under this final rule (see §§ 122.21(r), 125.95, 125.96, 125.97, 125.98, 125.99) is mandatory. Existing facilities are requirecTto 'perform several data-gathering activities as part of the permit renewal application process. Today's final rule requires several distinct types of information collection as part of the NPDES renewal application. In general, the information will be used to identify which of the requirements in today's final rule apply to the existing facility, how the existing facility will meet those requirements, and whether the existing facility's cooling water intake structure reflects the best technology available for minimizing adverse environmental impact. Categories of data required by today's final rule follow. • Source waterbody data for determining appropriate requirements to apply to the facility, evaluating ambient conditions, and characterizing potential for impingement and entrainment of all life stages of fish and shellfish by the cooling water intake structure; • Intake structure and cooling water system data, consisting of intake structure design, cooling water system operational data and relationship of each intake to the cooling water system, and a facility water balance diagram, to determine appropriate requirements and characterize potential for impingement and entrainment of all life stages of fish and shellfish; • Information on design and construction technologies implemented to ensure compliance with applicable requirements set forth in today's final rule; and • Information on supplemental restoration measures proposed for use with design and construction technologies or alone to minimize adverse environmental impact. In addition to the information requirements of the permit renewal application, NPDES permits normally Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41665 specify monitoring and reporting requirements to be met by the permitted entity. Existing facilities that fall within the scope of this final rule would be required to perform biological monitoring for at least two years, and as required by the Director, to demonstrate compliance. Additional ambient water quality monitoring may also be required of facilities depending on the specifications of their permits. The facility is expected to analyze the results from its monitoring efforts and provide these results in a bi-annual status report to the permitting authority. Finally, facilities are required to maintain records of all submitted documents, supporting materials, and monitoring results for at least three years. (Note that the Director may require more frequent "repofting~anS[ that recordFlae Kept for a longer period to coincide with the life of the NPDES permit.) All facilities carry out the activities necessary to fulfill the general information collection requirements. The estimated burden includes developing a water balance diagram that can be used to identify the proportion of intake water used for cooling, make- up, and process water. Facilities will also gather data (as required by the compliance alternative selected) to calculate the reduction in impingement mortality and entrainment of all life stages of fish and shellfish that would be achieved by the technologies and operational measures they select. The burden estimates include sampling, assessing the source waterbody, estimating the magnitude of impingement mortality and entrainment, and reporting results in a comprehensive demonstration study. For some facilities, the burden also includes conducting a pilot study to evaluate the suitability of the technologies and operational measures based on the species that are found at trie site.Some of the facilities (those choosing to use restoration measures to maintain fish and shellfish) will need to prepare a plan documenting the restoration measures they implement and how they demonstrate that the restoration measures are effective. Restoration is a voluntary alternative. Since facilities would most likely choose restoration only if other alternatives are more costly or infeasible, EPA has not assessed facility burden for this activity. However, burden estimates have been included for the Director's review of restoration activities. Some facilities may choose to request a site-specific determination of best technology available because of costs significantly greater than those EPA considered in establishing the performance standards or because costs are significantly greater than the benefits of complying with the performance standards. These facilities must perform a comprehensive cost evaluation study and submit a site- specific technology plan characterizing the design and construction technologies, operational measures and/ or restoration measures they have selected. In addition, facilities that request a site-specific determination because of costs significantly greater than the benefits must also perform a valuation of the monetized benefits of reducing impingement mortality and entrainment and an assessment of non- monetized benefits. Site-specific determinations are voluntary. Since facilities would choose site-specific determinations only if other alternatives are more costly, EPA has not assessed a facility burden for these activities; however, EPA has incorporated burden into the activities that the Director will perform in reviewing site-specific information. The total average annual burden of the information collection requirements associated with today's final rule is estimated at 1,700,392 hours. The annual average reporting and record keeping burden for the collection of information by facilities responding to the section 316(b) Phase II existing facility final rule is estimated to be 5,428 hours per respondent (i.e.,, an annual average of 1,595,786 hours of burden divided among an anticipated annual average of 294 facilities). The Director reporting and record keeping burden for the review, oversight, and administration of the rule is estimated to average 2,615 hours per respondent (i.e., an annual average of 104,606 hours of burden divided among an anticipated 40 States on average per year). Respondent activities are separated Tnto'frrose'activTfres^associated" with the NPDES permit application and those activities associated with monitoring and reporting after the permit is issued. The reason for this is that the permit cycle is every five years, while Information Collection Requests (ICRs) must be renewed every three years. Therefore, the application activities occur only once per facility during an ICR approval period, and so they are considered one-time burden for the purpose of this ICR. By contrast, the monitoring and reporting activities that occur after issuance of the permit occur on an annual basis. The burden and costs are for the information collection, reporting, and recordkeeping requirements for the three-year period beginning with the effective date of today's rule. Additional information collection requirements will occur after this initial three-year period as existing facilities continue to be issued permit renewals and such requirements will be counted in a subsequent information collection request. EPA does not consider the specific data that would be collected under this final rule to be confidential business information. However, if a respondent does consider this information to be confidential, the respondent may request that such information be treated as confidential. All confidential data will be handled in accordance with 40 CFR 122.7, 40 CFR Part 2, and EPA's Security Manual Part III, Chapter 9, dated August 9, 1976. Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information.An Agency may not conduct or sponsor, and a person is not required to respond to a collection of information, unless it displays a currently valid OMB control number. The OMB control numbers for EPA's regulations are listed in 40 CFR Part 9. EPA is amending the table in 40 CFR Part 9 of currently approved OMB control numbers for various regulations to list the information requirements contained in this final rule. C. Regulatory Flexibility Act The Regulatory Flexibility Act (RFA), as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 U.S.C. 601 etseq.. generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions. For the purposes of assessing the impacts of today's rule on 41666 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations small entities, small entity is defined as: (1) A small business according to RFA default definitions for small business (based on Small Business Administration (SBA) size standards); (2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and (3) a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field. After considering the economic impacts of today's final rule on small -entities, I-Cfij:ti£y_thaLthis actionjwilljioi have a significant economic impact on a substantial number of small entities. This final rule applies to existing power producing facilities that employ a cooling water intake structure and are design to withdraw 50 million gallons per day (MGD) or more from waters of the United States for cooling purposes. EPA expects this final rule to regulate 25 small entities that own electric generators. We estimate that 17 of the small entities are governmental jurisdictions (i.e., 16 municipalities and one political subdivision), two are private businesses (i.e., one nonutility and one investor-owned entity), and six are not-for-profit enterprises (i.e., rural electric cooperative). Of the 25 small entities, one entity is estimated to incur annualized post-tax compliance costs of greater than three percent of revenues; eight are estimated to incur compliance costs of between one and three percent of revenues; and 16 small entities are estimated to incur compliance costs of less than one percent of revenues. Eleven small entities are estimated to incur no costs -.ather-than-permitting .and .monitoring costs. Although this final rule will not have a significant economic impact on a substantial number of small entities, EPA nonetheless has tried to reduce the impact of this rule on small entities. EPA has divided implementation of section 316(b) of the Clean Water Act (CWA) into three phases where the majority of small entities will be addressed in Phase III. Under the Phase III rule, EPA will convene a SBREFA panel that will evaluate impacts to small entities. D. Unfunded Mandates Reform Act Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and Tribal governments and the private sector. Under section 202 of the UMRA, EPA generally must prepare a written statement, including a cost-benefit analysis, for proposed and final rules with "Federal mandates" that may result in expenditures to State, local, and Tribal governments, in the aggregate, or to the private sector, of $100 million or more in any one year. Before promulgating an EPA rule for which a written statement is needed, section 205 of the UMRA generally requires EPA to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, most cost-effective, or least burdensome alternative that achieves the objectives of; the-rule-.-T-he provisiorts-ef section 205 do not apply when they are inconsistent with applicable law. Moreover, section 205 allows EPA to adopt an alternative other than the least costly, most cost-effective, or least burdensome alternative if the Administrator publishes with the final rule an explanation why that alternative was not adopted. Before EPA establishes any regulatory requirements that may significantly or uniquely affect small governments, including Tribal governments, it must have developed under section 203 of the UMRA a small government agency plan. The plan must provide for notifying potentially affected small governments, enabling officials of affected small governments to have meaningful and timely input in the development of EPA regulatory proposals with significant intergovernmental mandates, and informing, educating, and advising small governments on compliance with regulatory requirements. EPA estimates the total annualized (post-tax) costs of compliance for facilities subject to the final rule to be ~$2^T5~millTon~(2um$)rotWhich $216.3 million is incurred by the private sector (including investor-owned utilities, nonutilities, and rural electric cooperatives) and $23.1 million is incurred by State and local governments that operate in-scope facilities.59 Additionally, permitting authorities incur $4.1 million to administer the rule, including labor costs to write permits and to conduct compliance monitoring and enforcement activities. EPA estimates that the highest undiscounted post-tax cost incurred by the private sector in any one year is approximately $419.1 million in 2009. The highest undiscounted cost incurred by the government sector in any one year is approximately $43.5 million in 59 In addition. 14 facilities owned by Tennessee Valley Authority (TVA). a Federal entity, incur $10.1 million in compliance costs. The costs incurred by the Federal government are not included in this section. 2008. Thus, EPA has determined that this rule contains a Federal mandate that may result in expenditures of $100 million or more for State, local, and Tribal governments, in the aggregate, or the private sector in any one year. Accordingly, EPA has prepared a written statement under § 202 of the UMRA, which is summarized as follows. See Economic and Benefits Analysis, Chapter B5, UMRA Analysis, for detailed information. 1. Summary of Written Statement a. Authorizing Legislation This final rule is issued under the authority of sections 101, 301, 304, 306, 308, 316, 401, 402, 501, and 510 of the Clean Water Act (CWA), 33 U.S.C. 1251, 1311, 1314, 1316, 1318, 1326, 1341, 1342, 1361, and 1370. This rule partially fulfills the obligations of the U.S. Environmental Protection Agency (EPA) under a consent decree in Riverkeeper, Inc. et al. v. Whitman, United States District Court, Southern District of New York, No. 93 Civ. 0314. See section III of this preamble for detailed information on the legal authority of this regulation. b. Cost-Benefit Analysis The final rule is expected to have total annualized pre-tax (social) costs of $389.2 million (2002$), including direct costs incurred by facilities and implementation costs incurred by State and Federal governments. The total use benefits of the rule are estimated to be $82.9 million. EPA was not able to estimate the monetary value of non-use benefits resulting from the rule, although the Agency believes non-use benefits may be significant. Thus, the total social costs exceed the total use benefits of the rule by $306.3 million, and the benefit-cost ratio, calculated by dividing total use benefits by total social costs, is 0.2. EPA notes that these analyses are based on a comparison of a partial measure of benefits with a complete measure of costs; therefore, the results must be interpreted with caution. For a more detailed comparison of the costs and benefits of the final rule, refer to section XII.E of this preamble. EPA notes that States may be able to use existing sources of financial assistance to revise and implement the final rule. Section 106 of the Clean Water Act authorizes EPA to award grants to States, Tribes, intertribal consortia, and interstate agencies for administering programs for the prevention, reduction, and elimination of water pollution. These grants may be used for various activities to develop Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41667 and carry out a water pollution control program, including permitting, monitoring, and enforcement. Thus, State and Tribal NPDES permit programs represent one type of State program that can be funded by section 106 grants. c. Macro-Economic Effects EPA estimates that this regulation will not have an effect on the national economy, including productivity, economic growth, employment and job creation, and international competitiveness of U.S. goods and services. Macroeconomic effects on the economyare"gerrerailyTiot considered to be measurable unless the total economic impact of a rule reaches at least 0.25 percent to 0.5 percent of Gross Domestic Product (GDP). In 2002, U.S. GDP was $10.4 trillion (2002$), according to the U.S. Bureau of Labor Statistics. Thus, in order to be considered measurable, the final rule would have to generate costs of at least $26 billion to $52 billion. Since EPA estimates the final rule will generate total annual pre-tax costs of only $389.2 million, the Agency does not believe that the final rule will have an effect on the national economy. d. Summary of State, Local, and Tribal Government Input EPA consulted with State governments and representatives of local governments in developing the regulation. The outreach activities are discussed in section III of this preamble. e. Least Burdensome Option EPA considered and analyzed several alternative regulatory options to determine the best technology available for minimizing adverse environmental - impact—These-regitiatoFy-optioHS-are discussed in the proposed rule at 67 FR 17154-17168, as well as in section VII of this preamble. These options included a range of technology-based approaches (e.g., reducing intake flow to a level commensurate with the use of a closed-cycle cooling system for all facilities; facilities located on certain waterbody types; facilities located on certain waterbody types that withdraw a specified percentage of flow; and the use of impingement and entrainment controls at all facilities). EPA also included consideration of at least four distinct site-specific options, including several proposed by industry. As discussed in detail in section VII., EPA did not select these options because ultimately they are not the most cost- effective among the options that fulfill the requirements of section 316(b). EPA selected the final rule because it meets the requirement of section 316(b) of the CWA that the location, design, construction, and capacity of cooling water intake structures reflect the best technology available for minimizing adverse environmental impact, and it is economically practicable. EPA believes the final rule reflects the most cost- effective and flexible approach among the options considered. By providing five compliance alternatives the final rule offers Phase II existing facilities a high degree of flexibility in selecting the most cost-effective approach to meeting section 316(b) requirements. Under the rule, these facilities can demonstrate that existing flow or CWIS technologies fiilfTirse'ction 31 6tbJricTeiitifydesign and control technologies, and/or use operational measures or restoration measures to fulfill the rule requirements. The final rule also ensures that any applicable requirements are economically practicable through the inclusion of the site-specific compliance alternative at § 125.94(a)(5). EPA further notes that the compliance alternative specified in § 125.94(a)(4) and 125.99(a) and (b) was included in part to provide additional flexibility to Phase II existing facilities as well as to reduce the burden of determining, implementing, and administering section 316(b) requirements among all relevant parties. Finally, the Agency believes that the rule extends additional flexibility to States by providing that where a State has adopted alternative regulatory requirements that achieve environmental performance comparable to that required under the rule, the Administrator will approve such alternative requirements. 2. Impact on Small Governments —EPA~has TfetermiTredrthatliris rule contains no regulatory requirements that might significantly or uniquely affect small governments. EPA estimates that 17 of the 62 government-owned facilities subject to the final rule are owned by small governments (i.e., governments with a population of less than 50,000). The total annualized post- tax compliance cost for all small government-owned facilities incurring costs under the final rule is $5.4 million, or approximately $316,000 per facility. The highest annualized compliance costs for a small government-owned facility is $1.3 million. These costs are lower than the corresponding costs for large governments and private entities. EPA therefore concludes that these costs do not significantly or uniquely affect small governments, and that today's rule is not subject to the requirement of section 203 ofUMRA. E. Executive Order 13132: Federalism Executive Order 13132, entitled "Federalism" (64 FR 43255, August 10, 1999), requires EPA to develop an accountable process to ensure "meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications." "Policies that have federalism implications" is defined in the Executive Order to include regulations that have "substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government." This final rule does not have federalism implications. It will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. Rather, this rule would result in minimal administrative costs on States that have an authorized NPDES program; would result in minimal costs to States and local government entities that own facilities subject to the regulation; it maintains the existing relationship between the national government and the States in the administration of the NPDES program; and it preserves the existing distribution of power and responsibilities among various levels of government. Thus, Executive Order 13132 does not apply to this rule. The national cooling water intake structure requirements will be implemented through permits issued under the NPDES program. Forty-five States and the Virgin Islands are currently authorized pursuant to section 402 (b) of the CWA to implement the NPDES program. In States not authorized to implement the NPDES program, EPA issues NPDES permits. Under the CWA, States are not required to become authorized to administer the NPDES program. Rather, such authorization (and potential funding to support administration) is available to States if they operate their programs in a manner consistent with section 402(b) and applicable regulations. Generally, these provisions require that State NPDES programs include requirements that are as stringent as Federal program requirements. States retain the ability to implement requirements that are broader in scope or more stringent than Federal requirements. (See section 510 of the CWA). EPA expects an average annual burden of 104,606 hours with total average annual cost of $4.8 million 41668 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations for States to collectively administer this rule during the first three years after promulgation. EPA has identified 62 Phase II existing facilities that are owned by State or local government entities. The estimated average annual compliance cost incurred by these facilities is $372,000 per facility. Today's rule would not have substantial direct effects on either authorized or nonauthorized States or on local. gavernmeats-because-it-would- not change how EPA and the States and local governments interact or their respective authority or responsibilities for implementing the NPDES program. Today's rule establishes national requirements for Phase II existing facilities with cooling water intake structures. NPDES-authorized States that currently do not comply with the final regulations based on today's rule will need to amend their regulations or statutes to ensure that their NPDES programs are consistent with Federal section 316(b) requirements. See 40 CFR 123.62(e). For purposes of this rule, the relationship and distribution of power and responsibilities between the Federal government and the States and local governments are established under the CWA (e.g., sections 402(b) and 510), and nothing in this rule alters this established relationship and distribution of power and responsibilities. Thus, the requirements of section 6 of the Executive Order do not apply to this rule. not apply to this rule, EPA did consult with representatives of State and local governments in developing this rule. EPA also met with the Association of State and Interstate Water Pollution Control Administrators (ASIWPCA) and, with the assistance of ASIWPCA, conducted a conference call in which representatives from 17 States or interstate organizations participated. A summary of consultation activities is provided in section III of this preamble. In the spirit of Executive Order 13132, and consistent with EPA policy to promote communications between EPA and State and local governments, EPA also specifically solicited comments on the proposed rule from State and local officials. A summary of the concerns raised during that consultation and subsequent public comment periods and EPA's response to those concerns is provided in section VIII of this preamble and in the response to comment document in the record. F. Executive Order 13175: Consultation and Coordination With Indian Tribal Governments Executive Order 13175, entitled "Consultation and Coordination with Indian Tribal Governments" {65 FR 67249, November 9, 2000), requires EPA to develop an accountable process to ensure "meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications." "Policies that have tribal implications" are defined in the Executive Order To TncHucRfregulations that have "substantial direct effects on one or more Indian tribes, on the relationship between the Federal government and the Indian tribes, or the distribution of power and responsibilities between Federal government and Indian tribes." This rule does not have Tribal implications. It will not have substantial direct effects on Tribal governments, on the relationship between the Federal government and the Indian Tribes, or the distribution of power and responsibilities between the Federal government and Indian Tribes as specified in Executive Order 13175. The national cooling water intake structure requirements will be implemented through permits issued under the NPDES program. No Tribal governments are currently authorized pursuant to section 402(b) of the CWA to implement the NPDES program. In addition, EPA's analyses show that no facility subject to this rule is owned by Tribal governments and thus this rule does not affect Tribes in any way in the foreseeable future. Thus, Executive Order 13175 does not apply to this rule. Nevertheless, in the spirit of Executive Order 13175 and consistent with EPA policy to promote communications between EPA and Tribal governments, EPA solicited comment on the proposed rule from all stakeholders. EPA did not receive any comments from Tribal governments. G. Executive Order 13045: Protection of Children From Environmental Health and Safety Risks Executive Order 13045: "Protection of Children from Environmental Health Risks and Safety Risks" (62 FR 19885, April 23, 1997) applies to any rule that: (l) Is determined to be "economically significant" as defined under Executive Order 12866, and (2) concerns an environmental health or safety risk that EPA has reason to believe may have a disproportionate effect on children. If the regulatory action meets both criteria, the Agency must evaluate the environmental health or safety effects of the planned rule on children, and explain why the planned regulation is preferable to other potentially effective and reasonably feasible alternatives considered by the Agency. Executive Order 13405 does not apply to this rule because the rule does not concern an environmental health or safety risk that EPA has reason to believe may have a disproportionate effect on children. This rule establishes requirements for cooling water intake structures to protect aquatic organisms. H. Executive Order 13211: Actions That Significantly Affect Energy Supply, Distribution, or Use This rale is not a "significant energy action" as defined in Executive Order 13211, ("Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use" (66 FR 28355, May 22, 2001)) because it is not likely to have a significant adverse effect on the supply, distribution, or use of energy. The final rule does not contain any compliance requirements that will: • Reduce crude oil supply in excess of 10,000 barrels per day; • Reduce fuel production in excess of 4,000 barrels per day; • Reduce coal production in excess of 5 million tons per day; • Reduce electricity production in excess of 1 billion kilowatt hours per day or in excess of 500 megawatts of installed capacity; • Increase energy prices in excess of 10 percent; • Increase the cost of energy distribution in excess of 10 percent; • Significantly increase dependence on foreign supplies of energy; or • Have other similar adverse outcomes, particularly unintended ones. EPA analyzed the final rule for each of these potential effects and found that this rule will not lead to any adverse outcomes. Based on the analyses, EPA concludes that this final rule will have minimal energy effects at a national and regional level. As a result, EPA did not prepare a Statement of Energy Effects. For more detail on the potential energy effects of this rule, see section XI.B.I of this preamble or the Economic and Benefits Analysis for the Final Section 316(b) Phase H Existing Facilities Rule. I. National Technology Transfer and Advancement Act As noted in the proposed rule, section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Pub. L. No. 104-113, section 12(d), (15 U.S.C. 272 note), directs EPA to use voluntary consensus standards in its regulatory activities unless to do so Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41669 would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standard bodies. The NTTAA directs EPA to provide Congress, through the Office of Management and Budget (OMB), explanations when the Agency dec-ides-net-to-use available-and-— - - - applicable voluntary consensus standards. This rule does not involve technical standards. Therefore, EPA did not consider the use of any voluntary consensus standards. /. Executive Order 12898: Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations Executive Order 12898 requires that, to the greatest extent practicable and permitted by law, each Federal agency must make achieving environmental justice part of its mission. E.O. 12898 states that each Federal agency must conduct its programs, policies, and activities that substantially affect human health or the environment in a manner that ensures such programs, policies, and activities do not have the effect of excluding persons (including populations) from participation in, denying persons (including populations) the benefits of, or subjecting persons (including populations) to discrimination under such programs, policies, and activities -beeause-eteheif-raee-,- eolor-oHiational -- origin. Today's final ride would require that the location, design, construction, and capacity of cooling water intake structures (CWIS) at Phase II existing facilities reflect the best technology available for minimizing adverse environmental impact. For several reasons, EPA does not expect that this final rule would have an exclusionary effect, deny persons the benefits of participating in a program, or subject persons to discrimination because of their race, color, or national origin. To assess the impact of the rule on low-income and minority populations, EPA calculated the poverty rate and the percentage of the population classified as non-white for populations living within a 50-mile radius of each of the 543 in-scope facilities for which survey data are available. The results of the analysis, presented in the Economic Benefits Analysis, show that the populations affected by the in-scope facilities have poverty levels and racial compositions that are quite similar to the U.S. population as a whole. A relatively small subset of the facilities are located near populations with poverty rates (23 of 543, or 4.2%), or non-white populations (105 of 543, or 19.3%), or both (13 of 543, or 2.4%) that are significantly higher than national - levelfr.-Basedon-these-results, EPA does not believe that this rule will have an exclusionary effect, deny persons the benefits of the NPDES program, or subject persons to discrimination because of their race, color, or national origin. In fact, because EPA expects that this final rule would help to preserve the health of aquatic ecosystems located in reasonable proximity to Phase II existing facilities, it believes that all populations, including minority and low-income populations, would benefit from improved environmental conditions as a result of this rule. Under current conditions, EPA estimates over 1.5 billion fish (expressed as age 1 equivalents) of recreational and commercial species are lost annually due to impingement and entrainment at the inscope Phase II existing facilities. Under the final rule, more than 0.5 billion individuals of these commercially and recreationally sought fish species (age 1 equivalents) will now survive to join the fishery each year. These additional fish will provide increased opportunities for subsistence - anglers-to-merease their eateh, thereby providing some benefit to low income households located near regulation- impacted waters. K. Executive Order 13158: Marine Protected Areas Executive Order 13158 (65 FR 34909, May 31, 2000) requires EPA to "expeditiously propose new science- based regulations, as necessary, to ensure appropriate levels of protection for the marine environment." EPA may take action to enhance or expand protection of existing marine protected areas and to establish or recommend, as appropriate, new marine protected areas. The purpose of the Executive Order is to protect the significant natural and cultural resources within the marine environment, which means "those areas of coastal and ocean waters, the Great Lakes and their connecting waters, and submerged lands thereunder, over which the United States exercises jurisdiction, consistent with international law." Today's final rule recognizes the biological sensitivity of tidal rivers, estuaries, oceans, and the Great Lakes and their susceptibility to adverse environmental impact from cooling water intake structures. This rule provides the most stringent requirements to minimize adverse environmental impact for cooling water intake structures located on these types of waterbodies, including potential reduction of intake flows to a level commensurate with that which can be attained by a closed-cycle recirculating cooling system for facilities that withdraw certain proportions of water from estuaries, tidal rivers, and oceans. EPA expects that this rule will reduce impingement mortality and entrainment at facilities with design intake flows of 50 MGD or more. The rule would afford protection of aquatic organisms at individual, population, community, or ecosystem levels of ecological structure. Therefore, EPA expects today's rule would advance the objective of the Executive Order to protect marine areas. L. Congressional Review Act The Congressional Review Act, 5. U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register. A major rule can not take effect until 60 days after it is published in the Federal Register. This action is a "major rule" as defined by 5 U.S.C. 804(2). This will be effective September 7, 2004. Dated: February 16, 2004. Michael O. Leavitt, Administrator. Note: The following appendices A and B will not appear in the Code of Federal Regulations. Appendix A 41670 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and RegulationsGO CD io cri i i^CMcntD^cDcn^oi^^^f^cncnh-iQcncn^ojTf^oi'^'CMcncowcn'jcoco^'^'^'^'cn'i^ddd^ddc\Jd^co»-cMddcMdddcodT-:i-'d'r-:co1ddtcJd-i-" d *— *- co d iCM CM »- i- CM i— i T— »-c\jT-cocMin'«j-CM»-cnm-'-*-CMh-c\]»--»-!-mincna>rf .s • 5> aSgsJ?^uj oS o E uj uj ••a «i • UJ — UJ — UJ — UJUJUJL1J~~UJUJUJUJ*=a °a «8 •ULJ uj — ujuj — uj-°o oa =8 08 =a • UJ UJ UJ "«a os =a S O 01 inoo en enr in" T-" in •••S"o"i-~CO y~ 08- 0- CO (O O CJ T- -i*§1- CO TfCM CO CO O" •*" O" r-"10 r- m i/)T- in *- eocj o i- om m T- r- CO CO m om in O) T- S3 §- CO CO88olo" TJ 2o>c~o c c .g> s.M + a M s —§±^•0^ SV § "§<•£51«fii| CM_ m co T-_ en r-_ »-_ - " " " " _ " co vS t^ i- • T co co _ _<o to in ^ m" oj co" in" co" ^^ oc\j^,>:V-^^tD^_ oq ^ en oo i in to co rt •¥ co t ^- o co i-maa^Gtotoooifto^Fe'ft^toc^ccotoocotDmcointor^inco^-cooimto cocvj^o ^•Tfh-^-c CM CM CM 1 ^- CM CO O> T- CO> m co to CM in en §^ Is- ^ co CM*- in toCM" CO'CM" icooooi— COOT--*— cocni _ co_ T- in co_ • r^-i-T-T-enT-T- en CM m Is- T- CMIO tnocooo^mmcncoocococot CM ^CDCO *!f tMCOCM ( )" Is-" ^" CO* T-" to" (sT T-" to"- — -^ jint * > en in in co en co o in o T-S to co in to 01co > en in coi- in en to) CO COt- -<t If- CO C i- i- to i— i-toT-r :c\ir*-»-<DT-»-mf-o sssr*- o m CM en oo o co-- _ r-_ CO_ i>-_ CO_ (D ID. CO^ O)""_ _ . ^ _ ^ _ _ _ _ _ _ - T- -^ r- CM tD »-CO CO CM in CM CO cococo»- en »— CM 1-1— m •coT— cMr*-CM j~io" r-^cn" T-~ en en" co" oo" CM" to" W co" r _K_ -" cf co" h^ to" ^-" co" inN^^inojintoccocoi- toin c !S^;) in o> t g S °PPP°°°°°°°°°H°°°°^ =)=)=) D =1 D 133 DD=>:3Z>DI> 3D looppoooooooooooobpj :<«««<<««<<?" 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" m" •* *-" o CM" co" eo" t*-" T?- •o-i— co co oofco'tcf^-'r-^r-ocMcocsTcy" of r-od^^'CMtocMCMincocor^'i— r^ co CM o co co co r^ to co ^- rr co^ CM r oooor^-oococo'^'^-oino^'^'CTtr-T-CM'tCMCM-'-CMTl-CMtD COC ) CM r^ 01 in *- coSS^SSSi' f-coeMocor.cMin)CMT-OCMCOCMinrcncoiDiOT-cocMf co" CM" of T-" r-" co" CM" Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41673CM CM OJ CJ) ^ 5ID CD CO CO O Om in CD tO CO CO•>* -<?• co oq i- T—co co' d d ^ *-'CM CM Is- CM ^- (•- - — m o cd -r-' d d d d d cxi DJ T-" i tO^coin^incocowT- d T- CO' CO CO O O O CXI CM O O i— r- T-^ O O *-' r-' O t- CM O* CO O O O O *t^ ^ d CM' m d d • i- O O CM i LUUJUJU] UJ UJ LLJ UJ UJ ~ UJ 'ofi o3 o(i ofl eQ ofl in co m CMin in co coin in o cooo in T- oo 83O Oo" to"m co CM CMo> o *_•" co"Is-. oen *- — co CD in inCM m to coco r** en en CO CM r- r- co" o" o"r- m in oo tro'co"SSi in CMffl ften fs. 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C\J CM C - CD CM r- eo f- T- -Bs"05^ -• § I f" in" o" h-" m" <o" T-" oo"i-mcocomo e " oo" en" »-" co" r-"T-cocor^cyi i- ^- CMT- CM co c S" of r-" i-" oo" co"t^- to m co oo CM CO OO ^p m ^ co coOO ^- CO CM en" cj" co" co"T- o> *- T- CO 00 OO O> COsssss * co in CM in o O T- f^ O T- ,-S CM h- co r*- h*m »- m co co t-C ao" ^ T-^ <o" co"- - -••— f-eoin o-i-oojojocMcnininco^WTtcoin^cn»-r-- 'J-T-coocco^h.1— r T-" of CM" 3 m i- oo *- o c co" CM" ^ in in" co" i en in in co •* ^>i— oo co CD in inIs- CM «* CD CO CO S'.cvj" -d-" co" K r-."i— o cn h- h-oo co CM ^ in in•*" ^-" co" • i- CO i !" oo" ^t" icn in t _.,.^_-_~..-_ __^- — — — —'COCOCMOOOOtOT-OCOOcnOOCOOCOCM^COOOCOOCOOCOCOOgcncncoincoocMooooooocoT—^inocMincoooincoooocoininr^^ooocoocoooor'^ocMCMCM^h^oino_ooocvjcMooco_i^oor^ooincoooocMT-oooocMcni^-cncooocoocMOcncMo"oo"p^^"l^co"cn"cn"co~in"^"Lnr^"o~T^cD"o"cD"co"r^"^co"co^ r-i-t-i- COtDT-^CMCMOOCM i-COt-^-COTf^ Tj-"*CD CO r^h-r^-ocnT^cDT-cococooToiinm^cnoor-cocoi-inCM CO T- T- T- i— CM > CM O •>- ( I CM O LQ t E E ftv>y> : °°: oa ll Q- LT QOQQQOOQQQQQDQOQaQQQt _ IQQOQQQQQQQQQQQQQDQQQQQDQOQi Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41675cnomcvjcMWrjN-cococomiomococoto^ocoincoiDh-co oo co r^ •* r- »-; inddddcod.-:oJCMCVJOJi— COi-»-cocococococo co CD T- i— c'itomininineoNCQcococMincococococococoj i— •^•^•^•^•co_incor^r^'r^cvj'-'»-'-'^cqi^.i-UJUJUJUJLULU lilUJlULUUJLU 11J HI ~ UJliJliIliJUJLULIJLlJllJ~LLl"od 00" °CJ o •* in : enm tt coCO CO O) S o) o h- in m r-- coCO OJ ^" CO CO CO <O CD f1^-" CO CO CO Ol i~ Tf *~ *~ co co_ in ini-~cy incocMcncncopj^COCMOOCO*-i-^C\£ m" m" to" to" ^ w" csj of(OtocOT-cor-ooji— »- O CO h- i- in i- cy_ co_ o en S" co" to" of T- o" m" Vin r*- DO in ^ oo co S" 01" Is*" Is- co" tm oo CNJ o cc\j in cnocnocncomcn CO' en into to" •* m T- mco to PJ r*o o> in wco" T-" oo" ^-"CO i- (O CM ^_ S" CM"T- coc\icncni^-caO'grincOT-oco'-tocoooc\iooi^-r*-oocMh-T—•t-tor-coT- h-" of to" to c\T co" CM m" co" m" CM" to" -^ CM" **" o" co" *- r*-" Is-" W co"»-" ra" co" of uf m" T^" ^ f'.CJCOi— T— *~C\ji— """ CO COCMCOCO T-i-00'«f i-COC\JCOCOCO CM ^-" r-' *-" CVj" i-~ W h- h- O i— to r*- m m ico" m" to" i-" c _ o> h-_ ip_ CD r" " "_ CM_ c\i_ T-_ o_ CM_ <" " " " "_ _ _ _ _ _ _ _ _ _ _ _ _ _ _" &y r- CM" <o" oo" co" to" en" co" co to" o co" en" o" m" CM" in" m" to" ci-mcOf-cor'^cMcocM-^-cMcoT-^-r-.cooocMincMci- *- *- *~ T- (O *- CM »— in CM CO C cocoor*-inc\icoots-com :mocoo>cococo^-r-tM-^-^tcocoiNco :co*-w-r-Nomcjino_p>-toincnoi_r^ ii-cncor^Tr o" o" W co" co" o" o" i-" in" co" r-" : o" CD" co" ^ CM"eoi-r^-^owi—ococno :cor**mcoco eonCM O) ^asfts CM tOCD^CM T- OCO ^ i- CM'i-CO 1^- OOOOOOOCOOOOCOCOCOi-COCOi-OOOOOe»3OO)C\J'^-(OOO{MomoooinooQcoocor--'«tinoocM--^^^ o" c\f r^ CM" co" *-" en at o" o" co" en"-coi-cocMTj-r^h-cor.oincoCOI-CM-*CM T- ••j-t " to" ca~ ^ o" c\f csf ai"-- t- CJ COo o* o §§ m 03 03 )flOoojcoco coo>oc|jcooocooj»— T-ii-'— iFs-fi^r%-r^ts-iiv-h-r*"r^ ^ojj^^Ortjjjdjj.nJ^tojflj CO (0 CO <8 (Q £0 i ocococMcotOf-r-o-•I-T—•»-c\tcocoi*^-ini* ~ooooooro o o o o o c ! S S § p p o j ) co *" m 41676 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations IJ.I MO fSi -,'^sl s J« E Q. Q) "^ UJ "O ooooooo Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41677coojcdco cii oj cd en co cc 03 IOCQCQCO «<<<<<<<QQQQQQC1Q 41678 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulationsi lf5•t c0 * MM C 2 B» ow o> 1!5 18 §* . 0 £ c CO • |S ,- to f^ C\! C\J CM 000 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41679nil-„„* ? "£ ? f "i co •* in in CDCVI CM CM CVJ CM 55555Q Q Q 0 Q la"c_Cuso0-01-CI£ T3 'S §U (A 1O CDcd 1u 2 g-g I CO 0*c ^E of "o ®o oc _. . ">v 0 S f II 1 --fe c JS -^"w * jS3 S.E ^, *- ^ "o ^ g -S S.1^. o w c '€ -o 5 ! i!~o 1 If8 » » =•a Is * ?- n CD tn= 8 E tHi t iili fi fw o o c. o Illlfl <>- N n « Z QJ w 41680 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations Appendix B: Facility ID and Facility Name for All Facilities Not Claiming Survey Information CBI Facility ID AUT0001 ... AUT0002 ... AUT0004 ... AUT0010 ... AUT0011 ... AUT0012 ... AUT0013 ... AUT0014 ... AUT0015 ... AUT0016 ... AUT0018 ... AUT0019 ... AUT0020 ... AUT0021 ... AUT0022 ... AUT0024 ... AUT0027 ... AUT0033 ... AUT0036 ... AUT0041 ... AUT0044 ... AUT0047 ... AUT0049 ... AUT0050 ... AUT0051 ... AUT0053 ... AUT0054 ... AUT0057 ... AUT0058 ... AUT0064 ... AUT0066 ... AUT0067 ... AUT0068 ... AUIUO/1 ... AUT0072 ... AUT0073 ... AUT0078 ... AUT0079 ... AUT0080 ... AUT0083 ... AUT0084 ... AUT0085 ... AUT0092 ... AUT0093 ... AUT0095 ... Facility name Cane Run Chesapeake Hennepin Bowen Shawville Diablo Canyon Nuclear Montville Williams Northport Cholla R M Heskett Station Charles Poletti B L England B C Cobb St Johns River Power Bull Run Lake Hubbard Muscatine Edgewater Edwin I Hatch Hunters Point Michoud Chalk Point Wyandotte Suwannee River Nelson Dewey Flint Creek Thomas Fitzhugh Mercer Decordova Fermi Nuclear Henry D King Scattergood Oswego Sioux Lake Catherine Missouri City Eagle Mountain Lone Star Schiller Salem Nuclear Point Beach Nuclear Linden Perry Nuclear Tyrone AUT0097 ... Little Gypsy AUT0101 ... AUT0106 ... AUT0110 ... AUT0111 ... AUT0114 ... AUT0120 ... AUT0123 ... AUT0125 ... AUT0127 ... AUT0129 ... AUT0130 ... AUT0131 ... AUT0134 ... AUT0137 ... AUT0139 ... AUT0142 ... AUT0143 ... AUT0146 ... AUT0148 ... Atrnms-r- AUT0151 ... AUT0152 ... AUT0156 ... AUT0157 ... Lakeside Cheswick C P Crane Cape Fear Kewaunee Nuclear Norwalk Harbor Warren Beaver Valley Nuclear Lake Road Susquehanna Nuclear Elmer W Stout Hammond Mount Tom Mitchell Albany Lauderdale Wood River Meredosia Tanners Creek -TtTomarHltl Decker Creek Duck Creek Waterford 1 & 2 Pulliam Facility ID AUT0160 ... AUT0161 ... AUT0163 ... AUT0168 AUT0170 ... AUTOT7TT: AUT0173 ... AUT0174 ... AUT0175 ... AUT0176 ... AUT0178 ... AUT0181 ... AUT0182 ... AUT0183 ... AUT0185 ... AUT0187 ... AUT0190 ... AUT0191 ... AUT0192 ... AUT0193 ... AUT0196 ... AUT0197 ... AUT0201 ... AUT0202 ... AUT0203 ... AUT0205 ... AUT0208 ... AUT0215 ... AUT0216 ... AUT0221 ... AUT0222 ... AUT0226 ... AUT0227 ... AUT0228 ... AUT0229 ... AUT0230 ... AUT0232 ... AUT0235 ... AUT0238 ... AUT0240 ... AUT0241 ... AUT0242 ... AUT0244 ... AUT0245 ... AUT0246 ... AUT0248 ... AUT0254 ... AUT0255 ... AUT0257 ... AUT0260 ... AUT0261 ... AUT0264 ... AUT0266 ... AUT0268 ... AUT0270 ... AUT0273 ... AUT0275 ... AUT0276 ... AUT0277 ... AUT0278 ... AUT0284 ... AUT0285 ... AUT0286 ... AUT0287 ... AUT0292 ... AUT0295 ... AUT0296 ... AUT0297 ... AUT0298 ... — AUT0299-— AUT0300 ... AUT0302 ... AUT0304 ... AUT0305 ... Facility name L V Sutton Valley Belle River E F Barrett O W Sommers New Madrid Fort Calhoun Nuclear Herbert a Wagner R E Burger Martin Lake Mt Storm Prairie Creek Arsenal Hill Schuylkill Gallatin North Anna Nuclear Ginna J H Campbell R W Miller Joliet 29 Southside Austin-dt Cope Donald C Cook Nuclear Riverside Joliet 9 New Castle Coleto Creek Fort St Vrain Polk Marion Sooner Silver Lake High Bridge Dan E Karn McWilliams V H Braunig Sam Ruybudi North Lake Lee J B Sims Quad Cities Nuclear Elk River Avon Lake Canaday Sam Bertron Chamois Cooper Gerald Gentleman Marshall Dale Indian Point 3 Nucler North Omaha Cutler Possum Point Stanton Seabrook Nuclear River Rouge Dubuque Morgantown Handley Conners Creek Welsh Horseshoe Lake Harris Nuclear Jack Mcdonough W H Zimmer Quindaro Harllee Branch ChEsrerfreW Eckert Station U.S. DOE SRS (D-area) Lansing Kahe Facility ID AUT0307 .. AUT0308 .. AUT0309 .. AUT0310 .. AUT0314 .. AUT0315 ... AUT0319 ... AUT0321 ... AUT0331 ... AUT0333 ... AUT0337 ... AUT0341 ... AUT0343 ... AUT0344 ... AUT0345 ... AUT0349 ... AUT0350 ... AUT0351 ... AUT0355 ... AUT0356 ... AUT0358 ... AUT0359 ... AUT0361 ... AUT0362 ... AUT0363 ... AUT0364 ... AUT0365 ... AUT0368 ... AUT0370 ... AUT0373 ... AUT0379 ... AUT0380 ... AUT0381 ... AUT0384 ... AUT0385 ... AUT0387 ... AUT0388 ... AUT0390 ... AUT0394 ... AUT0396 ... AUT0397 ... AUT0398 ... AUT0399 ... AUT0401 ... AUT0403 ... AUT0404 ... AUT0405 ... AUT0406 ... AUT0408 ... AUT0411 ... AUT0415 ... AUT0416 ... AUT0419 ... AUT0423 ... AUT0424 ... AUT0427 ... AUT0431 ... AUT0433 ... AUT0434 ... AUT0435 ... AUT0440 ... AUT0441 ... AUT0443 ... AUT0444 ... AUT0446 ... AUT0449 ... AUT0453 ... AUT0455 ... AUT0459 ... AUT0462 ... AUT0463 ... AUT0467 ... AUT0472 ... AUT0473 ... Facility name Rodemacher WS Lee Wilkes A B Paterson Philip Sporn Sabine Cliffside J E Corette Lake Creek Hamilton Johnsonville Montrose John E Amos Weston Summer Nuclear McGuire Nuclear Clinton Nuclear Portland Limerick Nuclear Byron Nuclear H T Pritchard Hookers Point Hawthorn Teche Wansley Dresden Nuclear Arkwright Kaw Deepwater Valmont Lake Pauline Will County Healy Somerset Hutsonville Haynes Lewis Creek Fort Churchill Nebraska City Bremo Power Station George Neal North latan Boomer Lake Fort Myers Nine Mile Point Nuclear Mitchell Fisk Vlerom Cameo Roseton Rochester 7 Moblesville Brunswick Nuclear James A Fitzpatrick Davis-besse Blount Street San Angelo Mistersky3aradise Shiras Eaton3iqua Hilton L Kapp Gibbons Creek Richard H. Gorsuch Big Brown -our Corners Seminole Vogtle Nuclear Warrick lex Brown Vero Beach viiami Fort Palisades Nuclear Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41681 Facility ID AUT0476 ... AUT0477 ... AUT0478 ... AUT0481 ... AUT0482 ... AUT0483 ... AUT0489 ... AUT0490 ... AUT0492 ... AUT0493 ... AUT0496 ... AUT0499 ... AUT0500 ... AUT0501 ... AUT0507 ... AUT0512 ... AUT0513 ... AUT0515 ... AUT0517 ... AUT0518 ... A I lTni^Ot_— f*i\J-t-*J3i£-l — j-.-. — AUT0522 ... AUT0523 ... AUT0529 ... AUT0531 ... AUT0534 ... AUT0535 ... AUT0536 ... AUT0537 ... AUT0538 ... AUT0539 ... AUT0540 ... AUT0541 ... AUT0544 ... AUT0546 ... AUT0547 ... AUT0551 ... AUT0552 ... AUT0553 ... AUT0554 ... AUT0555 ... AUT0557 ... AUT0561 ... AUT0564 ... AUT0567 ... AUT0568 ... AUT0570 ... AUT0571 ... AUT0573 ... AUT0575 ... AUT0577 ... AUT0580 ... AUTnFiR? AUT0583 ... AUT0585 ... AUT0588 ... AUT0590 ... AUT0599 ... AUT0600 ... AUT0601 ... AUT0602 ... AUT0603 ... AUT0604 ... AUT0606 ... AUT0607 ... AUT0608 ... AUT0611 ... AUT0612 ... AUT0613 ... AUT0617 ... AUT0618 ... AUT0619 ... AUT0620 ... AUT0621 ... Facility name Trinidad Fair Station Dansby Powerlane Gen J M Gavin Shawnee Nearman Creek Buck Collins E S Joslin Indian River Bay Front Big Cajun 2 Jack Watson Crawford J K Spruce Waterford #3 Nuclear Rockport Humboldt Bay James River Menasha Jefferies Walter C Beckjord Gould Street Braidwood Nuclear Crisp Urquhart Rush Island Dallman Genoa Edge Moor J P Madgett Indian Point Nuclear Eddystone Watts Bar Nuclear Muskingum River Allen S King Kingston Hunlock Pwr Station Potomac River Zuni Sayreville J T Deely Kyger Creek F B Culley Northside Peach Bottom Nuclear Baxter Wilson San Onofre Nuclear Trenton Channel Middletown Sixth Street F W Rrnwn Dave Johnston Burlington Monticello C D Mclntosh Jr Kearny Kincaid Bridgeport Harbor Mason Steam Astoria C R Huntley Hmp&l Station 2 Moss Landing Pilgrim Nuclear New Boston Huntington Beach Morro Bay Ravenswood New Haven Harbor William F Wyman Dunkirk Contra Costa Facility ID AUT0623 ... AUT0625 ... AUT0630 ... AUT0631 ... AUT0635 ... AUT0637 ... AUT0638 ... AUT0639 ... DMU3244 .. DMU3310 .. DNU2002 ... DNU2011 ... DNU2013 ... DNU2014 ... DNU2015 ... DNU2017 ... ONU2Q-1-S DNU2021 ... DNU2025 ... DNU2031 ... DNU2032 ... DNU2038 ... DNU2047 ... DUT0062 ... DUT0576 ... DUT1002 ... DUT1003 ... DUT1006 ... DUT1007 ... DUT1008 ... DUT1011 ... DUT1012 ... DUT1014 ... DUT1021 ... DUT1022 ... DUT1023 ... DUT1026 ... DUT1029 ... DUT1031 ... DUT1033 ... DUT1034 ... DUT1036 ... DUT1038 ... DUT1041 ... DUT1043 ... -.BLLT1Q44_._ DUT1046 ... DUT1047 ... DUT1048 ... DUT1049 ... DUT1050 ... DUT1051 ... DUT1056 ... DUT1057 ... DUT1062 ... DUT1066 ... DUT1067 ... DUT1068 ... DUT1070 ... DUT1 072 ... DUT1084 ... DUT1085 ... DUT1086 ... DUT1088 ... DUT1093 ... DUT1097 ... DUT1098 ... Facility name Kendall Square Encina Lovett Salem Harbor Aes Hickling Ormond Beach Mandalay Pittsburg University of Notre Dame Power Plant University of Iowa — Main Power Plant Brooklyn Navy Yard Cogenera- tion Partners, L.P. Long Beach Generation Maine Energy Recovery Com- pany Baltimore Resco Southern Energy-Canal Westchester Resco Co. Grays Ferry Coosneration Part- nership Morgantown Sparrows Point Div Bethlehem Steel Corp Ch Resources — Beaver Falls Duke Energy South Bay Saugus Resco El Segundo Power Leland Olds Station Sam O. Purdom Generating Station Monroe Peru Martins Creek Presque Isle Far Rockaway Stryker Creek Grand Tower Dolphus M Grainger Alma Comanche Peak Nuclear Oyster Creek Nuclear Delaware Crystal River Merrimack J C Weadock South Oak Creek Allen North Texas Elmer Smith Ray Olinger Iradingbouse Labadie Elrama Holly Street Joppa Steam Browns Ferry Nuclear Havana Webster Wateree Fayette Power Prj F J Gannon Paint Creek Harbor Millstone Graham Fort Phantom Petersburg Valley Seward Bailly Rock River Blackhawk Facility ID DUT1100 .. DUT1103 .. DUT1109 .. DUT1111 .. DUT1112 ... DUT1113 ... DUT1116 ... DUT1117 ... DUT1118 ... DUT1122 ... DUT1123 ... DUT1132 ... DUT1133 ... DUT1138 ... DUT1140 ... DUT1142 ... DUT1143 ... DUT1145 ... DUT1146 ... DUT1148 ... DUT1152 DUT1153 ..! DUT1154 ... DUT1155 ... DUT1156 ... DUT1157 ... DUT1161 ... DUT1165 ... DUT1167 ... DUT1169 ... DUT1170 ... DUT1172 ... DUT1173 ... DUT1174 ... DUT1175 ... DUT1179 ... DUT1185 ... DUT1186 ... DUT1187 ... DUT1189 ... DUT1191 ... DUT1192 ... DUT1194 ... DUT1198 ... DUT1202 ... DUT1206 ... DUT1209 ... DUT1211 ... DUT1212 ... DUT1213 ... DUT1214 ... DUT1217 ... DUT1219 ... DUT1223 ... DUT1225 ... DUT1227 ... DUT1228 ... DUT1229 ... DUT1235 ... DUT1238 ... DUT1248 ... DUT1249 ... DUT1250 ... DUT1252 ... DUT1258 ... DUT1259 ... DUT1261 ... DUT1265 ... DUT1268 ... DUT1269 ... DUT1270 ... DUT1271 ... DUT1272 ... DUT1273 ... Facility name Sewaren Milton R Young Riverside E D Edwards Lieberman Sequoyah Nuclear Waiau Columbia Cooper Edgewater Waukegan Cumberland J R Whiting Harbor Morgan Creek Victoria East River Honolulu Devon Council Bluffs Coffeen Mill Creek McClellan P H Robinson John Sevier Sterlington Robert E Ritchie Big Bend Ninemile Point Hudson Carl Bailey Barney M Davis Logansport Arkansas Nuclear One Fox Lake Pirkey Cromby Glenwood Mountain Creek Larsen Memorial Monroe Meramec Gerald Andrus O H Hutchings Manitowoc Indian River Widows Creek Surry Nuclear J M Stuart Riverside Charles R Lowman Deepwater 3ort Washington \Jueces Bay Burlington Sibley Willow Glen ^iverton Riverside ^edar Bayou <nox Lee Oak Creek Vermont Yankee Nuclear vluskogee St Clair James De Young Green River 3iver Crest Calvert Cliffs Nuclear Dean H Mitchell3ueblo Michigan City vlonticello Sim Gideon 41682 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations Facility ID DUT1274 ... DUT1275 ... DU-74276-^,- DUT1278 ... Facility name P L Bartow Anclote Newton §9.1 OMB approvals under the Paperwork provisions of §125.95 of this chapter as ***** Proposal for Information Collection ....... - - 40 CFR dtafi-otl GMB^Control with § 125. 95(b)(l). List of Subjects 40 CFR Paii 9 Environmental protection, Reporting and recordkeeping requirements. 40 CFR Part 122 Environmental protection, Administrative practice and procedure, Confidential business information, Hazardous substances, Reporting and recordkeeping requirements, Water pollution control. 40 CFR Part 123 Environmental protection, Administrative practice and procedure, Confidential business information, Hazardous substances, Indians-lands, Intergovernmental relations, Penalties, Reporting and recordkeeping requirements, Water pollution control. 40 CFR Part 124 Environmental protection, Administrative practice and procedure, Air pnlTiifinn rnntrnl f-Tayqi'Hnufi wa.stft, Indians-lands, Reporting and recordkeeping requirements, Water pollution control, Water supply. 40 CFR Part 125 Environmental protection, Cooling water intake structure, Reporting and recordkeeping requirements, Waste treatment and disposal, Water pollution control. • For the reasons set forth in the preamble, chapter I of title 40 of the Code of Federal Regulations is amended as follows: PART 9— OMB APPROVALS UNDER THE PAPERWORK REDUCTION ACT • 1 . The authority citation for part 9 continues to read as follows: Authority: 7 U.S.C. 135 et seq., 13G-136y; 15 U.S.C. 2001, 2003, 2005, 2006, 2601-2671, 21 U.S.C. 331j, 346a, 348; 31 U.S.C. 9701; 33 U.S.C. 1251 at seq., 1311, 1313d, 1314, 1318, 1321, 1326, 1330, 1342, 1344, 1345 (d) and (e), 1361; E.O. 11735, 38 FR 21243, 3 CFR, 1971-1975 Comp. p. 973: 42 U.S.C. 241, 242b, 243, 246, 300f, 300g, 300g-l, 300g-2, 300g-3, 300g-4, 300g-5, 300g-6, 300J-1, EPA Administered Permit Programs: The National Pollutant Discharge Elimination System 122.21 (r)2040-0241, 2040-0257 Criteria and Standards for the National Pollutant Discharge Elimination System 125.95 125.96 125.97 125.98 125.99 2040-0257 2040-0257 2040-0257 2040-0257 2040-0257 B901-6992k, 7401-7G71q, 7542, 9601-9657, 11023, 11048. • 2. In § 9.1 the table is amended by revising the entry for "122.2l(r)" and by adding entries in numerical order under the indicated heading to read as follows: PART 122—EPA ADMINISTERED PERMH^PROGRAMSrTHtNATIONAL POLLUTANT DISCHARGE ELIMINATION SYSTEM • 1. The authority citation for part 122 continues to read as follows: Authority: The Clean Water Act, 33 U.S.C. 1251 et seq. m 2. Section 122.21 is amended by revising paragraph (r)(l) and by adding a new paragraph [r](5) to read as follows: § 122.21 Application for a permit (applicable to State programs, see §123.25) ***** (r) Application requirements for facilities with cooling water intake structures—(l)(i) New facilities with new or modified cooling water intake structures. New facilities with cooling water intake structures as defined in part 125, subpart I, of this chapter must submit to the Director for review the information required under paragraphs (r)(2), (3), and (4) of this section and § 125.86 of this chapter as part of their application. Requests for alternative requirements under § 125.85 of this chapter must be submitted with your --peimit-applieatiorh (ii) Phase II existing facilities. Phase II existing facilities as defined in part 125, subpart J, of this chapter must submit to the Director for review the information required under paragraphs (r)(2), (3), and (5) of this section and all applicable (5) Cooling water system data. Phase II existing facilities as defined in part 125, subpart J of this chapter must provide the following information for each cooling water intake structure they use: (i) A narrative description of the operation of the cooling water system, its relationship to cooling water intake structures, the proportion of the design intake flow that is used in the system, the number of days of the year the cooling water system is in operation and seasonal changes in the operation of the system, if applicable; and (ii) Design and engineering calculations prepared by a qualified professional and supporting data to support the description required by paragraph (r)(5Ki) of this section. • 3. Section 122.44 is amended by revising paragraph (b)(3) to read as follows: §122.44 Establishing limitations, standards, and other permit conditions (applicable to State NPDES programs, see §123.25). (3) Requirements applicable to cooling water intake structures under section 316(b) of the CWA, in accordance with part 125, subparts I and J, of this chapter. PART 123—STATE PROGRAM REQUIREMENTS • 1. The authority citation for part 123 continues to read as follows: Authority: Clean Water Act, 33 U.S.C. 1251 et seq. • 2. Section 123.25 is amended by revising paragraphs (a)(4) and (36) to read as follows: § 123.25 Requirements for permitting. (a) * * * (4) §122.21 (a)-(b), (c)(2), (e)-(k), (m)- (p), (q), and (r)—(Application for a permit); ***** (36) Subparts A, B, D, H, I, and J of part 125 of this chapter; PART 124—PROCEDURES FOR DECISIONMAKING • 1. The authority citation for part 124 continues to read as follows: Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41683 Authority: Resource Conservation and Recovery Act, 42 U.S.C. 6001 fit seq.; Safe Drinking Water Act, 42 U.S.C. 300f et seq.; Clean Water Act, 33 U.S.C. 1251 et soq.; Clean Air Act, 42 U.S.C. 7401 fit seq. m 2. Section 124.10 is amended by revising paragraph (d)(l)(ix) to read as follows: § 124.10 Public notice of permit actions and public comment period. ***** (d) * * * (1)* * * (ix) Requirements applicable to cooling walerTrrtake"StntctmesTirrder section 316(b) of the CWA, in accordance with part 125, subparts I and J, of this chapter. PART 125—CRITERIA AND STANDARDS FOR THE NATIONAL POLLUTANT DISCHARGE ELIMINATION SYSTEM • 1. The authority citation for part 125 continues to read as follows: Authority: Clean Water Act, 33 U.S.C. 1251 fit Kf.q.; unless otherwise noted. • 2. Add subpart J to part 125 to read as follows: Subpart J—Requirements Applicable to Cooling Water Intake Structures for Phase II Existing Facilities Under Section 316(b) of the Act Sec. 125.90 What are the purpose and scope of this subpart? 125.91 What is a "Phase II existing facility"? 125.92 [Reserved] 125.93 What special definitions apply to this subpart? J 25.94 How will requirements reflecting best technology available for minimizing adverse environmental impact be established for my Phase II existing facility? 125.95 As an owner or operator of a Phase II existing facility, what must I collect and submit when I apply for my reissued NPDES permit? 125.9G As an owner or operator of a Phase II existing facility, what monitoring must I perform? ] 25.97 As an owner or operator of a Phase II existing facility, what records must I keep and what information must I report? 125.98 As the Director, what must I do to comply with the requirements of this subpart? 125.99 What are approved design and construction technologies? Subpart J—Requirements Applicable to Cooling Water Intake Structures for Phase II Existing Facilities Under Section 316(b) of the Act § 125.90 What are the purpose and scope of this subpart? (a) This subpart establishes requirements that apply to the location, design, construction, and capacity of cooling water intake structures at existing facilities that are subject to this subpart [i.e., Phase II existing facilities). The purpose of these requirements is to establish the best technology available for minimizing adverse environmental impact associated with the use of ""coolmg"Wcrrer~fntake structures. These requirements are implemented through National Pollutant Discharge Elimination System (NPDES) permits issued under section 402 of the Clean Water Act (CWA). (b) Existing facilities that are not subject to requirements under this or another subpart of this part must meet requirements under section 316(b) of the CWA determined by the Director on a case-by-case, best professional judgment (BPJ) basis. (c) Alternative regulatory requirements. Notwithstanding any other provision of this subpart, if a State demonstrates to the Administrator that it has adopted alternative regulatory requirements in its NPDES program that will result in environmental performance within a watershed that is comparable to the reductions of impingement mortality and entrainment that would otherwise be achieved under § 125.94, the Administrator must approve such alternative regulatory requirements. (d) Nothing in this subpart shall be construed to preclude or deny the right of any State or politicaFsubdivision of a State or any interstate agency under section 510 of the CWA to adopt or enforce any requirement with respect to control or abatement of pollution that is not less stringent than those required by Federal law. § 125.91 What is a "Phase II Existing Facility"? (a) An existing facility, as defined in § 125.93, is a Phase II existing facility subject to this subpart if it meets each of the following criteria: (1) It is a point source. (2) It uses or proposes to use cooling water intake structures with a total design intake flow of 50 million gallons per day (MGD) or more to withdraw cooling water from waters of the United States; (3) As its primary activity, the facility both generates and transmits electric power, or generates electric power but sells it to another entity for transmission; and (4) It uses at least 25 percent of water withdrawn exclusively for cooling purposes, measured on an average annual basis. (b) In the case of a Phase II existing facility that is co-located with a manufacturing facility, only that portion of the combined cooling water intake flow that is used by the Phase II facility to generate electricity for sale to another entity will be considered for purposes of determining whether the 50 MGD and 25 percent criteria in paragraphs (a)(2) and (4) of this section have been exceeded. (c) Use of a cooling water intake structure includes obtaining cooling water by any sort of contract or arrangement with one or more independent suppliers of cooling water if the supplier withdraws water from waters of the United States but is not itself a Phase II existing facility, except as provided in paragraph (d) of this section. This provision is intended to prevent circumvention of these requirements by creating arrangements to receive cooling water from an entity that is not itself a Phase II existing facility. (d) Notwithstanding paragraph (c) of this section, obtaining cooling water from a public water system or using treated effluent as cooling water does not constitute use of a cooling water intake structure for purposes of this subpart. §125.92 [Reserved] § 125.93 What special definitions apply to this subpart? In addition to the definitions provided in § 122.3 of this chapter, the following special definitions apply to this subpart: Adaptive management method is a type of project management method where a facility chooses an approach to meeting the project goal, monitors the effectiveness of that approach, and then based on monitoring and any other relevant information, makes any adjustments necessary to ensure continued progress toward the project's goal. This cycle of activity is repeated as necessary to reach the project's goal. Annual mean flow means the average of daily flows over a calendar year. All life stages means eggs, larvae, juveniles, and adults. Calculation baseline means an estimate of impingement mortality and entrainment that would occur at your site assuming that: the cooling water system has been designed as a once- 41684 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations ....-_. cooling water intake structure is located at, and the face of the standard 3/a-inch mesh traveling screen is oriented parallel to, the shoreline near the surface of the source waterbody; and the baseline practices, procedures, and structural configuration are those that your facility would maintain in the absence of any structural or operational controls, including flow or velocity reductions, implemented in whole or in part for the purposes of reducing impingement mortality and entrainment. You may also choose to use the current level of impingement mortality and entrainment as the calculation baseline. The calculation baseline may be estimated using: historical impingement mortality and entrainment data from your facility or from another facility with comparable design, operational, and environmental conditions; current biological data collected in the waterbody in the vicinity of your cooling water intake structure; or current impingement mortality and entrainment data collected at your facility. You may --requesMhat^he-ealeulatieH-bftselHie-be—• modified to be based on a location of the opening of the cooling water intake structure at a depth other than at or near the surface if you can demonstrate to the Director that the other depth would correspond to a higher baseline level of impingement mortality and/or entrainment. Capacity utilization rate means 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. In cases where a facility has more than one intake structure, and each intake structure provides cooling water exclusively to one or more generating units, the capacity utilization rate may be calculated separately for each intake structure, based on the capacity utilization of the units it services. Applicable requirements under this subpart would then be determined separately for each intake structure. The average annual net generation should be measured over a five year period (if available) of representative operating conditions, unless the facility makes a binding commitment to maintain capacity utilization below 15 percent for the life of the permit, in which case the rate may be based on this commitment. For purposes of this subpart, the capacity utilization rate applies to only that portion of the facility that generates electricity for transmission or sale using a thermal cycle employing the steam water system as the thermodynamic medium. Closed-cycle recirculating system means a system designed, using minimized make-up and blowdown flows, to withdraw water from a natural or other water source to support contact and/or noncontact cooling uses within a facility. The water is usually sent to a cooling canal or channel, lake, pond, or tower to allow waste heat to be dissipated to the atmosphere and then is returned to the system. (Some facilities divert the waste heat to other process operations.) New source water (make-up water) is added to the system to replenish losses that have occurred due to blowdown, drift, and evaporation. Cooling water means water used for contact or noncontact cooling, including water used for equipment cooling, evaporative cooling tower makeup, and dilution of effluent heat content. The intended use of the cooling water is to absorb waste heat rejected from the process or processes used, or from auxiliary operations on the facility's premises. Cooling water that is used in a manufacturing process either before or after it is used for cooling is considered process water for the purposes of calculating the percentage of a facility's intake flow that is used for cooling purposes in § 125.91(a)(4). Cooling water intake structure means the total physical structure and any associated constructed waterways used to withdraw cooling water from waters of the U.S. The cooling water intake structure extends from the point at which water is withdrawn from the surface water source up to, and including, the intake pumps. Design and construction technology means any physical configuration of the cooling water intake structure, or a technology that is placed in the water body in front of the cooling water intake structure, to reduce impingement mortality and/or entrainment. Design and construction technologies include, but are not limited to, location of the intake structure, intake screen systems, passive intake systems, fish diversion and/or avoidance systems, and fish handling and return systems. Restoration measures are not design and construction technologies for purposes of this definition. Design intake flow means the value assigned (during the cooling water intake structure design) to the total volume of water withdrawn from a source waterbody over a specific time period. Design intake velocity means the value assigned (during the design of a cooling water intake structure) to the average speed at which intake water passes through the open area of the intake screen (or other device) against which organisms might be impinged or through which they might be entrained. Die! means daily and refers to variation in organism abundance and density over a 24-hour period due to the influence of water movement, physical or chemical changes, and changes in light intensity. Entrainment means the incorporation of any life stages of fish and shellfish with intake water flow entering and passing through a cooling water intake structure and into a cooling water system. Estuary means a semi-enclosed body of water that has a free connection with open seas and within which the seawater is measurably diluted with fresh water derived from land drainage. The salinity of an estuary exceeds 0.5 parts per thousand (by mass) but is typically less than 30 parts per thousand (by mass). Existing facility means any facility that commenced construction as described in 40 CFR 122.29(b)(4) on or before January 17, 2002; and any modification of, or any addition of a unit at such a facility that does not meet the definition of a new facility at §125.83. Freshwater river or stream means a lotic (free-flowing) system that does not receive significant inflows of water from oceans or bays due to tidal action. For the purposes of this rule, a flow-through reservoir with a retention time of 7 days or less will be considered a freshwater river or stream. Impingement means the entrapment of any life stages of fish and shellfish on the outer part of an intake structure or against a screening device during periods of intake water withdrawal. Lake or reservoir means any inland body of open water with some minimum surface area free of rooted vegetation and with an average hydraulic retention time of more than 7 days. Lakes or reservoirs might be natural water bodies or impounded streams, usually fresh, surrounded by land or by land and a man-made retainer (e.g., a dam). Lakes or reservoirs might be fed by rivers, streams, springs, and/or local precipitation. Moribund means dying; close to death. Natural thermal stratification means the naturally occurring and/or existing division of a waterbody into horizontal layers of differing densities as a result of variations in temperature at different depths. Ocean means marine open coastal waters with a salinity greater than or Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41685 equal to 30 parts per thousand (by mass). Once-through cooling water system means a system designed to withdraw water from a natural or other water source, use it at the facility to support contact and/or noncontact cooling uses, and then discharge it to a waterbody without recirculation. Once-through cooling systems sometimes employ canals/channels, ponds, or non- waste heat from the water before it is discharged. Operational measure means a modification to any operation at a facility that serves to minimize impact to fish and shellfish from the cooling water intake structure. Examples of operational measures include, but are not limited to: reductions in cooling water intake flow through the use of variable speed pumps and seasonal flow reductions or shutdowns; and more frequent rotation of traveling screens. Phase II existing facility means any existing facility that meets the criteria specified in §125. 91. Source wafer means the waters of the U.S. from which the cooling water is withdrawn. Supplier means an entity, other than the regidated facility, that owns and operates its own cooling water intake structure and directly withdraws water from waters of the United States. The supplier sells the cooling water to other facilities for their use, but may also use a portion of the water itself. An entity that provides potable water to residentiaFpopulations [e.g., public water system) is not a supplier for purposes of this subpart. Thermocline means the middle layer of a thermally stratified lake or a reservoir. In this layer, there is a rapid change in temperatures between the top and bottom of the layer. Tidal river means the most seaward reach of a river or stream where the salinity is typically less than or equal to 0.5 parts per thousand (by mass) at a time of annual low flow and whose surface elevation responds to the effects of coastal lunar tides. §125.94 How will requirements reflecting best technology available for minimizing adverse environmental impact be established for my Phase II existing facility? (a) Compliance alternatives. You must select and implement one of the following five alternatives for establishing best technology available for minimizing adverse environmental impact at your facility: (l)(i)You may demonstrate to the Director that you have reduced, or will reduce, your flow commensurate with a closed-cycle recirculating system. In this case, you are deemed to have met the applicable performance standards and will not be required to demonstrate further that your facility meets the impingement mortality and entrainment performance standards specified in paragraph (b) of this section. In addition, you are not subject to the requirements in §§ 125.95, 125.96, 125.97, or 125.98. However, you may - "stirr"be-strtrject-tcrany morestringent requirements established under paragraph (e) of this section; or (ii) You may demonstrate to the Director that you have reduced, or will reduce, your maximum through-screen design intake velocity to 0.5 ft/s or less. In this case, you are deemed to have met the impingement mortality performance standards and will not be required to demonstrate further that your facility meets the performance standards for impingement mortality specified in paragraph (b) of this section and you are not subject to the requirements in §§ 125.95, 125.96, 125.97, or 125.98 as they apply to impingement mortality. However, you are still subject to any applicable requirements for entrainment reduction and may still be subject to any more stringent requirements established under paragraph (e) of this section. (2) You may demonstrate to the Director that your existing design and construction technologies, operational measures, and/or restoration measures meet the performance standards specified in paragraph (b) of this section and/or the restoration requirements in - paragraph- («)-ef this-seetiert;— (3) You may demonstrate to the Director that you have selected, and will install and properly operate and maintain, design and construction technologies, operational measures, and/or restoration measures that will, in combination with any existing design and construction technologies, operational measures, and/or restoration measures, meet the performance standards specified in paragraph (b) of this section and/or the restoration requirements in paragraph (c) of this section; (4) You may demonstrate to the Director that you have installed, or will install, and properly operate and maintain an approved design and construction technology in accordance with§125.99(a)or(b);or (5) You may demonstrate to the Director that you have selected, installed, and are properly operating and maintaining, or will install and properly operate and maintain design and construction technologies, operational measures, and/or restoration measures that the Director has determined to be the best technology available to minimize adverse environmental impact for your facility in accordance with paragraphs (a)(5)(i) or (ii) of this section. (i) If the Director determines that data specific to your facility demonstrate that the costs of compliance under alternatives in paragraphs (a)(2) through (4) of this section would be significantly greater than the costs considered by the Administrator for a facility like yours in establishing the applicable performance standards in paragraph (b) of this section, the Director must make a site- specific determination of the best technology available for minimizing adverse environmental impact. This determination must be based on reliable, scientifically valid cost and performance data submitted by you and any other information that the Director deems appropriate. The Director must establish site-specific alternative requirements based on new and/or existing design and construction technologies, operational measures, and/or restoration measures that achieve an efficacy that is, in the judgment of the Director, as close as practicable to the applicable performance standards in paragraph (b) of this section, without resulting in costs that are significantly greater than the costs considered by the Administrator for a facility like yours in establishing the applicable performance standards. The Director's site-specific determination may conclude that design and construction technologies, operational measures, and/or restoration measures in addition to those already in place are not justified because of the significantly greater costs. To calculate the costs considered by the Administrator for a facility like yours in establishing the applicable performance standards you must: (A) Determine which technology the Administrator modeled as the most appropriate compliance technology for your facility; (B) Using the Administrator's costing equations, calculate the annualized capital and net operation and maintenance (O&M) costs for a facility with your design intake flow using this technology; (C) Determine the annualized net revenue loss associated with net construction downtime that the Administrator modeled for your facility to install this technology; (D) Determine the annualized pilot study costs that the Administrator modeled for your facility to test and optimize this technology; (E) Sum the cost items in paragraphs (a)(5)(i)(B), (C), and (D) of this section; and 41686 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations (F) Determine if the performance standards that form the basis of these estimates (i.e., impingement mortality reduction only or impingement mortality and entrainment reduction) "afeTapplicalite to your~faciffiy,"lincnf necessary, adjust the estimates to correspond to the applicable performance standards.(ii) If the Director determines that data specific to your facility demonstrate that the costs of compliance under alternatives in paragraphs (a)(2) through (4) of this section would be significantly greater than the benefits of complying with the applicable performance standards at your facility, the Director must make a site-specific determination of best technology available for minimizing adverse environmental impact. This determination must be based on reliable, scientifically valid cost and performance data submitted by you and any other information the Director deems appropriate. The Director must establish site-specific alternative requirements based on new and/or existing design and construction technologies, operational measures, and/or restoration measures that achieve an efficacy that, in the judgment of the Director, is as close as practicable to the applicable performance standards in paragraph (b) of this section without "resulting in costs that are significantly greater than the benefits at your facility. The Director's site-specific determination may conclude that design and construction technologies, operational measures, and/or restoration measures in addition to those already in place are not justified because the costs would be significantly greater than the benefits at your facility. (b) National performance standards.—(l) Impingement mortality performance standards. If you choose compliance alternatives in paragraphs (a)(2), (a)(3), or (a)(4) of this section, you must reduce impingement mortality for all life stages of fish and shellfish by 80 to 95 percent from the calculation baseline. (2) Entrainment performance standards. If you choose compliance alternatives in paragraphs (a)(l)(ii), (a)(2), (a)(3), or (a)(4) of this section, you must also reduce entrainment of all life stages of fish and shellfish by 60 to 90 percent from the calculation baseline if: (i) Your facility has a capacity utilization rate of 15 percent or greater, and thlPTTVour facfliTy usesWblmg~wafer" withdrawn from a tidal river, estuary, ocean, or one of the Great Lakes; or (B) Your facility uses cooling water withdrawn from a freshwater river or stream and the design intake flow of your cooling water intake structures is greater than five percent of the mean annual flow. (3) Additional performance standards for facilities withdrawing from a lake Cottier than one of the Great Lakes) or a reservoir. If your facility withdraws cooling water from a lake (other than one of the Great Lakes) or a reservoir and you propose to increase the design intake flow of cooling water intake structures it uses, your increased design intake flow must not disrupt the natural thermal stratification or turnover pattern (where present) of the source water, except in cases where the disruption does not adversely affect the management of fisheries. In determining whether any such disruption does not adversely affect the management of fisheries, you must consult with Federal, State, or Tribal fish and wildlife management agencies). (4) Use of performance standards for Kite-specific determinations of best technology available. The performance standards in paragraphs (b)(l) through (3) of this section must also be used for determining eligibility for site-specific determinations of best technology available for minimizing adverse environmental impact and establishing site specific requirements that achieve -aasfficacy-.as-ciose..as_practicable to the applicable performance standards without resulting in costs that are significantly greater than those considered by the Administrator for a facility like yours in establishing the performance standards or costs that are significantly greater than the benefits at your facility, pursuant to § 125.94(a)(5). (c) Requirements for restoration measures. With the approval of the Director, you may implement and adaptively manage restoration measures that produce and result in increases of fish and shellfish in your facility's watershed in place of or as a supplement to installing design and control technologies and/or adopting operational measures that reduce impingement mortality and entrainment. You must demonstrate to the Director that: (1) You have evaluated the use of design and construction technologies and operational measures for your facility and determined that the use of restoration measures is appropriate because meeting the applicable performance standards or site-specific r^qTurements^fhrough the use~of design and construction technologies and/or operational measures alone is less feasible, less cost-effective, or less environmentally desirable than meeting the standards or requirements in whole or in part through the use of restoration measures; and (2) The restoration measures you will implement, alone or in combination with design and construction technologies and/or operational measures, will produce ecological benefits (fish and shellfish), including maintenance or protection of community structure and function in your facility's waterbody or watershed, at a level that is substantially similar to the level you would achieve by meeting the applicable performance standards under paragraph (b) of this section, or that satisfies alternative site-specific requirements established pursuant to paragraph (a)(5) of this section. (d)(l) Compliance using a technology . installation and operation plan or restoration plan. If you choose one of the compliance alternatives in paragraphs (a){2), (3), (4), or (5) of this section, you may request that compliance with the requirements of § 125.94(b) during the first permit containing requirements consistent with this subpart be determined based on whether you have complied with the construction, operational, maintenance, monitoring, and adaptive management requirements of a Technology Installation and Operation Plan developed in accordance with § 125.95(b)(4)(ii) (for any design and construction technologies and/or operational measures) and/or a Restoration Plan developed in accordance with § 125.95(b)(5) (for any restoration measures). The Technology Installation and Operation Plan must be designed to meet applicable performance standards in paragraph (b) of this section or alternative site-specific requirements developed pursuant to paragraph (a)(5) of this section. The Restoration Plan must be designed to achieve compliance with the applicable requirements in paragraph (c) of this section. (2) During subsequent permit terms, if you selected and installed design and construction technologies and/or operational measures and have been in compliance with the construction, operational, maintenance, monitoring, and adaptive management requirements of your Technology Installation and Operation Plan during the preceding permit term, you may request that compliance with the requirements of § 125.94 during the following permit term be determined based on whether you remain in compliance with your Technology Installation and Operation Plan, revised in accordance with your adaptive management plan in § 125.95(b)(4)(ii)(C) if applicable performance standards are not being Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41687 met. Each request and approval of a Technology Installation and Operation Plan shall be limited to one permit term. (3) During subsequent permit terms, if you seTeTrEecTahd installe3~fes'fofation measures and have been in compliance with the construction, operational, maintenance, monitoring, and adaptive management requirements in your Restoration Plan during the preceding permit term, you may request that compliance with the requirements of this section during the following permit term be determined based on whether you remain in compliance with your Restoration Plan, revised in accordance with your adaptive management plan in §125.95(b)(5)(v) if applicable performance standards are not being met. Each request and approval of a Restoration Plan shall be limited to one permit term. (e) More stringent standards. The Director may establish more stringent requirements as best technology available for minimizing adverse environmental impact if the Director determines that your compliance with the applicable requirements of this section would not meet the requirements of applicable State and Tribal law, or other Federal law. demonstrate to the Director based on consultation with the Nuclear Regulatory Commission that compliance with this subpart would result in a conflict with a safety requirement established by the Commission, the Director must make a site-specific determination of best technology available for minimizing adverse environmental impact that would not result in a conflict with the Nuclear Regulatory Commission's safety requirement. §125.95 As an owner or operator of a Phase II existing facility, what must I collect and submit when I apply for my reissued NPDES permit? (a)(l) You must submit to the Director the Proposal for Information Collection required in paragraph (b)(l) of this section prior to the start of information collection activities; (2) You must submit to the Director the information required in 40 CFR 122.21(r)(2), (r)(3) and (r)(5) and any applicable portions of the Comprehensive Demonstration Study Information Collection required by paragraph (b)(l) of this section; and (i) You must submit your NPDES permit application in accordance with the time frames specified in 40 CFR 122.21(d)(2). (ii) If your existing permit expires before [Insert date 4 years after date of publication in the FR], you may request that the Director establish a schedule for ~ytrn "to ~subnrrtrthe~ iirfOTrnatrorr Tequired by this section as expeditiously as practicable, but not later than [Insert date 3 years and 180 days after date of publication in the FR[. Between the time your existing permit expires and the time an NPDES permit containing requirements consistent with this subpart is issued to your facility, the best technology available to minimize adverse environmental impact will continue to be determined based on the Director's best professional judgment. (3) In subsequent permit terms, the Director may approve a request to reduce the information required to be submitted in your permit application on the cooling water intake structure(s) and the source waterbody, if conditions at your facility and in the waterbody remain substantially unchanged since your previous application. You must submit your request for reduced cooling water intake structure and waterbody application information to the Director at least one year prior to the expiration of the permit. Your request must identify each required information item in § 122.21 (r) and this section that you "Tieleilnii'neJtrasTTot~subblaiiUally changed since the previous permit application and the basis for your determination,(b) Comprehensive Demonstration Study. The purpose of the Comprehensive Demonstration Study (The Study) is to characterize impingement mortality and entrainment, to describe the operation of your cooling water intake structures, and to confirm that the technologies, operational measures, and/or restoration measures you have selected and installed, or will install, at your facility meet the applicable requirements of § 125.94. All facilities except those that have met the applicable requirements in accordance with §§ 125.94(a)(l)(i), 125.94(a)(l)(ii), and 125.94(a)(4) must submit all applicable portions of the Comprehensive Demonstration Study to the Director in accordance with paragraph (a) of this section. Facilities that meet the requirements in § 125.94(a)(l)(i) by reducing their flow commensurate with a closed-cycle, recirculating system are not required to submit a Comprehensive Demonstration Study. Facilities that meet the Tequiremerrrs-itt-§-'r25T94tff)(l}(ii) by reducing their design intake velocity to 0.5 ft/sec or less are required to submit a Study only for the entrainment requirements, if applicable. Facilities that meet the requirements in § 125.94(a)(4) and have installed and properly operate and maintain an approved design and construction technology (in accordance with § 125.99) are required to submit only the Technology Installation and Operation Plan in paragraph (b)(4) of this section and the Verification Monitoring Plan in paragraph (b)(7) of this section. Facilities that are required to meet only impingement mortality performance standards in § 125.94(b)(l) are required to submit only a Study for the impingement mortality reduction requirements. The Comprehensive Demonstration Study must include: (1) Proposal For Information Collection. You must submit to the Director for review and comment a description of the information you will use to support your Study. The Proposal for Information must be submitted prior to the start of information collection activities, but you may initiate such activities prior to receiving comment from the Director. The proposal must include: (i) A description of the proposed and/ or implemented technologies, operational measures, and/or restoration measures to be evaluated in the Study;(ii) A list and description of any historical studies characterizing impingement mortality and entrainment and/or the physical and biological conditions in the vicinity of the cooling water intake structures and their relevance to this proposed Study. If you propose to use existing data, you must demonstrate the extent to which the data are representative of current conditions and that the data were collected using appropriate quality assurance/quality control procedures; (iii) A summary of any past or ongoing consultations with appropriate Federal, State, and Tribal fish and wildlife agencies that are relevant to this Study and a copy of written comments received as a result of such consultations; and (iv) A sampling plan for any new field studies you propose to conduct in order to ensure that you have sufficient data to develop a scientifically valid estimate of impingement mortality and entrainment at your site. The sampling plan must document all methods and quality assurance/quality control procedures for sampling and data analysis. The sampling and data analysis methods you propose must be appropriate for a quantitative survey and include consideration of the methods used in other studies performed in the source waterbody. The sampling plan must include a description of the study area (including the area of influence of the cooling water intake structure(s)), and provide a 41688 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations taxonomic identification of the sampled or evaluated biological assemblages (including all life stages offish and sh_ellfish). (2) Source watef5o3y flow information. You must submit to the Director the following source waterbody flow information: (i) If your cooling water intake structure is located in a freshwater river or stream, you must provide the annual mean flow of the waterbody and any supporting documentation and engineering calculations to support your analysis of whether your design intake flow is greater than five percent of the mean annual flow of the river or stream for purposes of determining applicable performance standards under paragraph (b) of this section. Representative historical data (from a period of time up to 10 years, if available) must be used; and (ii) If your cooling water intake structure is located in a lake (other than one of the Great Lakes) or a reservoir and you propose to increase its design intake flow, you must provide a description of the thermal stratification in the waterbody, and any supporting documentation and engineering calculations to show that the total design intake flow after the increase will "nofcTisrupt the natural thermal stratification and turnover pattern in a way that adversely impacts fisheries, including the results of any consultations with Federal, State, or Tribal fish and wildlife management agencies. (3) Impingement Mortality and/or Entrainment Characterization Study. You must submit to the Director an Impingement Mortality and/or Entrainment Characterization Study whose purpose is to provide information to support the development of a calculation baseline for evaluating impingement mortality and entrainment and to characterize current impingement mortality and entrainment. The Impingement Mortality and/or Entrainment Characterization Study must include the following, in sufficient detail to support development of the other elements of the Comprehensive Demonstration Study: (i) Taxonomic identifications of all life stages of fish, shellfish, and any species protected under Federal, State, or Tribal Law (including threatened qr_ endangered species) that are in~the vicinity of the cooling water intake structure(s) and are susceptible to impingement and entrainment; (ii) A characterization of all life stages of fish, shellfish, and any species protected under Federal, State, or Tribal Law (including threatened or endangered species) identified pursuant to paragraph (b)(3)(i) of this section, mchidingj^ description of the abundance and temporal and spatial characteristics in the vicinity of the cooling water intake structure(s), based on sufficient data to characterize annual, seasonal, and diel variations in impingement mortality and entrainment [e.g., related to climate and weather differences, spawning, feeding and water column migration). These may include historical data that are representative of the current operation of your facility and of biological conditions at the site; (iii) Documentation of the current impingement mortality and entrainment of all life stages offish, shellfish, and any species protected under Federal, State, or Tribal Law (including threatened or endangered species) identified pursuant to paragraph (b)(3)(i) of this section and an estimate of impingement mortality and entrainment to be used as the calculation baseline. The documentation may include historical data that are representative of the current operation of your facility and of biological conditions at the site. Impingement mortality and entrainment samples to support the calculations required in paragraphsTr7)(4)(i)(C) and (b)(5)(iii) of this section must be collected during periods of representative operational flows for the cooling water intake structure and the flows associated with the samples must be documented; (4) Technology and compliance assessment information—(i) Design and Construction Technology Plan. If you choose to use design and construction technologies and/or operational measures, in whole or in part to meet the requirements of § 125.94(a)(2) or (3), you must submit a Design and Construction Technology Plan to the Director for review and approval. In the plan, you must provide the capacity utilization rate for your facility (or for individual intake structures where applicable, in accordance with § 125.93) and provide supporting data (including the average annual net generation of the facility (in MWh) measured over a five year period (if available) of representative operating conditions and the total net capacity of the facility (in MW)) and underlying calculations. The plan must explain the technologies and/ or operational measures youliave in place and/or have selected to meet the requirements in § 125.94. (Examples of potentially appropriate technologies may include, but are not limited to, wedgewire screens, fine mesh screens, fish handling and return systems, barrier nets, aquatic filter barrier systems, vertical and/or lateral relocation of the cooling water intake structure, and enlargement of the cooling water intake structure opening to reduce velocity. Examples of potentially appropriate operational measures may include, but are not limited to, seasonal shutdowns, reductions in flow, and continuous or more frequent rotation of traveling screens.) The plan must contain the following information: (A) A narrative description of the design and operation of all design and construction technologies and/or operational measures (existing and proposed), including fish handling and return systems, that you have in place or will use to meet the requirements to reduce impingement mortality of those species expected to be most susceptible to impingement, and information that demonstrates the efficacy of the technologies and/or operational measures for those species; (B) A narrative description of the design and operation of all design and construction technologies and/or operational measures (existing and proposed) that you have in place or will use to meet the requirements to reduce entrainment of those species expected to be the most susceptible to entrainment, if applicable, and information that demonstrates the efficacy of the technologies and/or operational measures for those species; (C) Calculations of the reduction in impingement mortality and entrainment of all life stages of fish and shellfish that would be achieved by the technologies and/or operational measures you have selected based on the Impingement Mortality and/or Entrainment Characterization Study in paragraph (b)(3) of this section. In determining compliance with any requirements to reduce impingement mortality or entrainment, you must assess the total reduction in impingement mortality and entrainment against the calculation baseline determined in accordance with paragraph (b)(3) of this section. Reductions in impingement mortality and entrainment from this calculation baseline as a result of any design and construction technologies and/or operational measures already implemented at your facility should be added to the reductions expected to be achieved by any additional design and/ or construction technologies and operational measures that will be implemented, and any increases in fish and shellfish within the waterbody attributable to your restoration measures. Facilities that recirculate a portion of their flow, but do not reduce Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41689 flow sufficiently to satisfy the compliance option in §125.94(a)(l)(i) ""may tHk:e~Tnt0'ancoTmtthe reductnjrrriT~ impingement mortality and entrainment associated with the reduction in flow when determining the net reduction associated with existing design and construction technologies and/or operational measures. This estimate must include a site-specific evaluation of the suitability of the technologies and/or operational measures based on the species that are found at the site, and may be determined based on representative studies (i.e.. studies that have been conducted at a similar facility's cooling water intake structures located in the same waterbody type with similar biological characteristics) and/or site-specific technology prototype or pilot studies; and (D) Design and engineering calculations, drawings, and estimates prepared by a qualified professional to support the descriptions required by paragraphs (b)(4)(i)(A) and (B) of this section.(ii) Technology Installation and Operation Plan. If you choose the compliance alternative in §125.94(a)(2), (3), (4), or (5) and use design and ""construction teuhuolugies and/oi operational measures in whole or in part to comply with the applicable requirements of § 125.94, you must submit the following information with your application for review and approval by the Director: (A) A schedule for the installation and maintenance of any new design and construction technologies. Any downtime of generating units to accommodate installation and/or maintenance of these technologies should be scheduled to coincide with otherwise necessary downtime (e.g., for repair, overhaul, or routine maintenance of the generating units) to the extent practicable. Where additional downtime is required, you may coordinate scheduling of this downtime with the North American Electric Reliability Council and/or other generators in your area to ensure that impacts to reliability and supply are minimized; (B) List of operational and other parameters to be monitored, and the location and frequency that you will monitor them; (C) List of activities you will irndeilake lo unsure tu llie degreB practicable the efficacy of installed design and construction technologies and operational measures, and your schedule for implementing them; (D) A schedule and methodology for assessing the efficacy of any installed design and construction technologies and operational measures in meeting applicable performance standards or site-specific requirements, including an "adaptive" managErneTTtrptarforrevising design and construction technologies, operational measures, operation and maintenance requirements, and/or monitoring requirements if your assessment indicates that applicable performance standards or site-specific requirements are not being met; and (E) If you choose the compliance alternative in § 125.94(a)(4), documentation that the appropriate site conditions in § 125.99(a) or (b) exist at your facility. (5) Restoration Plan. If you propose to use restoration measures, in whole or in part, to meet the applicable requirements in § 125.94, you must submit the following information with your application for review and approval by the Director. You must address species of concern identified in consultation with Federal, State, and Tribal fish and wildlife management agencies with responsibility for fisheries and wildlife potentially affected by your cooling water intake structure(s). (i) A demonstration to the Director that you have evaluated the use of design and construction technologies —and/ar-epeTatkrttatiReasures-for your facility and an explanation of how you determined that restoration would be more feasible, cost-effective, or environmentally desirable; (ii) A narrative description of the design and operation of all restoration measures (existing and proposed) that you have in place or will use to produce fish and shellfish; (iii) Quantification of the ecological benefits of the proposed restoration measures. You must use information from the Impingement Mortality and/or Entrainment Characterization Study required in paragraph (b)(3) of this section, and any other available and appropriate information, to estimate the reduction in fish and shellfish impingement mortality and/or entrainment that would be necessary for your facility to comply with § 125.94(c)(2). You must then calculate the production of fish and shellfish that you will achieve with the restoration measures you will or have already installed. You must include a discussion of the nature and magnitude of uncertainty associated with the perfonrrance^ofthese restoration measures. You must also include a discussion of the time frame within which these ecological benefits are expected to accrue; (iv) Design calculations, drawings, and estimates to document that your proposed restoration measures in combination with design and construction technologies and/or operational measures, or alone, will meet the requirements of § 125.94(c)(2). If the restoration measures address the same fish and shellfish species identified in the Impingement Mortality and/or Entrainment Characterization Study (in-kind restoration), you must demonstrate that the restoration measures will produce a level of these fish and shellfish substantially similar to that which would result from meeting applicable performance standards in § 125.94(b), or that they will satisfy site- specific requirements established pursuant to § 125.94(a)(5). If the restoration measures address fish and shellfish species different from those identified in the Impingement Mortality and/or Entrainment Characterization Study (out-of-kind restoration), you must demonstrate that the restoration measures produce ecological benefits substantially similar to or greater than those that would be realized through in- kind restoration. Such a demonstration should be based on a watershed approach to restoration planning and ' consider applicable multi-agency watershed restoration plans, site- specific peer-reviewed ecological studies, and/or consultation with appropriate Federal, State, and Tribal fish and wildlife management agencies. (v) A plan utilizing an adaptive management method for implementing, maintaining, and demonstrating the efficacy of the restoration measures you have selected and for determining the extent to which the restoration measures, or the restoration measures in combination with design and construction technologies and operational measures, have met the applicable requirements of § 125.94(c)(2). The plan must include: (A) A monitoring plan that includes a list of the restoration parameters that will be monitored, the frequency at which you will monitor them, and success criteria for each parameter; (B) A list of activities you will undertake to ensure the efficacy of the restoration measures, a description of the linkages between these activities and the items in paragraph (b)(5)(v)(A) of this section, and an implementation schedule; and (C) A process for revising the Restoration Plan as new information, including monitoring data, becomes available, if the applicable requirements under § 125.94(c)(2) are not being met. (vi) A summary of any past or ongoing consultation with appropriate Federal, State, and Tribal fish and wildlife management agencies on your use of restoration measures including a copy of 41690 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations any written comments received as a - -resittt-ef-stteh-eensttltatiens; (vii) If requested by the Director, a peer review of the items you submit for the Restoration Plan. You must choose the peer reviewers in consultation with the Director who may consult with EPA and Federal, State, and Tribal fish and wildlife management agencies with responsibility for fish and wildlife potentially affected by your cooling water intake structure(s). Peer reviewers must have appropriate qualifications (e.g., in the fields of geology, engineering, and/or biology, etc.) depending upon the materials to be reviewed; and (viii) A description of the information to be included-in a bi-annual status report to the Director. (6) Information to support site- specific determination of best technology available for minimizing adverse environmental impact. If you have requested a site-specific determination of best technology available for minimizing adverse environmental impact piirsuant to § 125.94(a)(5)(i) because of costs significantly greater than those consicIeredTjy the AdministratorTor a facility like yours in establishing the applicable performance standards of § 125.94(b), you are required to provide to the Director the information specified in paragraphs (b)(6)(i) and (b)(6)(iii) of this section. If you have requested a site- specific determination of best technology available for minimizing adverse environmental impact pursuant to §125.94(a)(5)(ii) because of costs significantly greater than the benefits of meeting the applicable performance standards of § 125.94(b) at your facility, you must provide the information specified in paragraphs (b)(6)(i), (b)(6)(ii), and (b)(6)(iii) of this section: (i) Comprehensive Cost Evaluation Study. You must perform and submit the results of a Comprehensive Cost Evaluation Study, that includes: (A) Engineering cost estimates in sufficient detail to document the costs of implementing design and construction technologies, operational measures, and/or restoration measures at your facility that would be needed to meet the applicable performance -standar-ds-ai'4-125,94(b); (B) A demonstration that the costs documented in paragraph (b)(6)(i)(A) of this section significantly exceed either those considered by the Administrator for a facility like yours in establishing the applicable performance standards or the benefits of meeting the applicable performance standards at your facility; and (C) Engineering cost estimates in - suffieient-detail-te-doeume&t--the costs of implementing the design and construction technologies, operational measures, and/or restoration measures in your Site-Specific Technology Plan developed in accordance with paragraph (b)(6)(iii) of this section. (ii) Benefits Valuation Study. If you are seeking a site-specific determination of best technology available for minimizing adverse environmental impact because of costs significantly greater than the benefits of meeting the applicable performance standards of § 125.94(b) at your facility, you must use a comprehensive methodology to fully value the impacts of impingement mortality and entrainment at your site and the benefits achievable by meeting the applicable performance standards. In addition to the valuation estimates, the benefit study must include the following: (A) A description of the methodology(ies) used to value commercial, recreational, and ecological benefits (including any non-use benefits, if applicable); (B) Documentation of the basis for any "'"assuinpHons'anTquantitative estimates. If you plan to use an entrainment survival rate other than zero, you must submit a determination of entrainment survival at your facility based on a study approved by the Director; (C) An analysis of the effects of significant sources of uncertainty on the results of the study; and (D) If requested by the Director, a peer review of the items you submit in the Benefits Valuation Study. You must choose the peer reviewers in consultation with the Director who may consult with EPA and Federal, State, and Tribal fish and wildlife management agencies with responsibility for fish and wildlife potentially affected by your cooling water intake structure. Peer reviewers must have appropriate qualifications depending upon the materials to be reviewed. (E) A narrative description of any non-monetized benefits that would be realized at your site if you were to meet the applicable performance standards and a qualitative assessment of their - jnagnitude-and-significanGe, (iii) Site-Specific Technology Plan. Based on the results of the Comprehensive Cost Evaluation Study required by paragraph (b)(6)(i) of this section, and the Benefits Valuation Study required by paragraph (b)(6)(ii) of this section, if applicable, you must submit a Site-Specific Technology Plan to the Director for review and approval. The plan must contain the following information: (A) A narrative description of the design and operation of all existing and proposed design and construction technologies, operational measures, and/or restoration measures that you have selected in accordance with §125.94(a)(5); (B) An engineering estimate of the efficacy of the proposed and/or implemented design and construction technologies or operational measures, and/or restoration measures. This estimate must include a site-specific evaluation of the suitability of the technologies or operational measures for reducing impingement mortality and/or entrainment (as applicable) of all life stages of fish and shellfish based on representative studies (e.g., studies that have been conducted at cooling water intake structures located in the same waterbody type with similar biological characteristics) and, if applicable, site- specific technology prototype or pilot studies. If restoration measures will be used, you must provide a Restoration Plan that includes the elements described in paragraph (b)(5) of this section. (C) A demonstration that the proposed and/or implemented design and construction technologies, operational measures, and/or restoration measures achieve an efficacy that is as close as practicable to the applicable performance standards of § 125.94(b) without resulting in costs significantly greater than either the costs considered by the Administrator for a facility like yours in establishing the applicable performance standards, or as appropriate, the benefits of complying with the applicable performance standards at your facility; (D) Design and engineering calculations, drawings, and estimates prepared by a qualified professional to support the elements of the Plan. (7) Verification Monitoring Plan. If you comply using compliance alternatives in §125.94(a)(2), (3), (4), or (5) using design and construction technologies and/or operational measures, you must submit a plan to conduct, at a minimum, two years of monitoring to verify the full-scale performance of the proposed or already implemented technologies and/or operational measures. The verification study must begin once the design and construction technologies and/or operational measures are installed and continue for a period of time that is sufficient to demonstrate to the Director whether the facility is meeting the applicable performance standards in § 125.94(b) or site-specific requirements "Federal "Register/Voi:^69; NoTT.31^FrWayrluty 9, 2004/Rules and Regulations 41691 developed pursuant to § 125.94(a)(5). The plan must provide the following: (i) Description of the frequency and duration of monitoring, the parameters to be monitored, and the basis for determining the parameters and the frequency and duration for monitoring. The parameters selected and duration and frequency of monitoring must be consistent with any methodology for assessing success in meeting applicable performance standards in your Technology Installation and Operation Plan as required by paragraph (b)(4)(ii) of this section. (ii) A proposal on how naturally moribund fish and shellfish that enter the cooling water intake structure would be identified and taken into account in assessing success in meeting the performance standards in § 125.94(b). (iii)A description of the information to be included in a bi-annual status report to the Director. " §T25;56~~As an owner or operator oTa Phase II existing facility, what monitoring must I perform? As an owner or operator of a Phase II existing facility, you must perform monitoring, as applicable, in accordance with the Technology Installation and Operation Plan required by § 125.95(b)(4)(ii), the Restoration Plan required by § 125.95(b)(5), the Verification Monitoring Plan required by § 125.95(b)(7), and any additional monitoring specified by the Director to demonstrate compliance with the applicable requirements of § 125.94. §125.97 As an owner or operator of a Phase II existing facility, what records must I keep and what information must I report? As an owner or operator of a Phase II existing facility you are required to keep records and report information and data to the Director as follows: (a) You must keep records of all the data used to complete the permit application and show compliance with the requirements of § 125.94, any - snp-plementa-Hnformfttten developed under § 125.95, and any compliance monitoring data submitted under § 125.96, for a period of at least three (3) years from date of permit issuance. The Director may require that these records be kept for a longer period. (b) You must submit a status report to the Director for review every two years that includes appropriate monitoring data and other information as specified by the Director in accordance with §125.98(b){5). § 125.98 As the Director, what must I do to comply with the requirements of this subpart? (a) Permit application. As the Director, you must review materials submitted by the applicant under 40 CFR 122.21(r) and § 125.95 before each permit renewal or reissuance. (1) You must review and comment on the Proposal for Information Collection submitted by the facility in accordance with § 125.95(a)(l). You are encouraged to provide comments expeditiously so that the permit applicant can make responsive modifications to its information gathering activities. If a facility submits a request in accordance with § 125.95{a)(2)(ii) for an alternate schedule for submitting the information required in § 125.95, you must approve a schedule that is as expeditious as practicable, but does not extend beyond January 7, 2008. If a facility submits a request in accordance with § 125.95(a)(3) to reduce the information about their cooling water intake structures and the source waterbody required to be submitted in their permit application (other than with the first permit application after September 7, 2004), you must approve the request within 60 days if conditions at the facility and in the waterbody remain substantially unchanged since the previous application. (2) After receiving the permit application from the owner or operator of a Phase II existing facility, you must determine which of the requirements specified in § 125.94 apply to the facility. In addition, you must review materials to determine compliance with the applicable requirements. (3) At each permit renewal, you must review the application materials and monitoring data to determine whether new or revised requirements for design and construction technologies, operational measures, or restoration measures should be included in the permit to meet the applicable performance standards in § 125.94(b) or alternative site-specific requirements established pursuant to §125.94(a)(5). (b) Permitting requirements. Section -ai6lbl_rfiqmrements_araimplemented for a facility through an NPDES permit. As the Director, you must consider the information submitted by the Phase II existing facility in its permit application, and determine the appropriate requirements and conditions to include in the permit based on the compliance alternatives in § 125.94(a). The following requirements must be included in each permit: (1) Cooling water intake structure requirements. The permit conditions must include the requirements that implement the applicable provisions of § 125.94. You must evaluate the performance of the design and construction technologies, operational measures, and/or restoration measures proposed and implemented by the facility and require additional or different design and construction technologies, operational measure, and/ or restoration measures, and/or improved operation and maintenance of existing technologies and measures, if needed to meet the applicable performance standards, restoration requirements, or alternative site-specific requirements. In determining compliance with the performance standards for facilities proposing to increase withdrawals of cooling water from a lake (other than a Great Lake) or a reservoir in § 125.94(b)(3), you must consider anthropogenic factors (those not considered "natural") unrelated to the Phase II existing facility's cooling water intake structures that can influence the occurrence and location of a thermocline. These include source water inflows, other water withdrawals, managed water uses, wastewater discharges, and flow/level management practices (e.g., some reservoirs release water from deeper bottom layers). As the Director, you must coordinate with appropriate Federal, State, or Tribal fish and wildlife management agencies to determine if any disruption of the natural thermal stratification resulting from the proposed increased withdrawal of cooling water does not adversely affect the management of fisheries. Specifically: (i) You must review and approve the Design and Construction Technology Plan required in § 125.95{b)(4) to evaluate the suitability and feasibility of the design and construction technology and/or operational measures proposed to meet the performance standards in § 125.94(b) or site-specific requirements developed pursuant to § 125.94(a)(5). (ii) If the facility proposes restoration measures in accordance with § 125.94(c), you must review and approve the Restoration Plan required under § 125.95(b)(5) to determine whether the proposed measures, alone or in combination with design and construction technologies and/or operational measures, will meet the requirements under § 125.94(c). (iii) In each reissued permit, you must include a condition in the permit requiring the facility to reduce impingement mortality and entrainment (or to increase fish production, if applicable) commensurate with the efficacy at the facility of the installed design and construction technologies, 41692 Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations operational measures, and/or restoration measures. (iv) If the facility implements design and construction technologies and/or operational measures and requests that compliance with the requirements in § 125.94 be measured for the first permit term (or subsequent permit terms, if applicable) employing the Technology Installation and Operation Plan in accordance with § 125.95(b)(4)(ii), you must review the Technology Installation and Operation Plan to ensure it meets the requirements of § 125.95(b)(4)(ii). If the Technology Installation and Operation Plan meets the requirements of § 125.95(b)(4)(ii), you must approve the Technology Installation and Operation Plan and require the facility to meet the terms of the plan including any revision to the plan that may be necessary if applicable performance standards or alternative site-specific requirements are not being met. If the facility implements restoration measures and requests that compliance with the requirements in § 125.94 be "fneasuredrtbTTrlelirst permit term for subsequent permit terms, if applicable) employing a Restoration Plan in accordance with § 125.95(b)(5), you must review the Restoration Plan to ensure it meets the requirements of § 125.95(b)(5). If the Restoration Plan meets the requirements of § 125.95(b)(5), you must approve the plan and require the facility to meet the terms of the plan including any revision to the plan that may be necessary if applicable performance standards or site-specific requirements are not being met. In determining whether to approve a Technology Installation and Operation Plan or Restoration Plan, you must evaluate whether the design and construction technologies, operational measures, and/or restoration measures the facility has installed, or proposes to install, can reasonably be expected to meet the applicable performance standards in § 125.94(b), restoration requirements in § 125.94(c)(2), and/or alternative site-specific requirements established pursuant to §125.94(a)(5), and whether the Technology Installation and Operation Plan and/or Restoration Plan complies with the applicable requirements of § 125.95(b). In reviewing the Technology Installation and Operation Plan, you must approve any reasonable scheduling provisions that are designed to ensure that impacts to energy reliability and supply are minimized, in accordance with § 125.95(b)(4)(ii)(A). If the facility does not request that compliance with the requirements in § 125.94 be measured employing a Technology Installation and Operation Plan and/or Restoration Plan, or the facility has not been in compliance with the terms of its current Technology Installation and Operation Plan and/or Restoration Plan during the preceding permit term, you must require the facility to comply with the applicable performance standards in § 125.94(b), restoration requirement in § 125.94(c)(2), and/or alternative site- specific requirements developed pursuant to § 125.94(a)(5). In considering a permit application, you must review the performance of the design and construction technologies, operational measures, and/or restoration measures implemented and require additional or different design and construction technologies, operational measures, and/or restoration measures, and/or improved operation and maintenance of existing technologies and measures, if needed to meet the applicable performance standards, restoration requirements, and/or alternative site-specific requirements. (v) You must review and approve the ._pri)piis£dJ&rifkmtkmJsilariitDjing Plan submitted under § 125.95(b)(7) (for design and construction technologies) and/or monitoring provisions of the Restoration Plan submitted under § 125.95(b)(5)(v) and require that the monitoring continue for a sufficient period of time to demonstrate whether the design and construction technology, operational measures, and/or restoration measures meet the applicable performance standards in § 125.94(b), restoration requirements in 125.94(c)(2) and/or site-specific requirements established pursuant to § 125.94(a)(5). (vi) If a facility requests requirements based on a site-specific determination of best technology available for minimizing adverse environmental impact, you must review the application materials submitted under § 125.95(b)(6) and any other information you may have, including quantitative and qualitative benefits, that would be relevant to a determination of whether alternative requirements are appropriate for the facility. If a facility submits a study to support entrainment survival at the facility, you must review and -aprjrovejhe-results jjfJhaLsludy. If you determine that alternative requirements are appropriate, you must make a site- specific determination of best technology available for minimizing adverse environmental impact in accordance with § 125.94(a)(5). You, as the Director, may request revisions to the information submitted by the facility in accordance with § 125.95(b)(6) if it does not provide an adequate basis for you to make this determination. Any alternative site-specific requirements established based on new and/or existing design and construction technologies, operational measures, and/or restoration measures, must achieve an efficacy that is, in your judgement, as close as practicable to the applicable performance standards of § 125.94(b) without resulting in costs that are significantly greater than the costs considered by the Administrator for a like facility in establishing the applicable performance standards in § 125.94(b), determined in accordance with § 125.94(a)(5)(i)(A) through (F), or the benefits of complying with the applicable performance standards at the facility; and (vii) You must review the proposed methods for assessing success in meeting applicable performance standards and/or restoration requirements submitted by the facility under § 125.95(b)(4)(ii)(D) and/or (b)(5)(v)(A), evaluate those and other available methods, and specify how assessment of success in meeting the performance standards and/or restoration requirements must be determined including the averaging period for determining the percent reduction in impingement mortality and entrainment and/or the production of fish and shellfish. Compliance for facilities who request that compliance be measured employing a Technology Installation and Operation Plan and/or Restoration Plan must be determined in accordance with § 125.98(b)(l)(iv). (2) Monitoring conditions. You must require the facility to perform monitoring in accordance with the Technology Installation and Operation Plan in § 125.95(b)(4)(ii), the Restoration Plan required by § 125.95(b)(5), if applicable, and the Verification Monitoring Plan required by § 125.95(b)(7). In determining any additional applicable monitoring requirements in accordance with § 125.96, you must consider the monitoring facility's Verification Monitoring, Technology Installation and Operation, and/or Restoration Plans, as appropriate. You may modify the monitoring program based on changes in physical or biological conditions in the vicinity of the cooling water intake structure. (3) Eecordkeeping and reporting. At a minimum, the permit must require the facility to report and keep records specified in §125.97. (4) Design and construction technology approval—(i) For a facility that chooses to demonstrate that it has installed and properly operate and maintain a design and construction technology approved in accordance with § 125.99, the Director must review Federal Register/Vol. 69, No. 131/Friday, July 9, 2004/Rules and Regulations 41693 and approve the information submitted in the Technology Installation and Operation Plan in § 125.95(b)(4)(ii) and determine if it meets the criteria in §125.99. (ii) If a person requests approval of a technology under § 125.99(b), the Director must review and approve the information submitted and determine its suitability for widespread use at facilities with similar site conditions in its jurisdiction with minimal study. As - the Direetor-f-yow-mwst-evaluate-the— adequacy of the technology when installed in accordance with the required design criteria and site conditions to consistently meet the performance standards in § 125.94. You, as the Director, may only approve a technology following public notice and consideration of comment regarding such approval. (5) Bi-annual status report. You must specify monitoring data and other information to be included in a status report every two years. The other information may include operation and maintenance records, summaries of adaptive management activities, or any other information that is relevant to determining compliance with the terms of the facility's Technology Operation and Installation Plan and/or Restoration Plan. § 125.99 What are approved design and construction technologies? (a) The following technologies constitute approved design and construction technologies for purposes of §125.94(a)(4): (1) Submerged cylindrical wedge-wire screen technology, if you meet the following conditions: (1) Your cooling water intake structure is located in a freshwater river or stream; —(ii) ^ouf-eeoimg-water-mtake structure is situated such that sufficient ambient counter currents exist to promote cleaning of the screen face; (iii)Your maximum through-screen design intake velocity is 0.5 ft/s or less; (iv) The slot size is appropriate for the size of eggs, larvae, and juveniles of all fish and shellfish to be protected at the site; and (v) Your entire main condenser cooling water flow is directed through the technology. Small flows totaling less than 2 MGD for auxiliary plant cooling uses are excluded from this provision. (2) A technology that has been approved in accordance with the process described in paragraph (b) of this section. (b) You or any other interested person may submit a request to the Director that a technology be approved in accordance with the compliance alternative in § 125.94(a)(4) after providing the public with notice and an opportunity to comment on the request for approval of the technology. If the Director approves the technology, it may be used by all facilities with similar site conditions under the Director's jurisdiction. Requests for approval of a technology must be submitted to the Director and include the following information: (1) A detailed description of the technology; (2) A list of design criteria for the technology and site characteristics and conditions that each facility must have in order to ensure that the technology can consistently meet the appropriate impingement mortality and entrainment performance standards in § 125.94(b); and (3) Information and data sufficient to demonstrate that facilities under the jurisdiction of the Director can meet the applicable impingement mortality and entrainment performance standards in § 125.94(b) if the applicable design criteria and site characteristics and conditions are present at the facility. [FR Doc. 04-4130 Filed 7-8-04; 8:45 am] BILLING CODE 6560-50-P June 13,2006 Testimony & additional documentation for the administrative record* David Hogan, Urban Wildlands Program Director Center for Biological Diversity City of Carlsbad and Housing and Redevelopment Commission Meeting Agenda Joint Special Meeting Item AB #18,602 - Development Plan and Desalination Plant Project The Center for Biological Diversity is a non-profit environmental organization dedicated to the conservation of endangered species and habitats. The purpose of this testimony is to reiterate the Center's opposition to the City of Carlsbad's proposed desalination project because project will result in many significant unnecessary impacts to the environment and human health, and environmental review documents for the project are deeply and legally flawed The Center and several other environmental organizations have submitted a detailed joint comment letter on the draft environmental impact report for the project. In summary, the project and environmental analysis are flawed for the following reasons and others: • The EIR's project description and alternatives analysis is unreasonably narrow and therefore inadequate to provide for a fully informed decision, especially with regard to consideration of wastewater reclamation, water conservation, and utilization of beach wells or infiltration galleries for source water; • The EIR's discussion and conclusions on the significance of entrainment and impingement of marine life is misleading and metope of impacts is too narrow; • The EIR's discussion and conclusions on growth inducing impacts are inadequate; • The impacts of the discharge of cleaning solution is not adequately addressed in the EIR and the analysis of impacts is inadequate; • The EIR's cumulative effects analysis does not adequately address energy demand, marine life mortality, and growth inducing impacts; and • The EIR does not adequately address the effects of the product drinking water quality on human health especially with respect to Boron. The EIR's inadequate treatment of the growth-inducing effects of the project warrants special attention. The document ultimately appears to suggest, without stating directly, that growth is not really growth if it is planned growth. Following this strange logic, new water supplies cannot induce new growth if this new growth has been anticipated in any number of regional water and land use planning documents. According to the California Environmental Quality Act, irrespective of whether growth is planned or unplanned, the EIR must fully analyze any growth attributable to the creation of the new water supply which would be generated by the desalination plant. The EIR for the Carlsbad desalination plant is entirely schizophrenic on this subject. On one hand the document essentially concludes that the facility may cause additional growth but that this is too speculative to reasonably assess impacts. On the other hand, the document strongly implies but never expressly states that the project will not induce new growth. Either way, the document entirely fails to address any suitable and feasible mitigation measures to support the statement of overriding considerations as required by CEQA. Based on this, the statement of overriding considerations for this project is not supported by law and we ask that you direct staff to work with us to identify suitable mitigation such as impact fees or other mechanisms to contribute to regional solutions for habitat conservation, transportation, and other important issues. * Attached Seaby, R.M.H., 2004. Notes on the South Bay Power Plant 316a & b application. Pisces Conservation Ltd. 27pp. ### Notes on the South Bay Power Plant (SBPP) 316 a & b application R M H Seaby Version 3 29 July 2004 PISCES CONSERVATION LTD IRC HOUSE THE SQUARE PENNINGTON LYMINGTON SO418GN ENGLAND PlSCES@IRCHOUSE.DEMON.CO.UK WWW.IRCHOUSE.DEMON.CO.UK PHONE 44 (O) 1 59O 676622 FAX 44 (O) 159O 675599 Aim: to identify the main ecological issues arising from the 316 a & b reports by South Bay Power Plant. Pisces Conservation Ltd. reviewed the studies prepared by Duke entitled South Bay Power Plant Cooling Water System Effects on San Diego Bay (Volume I and II). Specifically, Pisces was asked to review whether the studies justify findings for compliance under section 316(a) and (b) - new and old rules - of the Clean Water Act. In this document we highlight areas of concern that we identified from the Duke 316 studies. The EPA has long recognised that some habitats are far more sensitive than others to the effect of cooling water extraction, and has noted the particular vulnerability of estuaries and the littoral zone. A key aspect of any argument in favour of closed-cycle cooling or other technology must be the reduction of the ecological impacts caused by direct cooling. It is therefore essential that those favouring the introduction of new technologies establish that the existing direct-cooled power plant does have a detrimental effect. To some extent this is clear as we have direct observational evidence of entrainment and impingement mortality and the effect of the discharge on the localised environment. However, the spatial extent of the impact and the longer-term effects on populations are less clear as the biological studies have not been undertaken in a way that is likely to reveal them. However, as will be developed below, there are reasonable grounds for suspecting that the impact may have been greater than the negligible levels claimed. The evidence in favour of an appreciable effect is reviewed below. Table of Contents Executive Summary 4 Ability to meet New 316 (b) Requirements 5 Ability to Meet Old 316(b) Requirements 6 Impacts Related to Effluent Discharge 9 Duke Study Fails to Fully Assess the Impact of Chlorine in Discharge 9 Effect on the Fish Fauna of the Discharge Area 10 Duke Study Understates Impact of Copper in Discharge 10 Duke Study Fails to Adequately Assess Impact of Severe Eelgrass Damage 11 Benthic Studies Are Crucial to Determining Ecological Impact of SBPP 15 A Very High Percentage of the Volume of the Bay Affected 17 Impingement and Entrainment 18 Duke Study Does Not Adequately Assess Impact to Non-commercial and Non- target Fish 18 Surplus Production Does Not Discount for Data Showing Loss of Production and High Mortality Rates for Larval Fish 21 Another Fallacy of the Theory of Surplus Production - What Feeds on Larval Fish? 25 References 27 Executive Summary This report presents a response to Duke South Bay Power Plant (SBPP)'s 316 (a) and (b) reports in the context of actual and potential damage to the ecosystem of San Diego Bay. In our opinion SBPP do not meet the standards required for 316(a) and either the new or the old 316 (b) regulations. The SBPP extracts a significant portion of the volume of the South San Diego Bay each day (approximately 20%), and is capable of extracting the entire seawater contents of San Diego Bay in approx 62 days. We demonstrate that SBPP has had and is having an Adverse Environmental Impact and has failed on most of the steps required to avoid an Adverse Environmental Impact as defined by the EPA. Impacts of the SBPP are related to a) impingement of animals on filter screens, b) entrainment in the cooling water flow, c) temperature of outfall water, d) biocide content of outfall water, d) leachate content of outfall water, e) collection of dead animals, f) attraction of predators & scavengers, g) oxygen content of outfall water, h) increased sediment load. About 10% of the eelgrass in the Bay has already been lost and it is likely that a larger area still is growing and reproducing sub-optimally. Eelgrass is a very important component of the Bay ecosystem both in terms of habitat creation and food provision, especially for endangered least terns Sterna antillamm and halibut Paralichthys californicus. The distribution and abundance of nematode and oligochaetes indicates that the ecosystem near the outfall already has reduced biodiversity and is highly stressed. As much as 27% of some larval fish are currently entrained by the SBPP - impacts of this magnitude are unsustainable. Chlorine biocide concentrations well below permitted levels are known to damage bacterial and photosynthetic activity and to kill or suppress reproduction in zooplankton. Detrimental impacts on the populations of a species can have ramifications for all the other species that interact with them, be they prey, predator, parasite or competitor. These effects might not be directly or easily quantifiable. This report also refutes the often-quoted concept of surplus production - that natural populations exhibit a huge potential to sustain cropping and therefore can withstand the losses caused by the operation of the plant. We maintain that this argument fallaciously rests on principles developed in agricultural and domestic scenarios and have no relevance in nature where natural variability plays a central part in determining populations. We conclude that SBPP is not in compliance with 316(a) and (b) - old and new rules - of the Clean Water Act. Ability to Meet New 316 (b) Requirements To meet the new 316 b regulations for existing facilities, the applicant can either demonstrate that certain performance standards are reached or alternatively a site- specific determination can be undertaken to demonstrate BTA. Performance Standards. (1) You must reduce your intake capacity to a level commensurate with the use of a closed-cycle, recirculating cooling system; or (2) You must reduce impingement mortality of all life stages offish and shellfish by 80 to 95 percent from the calculation baseline if your facility has a capacity utilization rate less than 15 percent, or your facility's design intake flow is 5 percent or less of the mean annual flow from a freshwater river or stream; or (3) You must reduce impingement mortality of all life stages offish and shellfish by 80 to 95 percent from the calculation baseline, and you must reduce entrainment of all life stages of fish and shellfish by 60 to 90 percent from the calculation baseline if your facility has a capacity utilization rate of 15 percent or greater and withdraws cooling water from a tidal river or estuary, from an ocean, from one of the Great Lakes, or your facility's design intake flow is greater than 5 percent of the mean annual flow of a freshwater river or stream; or (4) If your facility withdraws cooling water from a lake (other than one of the Great Lakes) or reservoir: (i) You must reduce impingement mortality of all life stages offish and shellfish by 80 to 95 percent from the calculation baseline; and (ii) If you propose to increase your facility's design intake flow, your increased flow must not disrupt the natural thermal stratification or turnover pattern (where present) of the source water, except in cases where the disruption is determined by any Federal, State or Tribal fish or wildlife management agency(ies) to be beneficial to the management of fisheries. Federal Water Pollution Control Act, as amended though PL 2002 In the case of the SBPP proposal, if the performance standard approach is chosen then they must either reach closed-cycle levels of impact or reduce impingement mortality by 80 to 95 % and reduce entrainment of all life stages offish and shellfish by 60 to 90 %. Site-Specific Determination of Best Technology Available. (I) If you choose this alternative you must demonstrate to the Director that your costs of compliance with the applicable performance standards in paragraph (b) of this section would be significantly greater than the costs considered by the Administrator when establishing such performance standards, or that your costs would be significantly greater than the benefits of complying with such performance standards at your site. (2) If data specific to your facility indicate that your costs would be significantly greater than those considered by the Administrator in establishing the applicable performance standards, the Director shall make a site specific determination of best technology available for minimizing adverse environmental impact that is based on less costly design and construction technologies, operational measures, and/or restoration measures to the extent justified by the significantly greater cost. The Director's site-specific determination may conclude that design and construction technologies, operational measures, and/or restoration measures in addition to those already in place are not justified because of significantly greater costs. (3) If data specific to your facility indicate that your costs would be significantly greater than the benefits of complying with such performance standards at your facility, the Director shall make a site-specific determination of best technology available for minimizing adverse environmental impact that is based on less costly design and construction technologies, operational measures, and/or restoration measures to the extent justified by the significantly greater costs. The Director's site-specific determination may conclude that design and construction technologies, operational measures, and/or restoration measures in addition to those already in place are not justified because the costs would be significantly greater than the benefits at your facility. Based on the data presented in the Duke studies, we conclude that the SBPP fails to meet the performance standard approach since the plant is not operating at closed- cycle levels of impact or reducing their impingement mortality by 80 to 95 % and reducing entrainment of all life stages offish and shellfish by 60 to 90 %. As a result, we assume that in order for SBPP to come into compliance, it will have to seek a site- specific determination of best available technology. Ability to Meet Old 316(b) Requirements U.S. EPA provided notes on how to assess an intake under the old 316(b) rules. (Quotes in this section are taken from Guidance For Evaluating The Adverse Impact Of Cooling Water Intake Structures On The Aquatic Environment: Section 316(B) P. L. 92-500 U.S. Environmental Protection Agency, 1977). If the intake is shown to have a high impact on the environment as argued above, and as outlined in the EPA definition of an Adverse Impact, then steps must be taken to reduce its impact. Adverse Environmental Impact Adverse aquatic environmental impacts occur whenever there will be entrainment or impingement damage as a result of the operation of a specific cooling water intake structure. The critical question is the magnitude of any adverse impact. The magnitude of an adverse impact should be estimated both in terms of short-term and long-term impact with reference to the following factors: (1) Absolute damage (# offish impinged or percentage of larvae entrained on a monthly or yearly basis); (2) Percentage damage (% of fish or larvae in existing populations which will be impinged or entrained, respectively); (3) Absolute and percentage damage to any endangered species; (4) Absolute and percentage damage to any critical aquatic organism; (5) Absolute and percentage damage to commercially valuable and/or sport fisheries yield; or (6) Whether the impact would endanger (jeopardize) the protection and propagation of a balanced population of shellfish and fish in and on the body of water from which the cooling water is withdrawn (long term impact The loss of a significant percentage of a critical organism such as eelgrass is covered by section 4 of the above. The loss of a large proportion of some species offish is covered section 2. This report will detail evidence of these losses, and others that the Duke studies failed to identify, in later sections. In the event of an Adverse Environmental Impact, a series of steps to undertake is provided, in order to ensure compliance. • The first step should be to consider whether the adverse impact will be minimized by the modification of the existing screening systems. • The second step should be to consider whether the adverse impact will be minimized by increasing the size of the intake to decrease high approach velocities. • The third step should be to consider whether to abandon the existing intake and to replace it with a new intake at a different location and to incorporate an appropriate design in order to minimize adverse environmental impact. • Finally, If the above technologies would not minimize adverse environmental impact, consideration should be given to the reduction of intake capacity which may necessitate installation of a closed cycle cooling system with appropriate design modifications as necessary. In our assessment, the SBPP fails on most of these steps. First, the existing screening system is the only feasible one considering the large volumes of water passing through the system. Fine mesh and wedgewire screens are probably impractical with this volume and in this situation. Second, the fact that the screens are not rotated continuously (section 4.2.1 paragraph 2 SBPP Cooling water systems effects on San Diego Bay. volume II) means that the survival probability of any impinged fish returned to the discharge canal will be lower than is technically possible. Finally, the intake velocity and position of the intake are fundamental design parameters of the system and could only be altered by using less cooling water or reengineering the intake configuration. Later in the guidance notes the EPA refers to 'habitat formers' and describes them as "critical to the structure and function of the ecological system". Habitat formers are plants and/or animals characterized by a relatively sessile life state with aggregated distribution and functioning as: 1. a live and/or formerly living substrate for the attachment of epibiota; 2. either a direct or indirect food source for the production of shellfish, fish, and wildlife; 3. a biological mechanism for the stabilization and modification of sediments and contributing to processes of soil buildings; 4. a nutrient cycling path or trap; or 5. specific sites for spawning, and providing nursery, feeding, and cover areas for fish and shellfish. It is our assessment, which will be detailed in later sections of this Report, that the impact that the SBPP has on the eelgrass in the bay impinges on its functioning under section 3. The EPA also refers to High Potential Impact Intakes: High potential impact intakes are those located in biologically productive areas or -where the volume of -water withdrawn comprises a large proportion of the source water body segment or for which historical data or other considerations indicate a broad impact. Again this definition is applicable to SBPP, which is capable of taking a significant proportion of the water in the Bay through its intake each day. From the above points it is our assessment that SBPP does not comply with the old Impacts Related to Effluent Discharge To assess the impact of the intake and outfall of SBPP in relation to the 316 (a) and (b) regulations many factors must be taken into account. It is normally the case that onshore outfalls such as that used at the SBPP have a greater impact than offshore outfalls because the warm and sometimes chlorinated effluent stream is more likely to impact the benthic community. There is a number of ways in which an effluent discharge influences the receiving water and seabed. The most important of these potential effects are itemised below: • The warming (and rapid cooling when the plant ramps up and down) effect on benthic communities. • The effect of chlorine and chlorination products on benthic and planktonic organisms. • The effect of the 'rain' of dead and damaged animals that have been entrained or broken up by the cooling water system on the receiving ecosystem. • The attraction of predatory and scavenging organisms into the outfall region. • Changes in water quality linked to differences in nutrient levels, pollutants, salinity etc. between the water in the intake and outfall areas. • The impact of outfall canals and structures. • The impact of general reduced water quality e.g. reduction in dissolved oxygen, increased sediment load and leachates from cooling water system. From the studies undertaken and reported by Duke, it is difficult to assess the impact of the effluent discharge on the local ecosystem because no data are presented on the state of the communities prior to the establishment of the outfall. Thus the only means available to detect ecological impacts is the detection of trends with distance from the outfall. This approach is problematic, however, as other uncontrolled physical factors, such as water exchange with the open sea and other anthropomorphic effects, will also be changing with distance. The result is that only large, visually apparent, effects are likely to have been detected. This problem is particularly apparent in the beach and offshore benthic samples where variation in animal abundance and diversity linked to natural changes in the substrate may mask any trend linked to distance from the outfall. All that can really be stated with certainty is that the sampling stations show considerable variability and that sampling stations nearest to the outfall are different from some of those that are further away. There are however indications that sampling stations closest to the outfall differ in animal composition from all others. Duke Study Fails to Fully Assess the Impact of Chlorine in Discharge It is concluded in the Duke studies that the phytoplankton community will not be impacted by contact with the effluent plume because of the temperature tolerance of the species present. This may or may not be true. However, no consideration is given to other properties of the plume, in particular the presence of chlorine biocide. Residual chlorine in the discharge will be allowed up to the permitted concentration of 0.2 mg/1 (milligrams per litre). Davis & Coughlan (1978) demonstrated that photosynthetic activity was considerably reduced at residual chlorine levels well below 0.2 mg/1 and concluded that bacterial activity was suppressed at chlorine levels below detection levels. While chlorination will only be intermittent, there will be periods when the effluent will impact the local phytoplankton community. Similar concerns to those expressed above for the phytoplankton also apply to the zooplankton. Zooplankton show severe metabolic and reproductive suppression after exposure to chlorine at levels as low as 0.01 mg/1 in seawater (Goldman et al. 1978). Davis & Coughlan (1978) reported that 48 hr after exposure to a concentration between 0 and 0.25 mg/1, 22 % of adult copepods were dead. The larvae of oysters are also known to be vulnerable to low levels of chlorine. Chlorine concentrations of 0.05 mg/1 caused about 50% of Pacific oyster, Crassostrea gigas, larvae to develop abnormally (Bamber & Seaby, 1997). The larvae of American oysters have a 48h LC50 (the concentration at which 50% of the animals die) of less than 0.005 mg/1 (Mattice & Zittel, 1976). Effect on the Fish Fauna of the Discharge Area. The data presented by the Duke studies suggest that the outfall is influencing fish abundance. In the zone close to the discharge point, the studies pointed out the abundance offish was higher than that observed at control stations. The study stated that itt was dominated by large numbers of juvenile slough and deepbody anchovy. The aggregation offish in the vicinity of outfalls, however, is a commonly observed feature usually linked to the presence of food in the form of debris from impinged animals and dead, injured or disorientated plankton that have passed through the station. The currents produced by cooling water discharges also offer a situation where faster swimming predatory fish can hold an appreciable advantage over their prey. This is not to say that these fish themselves will not be harmed by temperature changes near the outfall as the plant goes on- and off-line. Duke Study Understates Impact of Copper in Discharge Copper, even at low discharge levels, bioaccumulates from the environment into higher animals. Copper from the SBPP is released by leaching from the condenser tubes from units 3 and 4. Unit 1 is a high performance stainless steel containing alloying elements of chromium, molybdenum and nickel. Unit 2 condenser tubing is aluminum brass, and Units 3 and 4 have copper-nickel tubing. Any copper release is likely to stay within the bay and accumulate through the food web. 10 Duke Study Fails to Adequately Assess Impact of Severe Eelgrass Damage To be in compliance with 316(b), both old and new editions, there must be no significant degradation of the environment. The operation of SBPP has resulted in the loss of 10% of the eelgrass in the Bay. Eelgrass is very efficient at converting solar energy into plant tissue. During this process it concentrates numerous elements that occur at low concentrations. With its high productivity and rapid growth, eelgrass forms the food-base for fish, shellfish and waterfowl in shallow seas, as plankton does for marine life in deeper waters. The thermal and chemical impact of the SBPP has reduced the amount of eelgrass present in the bay. From Fact Sheet for Public Tentative Order No. R9-2004-0154 NPDES Permit No. CA0001368: "The predicted turbidity effects of the SBPP cooling water flows suggests that the SBPP, operating at maximum cooling water circulation rates (i.e. 601.13 MGD) would preclude eelgrass from approximately 104 acres of south San Diego Bay. At the mean summer 2003 operating conditions of 441 mgd, the SBPP is predicted to preclude eelgrass from approximately 71 acres of south San Diego Bay through its cooling water discharge effects on naturally-generated turbidity." This loss represents about 10% of the eelgrass habitat of the entire bay. If the power plant is excluding eelgrass totally from an area there must be a much larger area that is growing sub-optimally. The loss and sub-optimal growth of eelgrass within the bay is likely to impact on the community structure as a whole. The loss of the eelgrass from an area will significantly change the environment and the community of organisms living in that area. In an Order issued by the California Regional Water Quality Control Board, San Francisco Bay Region they state: Eelgrass beds are important components of estuarine ecosystems, and have declined from historical levels both globally and in the San Francisco Bay. Eelgrass restoration projects should therefore be encouraged in the region in order to increase water clarity, reduce erosion, provide nurseries for fish, and increase habitat for invertebrates, in shallow water coastal habitats. This indicates that the State has recognised the importance of eelgrass and where possible are working to increase the total overall area of this ecotype. 11 Diane Gussett from the Port Townsend Marine Science Center in Washington (www.ptmsc.org/html/eelgrass.html) summarises the importance of eelgrass in modifying the habitat. It: • Creates a highly structured habitat from loose and shifting sands. • Softens the impact of waves and currents, stabilizing the shoreline and providing a calm space where organic matter and sediments are deposited. • Provides shelter and protection from predators for many juvenile fish and shellfish of ecological, commercial and recreational importance. • Absorbs and concentrates nutrients from the sea and transfers them to the sediment or to animals. • Decomposes into an important part of the food web for the coastal marine ecosystem. • Provides diverse habitats. • Provides an important pathway for food for both local and distant communities This natural modification of the environment, caused by the growth of eelgrass, results in an increase in productivity. Bare sand has a lower diversity and a lower abundance offish than sites with eelgrass present (Murphy et al, 2000). It is not only fish that can benefit from the presence of eelgrass. The leaves, stems, roots and rhizomes provide multiple habitats and support a great variety of animals living in, above, and under but not directly feeding on, the eelgrass. Much of the production used by the community living on and around the eelgrass not only consumes the eelgrass but also consumes the epiphytic covering of algae and bacteria. The health of this layer is also important to the productivity of the eelgrass beds. This layer is vulnerable to pollution, both thermal and chemical. One of the main functions of eelgrass is the production of detritus. The eelgrass fragments are ingested and egested several times, each time becoming smaller and therefore available to a different part of the food chain. The nutrition obtained by the animals consuming these fragments is derived both from the plant itself and the microbial colonisation of the fragments. In 1930 and 31 much of the Atlantic Coast eelgrass population was killed by wasting disease. The effects were dramatic and wide-ranging: To appreciate the ecological importance of seagrasses, consider the sudden disappearance of eelgrass beds along the Atlantic coast during the 1930s. An epidemic infestation of the parasitic slime fungus (Labyrinthula), called "wasting disease," literally destroyed the rich eelgrass meadows, the results of which were catastrophic. Populations of cod, shellfish, scallops and crabs were greatly diminished, and the oyster industry was ruined. There was also a serious decline in overwintering populations of Atlantic brant. Areas formerly covered by dense growths of eelgrass were completely devastated and beaches which had been protected from heavy wave action were now exposed to 12 storms. Without the stabilizing effects of eelgrass rhizomes, silt spread over gravel bottoms used by smelt and other fish for spawning. This resulted in a decline in waterfowl populations that fed on the fish. Without the filtering action of eelgrass beds, sewage effluent from rivers caused further water pollution, thus inhibiting the recovery of eelgrass. (From http://waynesword.palomar.edu/seagrass.htm a web site run by Professor Armstrong at Life Sciences Department of Palomar College) Studies into the effects of temperature on eelgrass have a long history. As early as the 1920s studies were performed analysing the life cycle of eelgrasses and the effect of temperature. Based on Setchell's field observations, the relationship between temperature and phenotypic status is given in Figure 2. Field collections were frequently made through 1923-24 at Kiel and Paradise Coves (Setchell 1929). This investigation convinced Setchell that temperature was the primary controlling factor in eelgrass reproduction. In essence, he argued that as temperatures warmed in spring, vegetative growth (and seedling germination began). When temperature reached 15° C sexual reproduction was initiated. Growth slowed as water temperature increased and prolonged exposure to 30° C could result in shoot mortality. Setchell was struck by the fact that as temperatures cooled, the plants did not respond by resuming growth but rather became dormant and did not exhibit a growth response until the following spring and associated temperature increase (Setchell 1929). Phillips et al. (1983) concluded that while water temperature was a factor there were other factors controlling eelgrass phenology1, a position that is widely accepted but untested, although the influence of photoperiod is a likely candidate in this regard. Phenology is the study of the annual cycles of plants and animals and how they respond to seasonal changes in their environment. 13 Figure 2. Graphic illustration of Setchell's topology describing the relationship between temperature and eelgrass phenology (Re-drawn from Setchell 1929). (From the Office of Response and Restoration website http://response.restoration.noaa.gov/cpr/watershed/sanfrancisco /sfb_html/pdfs/projectreports/partnership_seagrassrev_fm.pdf) The most notable aspect of this description is that eelgrass does not return to growth and reproduction after being subjected to heat stress. It is therefore likely that eelgrass which has been stressed by the SBPP thermal outfall will not reproduce. In 1986 Marsh et al measured the changes in eelgrass photosynthesis and respiration rates at 8 temperatures between 0 to 35C. He found that 5C was the optimum temperature for the growth of eelgrass. At 30C the respiration rate of the eelgrass exceeded the rate of photosynthesis resulting in negative growth. These experiments were done in clear water. In turbid water, such as is now found in the South Bay, the rate of photosynthesis will be reduced. Hence the switch point between positive and negative growth will occur at lower temperatures. For example, Bulthuis (1987) examined the effect of temperature on seagrass photosynthesis rates at low light levels. He showed that optimum temperature for photosynthesis in Heterozostera tasmanica decreased from 35°C at light saturation to 5°C at reduced light levels. (From http://www.epa.gov/regionl/braytonpoint/pdfs/BRAYTONchapter6.PDF- including Marsh et al 1986 reference.) Although Bulthuis was working on an Australian species, it is likely that a similar compensation point (where photosynthesis equals respiration) will apply for North American species. In conclusion, eelgrass is a habitat-modifying species. As such it has a very significant effect on the habitat and community of the Bay. It creates organic material that in turn supports a complex food web of detritivores and consumers. It is used for shelter by many fish species, and is an important food and habitat for birds. It is affected by temperature and suspended solids; large areas have been lost due to the operation of the SBPP. Other areas may be growing less well than they would without the effect of the power plant. The ramifications of this loss are complex and difficult to quantify. 14 Benthic Studies Are Crucial to Determining Ecological Impact ofSBPP SBPP has affected the benthos in the Bay. It has had effects that are measurable and are likely to be affecting the production of the habitat in the vicinity of the power plant. The high biomass of nematodes and oligochaetes in the benthic samples around the outfall of the plant indicates that the system is highly stressed. Dominance by nematode and oligochaetes is usually a sign of organic enrichment and subsequent low oxygen (due to high levels of bacterial respiration). Diversity increases (i.e. the relative importance of these worms decreases) with distance down the discharge channel. It is known that low diversity habitats with high abundance of pollution-tolerant species such as nematodes and oligochaetes are a sign of a disturbed or polluted environment. See table below. Table I. Potential indicators of beufhic stress. twn-DiMttrbtd Eitvirorantnts: EmirDmnnial Characteristics - Low Total QiMEk Cuban (<1%) - High EfdOx pateEiU] (positive Eh vakes) - Low preswMer sulfids (< 0.01 K5<1 mion>;« Hj - Low porraiter ammonia $ 0.2 aigS. acioaised " - Low assures of SBdunset comambatioa: - Low ddceofomi estradable biaateo fs 1 mgj'g) - EndiMcial dwiaical ajacoiaatsea; tea aaE sadaoeat quality gm&Jraa vatoB PRM. PEL values). - Loar mean ERM quotient (< 0.01} Enimmwiiiil Characteristics - Low RedOx potaHial (active Bis vato es} - High porewater aflSde f^ 0.05 !B£fI.iimcoii=ed HjS) - HJh porewster acmwEia (> 0.4 mg'L sidooised - Low bKtom mats liiiolvid oxygsn {< 2 ng'L) _ a chloroform eHttactabk hitmen (>1Q ta^-'sj - indnidsiai ch£t£uc3l cccocciSQtfioQs gn^lsr Suzi ssdimjct quality gabielic* i^lus, (ER}k(. PSL vakes). - Kigk meaaSEM quooect (> 0.1) * Simjfkan: sedinwct tosicLtj' - E^h mmfetinf Biokrpral Ctaractsristics s. of lon|-liv»d''eqidh't™ai & pollatkia- - Low Nos. of opportunistic and pollutioa-tnlti&u ipe - Kighe? raiio af fitefeedeti to carnivores aid fejkit-f«deii - Kigi«r mujd-iaetnc braUiic indeie icore - Diverse ige-c&ss structuie - Law iKi&ace of nsraptsriogkal iMaulies - Kighef Eido of cimaceans topolmaetes and aictocs - Low isiaiijace''aianu;s ratio - Lanr ioundjiicei' species mio - Lew iDcidsnce of iatHial paassitre {esp. Enrfhac^ Biolof ical Chirac tfrisfes -LowmmJSerof rperies - Lotr tolal feid abimdjac? - Loa specie; et^msess/hi^i domirumce - Ld« Has. of long -lived equilibrium & poluMa-secsiiivj tpedes - Kijh Sos. of opportunistic god poILutoij-totesii specUs - Lower nrao of fiUa fssden to carnivore; & dsfxiat-feecteis - Loa^r mold-EHCbc ben tak iodex score - High kticaice of Eorpbospcal raoaaiies - Lower raao af c3U5Ssraans topoljtiuiftes ac.d molluscs - High ibiaflince'' spscie; ritio - Hi|h iocicteace of internal parasites {esp. iao3t;c=.) - EighK aKl&oM of younger fbnm - Preface of begfiaaa-lite nuts - High iKideacmf iinposec - Atexxmat occuireace of icfeima MMve HJ sedimsat deptb (higii I . Abiotic factors to aelp iutejpretadon of cata oa 'oLolosicjl icd ravacnaEeottJ (aeieor) \'jn<!ble5 such as grain size, CVN ratioi, calwopaya ipiiseopipneat mils, jmd acid voUtilt s"iL£d«s. 2. 15 (From Intergovernmental Oceanographic Commission - technical series. Ad Hoc Benthic Indicator Group, Results of Initial Planning Meeting, Paris, France 6-9 December 1999) The SBPP power plant will cause a reduction in diversity in several ways. The outfall could eliminate species that: 1. cannot withstand the temperatures found in the area impinged by the outfall. 2. cannot withstand the lower oxygen levels in the area, caused by a) the elevated temperatures and b) the "rain" of dead and dying organisms released by the plant by entrainment and plant washing. 3. cannot withstand the elevated suspended solids found in the area 4. are killed by the presence of biocides in the outfall water 5. are killed by other chemicals leaching from the plant. Even if species can live within this zone, they might be living sub-optimally and possibly not be able to reproduce. Often, where the temperature of the water is below the thermal death point of the organism, it can have deleterious effects such as increasing growth rates, prolonging the growth season, causing earlier breeding (Barnett, 1971) or causing avoidance behaviour (Naylor, 1965). Other outfalls have been shown to reduce the diversity of the invertebrates found in the sediments. For example at Morro Bay, California, the number of invertebrates was identified from the discharge zone and at 300 and 500 feet from the end of the discharge. This was compared to a control site along the coast. The control site had 66 species present. The samples from Morro Bay had 21, 34 and 54 species - respectively. Interestingly, 95 % of the species found in the samples closest to the discharge were identified as warm water species (See figure below from Adams, 1969). WMBEfl OF SPECIES 20 40 80 MORRO BAY POWER PLANT DISCHARGE MORRO BAY P P 300 PT. OUT MORRO BAY P. P. SCO FT. OUT DIABLO NO P. P.COMPARABLEAREA '' 3S% SO 100*/< WARM WATER SPf CIES INVERTEBRATES COLLECTED AND IDENTIFIED AT MORRO BAY POWER PLANT AND AT DIABLO (NO POWER PLANTf) 16 A Very High Percentage of the Volume of the Bay Affected In the old regulations, specific mention was made of an intake that "comprises a large proportion of the source -water body segment." This is obviously the case for SBPP. A high percentage of the volume of the water in zone 4 is potentially passed through the power plant. The volume of zone 4 (the zone in which the plant is operating) is 20,410,508 m3. SBPP, when operating at full capacity, uses 1,580m3 per minute. In one day the plant uses (60*24*1580) 2,275,200 m3. This is 11% of the water in zone 4 per day. The volume of the entire San Diego bay is 140,612,092m3, which means that the plant is utilising 1.6% of the bay per day. The plant could pass the equivalent of the entire bay thorough the cooling water system every 62 days, or about 6 times a year. SBPP give the average water flow during December 1998 to September 2003 as 425,056m3. This still represents 2% of the southern bay per day. This number has to be treated with caution as the figure 2.1.2 in 316b report from SBPP shows that the plant operates at or near full capacity for quite long periods. Since planktonic stages in fish are fairly short lived the effect on some species might be greater that the 2% figure suggests. For a more accurate figure it would be necessary to determine the actual flows during the period during which each species is vulnerable to entrainment. 17 Impingement and Entrainment The SBPP intake within San Diego Bay acts as a suppressor on the ecosystem, continually removing and killing a wide variety of organisms. Because intakes tend to kill disproportionately large numbers of small animals and juveniles, they tend to impoverish the standing crop in the lower trophic levels towards the base of the ecosystem. The ecosystem in the vicinity of an intake gradually distorts under this unnatural mortality. Given sufficient time, an un-natural equilibrium community adapted to the artificial conditions may develop. However, this may take many years, and other changes are also probably occurring simultaneously. There are no data sets presented by the Duke studies that attempt to quantify the extent of these changes. Within a restricted water body, such as San Diego Bay, where the plant can utilise the total volume of water in the bay every 60 days, impingement and entrainment mortality has the potential to reduce the local population by a significant amount. The potential for local impoverishment is most clearly seen in the analysis of Duke's entrainment data. The numbers offish entrained represent a considerable part of the local population. The Duke studies estimate that the proportion of the larval gobies entrained by the power station varied between 21-27%, Longjaw mudsucker 17-50 %, Anchovy complex 7-10%, Silverside about 14% and combtooth blennies about 3%. In the earlier studies, the total loss of eggs and larvae was estimated at about 12% of the total source stock. Natural populations cannot remain unaffected by extra mortalities of these magnitudes when applied on a continuous basis. The percentage loss for some species is so large that, in our assessment, they can never be considered acceptable. The ETM calculations demonstrate that, for some species, a high proportion of the local fish larvae are entrained and probably killed by the power station. It is well established that such loss rates can impact populations, even of short-lived, high-fecundity species such as gobies. It is clear that the entrainment and impingement mortality rates observed would not allow isolated populations within San Diego Bay to maintain their size. SBPP is causing the South Bay to act as a trap that kills animals recruited from the ocean beyond. While many of the animals killed are derived from populations that extend beyond the bay, it should be noted that many of the fish killed by the cooling water system are typical members of the San Diego Bay community. Thus it is quite possible that the present cooling water system has reduced the size of the local fish and crustacean population by a significant amount Duke Study Does Not Adequately Assess Impact to Non- commercial and Non-target Fish Only a small fraction of the life forms present in a water body are normally given a monetary value. Yet almost all the species present in the water column or living on the river or seabed in the vicinity of an outfall will be impacted by a direct cooled 18 power plant. Most are not fished or sold in any form and are not of immediate value as tourist features, as may be the case for an elephant seal colony or turtle breeding beach. In general somewhere in the region of about 1 in every 100 species can be assigned a monetary value. The question is how should we consider the worth of the other 99%, many of which are small or even microscopic. The interdependence of species, and the fact that all species can be viewed as interconnected units within a food web, immediately suggests that the economically important species are dependent upon the existence of many other species either directly because they are their food or indirectly because they help to create some aspect of the habitat that is essential for their existence. Perhaps the most clear cut, but unusual, situation would be where clear dependence can be shown between two species such that a dependent species that has an economic value cannot exist without another supporting species. With this type of situation the supporting species can be assigned a value as a resource base for the economically important species. Given sufficient ecological knowledge it would be possible to calculate how many of the economically important species would be lost if the resource base was diminished in size. Because almost all the commercially important fish and crustaceans are predators that feed on a variety of prey and can often be quite flexible in their feeding behaviour such a simple relationship will not generally be the case. However, as the vast majority of species with no economic value can be placed towards the foot of the trophic pyramid, they can be viewed collectively as the resource base upon which the economically important species depend. Such an approach suggests how we might give a value to the majority of species. Suppose that an estuary has 20 species that can be given a commercial value and these 20 have a production of say 50 kg per hectare per year and this is supported by an ecosystem that achieves a maximum annual standing crop of say 50,000 kg per hectare. Then we might roughly state that 1000 kg of standing crop of all species is needed to produce 50 kg of commercially important species. Then if entrainment reduces the standing crop by say 10% we can conservatively assume that this will result in a proportionate reduction in the commercial species of 10%. Once such a rough relationship is established we can then give a monetary value to any loss to the ecosystem. Some measure of the likely loss of standing crop of plankton can be gained from simple modelling. We can model the plankton community using say a logistic equation such that in the absence of the power plant the population would be at carrying capacity. Then given a daily mortality rate determined by the proportion of the total volume of the habitat that is pumped via the plant the fractional reduction below carrying capacity that results can be estimated. While the approach outlined above might be used to estimate the overall value of the resource in terms of its food value to economically important species this does not represent the full value of species lost by entrainment and impingement. Unquantifiable losses include the following. 19 • Loss of recycling efficiency and the loss of nutrients and materials to the local ecosystem. Damage to ecosystems typically results in a loss of ecological efficiency and the release of materials that would have been retained within the ecosystem. Thus a river or estuary may export to the ocean more resources than would have been the case if the ecosystem had been undamaged. • Power plant mortality will tend to favour short-lived species at the expense of long-lived forms. This tends to produce a bias in favour of more 'weed-like' life forms. The naturally occurring species towards the top of the food chain such as striped bass are typically adapted to live in climax ecosystems in which short-lived species are less dominant. Further, the bias produced may result in a loss of biodiversity resulting in a less stable ecosystem. • Damage and alteration to the ecosystem may allow the invasion of unwelcome aliens. In particular, fasting growing invasive species that have adapted to man-made or disturbed habitats may reach pest levels. It is notable that most of the alien species that have become established in the Hudson estuary for example are invasive 'weeds' suggesting that human disturbance may be implicated in allowing them to become established. • Damage to ecosystems may increase the risk of the development of organisms dangerous to human health. Water bodies receiving heated effluent have been closed to water sports because of the risk of pathogens. Red tides may become more frequent and toxic in highly disturbed and unnatural waters. This can increase the costs associated with environmental monitoring and the processing costs of drinking water. In addition to the costs that may accrue we can also view the ways in which the ecosystem as a whole can offer us services. Some of the most important are listed below. • Recycling of human waste. This is probably the most important service that is offered by waters close to human habitation. • Demobilisation and detoxification of chemical waste products. The living world is involved in both the breakdown and locking away within the sediments of dangerous metals, petroleum products and a vast range of chemical wastes and products. • The stabilisation and accumulation of sediments. Without vegetation soft sediments would be far more mobile resulting in increased turbidity and sedimentation of channels. • Support to the terrestrial ecosystem. In many localities there can be a major re- exportation of biomass from water to the land via insects and other invertebrates but also via fishing birds and mammals. Thus the presence of a diverse and rich aquatic fauna can enhance the health of the associated terrestrial flora and fauna. Finally the presence of rare species, or species naturally at very low numbers, are by nature, overlooked by most impingement and entrainment studies. These studies are usually comparatively short in length, only 1 or 2 years, and usually only sample for short time within that period. At SBPP entrainment was sampled for 24 hours monthly for one year and then bimonthly for the second, while the fish impingement was sampled for 24 hours once every two weeks. The chance, therefore, of catching a rare species that occurs in very densities is very low. 20 Surplus Production Does Not Discount for Data Showing Loss of Production and High Mortality Rates for Larval Fish The operation of the SBPP results in a loss of production, either by removal from the system or by organisms living and growing sub-optimally. The Duke studies discount this loss as being surplus production and, as such, conclude that the loss has no effect on the environment. The concept of surplus production is based on the view that the entrained organisms and particularly larval fish were in most cases never going to become adults and that their loss is therefore of no significance. This argument is used to state that the SBPP has no effect on the environment and hence there is no breach of the regulations. It has long been recognised that man is able to deplete the natural populations of mammals, birds and migratory fish. A generally held view is that a serious decline is usually linked to the harvesting of numbers greater than the population can sustain, but, with suitable restraint, a harvesting level can be found that is sustainable in the long-term. The portion that can be taken without reducing the population is thought of as surplus production. To some extent the idea has origins in agriculture. Each year a certain proportion of the production must be kept aside as seed for the next year, the rest is the surplus that can be consumed. Until recently the assumed availability of surplus production in wild as well as domestic populations was never given serious scientific scrutiny. By the 19th century it was clear that the eggs and larvae offish must suffer high mortalities and few of the offspring could ever reach adulthood otherwise they would exhaust the resources upon which they rely. Therefore there was a self-evident surplus. One reason why the concept of surplus production was widely accepted was that it fitted with the prevailing 19th and early 20th century views of natural selection, the struggle for existence. Many young are produced but only a few will survive, the rest are just victims of the struggle. It should also be remembered that until the 20th century religious beliefs frequently held that the world had been created with a surplus of fruits for man to exploit. This view is still prevalent in some regions. The important point to note is that when questioning the validity of surplus production we question a long respected paradigm. The basic mistake that many people make is to assume that wild populations can be exploited in similar fashion to domestic plants and animals. They forget that in agricultural practice we assiduously nurture and protect the surplus production, whereas in the wild this would be eroded by natural losses. Furthermore we are unconcerned about the fate of the majority of species in the previously established ecosystem. The concept of surplus production was first used in fisheries science by Graham in 1935. If fish were to be harvested without a decline in their population there needed to be greater spawning capacity within the population than was required to maintain the population, Given the extremely high fecundities of many fish, where the annual egg production of a single female can range from thousands to millions, this seemed self- evident. Biologists could also point to examples of populations where overcrowding resulted in considerable damage to the reproductive output of the weak or unlucky. 21 For example, salmon have been observed to destroy redds (nests of eggs buried under the gravel on the stream bed) from earlier spawning in years when numbers of returning fish were high. Another example might be the smothering of herring eggs by the eggs of later arrivals on the spawning grounds. Under such conditions it seemed obvious that some of the adults could be removed without harming the reproductive output of the population. Note that at the core of the surplus production concept lie assumptions about the importance of the population, rather than individual, and an emphasis on the stability of the natural world. The fate of the individual is unimportant - it does not matter which fish dies or lives provided there is sufficient reproductive capacity left. Secondly, those that favour the concept of surplus production generally argue that the natural variability of the world does not require the surplus production from good years to compensate for the poor years when there may be almost total breeding failure. The fact that surplus production arguments do not take account of environmental variability was one of the key features noted by Boreman (2000) in his critique. Surplus production would not have developed into a fisheries concept if it had not been for the development of density-dependence theory. This theory was developed as an explanation for the stability and continued existence of natural populations. It was realised in the 1930s that populations would continue to fluctuate unless their survival and birth rates varied with the size of the population. Density-dependence allowed the development of a modified view of surplus production - that it was no longer just the excess young that could not be supported to adulthood produced in any particular year, it could be a larger part of the population providing that those that remained after harvesting could respond by either having a higher fecundity or survival rate. Such arguments were used to justify ever increasing exploitation of marine fish populations. They were also used by power plant operators to defend the destruction of millions of young fish and other aquatic organisms. The development of fisheries models has been completely anthropocentric. We know of no model that asks what yield we can take that not only protects the population but also avoids harming the natural predators of a fish. It should always be remembered that it is not only the abundance of the prey that can affect a predator but also the size distribution. Almost all predators have a favoured size of food. However, it is clear that the disproportionate harvesting of particular age groups is the norm and will result in a change in the population age structure even if total numbers remain stable. Thus, if a population can support additional anthropogenic mortality it may still damage the predators. No fish or other biological resource can be harvested at zero cost to the ecosystem. In this sense there cannot be any such thing as surplus production. That the no cost view is commonplace is certainly suggested by the descriptive terms and statements of some who have argued that power plants cannot harm fish populations and natural communities. Goodyear (1977) referred to 'excess production' and Watt (1968) to 'wastage'. Here we see a different viewpoint being introduced. The animals that can be harvested are an excess or natural wastage that, if not killed, would in some way be flushed from the system. Their arguments are based on the premise that the fish killed by impingement and most importantly entrainment are of no worth, either to man or other organisms within their ecosystem. John 22 Boreman (2000) has, by taking an ecosystem approach, shown the fallacy of this argument. "If a surplus is being removed by power plant operations, then something else in the ecosystem is being out-competed." This is an important point that has frequently been lost during studies of density- dependence in fish. The focus of the population modeller tends to be the maintenance of adult numbers within the population under study. No consideration is given to the maintenance of the predators that normally feed upon the fish if man does not take them. Mayers & Worm (2003) discuss the recent large declines in the abundance of top predators including piscivorous fish, mammals and reptiles because of overfishing. They estimated predator levels at only 10% of undisturbed levels. Density-dependent arguments are concerned with the stability and continued existence of a target population as mortality and natality changes. They can say nothing about the overall ecological health of a system subjected to greatly increased mortality rates from power plants and other cooling water intakes. A core aspect of density-dependent control theory is that the agents of density-dependent control are almost always living organisms. This is because only living entities can respond to the size of the prey population by growing or shrinking in abundance. A change in the response of the controlling species that is proportional to the size of the controlled population is an essential pre-requisite for density-dependent control. This observation brings out clearly the point made by Boreman (2000). If a power plant is killing large numbers of a small fish, say the anchovy, then the animals that would normally control the population by predation or competition will respond to the reduced abundance of anchovy. The predators must decline in abundance or move away while their competitors may increase in numbers as they exploit the vacated space. Thus, the existence of surplus production and density-dependence implies that there are inter-species dependencies and relationships and further implies that these species must respond not only to direct entrainment and impingement losses but also to those of their prey. The only situation in which the predators and competitors would not express the losses to a prey population would be if the loss were tiny and hidden within the random variation that all populations exhibit. Hidden within the adult equivalent approach to assessment of power station losses there is also a surplus production argument. Just because only a small number of the young will live to adulthood does not mean that these young over their brief lives might not contribute to the maintenance of predators and other organisms that can take advantage of their presence. The weakness of the adult equivalent argument can be easily seen by analogy. A hundred tons of rice might be required to give sufficient energy to take 5 humans from birth to age 70. However, during a famine this quantity of rice might sustain 2000 people for sufficient time to ensure their survival until the next harvest. If the rice store were to burn down during a famine, who would equate the loss to 5 human equivalents? The fact that almost all exploited fish populations have declined indicates that the amount of surplus production that can be taken by man may be much less than has 23 frequently been assumed. While the destruction of some populations is easy to understand as a simple uncontrolled scramble for a limited resource, it is disheartening to note that even managed fisheries have collapsed. The reason for this is essentially because we have misunderstood (overestimated?) the amount of density dependent compensation within the population. The history of management failure and the frequently observed strong recovery when fishing pressure or mortality rates are reduced gives clear examples of the exaggerated density-dependent response. A good example is the striped bass in the River Hudson. It was argued in the 1970s and early 1980s that the population was under density-dependent control and thus reduced mortality would not allow the population to increase. It was effectively saturating its environment. Yet the closure of this fishery resulted in a 15-fold increase in abundance. In conclusion, the only theoretical basis for surplus production is the observation that some populations in some years produce an excess of young that cannot hope to survive. These young can be harvested without affecting the size of the adult population. A key aspect that surplus production arguments never consider is the between-year variation in survival and thus production. Some fish may depend on occasional highly favourable years when they can produce so many young that they saturate the appetites of the predators and create a strong cohort that will sustain the population for many years. An example of such a fish is the striped bass. Further, harvesting may result in the exclusion of some predators from the resource. The weakness of surplus production pleading can be exposed by the following arguments: 1. Despite the outward appearance of stability in the marine and freshwater environment, fish live in highly variable environments and this is not considered in the models. When variability is introduced into models the predicted surplus production is often much reduced or non-existent. 2. Surplus production only exists in a model that includes man and the target population. When we harvest, the natural predators are, to some extent, denied a food resource. 3. A high proportion of exploited populations are much reduced or in decline. Any reduced survival in these populations must be reflected in reduced adult numbers. 4. The existence of density-dependent control does not imply that there must be surplus production as is often assumed. We must separate the two concepts or we will find ourselves arguing against the established scientific paradigm. Density-dependent control comes about because species are held within a matrix of active and potential controls based on their predators, prey, parasites and diseases. This network of interactions is maintained in part by the consumption of the focal species. If we take a harvest then this control network is disrupted. Thus our harvesting does to some extent break the very density-dependent relationships that the proponents of surplus production claim. The end result of anthropogenic mortality is known, it is ecological degradation. 24 Another Fallacy of the Theory of Surplus Production - What Feeds on Larval Fish? The concept of surplus production is based on the view that the entrained organisms and particularly larval fish were in most cases never going to become adults and that their loss is therefore of no significance. This will not be the case if their loss denies other organisms this food resource. Below we consider what organisms feed on larval and small fish. Many organisms feed on larval fish and eggs. Some species actively seek out larval fish while others are indiscriminate feeders that take them as part of their general diet. Planktiverous fish such as the clupeids (anchovy, alewife, shad) filter food from the water as they pass through. Some of these species simply filter everything in a certain size range. In others there is evidence that they can discriminate as to which of the small organisms they will take. Filter feeders will generally predate in approximate proportion to the density of the food in the water. Alewife, for example, have been found to have selected larval fish and eggs in their diet as juveniles as they grow they become more omnivorous. The Bay anchovy, an abundant fish in the Hudson, has also been found to feed on larval fish. It is a regular but minor part of their diet (Fish and Wildlife Service, 1989). Small white perch feed almost exclusively on fish eggs at times when eggs are abundant in the water. (Fish of the Great Lakes, Wisconsin Sea Grant). This indicates that they are actively predating this food resource. The diet of young of year striped Bass (Morone soxatilis) was studied in the Hudson between 1993 and 1997 (Hurst and Conover, 2001). It was found to comprise between 2 to 8 % fish. These are likely to include larval fish and eggs. Small predatory fish will take eggs and larvae in large numbers. Species such as stickleback are voracious predators on plankton. Other groups of organisms also eat larval fish and. Jellyfish, for example, have been observed to feed extensively on larval fish and eggs. In a study in Chesapeake bay Rilling and Houde (1999) noted that ctenophores, a type of small jellyfish, were voracious predators of larval and egg of the bay anchovy: - "Results of mesocosm experiments (Co-wan and Houde, 1993) have indicated that up to 20-40% of bay anchovy eggs and larvae in Chesapeake Bay during the peak spawning season may be consumed daily by jellyfish. PureeII et al. (1994) analyzed jellyfish gut contents and estimated that these predators could account for up to 21% of the daily egg mortality and 41% of the larval mortality of bay anchovy in Chesapeake Bay. In site- specific studies, Dorsey et al. (1996) estimated that jellyfish accounted for 0-35%/dofegg mortality, and from 0 to 15%/d of yolksac larval mortality." To give some indication of the wide range of animals that will feed on the eggs and larvae offish we reproduce below the results of a major study on predation on the Grand Banks (Madin et al., 1999) (Table 1). Many of these organisms, or closely related forms will occur in the region. In a study investigating the predation mortality 25 of a wide range of marine animals Madin et al (1999) found that many organisms feed on larval fish. Table 1 show a reduced version of their table showing only the species and groups where larval fish or eggs were mentioned. Table 1 Predator Occurrence Prey Feeding Data (modified from Madin et al 1999) Cnidarians Clytia gracilis (hydroids) Cyanea capillata Other hydromedusae Ctenophores Bolinopsis infundibulum Pleurobrachia pileus Hydroid/ jellyfish Often very abundant on crest Patchy occurrence Variable occurrence, rarely dense Jellyfish Patchily abundant on flank, hard to quantify ™.v., .w™, , „.....,.:,. Patchily abundant in spring ' " ' Nauplii, Copepods, Fish larvae Copepods, Fish eggs 'Copepods, Fish larvae Copepods, Fish larvae Copepods Fish larvae F, T responses, selectivity on copepod eggs & nauplii, rates on cod larvae (GLOBEC data) Rates, selectivity on copepods (literature data) Rates on fish larvae from gut contents, experiments (literature data) Rates on copepods from gut contents (GLOBEC data) j Rates on copepods from gut contents (GLOBEC data), F and T responses (literature data) | Euphausiids Euphausii ! krohnii Crustacean Patchily abundant Copepods Fish larvae Estimate from other species (literature data) | Isopodsi •" \Cirolanapolita Crustacean Demersal, in water \ column at night | Fishes Clupea harengus j Scomber I scombrus Copepods, [Rates on nauplii, copepods from Larval experiments (GLOBEC data) fish? Briefly abundant during migratory passage Briefly abundant during migratory |passage | Copepods, ! Rates on copepods, fish larvae | larval fish J from gut contents (COP- GLOBEC data), Copepods, larval fish Rates on copepods, fish larvae from gut contents (COP- GLOBEC data), As can be seen from this table several species of hydroid, crustacean, jellyfish and fish were observed to feed on larval fish and eggs. No assessment was made in the 316 studies of any interactions resulting from the loss of entrained organisms. 26 References Adams, J.R. (1969). Ecological investigations related to thermal discharges. Pacific Coast Electrical Association, Emeryville, California. Barnett, P.R.O. (1971). Some changes in intertidal sand communities due to thermal pollution. Proc. Royal Soc. Lond. B., 177, 353-364. Boreman, J. 2000 Surplus production, compensation, and impact assessments of power plants. Environmental Science & Policy, 3, S445-S449 Davis, M.H. & Coughlan, J. (1978) Response of entrained plankton to low-level chlorination at a coastal power station. In Water Chlorination Environmental impact and health effects (ed R.L.e.a. Jolley), Vol. 2, pp. 9. Fish and Wildlife Service, Biological Report 82(11.97), February 1989, TR EL.82.4 Species Profiles: Life Histories and Environmental Requirements of Coastal Fishes and Invertebrates (Mid-Atlantic) U.S. Department of the Interior Coastal Ecology Group Waterways Experiment Station U.S. Army Corps of Engineers Goodyear, C. P. 1977 Assessing the impact of power plant mortality on the compensatory reserve offish populations. In: Van Winkle, W. Ed, Proceedings of the Conference on Assessing the Effects of Power Plant Induced Mortality on Fish Populations Pergamon Press, New York. Madin, L. P, E. F. Horgan, H. Franklin, S. M. Bollens, and B. K. Sullivan - 1999, [Towards] estimates of broad-scale predation mortality (http://globec.whoi.edu/globec-dir/reports/siworkshopl999/madin.html) Murphy, M. L., Johnson, S. W. and Csepp, D J. 2000, A comparison offish assemblages in eelgrass and adjacent subtidal habitats near Craig Alaska. Alaska Fishery Research Bulletin 7:11-21 Myers, R. A. & Worm, B. 2003 Rapid worldwide depletion of predatory fish communities. Nature, 425, 280-283. Naylor, E. (1965) Effects of heated effluents upon marine and estuarine organisms. Advances in Marine Biology, 3, 63-103. Rilling G. C. and Houde E. D. (1999). Regional and temporal variability in growth and mortality of bay anchovy, Anchoa mitchilli, larvae in Chesapeake Bay Fish. Bull. 97:555-569 Watt, K. E. F. 1968. Ecology and Resource Management, A Quantitative Approach. McGraw-Hill Book Company, New York. Wyllie-Echeverria S. and M.S. Fonseca, 2003. Eelgrass (Zostera marina L.) research in San Francisco Bay, California from 1920 to the present (http://response.restoration.noaa.gov/cpr/watershed/sanfrancisco/sfb_html/pdfs/projec treports/partnership_seagrassrev_fin.pdf) 27 -.-L SIERRA Main Office: (619) 299 1743 Chapter Coordinator: (6i9)-299-i74i J»B-^ Fax: (6l9)-299-7l42 C HI] PL Email: creiff@sierradubsandiego.org \»_> 1L.V-? U' www.sierraclubsandiego.org fOUKDID San Diego Chapter Serving the Environment in San Diego and Imperial Counties 3820 Ray Street San Diego, CA 92104 Comments on Exhibit 1 Carlsbad City Council Additional Responses to Comments on the Final EIR-03-05 For the Precise Development Plan and Desalination Plant Project SCH #20040041081 June 13,2006 Exhibit 1 items: 2.0 Background Issue 1: Operation of the Desalination Plant as a Stand Alone Facility - separate from the EPS If the plant is to be a stand alone facility the City would require to a new permit and new CEQA. The response states that if this were the case that the analysis in the Final EIR are still accurate and valid. 4.0 Discussion Issue 1: We disagree with the conclusion that the Final EIR (FEIR) contains substantial evidence that shows that the impacts from a No Power Plant Operation scenario to have the same level of significance as the With Power Plant operation for all impact areas' i.e., Marine Biology Entrainment and Impingement Key items in the Exhibit: The average withdrawal to supply the desalination plant is 105 mgd average to produce 50 mgd product water. The stand alone facility would require 200 mgd additional intake flows to provide the minimum dilution of the brine discharge. Marine Biology Entrainment: Table I of the FEIS shows the estimated entrainment losses under the No Power Plant Operation scenario. On page 7 of the additional responses, it uses the argument the California Department of Fish and Game Nearshore Fisheries Management Plan provides for sustainable populations with harvest of up to 60% of unfished adult stocks. It concludes: "The incremental entrainment ("harvest") effect of larval fishes from the desalination facilities operations at 106 Or 306 mgd is approximately 1 tO 34% (depending on the species); losses that would have no significant effect on the source water populations to sustain themselves. Additionally, entrainment mortality losses are not harvests in the common sense, because the larval fish are not removed from the ocean, but are returned to supply the ocean's food web - the natural fate of at least 99 percent of the larvae whether entrained or not. Generally less than one percent of all fish become reproductive adults." The Final Edits section on page 20, repeats the above argument on the abundance referring to gobies. "Gobies are not substantially impacted because of their widespread distribution and high reproductive potential due to spawning several times a year, are able to sustain conditional larval stage mortality rates of 34% and higher without a decline in adult population level." The reason for quoting these statements is because they contain fundamental flaws discussed in the critique that is presented below. Impingement Effect. The FEIS on page 11 states that the approach velocity at the Encina Power Station intake structure in the No Power Plant Operation scenario would not exceed 0.5 feet per second, the 316(b) Phase II permitting requirements. The FEIS fails to comply with other requirements 316(b), e.g., Parts A and B. For example, the cumulative impacts, the non-use benefits in Part B are not addressed. The FEIR makes no mention whether the stand alone facility would be considered as a new facility or as and existing facility. 316(b) Phase I regulations apply to new facilities while 316(b) Phase II is for existing facilities. My view is that it would be a new facility. Critique of the FEIS The following critique is based on three main sources: • Riverkeeper, Inc attorneys Reed W. Super and David K. Gordon, who have filed lawsuits against EPA on the Clean Water Act section 316(b) Phase I and Phase II. Their arguments pertinent to this the impingement and entrainment are presented in their published article "Minimizing Adverse Environmental Impact: How Murky the Waters", The Scientific World Journal, June 7, 2002, pp 219-237 • Pisces Conservation Ltd, an internationally recognized expert in the analysis of the impingement and entrainment impacts caused by power plants. Pisces did a study on the thermal and I&E impacts caused by the South Bay Power Plant that was paid by EHC and submitted with the Bay Council comments on the NPDES renewal. The report was authored by Seaby, R.M.H, entitled "Notes on the South Bay Power Plant (SBPP) 316 (a and b) Application", 29 July 2004. Pisces Conservation Ltd, IRC House, The Square Pennington, SO4 8GN, England) • Applicable sections of the Clean Water Act 316(b) Phase II, final rule are cited as well The FEIR arguments on Impingement and Entrainment (I&E) in our view are refuted by the work of Super and Gordon as well as Seaby and the 316(b) Phase II final rule itself. These are listed below. 1. The Super and Gordon article states that Congress enacted 316(b) in 1972 response to the large fish kills observed in the power stations. The intent of Congress was to require the best available technology standard to minimize the adverse environmental impacts (AEI) of the cooling water intake structure. The goals of the technology are to update all facilities to use the state-of the art pollution controls as rapidly as possible. 2. Meaning of Adverse Environmental Impact. Super and Gordon discusses this because it is basic to 316(b). "Adverse" means unfavorable, antagonistic and impact means influence, effect. Congress chose not to set thresholds on AEI contrary to the wants of the regulated industry. The FEIS fails to address the requirement to use the BAT to minimize the AET. 3. Any non trivial aquatic mortality constitutes AEI. Several states and EPA as well as several federal regulatory agencies have acknowledged this. Super and Gordon states the scientists, lawyers, regulators, permit applicants and other interested parties should not focus on defining AET but rather on minimizing it. The intent of Congress in enacting 301(b) was to minimize AEI using the technology forcing standards. 4. Table I in the FEIR provides estimates of the losses in entrainment. These are not trivial losses. Sucking in seawater causes AEI in more ways than one. Impingement kills adult fish, those of recreational and commercial as those that are not. Seaby points out that the majority of species with no economic value can be located at the lower end of the food chain and are ecologically significant as well as resource upon which the economically important species depend. 5. Entrainment kills young fish, eggs, larvae, and smaller aquatic life such as plankton by the tens of hundreds of millions. Thus it disrupts the natural function of the ecosystem, which includes fish, smaller aquatic life, insects, birds, mammals and plant communities. It can alter the abundance and diversity of the ecosystem leading to decline of some species. Overfishing has increased the sensitivity of coastal ecosystems making them more vulnerable to human impacts and potential collapse. "EPA firmly believes that protective, risk-averse measures are warranted to prevent further declines or collapses of coastal and other aquatic systems. EPA views impingement and entrainment losses to be one of many potential forms of disturbances that should be minimized to avoid further degradation." (66 Federal Register 65293) 6. With respect to the above statement in the FEIR referring to the Fisheries Management Plant, Super and Gordon states that the minimization of AEI is confused with the Fisheries Management. The objective of the science of fisheries management is to assure sustainability of the fish population for the benefit of fishers and consumers. It is clear from the FEIR comment that industry's interpretation of 316(b) and AEI is to include the BTA regulations within the framework of fisheries management. Note that the FEIR uses the term "harvest". The focus is on recreationally and commercially valuable fish and totally ignores the intent of the CWA to minimize the AEI. Super and Gordon state: "Nothing in the CWA reflects intent to manage collateral industrial impacts on aquatic ecosystems as sustainable harvest. Congress's requirement to use the BTA to minimize AEI sets forth a dramatically different protective standard from, for example, the Magnuson Stevens Act provision enacted just 4 years later to allow 'on a continuing basis, the optimum yield from each fishery.'" 7. Comment on the fallacy of surplus production or Industry's use of population-based AEI models to avoid minimizing fish kills. The FEIS as in the above quoted sections defends the entrainment losses because of the abundant population of the marine life. Seaby discusses at some length the theoretical basis for the concept of surplus production and its application to the fisheries science. He also notes the connection to the concept of density dependence theory. Super and Gordon also discusses this issue. Rather than discuss these theories here, the conclusion is that the industry misuses these theories. Surplus production analyses disregards the ecological value of million offish and other aquatic life at the lower end of the food web that are essential to whether they grow to adulthood. Both papers cite Boreman1: "If a 'surplus' is being removed by power plant operations, then something else in the ecosystem is being out-competed. Use of surplus production is essentially an allocation issue among competitors of that resource. Do we use it for supporting fisheries, for allowing the population to hedge against bad times, for providing extra sustenance for natural predators, or for supporting other use of our resources?" Super and Gordon pointedly remark that industry's compensation theories have no explanation why fish would have evolved to create surplus production. It did not evolve to allow fish to be killed by power plants. They end this discussion by noting the 1 Boreman, J "Surplus Production, compensation, and impact assessment of power plants" Environmental Science & Policy, 3, S445-S449 3 indiscriminant use of density dependent models of fishery production has allowed power generators to gut statutory requirements to minimize AEI. They use sophisticated statistics that is beyond the expertise of most permitting agencies and members of the public to critically analyze. The 316(b) Phase II2, final rule on pages 49-50 states: "Decreased numbers of aquatic life can disrupt aquatic food webs and alter species composition and overall levels of biodiversity. For example, large entrainment losses of forage fish, such as bay anchovy, predicted subsequent reductions in predator populations (including commercially and recreationally important species such as striped bass, weakfish, and blue fish) as high as 25%. This is because forage species, which comprise a majority of entrainment losses at many facilities, are often a primary food source for predator species." The FEIS statement that the "the larval fish are not removed from the ocean, but are returned to supply the ocean's food web larval fish are not removed from the ocean". This statement ignores the fact that dead larvae become detritus and become food for the lower life forms or decays. The food energy is transferred down the web rather than up the food web. The entrainment losses disrupt the aquatic food web as noted in the 316(b) comment above. 8. Drs. P. A Henderson and R.M.H Seaby of Pisces Conservation Ltd prepared a report "Technical Evaluation of US Environmental Protection Agency Proposed Water Intake Regulations for New Facilities" November 2000 is worth noting because they conclude that once-through-cooling is to damaging to inshore ocean ecosystems to be considered best available technology. 9. Conclusion: The No Power Plant Operation scenario presented in the FEIS fails to provide BAT that minimizes the adverse environmental impacts and would not comply with either 316(b)PhaseIorII. EdKimura Sierra Club San Diego Chapter June 12,2006 ! EPA 40CFR Parts 9, 122,124, 125 Officei's John Van De Kamp President Sage Sweetwood President Emeritus Kevin Johnson Senior ('ice President Bill Center Secretan'Treasurer PLANNING AND CONSERVATION LEAGUE Regional Vice Presidents Elisabeth Brown Jan Chatten-Brown Dorothy Green Phyllis Faber Rrck Havvley Doug Linney David Mogavero Lynn Sadler Teresa Villegas June 12,2006 City Council of the City of Carlsbad 1200 Carlsbad Village Drive Carlsbad, CA 92008 RE: Poseidon-Carlsbad Desalination Plant at Encina Power Station Final Environmental Impact Report Dear City Council Members and Mr. Scott Donnell, As the comments PCL submitted on July 11 ,2005 demonstrate and as these additional comments further show, the EIR for the Poseidon Carlsbad Seawater Desalination Facility does not provide information essential to assessing the long-term feasibility and impacts of the proposed project and must be rejected. Specifically, the EIR does not adequately demonstrate a need for the project. It fails to adequately analyze alternatives. It fails to analyze the operation of the desalination plant separately from the power plant operations and therefore fails to adequately analyze impacts on marine life. It does not provide information on the impacts of energy use or analyze how the facility's operations would perpetuate climate change. It fails to adequately analyze growth-inducing impacts or environmental justice impacts. It does not provide information on how private ownership of the desalination facility impacts the operation of the proposed facility or how the responsibilities and interests of the private company will differ from that of a public owner. It fails to adequately address the healthfulness of the produced water or the cumulative impacts of this and other projects in the region. All of this information is essential for the public and the City Council to consider prior to moving forward on this project. Unfortunately, this EIR is inadequate, flawed, and sets an unacceptably low precedent for future reviews of desalination in California. The EIR does not provide essential information to the decision makers and therefore must be rejected. Thank you, Matt Vander Sims Planning and Conservation League California Affiliate 1107 9thStreet, Suite360, Sacramento, CA95814 Phone: (916)444-8726 Fax: (916)448-1789 Website: www.pcl.oig Email: pclmail@pcl.org 1 NATIONAL WILDLIFE ftlltRATlON www.nwt.om"1 COMMENTS 1) The EIR does not adequately demonstrate a need for the proposed project. When the Planning and Conservation League submitted comments on the Draft Environmental Impact Report for the Poseidon-Carlsbad Seawater Desalination Plant at Encina Power Station in July 2005 we urged the City of Carlsbad to analyze the draft California Water Plan Update 2005. Since that time the final version of that document has been released and shows very similar results. For example, the final California Water Plan Update 2005 shows that under the "current trends" scenario water demands across the state decrease slightly by 2030, even with an additional twelve million residents (see figure 4-2 below). 6 I S 4 4 Cwrratt Trandb I maf to ^<y."'«! it *>»fi<'}*4 for oil scenario! 1a «iiminase ' Resource Intensive W<*»r , moy ch=ng» e*(»M»»n 3OOO «d http://www.waterplan.water.ca.gov/docs/meeting_materials/ac/12.09.05/Changes_to_PRD Slides_f 12-08- 200Sl.pdf The California Water Plan Update also indicates that the Southern California region could feasibly use less water in 2030 than it does today. The Update's less-resource intensive scenario (see below) indicates that Southern California will use about 100,000 acre-feet less water with minimal implementation of conservation measures. South coast- California Water Plan Update, Highlights, page 4 In addition, the recent Pacific Institute report, California Water 2030: An Efficient Future determined that it is feasible for total water use in California to decrease by as much as 20 percent by 2030 with an additional 12 million new residents. In their February 2005 SDCWA Water Conservation Fact Sheet, (http://www.sdcwa.org/manage/pdf/Conservation/Conservation_factsheet.pdf)theSan Diego County Water Authority reported that "water conservation measures are expected to reduce total urban water demands by approximately 10 percent in 2020, with an estimated savings of 93,200 acre-feet of water a year." This EIR must analyze these documents and show what regional changes will create the demand for an additional 56,000 acre-feet annually beyond the supplies that will be available from future water conservation and recycling. 2) The EIR does not fully analyze alternatives to the proposed project. The EIR defines its purpose in an overly narrow manner, precluding an analysis of alternatives that include conservation, recycling and groundwater treatment. In 2004, Water for California and the Planning & Conservation League released the Investment Strategy for California Water, which demonstrates that California can more than meet water needs with implementation of cost-effective water conservation, water recycling, and groundwater clean up. According to the California Water Plan Update, Urban Water Use Efficiency holds the greatest potential as a water management option with a potential to provide up to 3.1 million acre feet of water. The Update states that recycled water has a potential to provide up to an additional 1.4 million acre feet of water. Groundwater management and storage is also identified as having a significant potential at greater than 2.0 million acre feet.1 1 California Water Plan Update, Highlights, page 15 ,2 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0,0 .V Addliord Annual Water DHigh Estimate • Low Estimate CjjyjjjjD r~~J ^^ •. ... California Water Plan Update, Highlights, page 14 The recently released California Bay Delta Authority Water Use Efficiency Comprehensive Evaluation Public Review Draft April 2006 evaluated water use efficiency potential in California and found that statewide, there is 3.1 million acre feet of existing potential. The Comprehensive Evaluation further identified 330,000 acre feet of cost effective water conservation potential that could be achieved in the South Coast region by 2010, and over 500,000 acre feet of potential savings that could be achieved by 2020 (p. 120, figure 3.13). This implies that by 2010, cost-effective water use efficiency could provide over six times the water that is proposed to be produced by the desalination facility. It is widely understood that the Best Management Practices (BMPs) agreed to over a decade ago as part of the Memorandum of Understanding in the formation of the Urban Water Conservation Council represent minimum water conservation actions and minimum potential savings and do not represent all cost-effective water conservation practices. For example, the BMPs do not include any outdoor water conservation measures as described in the findings of the State Landscape Taskforce. Since the MOU was signed over a decade ago, new methods for achieving greater water savings have been identified. For instance, this year AB 1881 (Laird) sponsored by the San Diego County Water Authority would direct water agencies to implement outdoor conservation beyond the current implementation required by the MOU's BMPs. Other pending legislation, including AB 2515 (Ruskin) and AB 2496 (Laird) would seek to implement feasible and cost-effective water conservation programs that water agencies, including San Diego County Water Authority have not yet implemented. Analyzing these water saving alternatives in this EIR is especially appropriate given the stated interest in a drought-proof water supply. Unlike seawater desalination, conservation, water recycling and use of stored groundwater are proven, reliable drought responses. Recent developments of these water management strategies have increased drought reliability in Southern California. For example, in Orange County, recycled water is being stored in natural local aquifers, providing a secure supply that can be accessed during drought periods. A more reliable local source of potable water for the San Diego region could be attained through a similar program. Why isn't ocean water desalination a reliable drought response? During a drought, the proposed desalination facility would continue to require a tremendous amount of energy, putting strain on the energy grid. The California Energy Commission's 2005 report Potential Changes in Hydropower Production from Global Climate Change in California and the Western United States - Consultant Report), shows that energy is less available precisely when local water needs are greatest. Addressing a shortage of water by creating a shortage of energy is not the mark of a sustainable drought response. These alternatives discussed above should be analyzed in the EIR in keeping with the recommendations of Governor Schwarzenegger's Climate Action Team. The December 2005 draft Climate Action Team Report to the Governor and Legislature outlines the potential energy and air emissions benefits of water conservation, especially in Southern California: Region, elevation, water use sector, and energy source, among other factors, all influence water energy intensity. The statewide average for climate change emissions per acre foot is skewed by the wide local variation in the water energy intensity. Everything else being equal, a cooling tower condition meter installed in an industrial plant in Northern California will save 2,920 kWh compared to 9,270 kWh saved annually in a comparable plant south of the Tehachapi Mountains. Increased water use efficiency is the key element in the California Water Plan Update (Bulletin 160-05) plans to meet the state's needs for water in 2030 with a growing population. The plan calls for reducing urban water use by 1.1 to 2.3 MAP per year and agricultural water use by 0.5 to 2.0 MAP per year by 2030. Accelerating the investment to attain that water use savings by 2015 would result in an estimated additional climate change emission reductions of approximately 30 million tons cumulatively by 2030. Accelerating the investment to 2010 would result in a further cumulative reduction of 10 million tons, (p.63) http://www.climatechange.ca.gov/climate_action_team/reports/2005-12- 08 DRAFT CAT REPORT TO GOV+LEG.PDF 3) By failing to analyze the proposed large-scale desalination facility apart from the Power Station, the EIR fails to analyze the full environmental impacts of the desalination facility, especially impingement and entrapment of marine life. In order to ensure all impacts from a desalination facility are understood, the Department of Water Resources' Desalination Task Force recommended that impacts from a proposed project be assessed separately from the existing power plant, as co-locating a desalination facility with a coastal power plant, as is proposed with the EIR, can provide a justification for the continued use of once-through cooling technology. The EIR fails to follow this State Agency's recommendation. In failing to analyze impacts separately from the power plant, the EIR fails to address the issue of 316(b) compliance and fails to discuss the State Lands Commission resolution adopted on April 17,2006 which states that the Commission "shall not approve new leases for power facilities, whose operations include once-through cooling unless the power plant is in full compliance, or engaged in an agency-directed process to achieve full compliance, with requirements imposed to implement Clean Water Act Section 316(b)." In their resolution the Commission acknowledges the co-location issue, stating, "it is premature to approve new leases or extensions, amendments or modifications of existing leases to include co-located desalination facilities or other uses of once-through cooling water systems until first considering whether the desalination facility would adversely affect compliance by the power plant with requirements imposed to implement both the federal Clean Water Act Section 316(b) requirements and any additional requirements imposed by the State Water Resources Control Board and appropriate Regional Water Quality Control Board under state law and their delegated Clean Water Act authority. The Ocean Protection Council passed a similar resolution in April 2006. The DEIR must explain how the project will comply with the State Lands Commission resolution and the Ocean Protection Council resolution, as well as the general body of scientific evidence detailing the harmful effects of Once-through Cooling on marine ecosystems. Of note, in May 2006, the Contra Costa Water District (CCWD) released the Draft Environmental Impact Report/Environmental Impact Statement (Draft EIR/EIS) for CCWD's Alternative Intake Project for public review and comment. The Draft EIR/EIS evaluates the proposed construction and operation of a new non-open-water intake for CCWD. This document should be analyzed in the EIR for the Poseidon-Carlsbad Desalination Plant. Because the DEIR does not adequately assess the environmental impacts of entrainment and entrapment at the proposed desalination facility, the DEIR is fatally flawed and must be rejected. 4) The EIR does not provide clear information about the project's use of energy. Specifically it fails to clearly explain the amount of energy required for this project, the source of that energy, how that energy production affects overall project costs, the affects of global climate change on energy availability, the impact of the project's energy consumption on global climate change, and the impact of the project's energy consumption on air quality. Amount: In our previous comments PCL described the failure of the EIR to adequately quantify the energy required for this project. The 2005 Huntington Beach Desalination Plant REIR for a similarly sized 50 MDG facility stated that the operation of the proposed project would require 720 to 840 megawatt hours per day, enough for 30,000 to 35,000 residential units. Cost and Source: The EIR also fails to identify the source energy or energy costs for the project. The claimed benefits of this project would be greatly reduced if the price of water from the facility became prohibitively expensive, as has been the case with Tampa Bay's desalination facility. If the energy for the project will come from the energy grid, a discussion of the impact on energy costs and energy availability for other energy users must be included in the EIR. Global Climate Change: Global climate change is occurring in California today. As the new film "An Inconvenient Truth" reminds us, we must have a frank and open discussion about how it is shaping our lives and how we are directly contributing to the problem. An Environmental Impact Report is the most appropriate forum for a discussion of the affects of a project on climate change and the affects of climate change on a project. This perspective is shared by the Attorney General of California. On March 30, 2006 the office of the Attorney General of California submitted extensive comments calling for the analysis of the impacts of a Long-Range Transportation Plan on climate change. The comments submitted by the office of the Attorney General in response to the Orange County Transportation Authority Long-Range Transportation Plan Draft Program Environmental Impact Report should be analyzed and included in the EIR. Affects of Global Climate Change on Project: In addition to the California Energy Commission's report on changes to Hydropower Production from Climate Change, the California Water Plan Update 2005 also acknowledges that climate change will affect the way water can be managed: "Managing water resources with climate change could prove different than managing for historical climate variability because climate change could produce hydrologic conditions, variability, and extremes that are different from what current water systems were designed to manage; may occur too rapidly to allow sufficient time and information to permit managers to respond appropriately; and may require special efforts or plans to protect against surprises or uncertainties." (Page 4-32) The EIR must include an analysis of the California Energy Commission's report and analyze the implications of the California Water Plan Update's predictions regarding water management under climate change, specifically addressing how climate change will affect the energy sources for the proposed desalination facility and therefore the reliability and cost of water supplied by the facility. Also, most climate change models predict an increase in sea level. Some models predict these changes to be on the magnitude of tens of feet. This calls into question the viability of the physical/structural components of this proposal. The DEIR must describe what reasonably foreseeable actions might be carried out to ensure that the facility functions properly under these new conditions and what environmental impacts may be expected from those actions. Project Impacts on Global Climate Change: The DEIR must also analyze the impacts of the project's power demand on the energy grid for California and the Pacific Northwest and how the increased energy demand will contribute to global climate change. The instructions for the US Department of Energy's Voluntary Greenhouse Gas Reporting program (http://www.eia.doe.gov/pub/oiaf/1605/cdrom/pdf/FormEIA- 1605 2005_Instructions.pdf) state that the carbon intensity of the California electric grid is 0.275 metric tons of CO2 per MWh. According to the EPA's calculations, the generation of 714 MWh per day to power the desalination facility (the energy use estimation in the 2005 Huntington Beach Desalination Plant REIR) would generate 196.35 metric tons of CO2 per day. For reference, an average new car driven an average amount is estimated to produce approximately 12,000 Ibs (5.44 tons) of CO2 per year. That means that the generation of 714 MWh per day to power the Poseidon- Carlsbad Seawater Desalination Project at Enema Power Station would release as much greenhouse house gases as the addition of 13,174 new cars in Southern California each year. Unfortunately, by failing to address climate change the EIR avoids the opportunity to move beyond a fundamentally flawed and outdated assumption, that environmental conditions in California have been static and will continue to be static in the future. This is not true and therefore the EIR must be rejected. Air Quality: It should be noted the San Diego air basin is currently in non-attainment status for PM 10 and ozone. Given the high levels of smog-forming NOx emissions and PM10 from power plants and the clearly identified relationship between air pollution and elevated rates of childhood asthma and cancer in Southern California and throughout the state, any additional air pollution generated because of the Poseidon-Carlsbad facility must be analyzed in light of these accompanying health affects. 5) Growth inducing impacts have not been adequately analyzed. The absence of an identified user for all of the new water supplies or an identified mechanism, plan, or intention to ensure the decrease in importation of water calls into question the intended use for the project, and implies that water produced from this facility will be used to induce or facilitate new development and growth. Unfortunately, the EIR does not answer basic questions about the nature of those growth- inducing impacts. According to the Department of Water Resources' Desalination Task Force Findings, seawater desalination requires 30 percent more energy than any other supply source to Southern California, including imported water. As noted above, without a mechanism to ensure that water produced through seawater desalination actually reduces the importation of water, the DEIR should not understate the new facility's potential to generate large new growth in energy demands and construction of energy supply facilities. 6) The EIR fails to assess Environmental Justice Impacts from increased water costs and proliferation of the Encina Power Station operation. As discussed above, the proposed project may provide justification for the extended operation of the Encina Power Station. In the absence of the proposed project, the EPS may close as newer, more efficient and less environmentally-damaging power generation is developed. Operation of the proposed project would provide justification for the continued use of the Encina Power Station even if less environmentally-damaging power becomes available. Continued operation of the facility may have health effects that must be analyzed. In addition, if the proposed project were to provide water to the residents of San Diego County, the expensive water could increase the cost of water throughout the county. This potential increase in price could be marginal, but even a marginal increase in cost could severely impact residents on limited incomes. Because the EIR fails to address these impacts it must be rejected. 7) The EIR does not indicate how the privately owned facility will operate as a supplier of public water. The San Diego County Water Authority is currently considering a publicly owned facility on the same location as described in this Poseidon-Carlsbad Desalination Plant EIR. This greatly increases the need for a detailed discussion of the different environmental scenarios resulting from public and private ownership of a desalination facility in the City of Carlsbad. 8) The EIR does not adequately indicate how the facility will assure the healthfulness of the product water. There are several chemicals in seawater that are either not found in freshwater, or are found only in very low concentrations. For instance some algal toxins such as "Red Tide" are found in seawater. In addition wastewater discharges to the ocean introduce endocrine disrupters, viruses and parasites to coastal waters. Because California currently uses very little desalinated water, these constituents have not been evaluated as potential public health risks for drinking water. The EIR fails to show how it will identify, test and filter for any currently unmonitored contaminants and is therefore inadequate and must be rejected. 9) The Cumulative Impacts of desalination on the Southern California Bight are not adequately assessed. The EIR fails to include all proposed sites for desalination facilities in Southern California or address how proposed desalination projects in Southern California will perpetuate the use of harmful open ocean intakes on the Southern California Bight. Conclusion The residents of Carlsbad and the Carlsbad City Council will be some of the first to examine large-scale ocean water desalination in the United States. They deserve and require an Environmental Impact Report that allows them to weigh the issues carefully, to examine how their health and environment will be affected and how their actions will 10 affect their neighbors in the rest of the state and beyond. They have not received that document. Why is an accurate document so important? The environmental impacts discussed in an Environmental Impact Report are not abstractions that exist only on paper. They represent physical realities that will have an impact in the way we and our children experience the world. As "An Inconvenient Truth" reminds us, global climate change does not exist out in some netherworld. It is shaping California today and forcing us to carefully examine the choices we make. Ocean water Desalination greatly increases energy consumption. Water conservation and water recycling both reduce energy consumption. A factual, accurate document allows the reader to understand such issues and make an informed decision. It allows a parent to consider whether she is willing to tell her children, "I had the opportunity to reduce greenhouse gases and make the world more livable for you and I didn't." Because of the deficiencies outlined in our earlier comments and in the comments above, we ask the Carlsbad City Council to reject this legally deficient Environmental Impact Report and demand accurate information about the impacts of this proposed project. 11 Investment Strategy for California Water November 18, 2004 A Project of Water For California Coordinated by the Planning & Conservation League Executive Summary California's growing population, our $1.4 trillion economy and our natural resources all require clean, reliable and affordable water. At the same time with extremely limited federal, state and local budgets we cannot afford to make investment decisions that will not produce results. This Investment Strategy for California Water identifies the most cost-effective, environmentally beneficial and socially acceptable water management strategies. It directs public investments to locally planned and implemented programs to increase regional water self-sufficiency. This Investment Strategy will serve as our framework for sponsorship and support of the next state water bond. The Investment Strategy analyzed a wide range of management options, all the way from conservation and recycling to transfers, desalination and building new dams. The Strategy was developed in a fully open and inclusionary process. All drafts were posted for comment on the PCL website. Input from two public workshops helped guide development of the Strategy. Each of the recommendations is fully documented by multiple, credible sources. The table below demonstrates that we can more than meet California's water supply needs with the Strategy's identified priority investments. Additional Needs Population Increase Environmental Restoration Total additional needs million acre-feet 2.0-2.4 1.0 3.0-3.4 First Priority Options Urban Water Conservation Agricultural Water Conservation Recycled Water Groundwater Treatment and Desalination Total First Priority Potential million acre-feet 2.0-2.3 At least 0.3-0.6 1.5 At least 0.29 At least 4.09-4.69 In addition there are other options that are being considered to meet California's water needs. Water transfers will continue to be a significant strategy for meeting needs. However, they can also harm third parties and the environment. Therefore the Investment Strategy sets forth conditions needed to ensure transfers will not harm areas of origin, areas through which the water is conveyed, and areas receiving the water. The Investment Strategy looked at current proposals to increase reliance on additional exports from the Sacramento-San Joaquin Bay Delta Estuary. The recent study done for the Bay Delta Authority demonstrated that there is a 64% chance that the Bay-Delta will experience abrupt changes resulting from flooding or seismic activity within the next fifty years. A reasonable level of investment needs to be made to protect the Delta including existing export capability. However, it is not prudent to risk California's economy and water supply by relying on increased exports from such a fragile system. Water storage is another strategy that was reviewed. Groundwater storage, frequently done as part of a conjunctive use program, can have significant benefits as long as the sources of the water are protected. There is much rhetorical support for new surface water reservoirs. However despite tens of millions of taxpayer dollars spent studying the proposals in the CALFED Record of Decision, not one has been found to be cost effective or environmentally acceptable. Furthermore not one of the potential beneficiaries of the proposed surface reservoirs has offered to use their own money to pay for their benefits. The Investment Strategy includes recommendations on how to protect taxpayers by implementing the "beneficiary pays" principle. Desalination is another option that was reviewed. Groundwater desalination is a cost effective and environmentally beneficial method for restoring groundwater storage capacity and providing additional water supplies. However, unscreened ocean water desalination perpetuates the loss of marine species. Until adequate screening can be accomplished, that type of desalination is not recommended. Potential effects of global climate change on water supply were analyzed. The first priority recommendations - conservation, recycling and groundwater treatment - all meet the criteria as "no regrets actions" (strategies that make sense whatever the impacts of global climate change.) The Strategy also sets forth important priorities to provide water quality, environmental restoration, social equity, a strong economy, viable agriculture and preservation of open spaces, as well as integrated resource management. For additional information please contact Mindy Mclntyre, Water Policy Specialist, Planning and Conservation League, (916) 313-4518, mmcintyre@pcl.org. Introduction California's growing population, our $1.4 trillion economy and our natural resources all depend on clean, reliable, and affordable water. However, limited federal, state, and local budgets strain our ability to meet these needs. The CALFED program is under-funded by more than $15 billion dollars to complete projects originally envisioned in the CALFED Record of Decision (ROD).1 State general funds are in deficit. Voter-approved bonds (Propositions 13 and 50) that provide state funding for water programs will soon run out. In addition, research indicates that California's water system will be significantly impacted by global climate change.2 Data shows more precipitation is coming in the form of rain versus snow, and the snow pack is melting earlier in the spring. Flooding is more severe and frequent. Low-lying Sacramento-San Joaquin Delta levees are even more prone to failure. However, state and federal water planning fails to properly account for these new realities. These agencies remain focused on trying to increase exports from Northern California and the Bay-Delta Estuary and constructing new dams for the State Water Project (SWP) and the Central Valley Project (CVP), even as evidence of the potential for cost-effective improvements in water-use efficiency grows. With limited funding, we must make choices that maximize public benefits. While there is a growing need to address water demands and climate change impacts, there simply is not enough money to pursue ineffective projects. Recently, innovative thinking at the local and regional levels has resulted in highly cost-effective, multi-benefit solutions to water management challenges. Local water management solutions including conservation, recycling and groundwater treatment have the potential to meet the additional needs of California through more efficient utilization of water resources. This Investment Strategy calls for directing public funding to locally planned and implemented programs that will increase regional water self-reliance. These programs are more prudent and reliable than proposals dependent on increased water exports from Northern California and the Bay-Delta Estuary. This Investment Strategy analyzed a wide range of management options to meet the following seven objectives: • Provide reliable water to meet California's growing needs • Provide safe water for all Californians • Restore and sustain a healthy environment • Preserve viable agriculture and protect open spaces • Ensure social equity for all Californians • Enable a strong economy • Implement integrated resources management Investment priorities are given to those management options that maximize cost- effectiveness. Additional weight is given to those priorities that help California adapt to climate change, improve water quality, enhance the environment, protect the public trust, and are consistent with multi-objective integrated resource planning currently being implemented in many regions around the state. This Investment Strategy will be used as a guide for development of the next water bond. It establishes a framework for implementation of the "beneficiary pays" principle. It is also a useful guide for informing local decision makers as they choose which management options can provide the largest return for local investments. Investment Objectives Provide Reliable Water to Meet California's Growing Needs California's Growing Needs An essential requirement for a healthy California is a reliable water supply for all beneficial uses. Water needs to be available not only in wetter years but also in California's recurring droughts. Each region in California has its own needs, constraints and opportunities. It would be presumptuous for this Investment Strategy to suggest the right mix for each area. That comes from the integrated resources planning that more and more regions are now undertaking. Nevertheless, it is possible to look at aggregate needs and opportunities. This can be a useful tool for informing California's water investments. Additional Population The California Department of Finance projects that the state's population will increase by about 12 million people by the year 2030.3 Much, but not all, of this increase will be accompanied by newer, more water efficient housing. Anticipating their water use will be somewhere between 5 percent and 20 percent less than the current average water use; they will use 2.0 to 2.4 million acre feet per year. Environmental Restoration The second increased need is for environmental restoration. Like all other water users, managers of environmental resources, such as managed wetlands, need to be as efficient as practical. However, the reality is that river ecosystems do not function when there are insufficient flows, or in some cases no flows at all. As an approximation, about 1 million acre feet of water needs to be returned to the environment. Total Additional Needs for Population Increase and Environmental Restoration- 3.0 to 3.4 million acre feet How Can We Adapt to Global Climate Change? It is now recognized that global climate change is affecting California's water supply. Data show more precipitation is in the form of rain versus snow, and the snow pack is melting earlier in the spring.4 Larger year to year variations in precipitation are very likely over most areas where an increase in mean precipitation is projected. The Bay-Delta levees, already vulnerable to seismic activity, land subsidence, and inadequate maintenance will be further jeopardized by the rising sea water levels. It is estimated that between 1990 and 2100 global average sea level may rise between 3.5 to 35 inches as a result of climate change.6 Although a few countries began adapting as early as the 1980's, California lacks a program to ensure safe, reliable water in the face of impacts of climate change. What can be done to increase reliability? Investment should be increased immediately in cost-effective "no regrets" actions that maintain reliable water supplies using already available technology. According to the National Academy of Sciences "no regrets" actions are those that provide benefits whether an abrupt climate change ultimately occurs or not.7 As recommended in other sections, water conservation, water recycling, and groundwater treatment programs will remain cost-effective and optimize water resources. Investing in these programs will also reduce dependence on vulnerable and over-allocated water systems such as the Bay-Delta Estuary. In addition to investing in "no regrets" actions, the state should implement a two- stage approach to plan for the effects of climate change in water forecasts. The first stage should consist of a study performed by the University of California to analyze several scenarios for state and regional water supplies under different climate conditions for the next several decades. This study should include alternate hydrologies under various temperature and precipitation predictions, and it should include a cost-benefit analysis comparing various adaptation strategies. The results of these analyses will allow local, regional, and state water suppliers and users to incorporate climate change scenarios into their water resource planning. This is the approach the United Kingdom is already using to adapt to global climate change.8 How does global climate affect other options? State Water Project and Central Valley Project water deliveries are dependant on a vulnerable system with over 1,100 miles of Delta levees. Forty-five Delta levees have failed and 37 Delta islands have flooded since the State Water Project began pumping out of the Bay-Delta Estuary in 1971.9 Sea level rise, inadequate levees, increased flood flows and land subsidence behind the levees will increase the number of levee failures and disrupt water deliveries. It should also be noted that the 2004 levee break on Lower Jones Tract occurred in the summer with no flooding or earthquake. Moreover, the location of the levee break was never identified as an area of concern, and in fact the area had just been inspected.10 Until we can be assured of the resiliency of the Delta from flooding, sea level rise and earthquakes, we should not increase our dependency on exports from the Bay-Delta Estuary. The cost-effectiveness, reliability and environmental acceptability of increasing surface water storage for meeting California's water needs were also considered. California already has over 1,300 major dams and reservoirs that can store over 35 million acre feet of water.11 Although they have helped develop water supplies for our uses, they have also had profound impacts on California's natural resources. Already, 40 percent of natural freshwater flows on average are diverted before reaching the San Francisco Bay.12 Many of the major runs of salmonid fish species are threatened, endangered or, in some watersheds, extinct. Eighteen species in the Bay-Delta Estuary are listed as endangered or threatened.13 With global climate change these environmental impacts will increase. Another result of climate change is larger variations in precipitation.14 This can reduce the "yield" of proposed new surface water reservoirs. In addition, none of the CALFED studies to date has identified a new surface water reservoir whose benefits would exceed its costs. Furthermore, potential beneficiaries have not been willing to pay for new surface storage or even the costs for studies necessary for new surface storage. As outlined in the next section there are many more cost-effective actions California can take to maintain water supply reliability without increasing damage to our environment. Where Will the Water Come From? Water agencies have begun to successfully invest in diversified portfolios of programs and projects to maintain water supply reliability. This Investment Strategy emphasizes those programs that have proven to be cost-effective, maximize regional self-sufficiency, and are capable of being implemented. Strategies such as water conservation, recycling, and groundwater treatment including desalination are also the most reliable during drought periods. Invest in First Priority Water Supply Reliability Options These are the most cost-effective, environmentally and socially positive actions. They utilize existing, proven technologies and are already part of many regional integrated water management plans. They are also part of a responsible "no regrets" strategy to adapt to climate change. Urban Water Conservation - 2.0 to 2.3 million acre feet Urban water conservation by existing residents will continue to be the leading source of water for California's growing population. Water conservation is one of the main reasons that urban areas have been able to accommodate the last two decades of growth with about the same amount of water they used in the 1990's.15 However, there is still much more that can be accomplished with existing, readily available technology. This includes low-flow toilets and showerheads, efficient clothes washers, weather-based irrigation controllers, more efficient commercial and industrial cooling equipment, etc. Like all water management strategies, urban conservation faces implementation challenges. However, these challenges are less than those faced by other more costly and environmentally damaging options. Greater communication and collaboration among local agencies and stakeholders, as well as focused support from state and federal agencies will help to overcome these challenges. While these implementation challenges do need to be addressed, the high yield from conservation justifies significantly increased investments. The California Department of Water Resources estimates that an additional 1.5 to 2.5 million acre feet of urban conservation is achievable.16 In a more detailed report, the Pacific Institute estimated the potential as 2.0 to 2.3 million acre feet.17 Over half of that savings can be achieved at a cost of $200 per acre foot or less and at least 85 percent of the total potential can be realized for less than $600 per acre foot.18 For purposes of comparison the rate Metropolitan Water District of Southern California charges its member agencies for treated water is projected to be $417 in 2004, increasing to $488 to $530 by 2009.19 Agricultural Water Conservation - Very conservatively 300,000 to 600,000 acre feet Quietly and with little fanfare, farmers have achieved major efficiency improvements. Largely in order to maximize profits, they have increased crop production per acre foot of water by 50 percent since the 1980's.20 An extremely conservative estimate is that by the year 2030 farmers will continue to conserve another 300,000 to 600,000 acre feet.21 That is less than a 2 percent total increase in efficiency over 25 years. Another incentive for farmers to increase their irrigation efficiency will be the continued need to reduce Total Maximum Daily Loads (TMDL's) of contaminants. More efficient irrigation reduces runoff of pesticides and fertilizers. Just as in the past three decades, these conservation investments will actually increase farmers' net profitability. In addition, new technologies such as Regulated Deficit Irrigation actually reduce the amount of water some tree and vine crops use. The University of California has estimated a maximum potential of about 1 million acre feet of water use reduction, however some of fraction of that is probably already being achieved by innovative farmers.22 Improved efficiency will also be a major way that agriculture will deal with their groundwater overdraft. Agriculture cannot afford to pay for new surface water facilities to make up for their overdraft, and public funding is unavailable for further agricultural water subsides. Water Recycling -1.5 million acre feet Similar to conservation, water recycling is an extremely reliable strategy in all years including droughts. California generates about 5 million acre feet of municipal wastewater per year. Currently California recycles only about 10 percent of this wastewater, or 450,000 to 580,000 acre feet per year. Recycled water provides a substitute source for many water supply demands, such as industry, landscape and agricultural irrigation. The Department of Water Resources has recently identified 1.5 million acre feet of additional recycling potential at an average unit cost of about $600 per acre foot.23 Groundwater Treatment including Groundwater Desalination - 290,000 acre feet just for groundwater desalination; additional amount from other groundwater treatment currently unknown Between 25 and 40 percent of California's water supply in an average year comes not from surface streams or reservoirs but rather from beneath the ground. Groundwater resources can be effectively diminished if they become contaminated to such a degree that the water remaining in the aquifers is rendered unusable.24 In several groundwater basins there is water that is saline or has other constituents that prevent the water from being safely used. This is a particular issue for those communities, frequently low-income, entirely reliant on groundwater. From 1984 to 2001, more than 4,000 wells were removed from the drinking water system,25 and the coding of those wells in the Department of Health Services Drinking Water Database implies that contamination may have motivated the closure of many, if not most, of them.26 Treatment technologies can allow this water to be safely used. Cleaning up groundwater basins also allows them to be used for storage as part of a conjunctive use program. Because the salinity of groundwater is less than ocean water, the cost of groundwater desalination is less than ocean water desalination. In addition it does not have the impacts on fish and larvae associated with unscreened ocean water desalination. Environmentally acceptable methods exist for disposing of brine water associated with groundwater desalination.27 The State of California Desalination Task Force found that there is a potential for 290,000 acre feet of additional groundwater desalination at costs that range from $130 to $1,250 per acre foot.28 Stormwater Infiltration - amount currently unknown Capture and groundwater storage of in-basin precipitation has the potential to provide increased management flexibility and self-sufficiency to many regions in California. For instance, annual water use in the Los Angeles Basin29 is estimated at 1.6 million acre-feet. The annual runoff volume to the ocean in this area averages about 550,000 acre-feet, nearly a third of the total amount needed to meet the Basin's demands. In addition, there are nearly 2 million acre feet of unused storage in regional groundwater basins.30 Capturing some of this runoff for infiltration could help this and many other regions become more self-sufficient. 10 In addition to water supply benefits, local capture and storage can provide improved water quality in streams and the ocean, reduced flood risk, and many environmental benefits through the reduction of non-point source runoff and storm water retention. Potential for local storage of stormwater has not yet been quantified, and thus no estimate of yield or costs can be provided. Total Water Available From First Priority Actions to Meet the Needs for Population Increase and Environmental Restoration - at least 4.09 to 4.69 million acre feet MEETING CALIFORNIA'S GROWING NEEDS The following chart summarizes how California can more than meet our additional needs with cost-effective and environmentally friendly conservation, recycling and groundwater treatment including desalination. Federal, state, and local investments should focus on these programs. Additional Needs Additional Population Environmental Restoration Total additional needs million acre-feet 2.0-2.4 1.0 3.0-3.4 First Priority Management Options Urban Water Conservation31 Agricultural Water Conservation32 Recycled Water33 Groundwater Treatment and Desalination34 Total First Priority Potential million acre-feet 2.0-2.3 at least 0.3-0.6 1.5 at least 0.29 at least 4.09-4.69 11 Second Priority Water Supply Reliability Options It is recognized that with uncertainties surrounding global climate change, the state's available water supply might be reduced. Therefore, a set of second priority options can be considered by communities that have fully implemented their "no regrets" actions - conservation, recycling and groundwater treatment including desalination. Very few communities have yet approached full implementation of these programs. Second priority actions need to be evaluated on a case-by-case basis. While they can provide a water supply, they are not as environmentally sound or cost- effective as first priority options listed above. These actions can also cause adverse impacts that must be mitigated. Water Transfers Responsible, voluntary water transfers are one of the diverse strategies for increasing flexibility in water management. Water transfers are useful tools to meet many of the various needs of California. While agriculture to urban transfers are common, transfers from agriculture or urban areas to the environment should also be considered as a management option. In some cases water transfers that match water quality to use can better utilize existing supplies. Highest quality water can be used for potable uses and other water can be used for cooling, irrigation, etc. When the transferred water is from conservation, it actually stretches the supplies. When transfers are from selective fallowing or land retirement they reallocate water. In some cases this can be a net benefit to California. For instance paying farmers to retire 200,000 acres of land on the west side of the San Joaquin Valley with serious drainage problems can reduce water pollution, help farmers meet TMDL requirements, and make the water available for other purposes. While a useful management tool, water transfers and land retirements can have unintended impacts. Appropriate transfer conditions are needed to help ensure that local leaders in both source areas and receiving areas have adequate information to make informed investments, as well as ensure that third parties are protected. The following conditions should be set to ensure that transfers are appropriate: • Fallowing should be limited to prevent unreasonable impacts on local farming communities; 12 • Transfers based on groundwater substitution should not impact other users of the groundwater or impair groundwater aquifers; • Urban areas should be required to first maximize conservation and recycling before seeking transfers from agriculture. This is consistent with the recommendations of the Governor's Advisory Drought Planning Panel. The Panel recommended that for urban areas to be eligible for drought transfers they must be implementing applicable urban best management practices.35 In addition, California Water Code 10656 requires urban areas to complete an Urban Water Management Plan (UWMP) in order to receive drought assistance from the state.36 Urban water agencies are also required to have a current UWMP to be eligible for funding administered by the Department of Water Resources;37 • Only areas currently implementing development consistent with state planning priorities should be eligible to seek additional water transfers, (see Implement Integrated Resources Management section below); • For transfers of water from north of the Sacramento San Joaquin Bay-Delta Estuary to south of the Estuary, firm assurances need to be in place that such transfers will not impede progress towards improving Bay-Delta Estuary water quality or environmental restoration of the Estuary. • Permits to use California's water have been granted to allow specific uses of the state's water in specific places. Transferring water used in one area for a specific purpose to another area for a different use can have significant impacts on the environment in the place of origin. Therefore, when transfers of water result in a change of place and a change of use, a significant portion of the transferred water should to go to the environment for restoration. These provisions should be monitored and enforceable to ensure additional impacts from transfers do not increase overtime. The Department of Water Resources has estimated that an additional 300,000 to 700,000 acre feet of water can potentially be transferred.38 Conjunctive Use Agencies throughout California are actively pursuing opportunities to store water underground. New groundwater storage can complement existing surface storage to provide increased reliability. There are millions of acre feet of groundwater storage available in California. Under Proposition 13 there were proposals for several hundred million dollars in projects. One of the reasons 13 conjunctive use is so popular is that it often avoids many of the contentious issues that accompany proposals for new surface water storage. However, one issue that needs to be addressed for each proposal is the source of the water to be stored and the impacts of transporting it from its origin to storage. Investments in developing local ability to capture and store local water can provide the flexibility associated with conjunctive use and avoid the impacts from using transferred water. The Department of Water Resources projects an additional 500,000 acre feet of water from conjunctive use.39 Ocean Water Desalination Using Beach Well Intakes Desalination using beach well intakes can augment a local water supply. Beach well intakes use the sand to safely filter out organisms, avoiding the environmental impacts associated with unscreened ocean intakes. However, these intakes are limited in the amount of water they can extract. In addition, the desalination process is still very energy intensive and costly. Some coastal areas may choose to use beach well intake desalination in order to add diversity to their regional water supply portfolio. Additional Promising Management Options There are other promising strategies that could increase water supply reliability. These include watershed restoration projects such as the one promoted by Plumas Watershed Forum that retain water in the winter and slowly release it in the spring and summer. Systems that allow re-use of gray water and reservoir re- operation also can increase water reliability. Preliminary estimates of potential water supply from these sources are promising. Therefore, these options should be pursued and researched in order to quantify the benefits and identify the beneficiaries. Potential Water Supply Reliability Strategies that are Not Reliable, Cost-effective, or Environmentally Acceptable New Surface Water Reservoirs Additional surface water reservoirs would be costly to study and construct. The November, 2004 Draft California Bay-Delta Authority Finance Plan estimates that construction of the surface storage reservoirs proposed by the CALFED Record of Decision (ROD) would cost over $4 billion. The Department of Water Resources and the Bureau of Reclamation have spent tens of millions of taxpayer dollars trying to justify the five proposals identified for study in the ROD.41 According to the Department of Water Resources annual costs for the In 14 Delta Storage reservoir proposal would be $60 million and annual benefits would be only $30 million.42 After four years they have not been able to find a single beneficiary willing to cost-share for these projects. All of the surface water storage proposals being promoted are based on major subsidies from the general public,43 but they have little if any general public benefit. Despite political support from some water users for new surface water reservoirs, no one has offered to pay for the water. New surface water reservoirs also have significant adverse environmental impacts and they will yield only a fraction of the water that can be achieved from the less costly, more environmentally sound options outlined above. Increased Reliance on Exports from the Sacramento - San Joaquin Bay- Delta Estuary It is not responsible to risk California's future by increasing reliance on exports from the fragile Sacramento - San Joaquin Bay-Delta Estuary. In addition to the history of levee failures, land subsidence, inadequate maintenance and the additional impacts of global climate change discussed above, the Delta levees are also highly vulnerable to earthquakes. According to a recent analysis by Dr. Jeffery Mount for the CALFED Science Program, the Bay-Delta Estuary is undergoing significant changes on multiple scales, including changes that significantly increase the pressure on Delta levees.44 Dr. Mount's study found that there is a 64 percent chance that the Bay-Delta will experience abrupt changes resulting from flooding or seismic activity within the next fifty years.4 These changes would permanently alter the hydrology, water quality and ecosystem of the Estuary. Furthermore, Dr. Mount found that there is no institutional capacity to address these permanent changes. Sustaining even the current level of exports from the Bay-Delta Estuary will require significant federal, state and local investments in levee maintenance and improvement. In addition, there are significant unresolved water quality, environmental, and financial questions associated with current pumping levels. These are the same issues that have plagued proposals to increase exports from the Bay-Delta Estuary for the past three decades. As the comparison of future water needs and opportunities shows, implementing feasible strategies will eliminate the need to increase exports. Desalination Using Unscreened Ocean Intakes Desalination using unscreened open ocean water intakes is also not recommended for investment at this time. Although new reverse osmosis filters and improved systems have reduced energy demand and costs, in most areas 15 ocean water desalination is still among the most expensive and energy intensive water management options. The cost-effectiveness of ocean water desalination is also susceptible to likely increases in energy costs. In the United States there has never been a desalination plant built on the scale of those currently being considered by some California coastal communities. In fact, the desalination plant built in Tampa Bay, Florida in 2003, which is only half the size of the large projects proposed in California, has yet to provide the water originally envisioned. 46 Furthermore, the cost reductions promised by proponents have not yet been realized in operational plants. California coastal communities thus take a high financial risk if they attempt to rely on unscreened ocean desalination. In addition to the financial risks, there are unacceptable environmental impacts. There is currently no effective way to screen out fish and larvae. Results of a study of the impacts of impingement at a Morro Bay cooling water intake facility conducted from 1999 to 2000, reported a yearly rate of impingement of 55,000 invertebrate individuals and 78,000 fish.47 The study further found that up to 32% of the larvae in the Morro Bay area were being killed due to entrainment at the intake.48 Proposed unscreened ocean desalination would use intakes like the one at Morro Bay. Linking desalination plants to existing coastal power plant cooling intakes helps perpetuate intake systems that negatively impact the environment.49 Technology and research may in the future reduce environmental impacts and economic costs. However, for the near term, unscreened ocean desalination has unacceptable environmental impacts and is not as cost-effective as other available options. Provide Safe Water for All Californians Prevent groundwater pollution and treat contaminated groundwater Local areas can maximize local water supplies and management flexibility by using groundwater and groundwater storage if these resources are not polluted. The Department of Water Resources Bulletin 118, California's Groundwater Update 2003, found that poor land use decisions can reduce the amount of groundwater in local storage basins and degrade the quality of groundwater.50 Local land use agencies that invest in protecting natural groundwater recharge areas and wellhead zones will prevent costly clean up and will be able to 16 optimize their local groundwater resources. Non-point source reduction efforts such as storm water capture and reduced use of contaminants will help prevent groundwater pollution. Planning agencies can maximize groundwater quality and quantity by directing development away from recharge areas and ensuring that development incorporates porous surfaces. However, many groundwater basins are already contaminated. Naturally occurring contaminants such as arsenic and radon prevent some groundwater from being safely used as potable water. Man-made contaminants such as MTBE and perchlorate have polluted many other groundwater aquifers. Local and public investments in treating contaminated groundwater help to diversify water supplies and enable more flexible water use, including conjunctive use. Prevent surface water pollution and treat contaminated surface water Polluted runoff and direct discharges into streams decrease water quality for local users, the ecosystem, and downstream water users. This degraded water quality increases treatment and mitigation costs. While water treatment processes remove many of these contaminants from drinking water, others stay in the environment and degrade beaches, rivers and other ecosystems. Investments in programs to reduce runoff and pollution, as well as investments in stormwater treatment will significantly reduce environmental impacts, improve water quality and reduce costs of water treatment. With proper management, runoff can be used to refill groundwater basins, increasing regional water supply reliability. Local government and water agencies can reduce pollution and protect the sources of their water by developing source water protection plans based on the statewide source water assessments recently compiled by the California Department of Health Services (DHS).51 The DHS source water assessment program evaluated public drinking water sources to determine the human-caused activities to which water sources are most vulnerable.52 Local agencies can use this information to take proactive measures to minimize those activities likely to cause contamination of the local water source. Effective source water protection plans will help ensure public health and reduce water treatment costs. Investments in implementation of best management practices in urban areas and efficient water management practices for agricultural water users will both reduce costs of clean up and maximize available water supplies throughout a watershed. Investments should increase where necessary to treat man-made and naturally occurring contaminants found in drinking water supplies. These investments are necessary in order protect public health. 17 Invest in water quality monitoring, assessment, and research It is important to both public health and to planning efforts to know whether local and statewide water supplies can be safely used. Investments in integrated statewide monitoring, information assessment and scientific research will enable better identification of, and quick response to contaminants that threaten water sources, public and ecosystem health. The State Water Resources Control Board should fully implement the groundwater contamination and water quality monitoring program as outlined in AB 599. This program would establish a comprehensive monitoring program capable of assessing each groundwater basin in the state.53 Identifying and addressing pollution at an early stage will reduce clean up costs and minimize the loss of important water supplies. Because of the broad public and local benefit of this information, state, federal and local funds should be increased for such programs. Retire unsustainable agricultural lands Some agricultural lands in the westside of the San Joaquin Valley have severe drainage problems. Highly saline and toxic tail water from these lands contributes to the salinization of soil and contamination of surface and ground waters. Retiring these lands will return benefits including improved water quality and quantity, reduced clean up costs, and a healthier environment. Local farmers have expressed interest in selling this unsustainable agricultural land. Investments should be made to buy this land and take it out of agricultural production. If tax dollars are invested in taking this land out of production, taxpayers should be assured they will benefit, especially the surrounding communities. The local community should receive an investment that will allow for a diversification of its economy. Furthermore, the water saved from the retirement of this land should be dedicated to improving water quality and the environment for the entire state. Enforce the polluter pays principle Various pollutants have contaminated surface and ground waters of the state. When taxpayers pay for the clean up of polluted waters dischargers have no incentive to stop polluting. For instance, MTBE has polluted many California waters. MTBE clean up is expensive and difficult. Yet, MTBE producers have aggressively fought against taking financial responsibility for water supply clean ups. 18 Enforcement of the polluter pays principle should focus on removing and eliminating the maximum amount of the pollutant in question from the environment and public water supplies. Enforcing a polluter pays principle will encourage industries and other dischargers to ensure pollution never reaches water sources and thus, save taxpayers hundreds of millions of dollars. Restore and Sustain a Healthy Environment Investments in our environment return substantial benefits to all Californians. Functioning ecosystems provide increased groundwater recharge, improved water quality, multiple recreational opportunities, and increased flood protection at a reasonable cost. Healthy rivers, beaches and other natural landscapes contribute significantly to California's $75 billion tourism industry. Ecosystem investments such as those identified below should be a part of a balanced investment package. Restore California's rivers and freshwater ecosystems to a sustainable and attractive status consistent with the public trust California's second largest tributary to the Bay-Delta Estuary, the San Joaquin River, is completely dry for long stretches. Up to ninety percent of the Trinity River flows, formerly one of the most productive salmon nurseries in California, have been diverted south. These are two examples of the many California rivers that need to be restored. Recent court decisions have confirmed that both the Trinity and San Joaquin Rivers have been misused. These rivers could once again support recreation, provide habitat for fish and other wildlife and continue to be a part of California's water supply system. Even with court mandates for river restoration, actual implementation could be delayed for years. Restoration of these and other rivers will take dedicated leadership from the state and local public agencies. Investments and support directed to river restoration efforts, such as those for the Trinity and San Joaquin Rivers will benefit all Californians, including future generations. 19 Invest in the removal of unnecessary barriers to fish passage A limited number of dams across the state no longer serve their original functions. These dams impede fish passage, damage river ecosystems and create safety hazards for downstream communities. Removal of these dams will eliminate downstream safety concerns, create new recreational opportunities, contribute to restoration of functional river systems, and help to revitalize commercial and cultural fishing industries. Provide adequate freshwater for the Bay-Delta Estuary to restore its health and sustainability The Bay-Delta Estuary supports over 750 native species of animals and plants and contains 90 percent of the remaining coastal wetlands.54 While the Bay-Delta ecosystem is complex and intricate, it is recognized that the ecosystem requires varying amounts of freshwater depending on season and tides.55 This unique habitat has been severely impacted by development, including water development. On average about 40 percent of natural freshwater flows are diverted before reaching the San Francisco Bay.56 Eighteen species in the Bay- Delta Estuary are listed as endangered or threatened.57 Water quality continues to be a problem for both the Bay-Delta ecosystem and downstream water users. Invasive species continue to push out and threaten native species. Increased development and pumping from this already over-allocated system would increase these problems. With adequate freshwater, proper management and focused restoration efforts many of the ecological functions of the Bay-Delta Estuary will be revitalized. Benefits from a healthy Bay-Delta Estuary will include increased water reliability and water quality and preservation of California's biodiversity. Preserve Viable Agriculture and Protect Open Spaces California is home to some of the most productive agricultural lands and diverse open spaces in the world. California's agriculture industry grows more than half of the nation's total of fruits, nuts and vegetables.58 Open spaces provide habitat for California's unique wildlife. Other benefits derived from agricultural lands and open spaces include flood management, improved ecosystem health, increased groundwater recharge, and improved water quality. 20 Yet, with the pressures of increased population and demand for water in urban areas, California's open spaces and agricultural lands are shrinking. The Farmland Conversion Report states that more than 91,000 acres of farmland were urbanized throughout the state from 1998 to 2000 - a 30 percent increase from the 1996 to 1998 period.59 Two factors that contribute to the loss of open spaces and agricultural lands are development pressure and demand for water transfers from agriculture to urban areas. Investments in urban conservation, recycling and groundwater treatment including desalination will ease the pressure for transfers of agricultural water to urban areas and ensure that the benefits derived from these lands are recognized. Other sections of this Investment Strategy include recommendations that will also help to preserve these important lands. For instance, the Enable a Strong Economy section recommends better planning in California's urban areas that will help to slow urban sprawl and thus help preserve agriculture and open spaces. Invest in preserving and maintaining the many functions of the Sacramento - San Joaquin Bay-Delta Estuary The Sacramento - San Joaquin Bay-Delta is the largest estuary on the entire west coast of the United States. The Bay-Delta Estuary is also home to a successful agricultural industry. Residents of urban areas surrounding the Estuary enjoy access to recreation and fishing. The Estuary also provides the means by which to transfer water from Northern California to the south through the Central Valley Project and the State Water Project pumps. This array of demands has severely stressed the Estuary. It is simply over-allocated. Proposals to increase reliance on the Bay-Delta Estuary will only result in increased risks. In order to limit new demands on the Estuary, other regions of the state need to become more self-sufficient. Integrated resource management, including conservation and recycling, along with greater use of local water supplies will reduce the need for increased demands on the Estuary. Urban boundary lines that prevent development of the Estuary will protect the ecosystem and ensure people are not placed in an area with very high flood risk. The levee system that protects the agriculture and urban residents of the Bay- Delta Estuary, CVP and SWP facilities, and the ecosystem is in need of maintenance and improvement. While the risk of levee failure cannot be eliminated, it can be reduced through investments in levee maintenance and improvement, as well as enhanced emergency response capability. The agricultural users of the Bay-Delta Estuary have provided a level of maintenance of the Delta levees. However, when Delta levees fail all statewide 21 users of water diverted from the Bay-Delta Estuary are affected. Urban areas surrounding the Estuary can be affected by decreased water quality and increased flood risk. The water pumps for the SWP and CVP must reduce, or completely stop pumping water to the south. The most recent Delta levee break at Jones Tract in June 2004 resulted in $98 million in damages.60 Levee maintenance and repair are significantly less expensive strategies, at an estimated cost of $410 to $740 million over ten years.61 Agricultural users can pay for a portion of levee maintenance, but they do not have the financial capacity to perform necessary levee improvements and they are not the only beneficiaries of levee protection. The State Water Project and the Central Valley Project should also contribute to the maintenance and improvement of those levees necessary for the conveyance of water through the Bay-Delta Estuary. In addition, there may be other levees whose maintenance can provide environmental benefits. Through cost-sharing, public and other user funding should be invested in levee improvements to maintain and restore the functions of the Bay-Delta Estuary. However, public funds should not be used to enable further urban development of this fragile and valuable Californian resource. Urban development degrades the Bay-Delta ecosystem, magnifies water quality issues and increases the cost of levee maintenance, improvement, and repair. Urban development also places people in an area highly vulnerable to flood; a threat that has increased as a result of climate change. A voluntary flood easement program would allow willing agricultural land owners to receive public funding to improve levees up to the protection needed for agriculture (one foot levee freeboard in a 1 percent flood).62 In return, the public would receive assurances that frequency and costs associated with levee failures would be reduced, and that lands will remain in agriculture or as conservation easements. Invest in programs that reduce the impacts of long-term agriculture to urban water transfers Because agriculture uses nearly 80 percent of the developed water in California, many cities look to agriculture as a reserved water supply. Investments in urban water conservation and recycling programs will help urban areas meet demands and reduce the need to transfer water from agriculture. As the recent transfer from the Imperial Valley has demonstrated, when urban areas need water they will get it from agriculture. The Imperial Valley transfer also demonstrates that large transfers of water impact farmers, ecosystems, and local economies. 22 While water transfers can and will be used to provide flexibility to water managers, without proper planning and well-thought transfer conditions unintended and harmful impacts of these transfers will occur. Without transfer conditions, situations like the battle over Colorado River water will increase and the results will be the similar to those experienced in the Imperial Valley. Two of the conditions previously set forth in the water transfers section of this Investment Strategy will help protect agricultural communities and ensure that cities do not see agriculture water as the first option when demand increases. Urban areas should be required to first maximize water conservation and recycling before seeking transfers from agriculture. Secondly, only areas currently implementing development consistent with state planning priorities should be eligible to seek agricultural water transfers. Invest in floodplain management Open spaces and land along rivers and streams provide essential and low-cost flood management. These lands can be utilized as flood easements. An example of a successful agricultural easement is the Yolo Bypass, which has for decades provided the Sacramento area flood protection while over the same time remaining a productive agricultural area in non-flood years. Compensating farmers and open space land owners who agree to participate in flood easement projects will provide increased security for urban and rural communities, and also help California adapt to the flooding impacts of climate change. These investments will also highlight the value of both agriculture and open spaces, contributing to the preservation of these important lands. Ensure Social Equity for All Californians Recommendations in the other sections of this Investment Strategy will improve water management for all Californians. Recognizing that low-income communities and communities of color are often disproportionately impacted by inadequate water management, the following recommendations are provided to reduce the negative impacts specific to these communities. Ensure all Californians have access to clean, reliable and affordable water for drinking, recreation, and fish consumption According to the California Department of Health Services, about 250,000 Californians suffer water outages; 4 million residents have drinking water that is unfiltered surface or well water that has fecal or e.coli contamination; and 1 million rely on water systems that do not adequately treat sewage.63 Rural and economically disadvantaged communities make up the largest portion of those 23 without safe or clean water.64 Ensuring that quality water is available for drinking and other life requirements is a necessary investment if California is to achieve social equity. The affordability of drinking water for essential health and safety purposes is also an issue for low-income communities, including many communities of color. Tiered water pricing, including life-line water rates, should be part of all local agency pricing schemes. Ecosystem degradation also affects low-income and people of color more than other communities and presents an additional water quality problem. Many people in these communities rely on subsistence fishing for food and cultural practices, and public beaches and streams for recreation.65 Contaminants, such as mercury, that affect these environmental resources are often different than those that affect drinking water quality. When these resources are polluted, the people who rely on them are exposed to high levels of toxins. In order to adequately protect public health, it is important that California ensures ecosystems remain healthy and accessible for all Californians. Condition transfers and land retirements to protect third parties Water is a community resource. Water transfers from agricultural and other rural communities affect all members of the community. Improper substitution of groundwater for transferred water can deplete the water supply for dependant communities. Low-income residents of agriculture-dependant communities are often severely impacted when water transfers result in land fallowing. Impacts on these residents are not limited to loss of jobs, but also include health impacts when fallowing results in increased dust and reduced air quality. Transfer pre-conditions that protect groundwater basins and require proper mitigation for third party impacts will provide greater social equity in California. Ensure all Californians have equitable rate of recovery from flood disasters While it is important that new residential development be kept out of flood prone areas, it is recognized that many people, including low-income and people of color, already live in those areas. The less affluent a neighborhood, the slower it recovers from a flood.66 Hence, flood relief and recovery assistance should be targeted to low-income, non-insured or under-insured communities in order to ensure a more equitable response and recovery time. Furthermore, for a neighborhood to recover, it is the relative loss that is important. A poor family need not lose much to be profoundly harmed. It is 24 necessary to provide comprehensive relief to low-income families. In areas subject to repeated flooding, assistance should include development of alternate low-income housing outside the floodplain and relocation assistance. Ensure that all Californians can participate in water management planning Water management planning needs to be a more inclusive process. State and local agencies should engage members of affected communities, under- represented communities, communities of color and low-income communities in all planning efforts. Local water boards should be made up of people representative of the demographics of the areas served. Greater representation will result in more equitable investments. Enable a Strong Economy California's economy has prospered due in part to the innovation, investment, and hard work dedicated to water management and infrastructure improvements. Now virtually all of the state's water supplies are already allocated or in many cases over-allocated. To support California's economy in the next fifty years, investments need to focus on the restoration, management, and efficient use of California's water systems. The investments recommended in the other sections of this Strategy are the most cost-effective package for meeting California's water needs. There are three additional recommendations that will minimize taxpayer costs and maximize benefits. Minimize taxpayers' liability for flood losses Recently, a California court ruled that all taxpayers throughout California are responsible for damage incurred at a small Yuba County community due to levee breaks during the 1986 flood.67 Taxpayers throughout California are required to pay damages of $800 million to $1.5 billion from the already over-burdened general fund.68 Remarkably, a new development of 12,000 homes has been approved in the same area in Yuba County, even while it is known that the levees are still unsafe. Similar developments throughout the state represent a high financial risk for taxpayers and reduce the funds available for other important programs. In order to reduce the risk to taxpayers and to help local agencies make informed decisions, conditions for development in active and minimally protected floodplains should be mandated. 25 The state should also invest in educating the public about the limitations of misnamed "100-year" flood protection and risks associated with living in areas 'reasonably likely' to flood. Increased risks of flooding due to global climate change impacts and risks of living behind marginal levees should also be better known and disclosed. Many new developments have been proposed for areas with incomplete or out- of-date flood risk maps. Investments should be accelerated to map areas reasonably likely to flood. Flood risk maps should be completed and updated before developments in these areas are approved. These maps should incorporate increased flood risks resulting from additional planned development in the watershed and the impacts of climate change. Providing mapping and education to the public will also allow people to make smarter decisions when choosing to invest in a home. When used to guide responsible land-use decisions at the local level, these maps will also reduce taxpayer liability. Implement the beneficiary pays principle The beneficiary pays principle requires that costs, to the extent possible, be paid by the beneficiaries of the program actions.69 According to the California Legislative Analyst's Office, the beneficiary pays principle has not been implemented.70 With California's current budget problems it is unreasonable to ask the taxpayers to pay the high costs for projects that benefits a select few or for mitigation that is the responsibility of a specific group. Costs and benefits for all proposed actions should be determined in an open and public process. Those who are beneficiaries of projects should contribute their share. The Environmental Water Account (EWA) is largely a mitigation project for the Central Valley Project and the State Water Project, providing these projects assurances that Endangered Species Act requirements will not curtail their water deliveries. Yet taxpayers, not project contractors, are paying for this multi-million dollar program. Taxpayers have paid the entire cost of the EWA for the past four years, totaling over $168 million.71 Estimates indicate that the EWA will cost over $400 million over the next ten years.72 Even while the Legislative Analyst's Office has called for water users to pay for part of the EWA73, a recent draft finance plan for the EWA proposes that taxpayers continue to fully fund this expensive program for the next three years.74 The water user beneficiaries should pay their share of the costs of this project. It is inappropriate for taxpayers to continue to pay the water users' share of the EWA for three more years. Water users should be required to pay for the benefits they are receiving beginning this year. 26 Studies of surface water storage projects are another example of taxpayers being required to subsidize projects that are intended to benefit a select group. Seventy million taxpayer dollars75 have been spent to pursue projects that are not economically justified. Yet, no beneficiaries have been required to cost-share in these studies. These scarce funds should be directed to programs with greater economic and environmental cost-benefit ratios, such as conservation and recycling. Estimated costs for completing the five surface storage studies now underway total $87 million.76 If studies of surface water storage proceed, despite evidence that it is not needed, potential beneficiaries should be required to pay for these studies and to reimburse the state for those funds already spent. Because the Bureau of Reclamation has already indicated that all benefits from additional storage on the San Joaquin River would go to water supply, all costs for that study should be paid by those water districts intending to receive that supply. This recommendation is consistent with the Legislative Analyst's Office recent recommendations on funding surface storage and surface storage investigations.77 The State Water Project and the Central Valley Project benefit from secure Delta levees.78 The SWP and the CVP should contribute to the maintenance and improvement of those levees that are necessary for the conveyance of water through the Bay-Delta Estuary. Watershed management is another example of where beneficiary pays and cost sharing should be implemented. The benefits of watershed management and restoration frequently extend beyond local areas. Those who realize water supply and water quality benefits should pay for those benefits. Ensure sufficient reliable water supplies are available prior to approving development To minimize the likelihood of shortages and to prevent degradation of water quality, reliable water supplies should be identified and secured prior to approval of development in California. Failing to plan appropriately has resulted in over- allocated systems, groundwater overdraft, fallowing of farmland, environmental degradation and other negative impacts. Many Urban Water Management Plans do not have complete or accurate data. Investments in accurate and reliable data on water availability will facilitate responsible and intelligent planning. More reliable water availability data based on historical records, current research, climate change impacts, and some modeling information should be supplied from the state to local agencies. Investments should be made to develop new models and to calibrate existing models. The state should communicate the limitations of existing models such as 27 CALSIM II and provide guidance on the appropriate use of model information for local agencies. Local agencies should ensure that development and future growth is not dependent on supplies that are unreliable. Water that is interruptible or insecure, such as non-permanent transfers and surplus water deliveries, should not be considered reliable or permanent supplies. In a recent report on protecting water resources, the U.S. EPA recommended implementation of policies making adequate water a prerequisite of additional growth in order to maintain water quality and supply. Consistent with this recommendation, California should ensure that all planning and development is based on reliable and secure water supplies. Recent legislation (SB 221 and SB 610) requires planning agencies to coordinate somewhat with water agencies to ensure water supplies are available for new development projects over 500 units. While these laws are a first step toward responsible planning, they do not apply to the many development projects in California that are under 500 units. Legislation mandating that all general plans contain a. water element would help ensure that local agencies understand water supply availability, and encourage more responsible development in California. Implement Integrated Resources Management Effective water management integrates water quality, water quantity, groundwater, surface water, water temperature, timing, reliability, flood planning, and ecosystem restoration. Water management is also most effective when integrated with management of other resources including energy and land use. For instance, transporting and treating water makes up over 6 percent of California's entire electrical demand. Consequently, water conservation not only saves water, but also energy. By integrating management of multiple resources there are also greater opportunities for cost sharing among many agencies to achieve multiple benefits. For instance, flood managers and water districts can jointly fund projects to use storm water to recharge groundwater basins, reduce flood risk, increase wetland habitat, and increase water supply and reliability. Many regions and local agencies throughout California including the Metropolitan Water District of Southern California and the Inland Empire Utilities District have taken the lead in integrated resource management. These agencies are seeing positive results including increased regional self-sufficiency. 28 Invest in watershed management Watershed management employs both large and small scale projects to improve the overall health of an entire watershed. This management approach is a cost- effective means to efficiently achieve multiple benefits. It is applicable to individual watersheds as well as larger areas such as the Sierra Nevada which is the source for much of the state's water supply. Healthy watersheds reduce "flash runoff' and allow more infiltration. In rural areas of origin watershed management investments improve water quality and reliability for the entire state. In urban areas watershed restoration results in improved regional water quality, while also providing healthy ecosystems that can be enjoyed by city residents, including low-income communities and communities of color. Overall benefits of watershed management include increased water quality and reliability, habitat for native wildlife, multiple recreational opportunities, and preservation of California's unique, valuable and diverse landscapes. Watershed management can also reduce the costs of water treatment and ecosystem restoration. Watershed management also benefits energy generation. For instance, Pacific Gas & Electric's (PG&E) Rock Creek and Cresta hydro-electric dam reservoirs had lost half of their original storage capacities in the 1990's due to sedimentation, significantly reducing energy generation potential. Investments from PG&E along with local efforts have reduced sedimentation entering those reservoirs by 50 percent.81 This investment in watershed restoration resulted in energy generation and ecosystem restoration benefits. The public, local residents, and downstream water users are all beneficiaries who should invest in watershed management. Ensure water planning processes are more open, transparent and inclusive of all stakeholders Past closed-door water deals lead to distrust and long, costly legal battles that delayed progress for all Californians. Water resource planning should be an open and collaborative process inclusive of all governmental and non-governmental stakeholders. Public funding should go only to those projects that are developed in open, transparent and inclusive processes. The state's water management should serve as a model for inclusive and transparent public processes. Open processes will result in more complete and realistic water management strategies, prevent bitterness, build trust and save 29 the state millions of dollars. Most importantly, it will lead to programs that actually get implemented. Invest in water projects that are consistent with state planning priorities Taxpayer dollars should be directed to those programs that maximize overall benefits for dollars spent. Therefore, public funding should be invested in water projects consistent with legally mandated state priorities which support infill development and redevelopment, cultural and historic resources, environmental and agricultural resources, and efficient development patterns. Government Code section 65041.1 sets forth these priorities: "The state planning priorities, which are intended to promote equity, strengthen the economy, protect the environment, and promote public health and safety in the state, including in urban, suburban, and rural communities, shall be as follows: (a) To promote infill development and equity by rehabilitating, maintaining, and improving existing infrastructure that supports infill development and appropriate reuse and redevelopment of previously developed, underutilized land that is presently served by transit, streets, water, sewer, and other essential services, particularly in underserved areas, and to preserving cultural and historic resources. (b) To protect environmental and agricultural resources by protecting, preserving, and enhancing the state's most valuable natural resources, including working landscapes such as farm, range, and forest lands, natural lands such as wetlands, watersheds, wildlife habitats, and other wildlands, recreation lands such as parks, trails, greenbelts, and other open space, and landscapes with locally unique features and areas identified by the state as deserving special protection. (c) To encourage efficient development patterns by ensuring that any infrastructure associated with development that is not infill supports new development that uses land efficiently, is built adjacent to existing developed areas to the extent consistent with the priorities specified pursuant to subdivision (b), is in an area appropriately planned for growth, is served by adequate transportation and other essential utilities and services, and minimizes ongoing costs to taxpayers."82 Implementing these priorities will result in reduced polluted runoff, reduced per capita water and energy use, increased groundwater recharge, improved air quality reduced costs of infrastructure, and reduced traffic congestion.83 30 For more information about the Investment Strategy for California Water please contact Mindy Mclntyre, Water Policy Specialist at the Planning & Conservation League at (916) 313-4518 or at mmcintvre@pcl.org. 1 May 2004 CALFED Draft Finance Options Plan http://www.calwater.ca.gov/FinancePlanninq/Draft Finance Options Report 5-11-04.pdf 2 Emissions pathways, climate change, and impacts on California. June 23, 2004. http://www.pnas.org/cgi/reprint/101/34/12422.pdf Intergovernmental Panel on Climate Change 2001; Summary for Policymakers http://www.grida.no/climate/ipcc tar/wg1/008.htm The Effects of Climate Change on Water Resources in the West: Introduction and Overview pp. 1-11 Tim Barnett, Robert Malone, William Pennell, Detlet Stammer, Bert Semtner, Warren Washington Draft of paper: http://cirrus.ucsd.edu/~pierce/crd/globalwarming/ACPI-ClimaticChange.12-12- 02.pdf Mid-Century Ensemble Regional Climate Change Scenarios for the Western United States pp. 75-113 L Ruby Leung, Yun Qian, Xindi Bian, Warren M. Washington, Jongil Han, John 0. Roads http://www.pnl.gov/atmos sciences/Lrl/Leung-3.pdf Changes in Snowmelt Runoff Timing in Western North America under a 'Business as Usual' Climate Change Scenario pp. 217-232 Iris T. Stewart, Daniel R. Cayan, Michael D. Dettinger http://tenava.ucsd.edu/~dettinge/stewart acpi.pdf Mitigating the Effects of Climate Change on the Water Resources of the Columbia River Basin pp. 233-256 Jeffrey T. Payne, Andrew W. Wood, Alan F. Hamlet, Richard N. Palmer, Dennis P. Lettenmaier http://www.tag.washington.edu/publications/papers/pavne CC final 080503.pdf Potential Implications of PCM Climate Change Scenarios for Sacramento-San Joaquin River Basin Hydrology and Water Resources, pp. 257-281 Nathan T. VanRheenen, Andrew W. Wood, Richard N. Palmer, Dennis P. Lettenmaier http://www.tag.washington.edu/publications/papers/VanRheenen-etal.2004.ClimChg.62.257- 281.pdf Simulated Hydrologic Responses to Climate Variations and Change in the Merced, Carson, and American River Basins, Sierra Nevada, California, 1900-2099, pp. 283-317 Michael D. Dettinger, Daniel R. Cayan, Mary K. Meyer, Anne E. Jeton http://tenava.ucsd.edu/~dettinge/sierra change.pdf http://sfbav.wr.usgs.gov/access/bibliography/pdf/dettinger 2004 climate change.pdf Elevational Dependence of Projected Hydrologic Changes in the San Francisco Estuary and Watershed, pp. 319-336 Noah Knowles, Daniel R. Cayan http://sfbav.wr.usgs.gov/access/bibliographv/pdf/knowles 2004 sf estuary.pdf The Effects of Climate Change on the Hydrology and Water Resources of the Colorado River Basin, pp. 337-363 Niklas S. Christensen, Andrew W. Wood, Nathalie Voisin, Dennis P. Lettenmaier, Richard N. Palmer Draft of paper: http://www.hvdro.washington.edu/Lettenmaier/ Publications/ACPI/Christenson_CC_final_0801.pdf http://ftp.hvdro.washington.edu/pub/niklas/paper sep26 2.pdf VanRheenen, NT., Palmer, R.N., and Hahn, M.A. (2003). "Evaluating Potential Climate Change Impacts on Water Resources Systems Operations: Case Studies of Portland, Oregon and Central Valley, California." Water Resources Update, 124, 35-50. http://www.tag.washington.edu/publications/papers/VanRheenen- etal.2003.WaterResou rcesUpdate.124.35-50.pdf 31 Spring onset in the Sierra Nevada-When is snowmelt independent of elevation?, by Lundquist, Cayan, and Dettinger, Journal of Hydrometeorology, 5, 325-340, http://tenaya.ucsd.edu/~dettinqe/Lundguist synchmelt.pdf Brekke, L.D. , N. L. Miller, K.E. Bashford, N.W.T. Quinn, and J.A. Dracup. 2004: Climate change impacts uncertainty for water resources in the San Joaquin River Basin, California, J. Amer. Water Resources Assoc., 149-164. http://www- esd.lbl.gov/ESD staff/miller/pubs/brekke 2004.pdf Miller, N.L., K.E. Bashford, E. Strem, 2003: Potential Impacts of Climate Change on California Hydrology, J. Amer. Water Resources Assoc., 771-784. http://www- esd.lbl.qov/ESD staff/miller/pubs/miller jawra2003.pdf Kim, J., T-K Kim, R W Arritt and N L Miller 2002: Impacts of increased CO2 on the hydroclimate of the western United States, J. Climate, 15, 1926-1942 http://www- esd.lbl.gov/ESD staff/miller/pubs/kim jclimate2002.pdf "The transboundary setting of California's water and hydropower systems-Linkages between the Sierra Nevada, Columbia, and Colorado hydroclimates" by Cayan, Dettinger, Redmond, McCabe, Knowles, and Peterson, 2003, book chapter, pdf. http://tenaya.ucsd.edu/~dettinge/transboundary.pdf Climate Change Sensitivity Study of California Hydrology: A Report to the California Energy Commission. LBNL Technical Report No. 49110. November 2001. Norman L. Miller and Kathy E. Bashford California Water Resources Research and Applications Center Lawrence Berkeley National Laboratory, University of California and Eric Strem California-Nevada River Forecast Center NOAA-National Weather Service http://www-esd.lbl.qov/RCC/outreach/Miller-Bashford-Strem.pdf 3 Population Projections by Race/Ethnicity for California and Its Counties 2000-2050,California Department of Finance, May, 2004 http://www.dof.ca.gov/HTML/DEMOGRAP/DRU Publications/Proiections/P-1 Tables.xls 4 Emissions pathways, climate change, and impacts on California. June 23, 2004. http://www.pnas.org/cai/reprint/101/34/12422.pdf Intergovernmental Panel on Climate Change 2001; Summary for Policymakers http://www.grida.no/climate/ipcc tar/wa 1/008.htm6 Intergovernmental Panel on Climate Change 2001. Climate Change 2001: The Scientific Basis. Technical Summary, p. 75.7 Abrupt Climate Change: Inevitable Surprises, National Academy of Sciences, 2004 http://dels.nas.edu/abr dim/adapting.shtml 8 Potential UK adaptation strategies for climate change, May 2000. United Kingdom Department of Environment, Transport and Regions http://www.erm.eom/ERM/news.nsf/0/a28988fb502f6a608025694a005e0580/SFILE/Climate.pdf 9 Delta levee information provided via email by David Lawson, Department of Water Resources Bay-Delta Offices staff 10 "Local and state flood control officials were at a loss to explain why a privately maintained levee on the 11,000-acre Jones Tract, an island west of Stockton, had failed during the dry season." The Sacramento Bee, Associated Press, June 4, 2004 www.sacbee.com 11 Laypersons Guide to California Water. The Water Education Foundation. 2000. 12 The San Francisco Bay Institute, http://www.bav.org/about the bay.htm 13 The San Francisco Bay Institute, http://www.bav.org/about the bay.htm 14 Intergovernmental Panel on Climate Change 2001; Summary for Policymakers http://www.qrida.no/climate/ipcc tar/wg1/008.htm15 Draft California Water Plan Update 2003, California Dept. of Water Resources, June 7, 2004 Vol.1 pg 4 http://www.waterplan.water.ca.gOv/b160/B160.Draft.June.7.2004/Vol 1/Findings%20%20Recom rnended%20Actions%20 06-07-2004 .pdf16 Draft California Water Plan Update 2003, California Dept. of Water Resources, June 7, 2004, vol.1 pg 10 32 http://www.waterplan.water.ca.goV/b160/B160.Draft.June.7.2004A/ol 1/Findings%20%20Recom mended%20Actions%20 06-07-2004 .pdf 17 Waste Not, Want Not: The Potential for Urban Water Conservation in California, Pacific Institute, 2003 http://www.pacinst.org/reports/urban usage/18 Waste Not, Want Not: The Potential for Urban Water Conservation in California, Pacific Institute, 2003 http://www.pacinst.org/reports/urban usage/ 19 2004/05 Budget, Metropolitan Water District of Southern California, June, 2004 pg 12 http ://www. mwd h2o. com/m wd h2o/pdf/f inance/Exec2004web .pdf 20 Draft California Water Plan Update 2003, California Dept. of Water Resources, June 7, 2004 vol.1 pg 2 http://www.waterplan.water.ca.gOV/b160/B160.praft.June.7.2Q04/Vol 1/Findings%20%20Recom mended%20Actions%20 06-07-2004 .pdf 21 Draft California Water Plan Update 2003, California Dept. of Water Resources, June 7, 2004 vol.1 pg 10 http://www.waterplan.water.ca.goV/b160/B160.Draft.June.7.2004/Vol 1/Findings%20%20Recom mended%2QActions%20 06-07-2004 .pdf 22 Draft California Water Plan Update 2003, California Dept. of Water Resources, June 7, 2004, vol.4 pg 31 http://www.waterplan.water.ca.gOV/b160/B160.Draft.June.7.2004/Vol 4/Agriculture.pdf 23 Water Recycling 2030, California Dept. Of Water Resources, 2003 http://www.owue.water.ca.gov/recvcle/docs/TaskForceReport.htm24 California's Contaminated Groundwater: Is The State Minding The Store?, April 2001 Natural Resources Defense Council, http://www.nrdc.org/water/pollution/ccg/ccg.pdf25 Data from the Department of Health Services (DHS) Drinking Water Database (1984-2000); compiled by LFR 26 California's Contaminated Groundwater: Is The State Minding The Store?, April 2001 Natural Resources Defense Council, http://www.nrdc.org/water/pollution/cca/ccg.pdf27 Desalination Task force, California Department of Water Resources, 2003 http://www.owue.water.ca.gov/recycle/desal/desal.cfm28 Desalination Task force, California Department of Water Resources, 2003 http://www.owue.water.ca.gov/recycle/desal/desal.cfm Defined as the Los Angeles, San Gabriel Rivers and Santa Monica Bay Watersheds30 Source: Suzanne Dallman, Manager of Stormwater Programs for the Los Angeles & San Gabriel Rivers Watershed Council; specific references available upon request.31 Waste Not, Want Not: The Potential for Urban Water Conservation in California, Pacific Institute, 2003 http://www.pacinst.org/reports/urban usage/ 32Draft California Water Plan Update 2003, California Dept. of Water Resources, June 7, 2004 vol.1 pg 10 http://www.waterplan.water.ca.gOv/b160/B160.Draft.June.7.2004/Vol 1/Findings%20%20Recom rnended%20Actions%20 06-07-2004 .pdf 33 Water Recycling 2030, California Dept. Of Water Resources, 2003 http://www.owue.water.ca.gov/recvcle/docs/TaskForceReport.htm 34 290,000 acre-feet represents the potential of groundwater desalination only, the potential for groundwater treatment is currently unknown. Desalination Task force, California Department of Water Resources, 2003 http://www.owue.water.ca.gov/recvcle/desal/desal.cfm 35 Critical Water Shortage Contingency Plan, Governor's Advisory Drought Planning Panel, December 29, 2000. http://watersupplvconditions.water.ca.gov/pdf/Contingencv Plan-text.pdf 36 California Water Code Section 10656 http://www.owue.water.ca.gov/docs/UWMPAct 8-1-03.pdf37 California Water Code Section 10657 (a). http://info.sen.ca.gov/pub/01-02/bill/sen/sb 0601-0650/sb 610 bill 20011009 chaptered.pdf36 Draft California Water Plan Update 2003, California Dept. of Water Resources, September 30, 2003. http://www.waterplan.water.ca.gov/b160/workgroups/chapterreviewgroup.htm 39 Draft California Water Plan Update 2003, California Dept. of Water Resources, September 30, 2003. http://www.waterplan.water.ca.gov/b160/workgroups/chapterreviewgroup.htm 33 40 Draft California Bay-Delta Authority Finance Plan, November 2004 p 92 http://calwater.ca.gov/FinancePlanning/CALFED Finance Plan 11- 10-04.pdf 41 CALFED Draft Finance Options Report May 2004 http://calwater.ca.gov/FinancePlanninq/Draft Finance Options Report 5-11-04.pdfn Draft Executive Summary In Delta Storage Feasibility Studies - January 2004 http://calwater.ca.qov/Proqrams/Storage/lnDeltaStorageReports 2003/Executive%20Summarv/D raft In-Delta Executive Summary 1-30-04.pdf43 Draft California Bay-Delta Authority Finance Plan, November 2004 p 89 http://calwater.ca.gov/FinancePlanning/CALFED_Finance_Plan 1 l-10-04.pdf 44 Subsidence, Seismicity and Sea Level Rise: Hell AND High Water in the Delta; presented by Dr. Jeffery Mount to the California Bay-Delta Authority October 14, 2004. http://calwater.ca.qov/CBDA/Aqendaltems 10-13-14- 04/Presentation/ltem 13 6 Subsidence Seismicitv Sea Level Rise.pdf45 Subsidence, Seismicity and Sea Level Rise: Hell AND High Water in the Delta; presented by Dr. Jeffery Mount to the California Bay-Delta Authority October 14, 2004. http://calwater.ca.gov/CBDA/Agendaltems 10-13-14- 04/Presentation/ltem 136 Subsidence Seismicitv Sea Level Rise.pdf46 "Tampa Bay Desalination Plant, Florida, USA." Water Technology Webpage, September 30, 2004 http://www.water-technology.net/proiects/tampa/47 Estimation of ecological impacts due to use of seawater in a desalinization facility (in a NEPA / CEQA context) Impingement, Entrainment. Dr. Pete Raimondi, Professor and Chair, Dept of Ecology and Evolutionary Biology, UC Santa Cruz http://www.owue.water.ca.qov/recvcle/desal/Docs/Entrainment impingement.pdf48 Estimation of ecological impacts due to use of seawater in a desalinization facility (in a NEPA / CEQA context) Impingement, Entrainment. Dr. Pete Raimondi, Professor and Chair, Dept of Ecology and Evolutionary Biology, UC Santa Cruz http://www.owue.water.ca.gov/recvcle/desal/Docs/Entrainment impinqement.pdf49 Desalination Task force, California Department of Water Resources, 2003 http://www.owue.water.ca.gov/recvcle/desal/desal.cfm50 Bulletin 118-Update 2003 California's Groundwater, Department of Water Resources, pg. 3 http://www.dpla2.water.ca.gov/publications/groundwater/bulletin118/Bulletin118 Entire.pdf51 California's Drinking Water Source Assessment and Protection (DWSAP) Program http://www.dhs.ca.gov/ps/ddwem/dwsap/DWSAPiridex.htm52 California's Drinking Water Source Assessment and Protection (DWSAP) Program http://www.dhs.ca.gov/ps/ddwem/dwsap/DWSAPindex.htm53 California Assembly Bill 599 http://www.swrcb.ca.gov/gama/docs/ab 599 bill 20011005 chaptered.pdf 54 The San Francisco Bay Institute http://www.bav.org/about the bay.htm 55Michael Dettinger, William Bennett, Daniel Cayan, Joan Florsheim, Malcolm Hughes, B. Lynn Ingram, Noah Knowles, Frances Malamud-Roam, David Peterson, Kelly Redmond, and Lawrence Smith, "Climate Science issues and needs of the CALFED Bay-Delta Program." presented at the 83rd American Meteorological Society (AMS) Annual Meeting, February 2003 http://meteora.ucsd.edu/cap/AMS dettinger preprint.pdf 56 The San Francisco Bay Institute, http://www.bay.org/about the bay.htm 57 The San Francisco Bay Institute, http://www.bay.org/about the bay.htm 58 California Department of Food & Agriculture, California Agricultural Directory 2002. p 28 http://www.cdfa.ca.gov/card/card new02.htm 59 California Department of Conservation webpage: Urbanization Rate Picks Up in San Joaquin County, August 3, 2004 http://www.consrv.ca.gov/index/news/2004%20News%20Releases/NR2004- 20 San Joaguin FMMP.htm60Levee break losses go into the tens of millions, Ag Alert Kristen Souza, June 16, 2004 http://www.cfbf.com/agalert/2004/06 16 04 1 aa,cfm61 CALFED Draft Finance Options Report May 2004 pg. 73 http://calwater.ca.gov/FinancePlanning/Draft Finance Options Report 5-11-04.pdf 34 62 Public Law 84-99, Act of 1955 (as amended), Flood Control, Emergency Authority "Department of Water Resources Water Planning October 2003 pg 2 http://www.waterplan.water,ca.gov/landwateruse/wateruse/Urban/Potable%20Water/CALIFORNI ANS%20WITHOUT%20SAFE%20WATER final100703.doc 64 Department of Water Resources Water Planning October 2003. pg 2 http://www.waterplan.water.ca.qov/landwateruse/wateruse/Urban/Potable%20Water/CALIFORNI ANS%20WITHOUT%20SAFE%2QWATER final100703.doc 65Promoting Quality, Equity, and Latino Leadership in California Water Policy, pg 10 Latino Issues Forum June 2003. http://www.lif.org/publications/water report/water report2003.pdf 66 January 1997 Floods", Assembly Water, Parks & Wildlife Committee, California Research Bureau, Dennis O'Conner 67 Paterno v. State of California (2003) 114 Cal.App.4th 308d Dec. 24, 2003. No. C040553, Paterno v. State of California (2003) 114 Cal.App.4th 308d Western Water Magazine July/August 2004. Water Education Foundation 69 CALFED Bay-Delta Program Record of Decision August 28, 2000: p 34 http://calwater.ca.gov/Archiyes/GeneralArchive/rQd/ROD,pdf 70 Legislative Analyst's Office: February 2004 Analysis of the 2004-05 Budget Bill CALFED Bay- Delta Program: At a Funding Crossroads http://www.lao.ca.gov/analysis 2004/resources/res 02 cc calfed anl04.htm 71 Legislative Analyst's Office: February 2004 Analysis of the 2004-05 Budget Bill CALFED Bay- Delta Program: At a Funding Crossroads http://www.lao.ca.goy/analysis 2004/resources/res 02 cc calfed anl04.htm 72 Draft 10-Year Finance Plan Program Element Issue Papers September 2004, California Bay- Delta Authority http://calwater.ca.gov/FinancePlanning/Draft BDPAC 10 Year Finance Issue Papers 9-7- 04.pdf 73 Legislative Analyst's Office: February 2004 Analysis of the 2004-05 Budget Bill: CALFED Bay- Delta Program: At a Funding Crossroads http://www.lao.ca.gov/analvsis 2004/resources/res 02 cc calfed anl04.htm Draft California Bay Delta Authority Finance Plan November 2004, pg 41 http://calwater.ca.gov/FinancePlanninq/CALFED Finance Plan 11-10-04.pdf 75 Draft 10-Year Finance Plan Program Element Issue Papers September 2004, California Bay- Delta Authority http://calwater.ca.gov/FinancePlanning/Draft BDPAC 10 Year Finance Issue Papers 9-7- 04.pdf 76 Draft California Bay Delta Authority Finance Plan November 2004, pg 88 http://calwater.ca.gov/FinancePlanninq/CALFED Finance Plan 11-10-04.pdf 77 Legislative Analyst's Office: February 2004 Analysis of the 2004-05 Budget Bill: CALFED Bay- Delta Program: At a Funding Crossroads http://www.lao.ca.gov/analysis 2004/resources/res 02 cc calfed anl04.htm 78 Draft California Bay Delta Authority Finance Plan November 2004, pg 82 http://calwater.ca.gov/FinancePlanninq/CALFED Finance Plan 11-10-Q4.pdf 79 Protecting Water Resources With Smart Growth, U.S. EPA, May, 2004 http://www.epa.gov/smartgrowth/pdf/waterresources with sg.pdf 80 Water Energy Use In California, California Energy Commission , 2003 http://www.energy.ca.gov/pier/iaw/industrv/water.html 81 California Utility Invests in Watershed Restoration." Non-Point News-Notes, issue number 46, October 2003 http://notes.tetratech- ffx.com/newsnotes.nsf/0/89014cc560f27e698525666a005048cc?OpenDocument 82 California Government Code section 65041.183 Protecting Water Resources With Smart Growth, U.S. EPA, May, 2004 http://www.epa.gov/smartgrowth/pdf/waterresources with sg.pdf 35 AN EFFICIENT FUTURE A Report of the Pacific Institute, Oakland Peter H. Gleick, Heather Cooley, David Groves SEPTEMBER 2005 ACKNOWLEDGEMENTS N MANY WAYS, this report is a continuation of work the Pacific Institute has been pursuing for more than a decade. In 1995, the Institute published a vision of sustainable water use in California, entitled "California Water 2020." This report received an enormous amount of attention for proposing that there were affordable, attainable solutions to the state's perennial water disputes and challenges; in a lead editorial, the San Francisco Chronicle called it "a common sense plan" for the future. Yet traditional water planners are reluctant to explore alternative visions of the future. The most recent draft California Water Plan is a case in point—several scenarios were developed for the year 2030, yet none of them tried to evaluate what a truly water-efficient future could look like, instead pushing that analysis off to 2010. We believe such a future is possible, and even desirable. And we believe that thinking about what an efficient future might look like, and how to get there, are worthy and urgent goals. the freedom to explore unusual water paths and that solutions to water problems are possible. We thank them, especially the Flora Family Foundation, the Charles Evan Hughes Memorial Fund, and the William and Flora Hewlett Foundation. Their generosity and foresight have given us the flexibility to respond when and where we think it most important and necessary. We would also like to thank all those who have offered ideas, data, information, and comments on the report, including Nick Di Croce, Lloyd Fryer, Alex Hildebrand, Scott Matyac, Mindy Mclntyre, Jonas Minton, Bob Wilkinson, numerous members of the California Water Plan Public Advisory Committee, DWR staff, and an anonymous reviewer. We would like to thank Gary Wolff for fruitful discussions about the economics of conservation and efficiency. We would also like to thank Nicholas Cain of the Institute and Joe Sadusky and Bryan Kring for their help in editing, formatting, and producing the report. Funding for this study has come from a variety of sources that believe the Pacific Institute should have All errors are, of course, our own. CALIFORNIA WATER 2030: AN EFFICIENT FUTURE The Pacific Institute is dedicated to protecting our natural world, encouraging sustainable development, and improving global security. Founded in 1987 and based in Oakland, California, we provide independent research and policy analysis on issues at the intersection of development, environment, and security. Our aim is to find real-world solutions to problems like water shortages, habitat destruction, global warming, and conflicts over resources. We conduct research, publish reports, recommend solutions, and work with decision makers, advocacy groups, and the public to change policy. More information about the Institute, staff, directors, funders, and programs can be found at and Dr. Peter H. Gleick is co-founder and President of the Pacific Institute for Studies in Development, Environment, and Security in Oakland, California. Dr. Gleick works on the hydrologic impacts of climate change, sustainable water use, planning and policy, and international conflicts over water resources. Dr. Gleick received a B.S. from Yale University and an M.S. and Ph.D. from the University of California at Berkeley. In 2003 he received a MacArthur Foundation Fellowship for his work on water issues. He serves on the boards of numerous journals and organizations and was elected an Academician of the International Water Academy in Oslo, Norway in 1999. In 2001, he was appointed to the Water Science and Technology Board of the National Academy of Sciences, Washington, D.C. Dr. Gleick is the author of many scientific papers and five books, including the biennial water report The World's Water published by Island Press (Washington, D.C.). Resources from the University of California at Berkeley. Prior to joining the Institute, Ms. Cooley worked at Lawrence Berkeley National Laboratory on climate and land-use change. David Groves is a doctoral student in Policy Analysis at the Pardee RAND Graduate School (Ph.D. expected in August 2005). His dissertation applies new quantitative methods for decision making under deep uncertainty to California long-term water planning. As part of this work, he developed in collaboration with California Department of Water Resources staff a model to quantify scenarios of future water demand. He also holds an M.S. in Atmospheric Sciences and Certificate in Environmental Management from the University of Washington and an M.S. and B.S. from Stanford University. Heather Cooley is a Research Associate in the Water and Sustainability Program. Her research interests include conservation, privatization, and California water. Ms. Cooley holds a B.S. in Molecular Environmental Biology and an M.S. in Energy and Water Scenarios 13 DWR's Urban and Agricultural Water Demand Projections Over Time 15 Bulletin 160-2005: New Scenarios 18 A New Scenario: High Efficiency 20 Software 20 Modeling Urban Water Demand 22 Modeling Agricultural Water Demand 26 Modeling Environmental Water Demand 31 Urban Water Demand 32 Agricultural Water Demand 34 Total Water Demand 37 Data Constraints 38 Double Counting or Missing Water 39 Appendix A available online at CALIFORNIA WATER 2030: AN EFFICIENT FUTURE HAT COULD CALIFORNIA'S WATER situation look like in the year 2030—twenty-five years from now? The answer is, almost anything: from shortage and political conflict to sufficiency and cooperation. California water planners regularly prepare projections of supply and demand as part of the California Water Plan process, but these projections have never included a vision of a truly water-efficient future, where California's environmental, economic, and social water needs are met with smart technology, strong management, and appropriate rates and incentives. A water-efficient future is possible; indeed, it is preferable. We present a "High Efficiency" scenario here in which Californians maximize our ability to do the things we want, while minimizing the amount of water required to satisfy those desires. Under a High Efficiency scenario, total human use of water in California could decline by as much as 20 percent while still satisfying a growing population, maintaining a healthy agricultural sector, and supporting a vibrant economy. Some of the water saved could be rededicated to agricultural production elsewhere in the state; support new urban and industrial activities and jobs; and restore California's stressed rivers, groundwater aquifers, and wetlands. This High Efficiency scenario is not a prediction for the future, but a desirable and achievable possibility—a vision of California in which improvements in water-use efficiency are considered the primary tools for reducing human pressures on the state's precious water resources. Can such an efficient water future be achieved? Yes, given appropriate attention and effort, California's water-use practices can be substantially modified over the next quarter century, just as they have over the past 25 years. Will such a future be achieved? That is a question that only the public and our elected officials can answer. We hope this analysis will contribute to the dialogue on how to design and implement appropriate strategies for moving along this more efficient path. EXECUTIVE SUMMARY A water-efficient future for California is possible. The Pacific Institute High Efficiency scenario shows that water use in 2030 could be 20 percent below 2000 levels, even with a growing population and a healthy economy. A water-efficient future is achievable, with no new inventions or serious hardships. Implementing serious efficiency improvements requires actions on the part of legislators, water managers, water districts and agencies, farmers, corporations, and all individuals. The sooner such actions are taken, the easier the transition to an efficient future will be. The State of California has routinely prepared water scenarios and projections as part of long-term water planning. The principal tool for water planning at the state level is the California Water Plan, a regular analysis published by the California Department of Water Resources (DWR).1 The newest version of the Plan was released for public review in May 2005. Figure ES-1 shows projections of future human water demands from the California Water Plans over the past four decades, together with an estimate of actual water use. As this figure shows, official scenarios routinely project substantial increases in water use over time, often far in excess of the use that actually materializes. Figure ES-1 Projections of Total Water Demands in California Each Water Plan Update makes one or more projections of future demand. The number next to each projection refers to the year in which the projection was made. The 1974 Water Plan Update evaluated four scenarios for future demand, represented by Roman numerals I-IV. The 2005 Water Plan Update evaluates three scenarios of future demand: Current Trends (CT), More Resource Intensive (MRI), and Less Resource Intensive (LRI). 60-, 50- 1 40- 1 & 30-1 i t*H9 10 74 ». .83 83 74(1). 74,,,fc66 74 our-70 05 (CI), High Efficiency • Projections (ByYear) 1960 1970 1980 1990 2000 2010 2020 2030 The California Water Plan is also known as Bulletin 160. CALIFORNIA WATER 2030: AN EFFICIENT FUTURE The 2005 Draft California Water Plan introduced a long-term effort to develop multiple scenarios of water supply and demand. To initiate this effort, the 2005 Water Plan staff and Public Advisory Committee developed three scenarios of future water demand in California. The three scenarios developed for the 2005 version provide estimates of the quantity of water that would be used in 2030 under specified demo- graphic, economic, agricultural, and water management conditions. Figure ES-2 and ES-3 show urban and agricultural water use for the three DWR scenarios for 2030, compared to current (year 2000) levels. The Department of Water Resources describes these scenarios as follows: Current Trends. Water demand based on "current trends with no big surprises." Less Resource Intensive. "California is more efficient in 2030 water use than today while growing its economy within much more environmentally protective policies." More Resource Intensive. "California is highly productive in its economic sector. Its environment, while still important, is not the state's first priority for water management decisions. Water use in this scenario is less efficient in 2030 than it is in [the other] scenarios ..." (DWR 2005). A close analysis reveals that these scenarios are not radical, or even dramatic, departures from past analyses. All three DWR scenarios include only modest efficiency improvements achievable with current policies and programs. DWR has stated their intention to evaluate various "response packages," including greater water-use efficiency efforts, for the 2010 California Water Plan. We support that effort, but believe it is critical to begin evaluating, and implementing, stronger water-conservation and efficiency programs now. Waiting another five to ten years will make solving California's complex water challenges more difficult and expensive. 16-, 14- 12- 10- 8- 6- 4- 2- 0 Figure ES-2 Urban Water Demand from DWR's Estimate for 2000 and for 2030 as Projected in the Three DWR Scenarios 2000 Current Trends 2030 Less Resource Intensive 2030 More Resource Intensive 2030 EXECUTIVE SUMMARY figure ES-3 Agricultural Water Demand from DWR's Estimate for 2000 and for 2030 as Projected In the Three DWR Scenarios 35 30- 25- 20 15- 10- 5- 0 2000 Current Trends 2030 Less Resource Intensive 2030 More Resource Intensive 2030 Even the most efficient DWR scenario shows increases in urban water use by 2030 of nearly 1.5 million acre-feet (MAP), and the most inefficient scenario projects urban demand to increase by a huge, and most likely unattainable, 5.8 MAE All three scenarios project slight (5 to 10 percent) decreases in agricultural water use over the next 30 years, similar to the agricultural forecasts of the last three official California Water Plans. We believe it is possible to foresee—and move toward—a different future. We envision a future in which California water use is highly efficient, permitting us to maintain a healthy economy and healthy ecosystems while reducing overall water use. In an attempt to describe this future, we present here an alternative, High Efficiency scenario. According to our High Efficiency scenario, there is great potential for improving agricultural and urban water-use efficiency. The scenario was produced with the same model used by DWR to generate their three future demand scenarios for the 2005 California Water Plan. Our scenario adopted the same projections of population, housing distribution, agricultural land area, crop type and distribution, and income projections used by DWR. For the Pacific Institute High Efficiency scenario, we modified the assumptions about the potential for improving efficiency of water use based on more comprehensive implementation of existing technology and application of historical trends for water prices. Our analysis suggests that a water-efficient future is possible. CALIFORNIA WATER 2030: AN EFFICIENT FUTURE The Pacific Institute High Efficiency scenario is based on widespread adoption of existing water-efficiency technologies, not on the invention of new efficiency options, and on different estimates of water prices and trends. Figures ES-4 and ES-5 show total human water demands generated by the DWR Current Trends and Pacific Institute High Efficiency scenarios between 2000 and 2030, along with estimated actual water use during the latter half of the 20th century. Overall statewide agricultural and urban water demand is projected to decline in both scenarios, but in the Pacific Institute High Efficiency scenario total human use of water declines by 8.5 MAP—a reduction of around 20 percent from 2000. 1960 DWR Current Trends Figure ES-4 Statewide Trend in Total Urban and Agricultural Water Demand Between 1960 and 2000, with Projections to 2030 in the Current Trends and High Efficiency Scenarios 1970 1980 1990 2000 2010 2020 2030 2040 RgureES-5 Urban and Agricultural Water Demand Change (2000-2030) by Geographic Region in the Current Trends and High Efficiency Scenarios North : Central m South Current Trends High Efficiency 6 EXECUTIVE SUMMARY Urban water use in the Pacific Institute High Efficiency scenario falls 0.5 MAP per year below actual 2000 levels and far below the 2030 Current Trends scenario of DWR. Demand for water in California's urban sector between 2000 and 2030 is projected to increase by 3.0 MAP in the Current Trends scenario and decrease by 0.5 MAP in the Pacific Institute High Efficiency scenario (see Figure ES-6), a difference in urban water use of over 3.5 MAP annually. Total agricultural water use declines more than 20 percent from actual year 2000 water use in the Pacific Institute High Efficiency scenario as farmers move to more efficient irrigation methods, without reducing crop area or changing crop type from the official state Current Trends scenario. Figure ES-7 shows actual and projected agricultural water demand between 1960 and 2030 for the Current Trends and High Efficiency scenarios. Agricultural water demand is projected to decline from 2000 by ten percent (3.5 MAP) and 23 percent (8 MAP) in these two scenarios, respectively, while overall crop production remains relatively unchanged. The difference between the scenarios—approximately 4.5 MAP in water savings—is due to assumptions about irrigation technology and agricultural water prices. Even though total water use is projected to drop substantially in our scenario, total income to farmers remains effectively unchanged and total value per acre in the High Efficiency scenario slightly increases. Figure ES-6 Statewide Trend in Urban Water Demand Between 1960 and 2000, with Projections to 2030 in the Current Trends and High Efficiency Scenarios DWR Current Trends 1960 1970 1980 1990 2000 2010 2020 2030 2040 CALIFORNIA WATER 2030: AN EFFICIENT FUTURE 40-, 35- 30- 25' 20- 15- 10- 5 1960 DWR Current Trends Historical Use figure ES-7 Statewide Trend in Agricultural Water Demand Between 1960 and 2000, with Projections to 2030 in the Current Trends and High Efficiency Scenarios 1970 1980 1990 2000 2010 2020 2030 2040 We believe that this efficient future is achievable, with no new inventions or serious hardships. Indeed, we believe this future is likely to be better for all Californians and the environment. But implementing serious efficiency improvements requires actions on the part of legislators, water managers, water districts and agencies, farmers, corporations, and all individuals. Delaying action on water-conservation and efficiency increases the pressure to find, build, or buy new expensive and environmentally dam- aging sources of water supply. In California, and much of the rest of the western United States, such sources of supply are increasingly scarce or controversial. While we do not believe a highly efficient future is necessarily easy to achieve, we think it will be easier, faster, and cheaper than any other option facing us. • Ensure that urban and agricultural water rates reflect the true cost of service, including non-market costs. • Phase out water subsidies on the Central Valley Project, especially for low-valued, water-intensive crops. • Implement new rate structures that encourage efficient use of water. • Avoid inappropriate subsidies for new water-supply options. EXECUTIVE SUMMARY • Set new water-efficiency standards for residential and commercial appliances, including toilets, washing machines, dishwashers, showers, and faucets. • Offer comprehensive rebates, including both energy and water rebates, for the purchase of water-efficient appliances. • Require water-efficient appliances to be "retrofit on resale" for existing homes. • Revise and expand "Best Management Practices" for urban and agricultural water agencies. • Make "Best Management Practices" mandatory and enforceable. • Expand development and deployment of efficient irrigation technologies and new crop types. • Implement programs to permit water saved through efficiency improvements to be transferred and marketed, but reduce adverse impacts on rural communities and the environment from such transfers. • A statewide system of water data monitoring and exchange should be created, especially for water use. • Collect and make publicly available comprehensive water-use data for all users. • Design and implement comprehensive local groundwater monitoring and management programs statewide. Label all appliances with efficiency ratings. Expand water-efficiency information and evaluation programs in the Agricultural Extension Services and other agricultural outreach efforts. Develop on-line data collection and dissemination networks to provide farmers with immediate meteorological and hydrological information on climate, soil conditions, and crop water needs. CALIFORNIA WATER 2030: AN EFFICIENT FUTURE • Demonstrate a secure, permanent supply of water before new urban and suburban developments are approved. • Demonstrate water-efficient housing designs before developments are approved. • Protect high-quality agricultural land and related watersheds from urbanization. The two scenarios described here—the DWR Current Trends and the Pacific Institute High Efficiency scenarios—offer different views of urban and agricultural water use in 2030. They are the result of making different assumptions about a range of water efficiency options, policies, technologies, and decisions. Neither scenario is a prediction. How much water will be needed and used to meet urban and agricultural demands in 2030 is unknowable and uncertain, because it depends on a vast array of factors. Some of these factors are partly or completely out of the hands of Californians, such as decisions about crop production in other countries, the extent and severity of climate changes, technological developments, national policies around efficiency standards or pricing of water from federal projects, and so on. Other factors, however, are well within our ability to influence, and some of these factors will have a huge effect on future water demands. We believe a water-efficient future is possible; indeed we believe such a future is preferable. Ultimately, which future we reach depends upon what water policies are implemented over the coming years. Experience has shown that efforts to improve water-use efficiency are consistently successful and cost-effective. If California put as much time, money, and effort into water-efficiency programs as has gone into traditional water supply development, a high efficiency future could be readily achieved—with benefits to our economy, environment, and health. 10 CALIFORNIA WATER 2030: AN EFFICIENT FUTURE 11 AN EFFICIENT FUTURE Peter H. Gleick, Heather Cooley, David Groves SEPTEMBER 2005 HAT COULD CALIFORNIA'S WATER situation look like in the year 2030—twenty-five years from now? The answer is, almost anything: from shortage and political conflict to sufficiency and cooperation. We present here a vision of a water-efficient future, where California's environmental, economic, and social water needs are met with smart technology, strong management, and appropriate rates and incentives. While many scenarios of water use in California have been developed over the last 40 years, including three new ones for the latest California Water Plan, no official scenarios have made an effort to look at the true potential for improving water-use efficiency and conservation. In the Pacific Institute "High Efficiency" scenario, we maximize our ability to do the things we want, while minimizing the amount of water required to satisfy those desires. Our crystal ball is, of course, no clearer than anyone else's. Our intention is not to predict the future, but to offer a desirable and achievable possibility—a vision of California in which improvements in water-use 12 A REPORT OF THE PACIFIC INSTITUTE, OAKLAND efficiency are considered the primary tools for reducing human pressures on the state's precious water resources. The scenario presented here is just part of an overall vision for California, and part of a smart path to water, described in previous Institute reports. The changes necessary for achieving more efficient water use in California do not require "heroic" or extraordinary actions on the part of any individual or sector, nor do they require new technologies to be invented. Instead, these changes can come about by applying existing technologies; innovative governmental, industrial, and agricultural policies; an evolution in personal values; and changes in culture—all of which are already common characteristics of California's dynamic society. In addition, we make no projections of future water supply, new projects, or the impacts of climate change on water availability and quality. Can a water-efficient future be achieved? Yes, given appropriate attention and effort, California's water-use practices can be substantially modified over the next quarter century, just as they have over the past 25 years. Will such a future be achieved? That is a question that only the public and their elected officials can answer. We hope this analysis will contribute to the dialogue on how to move along this alternative path. Of special interest may be the Institute reports: California Water 2020: A Sustainable Vision and Waste Not. Want Not: The Potential for Urban Water Conservation in California. Both are available at . See also'Global Freshwater Resources: Soft-Path Solutions for the 21st Century,' (P.M. Gleick) Science Vol. 302,28 November 2003, pp. 1524-1528, and 'The Soft Path for Water; (G. Wolff and P. H. Gleick) in Ihe. World's Water 2002-2003. Island Press, Washington, O.C. The future is largely unknowable. Nevertheless, humans have always thought about possible futures, explored plausible paths, and tried to identify the advantages and disadvantages associated with different choices. In recent years this has led to a growing interest in scenarios, forecasting, and "future" studies (see, for example, Schwartz 1991). Scenario planning has more than academic implications. In the water sector, expectations about future water demands and supplies drive huge financial expenditures for water-supply projects. These projects, in turn, have significant human and ecological impacts. At the same time, failing to make necessary investments can lead to the failure to meet fundamental human water needs. The challenge facing water planners is to balance the risks and benefits of these kinds of efforts. Analysts and decision makers often construct scenarios to better understand the consequences of choices or policies on a wide range of plausible future conditions. This is particularly useful when there are great uncertainties about how the future may evolve, or when the stakes are especially high. Sometimes scenarios explore outcomes that are unlikely or incongruent with current decisions and policies. Sometimes these scenarios are purely descriptive and are designed to study outcomes that had not previously been considered. Sometimes the scenarios are quantitative and represent discrete outcomes drawn from a range of possible futures. Recognizing that a single forecast of resource demands is unlikely to characterize the actual future demand, decision makers often evaluate a wide range of alternatives. Collectively, a set of scenarios provides a CALIFORNIA WATER 2030: AN EFFICIENT FUTURE 13 broad look at how the future may evolve in response to (1) forces largely outside the control of policy makers, and (2) policy choices designed to shape future conditions. Such a "scenario analysis" approach can help resource managers and interested stakeholders better understand the inherent uncertainties about future management and, in turn, help reveal more innovative and successful management strategies for adapting to possible futures. Scenario analysis can also help guide more detailed assessments of particularly interesting cases using complex models. In any effort to look into the future, it is critical to keep in mind that no matter how thoughtful any scenario analyst is, there will be surprises and unexpected events. Despite this, as Peter Schwartz has noted, we can make pretty good assumptions about how many of them will play out (Schwartz 2003). Ultimately, the point—and power—of scenarios is not to develop a precise view or prediction of the future. It is to enable us to look at the present in a new and different way, and to find new possibilities and choices we might have previously overlooked or ignored. Water planners are among the few natural resource managers to think more than a few years into the future. The time required to design and build major water infrastructure, and the subsequently long lifetimes of dams, reservoirs, aqueducts, and pipelines, require planners to take a relatively long view. But what will future water demands be? How can they be predicted, given all the uncertainties involved in looking into the future? At the global level, various projections and estimates of future freshwater demands have been made over the past half century, some extending out as much as 60 or 70 years. At national and regional levels, water projections typically extend two or three decades into the future, using population and economic forecasts as the major drivers. Most of the earliest water projections used variants on the same methodology—future water use was typically based on population projections, simple assumptions of industrial, commercial, and residential water-use intensity (e.g., water per unit population or income), and basic estimates of future crop production as a function of irrigated area and crop yield. Early planning efforts usually produced single, "business-as- usual" projections with no variants. Most estimates of future water demand ignored water requirements for instream ecological needs, navigation, hydropower production, recreation, and so on. Almost all of these projections show increases—substantial increases—in demands for water over time. And almost invariably, these projections have turned out to be wrong. Figure 1 shows a set of over 25 water projections along with an estimate of actual global water withdrawals. As this figure shows, projections of water demands have routinely been too high. 14 A REPORT OF THE PACIFIC INSTITUTE, OAKLAND figure 1 Scenarios of Global Water Use, and an Estimate of Actual Global Water Withdrawals • Pre-1980 O 1980-1995 O Post-1995 14,000 O O Projections 1900 1920 1940 1960 1980 2000 2020 2040 2060 2080 More recently, large-scale water-use projections have become increasingly sophisticated due to the growing capability of easily accessible computers to handle significant numbers of calculations, the growing availability of water-use data, and better understanding of water management approaches and opportunities. Assessments that used to be done for continental areas or on a national basis are now being done for watersheds on smaller and smaller temporal and spatial scales. New studies have been published describing a wider range of results under a wider range of assumptions. Projections have begun to include information on actual water needs and water-use efficiencies, economic variables, dietary requirements, cropping patterns and types, and ecosystem functions. And as our ability to better evaluate options has grown, forecasts of the size of future demand have often dropped substantially. This is also true of the High Efficiency scenario for California described later in this report. An interim report was also produced by DWR for internal use in 1964, but this is not considered a formal California Water Plan. The State of California has routinely prepared water projections as part of long-term water planning. The principal tool for water planning at the state level is the California Water Plan, a regular analysis published by the California Department of Water Resources (DWR). The first California Water Plan ("Bulletin 3") was released in 1957 and subsequent versions (now called "Bulletin 160") were produced in 1966, 1970, 1974, 1983, 1987, 1993, and 1998.3 The latest version is to be released in late 2005, and a draft of this report was released in May 2005 for public comment. Each volume of Bulletin 160 is slightly different in form, structure, and tone, reflecting the resource, economic, and political conditions of the State at the time of publication. One version of Bulletin 160 (DWR 1974) included multiple scenarios for future water demands, but all the rest of these periodic reports made a single water-demand projection based on variables such as population, per-capita water demand, agricultural production, levels of economic productivity, and so on. The forecast is CALIFORNIA WATER 2030: AN EFFICIENT FUTURE 15 then compared to estimates of available water supplies and used to evaluate the kinds of management systems or infrastructure necessary to meet future demands. Using fairly constant water-intensity projections (in this case water use per person) coupled with projected increases in population, DWR has routinely assumed that California water problems and policies in the future will be little changed from today. Future farmers are assumed to grow approximately the same kinds of crops on about the same amount of land. The growing urban population will continue existing patterns of water use, with relatively minor changes in some residential water-use technology and efficiency. Water used by aquatic ecosystems will remain the same or decrease as human demands grow. And the projections of total future water demands routinely exceed estimates of available supplies by several million acre-feet annually, a shortfall projected in every California Water Plan since the first.4 The philosophy of the traditional California Water Plans can be succinctly stated as: "Only a substantial commitment to large-scale surface water storage and conveyance facilities would enable the major water supply problems in the State ... to be brought under control in the next 30 years" (DWR 1983, pp. 175). Even a more recently published version, Bulletin 160-98, identifies its purpose as quantifying "the gap between future water demands and the corresponding water supplies" (DWR 1998). The latest version, Bulletin 160-05, however, begins to move beyond this approach and examine California water issues more comprehensively. Unfortunately, more sophisticated approaches have not been adopted universally. In a report released in July of 2005, the Public Policy Institute of California (PPIC) projected that urban water demand will increase by 40 percent between 2000 and 2030 (Hanak 2005). This report simply assumes that per-capita water use will remain constant between 2000 and 2030, despite recent trends in declining per-capita use. Thus the increase in water use projected in the PPIC report simply reflects the projected increase in population by 2030. Figures 2 and 3 show the projections of future urban and agricultural water demands from the different versions of the Department of Water Resources Bulletin 160. In Figure 2, projections made in 1964 and 1966 for the year 2020 forecast a huge increase in expected urban water use,5 from around 3 MAF per year in 1960 to over 14 MAP per year in 2020. Forecasts made in 1970 show 2020 urban use increasing to just less than 12 MAF—still a tripling of water use. By the late 1970s and early 1980s, however, actual urban demand for water was beginning to level off, reflecting the first efforts at conservation and efficiency. As the growth in actual demand slowed, new projections for future demand also began to drop. Bulletin 160-74 included projections of future urban demands as low as around 10 MAF by 2020, and Bulletin 160-83 actually included a projection for 2010 of fewer than 8 MAF. In part, this reduction was driven by the severe drought experienced by California in 1976 and One acre-foot is equal to 1,233 cubic meters, or 326,000 gallons. The 1964 version was an unofficial draft and not released to the general public. 16 A REPORT OF THE PACIFIC INSTITUTE, OAKLAND 1977, which dropped the base of urban use in 1980. The two Bulletin 160s prepared in the 1990s regressed, however, to earlier approaches and higher baselines, with single scenarios showing urban use in 2020 growing to around 12 MAP per year. The lessons of uncertainty, efficiency, and the value of multiple scenarios had been lost. Figure 2 Projections of Urban Water Demands in California I 15 114- 13- 12- 11- 10- 9- 8- 7- 6 5- 4- 3- 2- 1- 64....66 93. 98^,70 93.74 (ID. 64 us 93. U66 87. * 83. 33^74(1) -83' 74(W* ^74M Projections (ByYear) 1960 1970 1980 1990 2000 2010 2020 05 (MH). 05 (en. 05 (U»). 2030 Figures Projections of Agricultural Water Demand in California Each Water Plan Update makes one or more projections of future demand. The number next to each projection refers to the year in which the projection was made. The 1974 Water Plan Update evaluated four scenarios for future demand, represented by Roman numerals I-IV. The 2005 Water Plan Update evaluates three scenarios of future demand: Current Trends (CT), More Resource Intensive (MRI), and Less Resource Intensive (LRI). ViI "S"s. 45-, 40- 35- 30- 25- 20- 15- 10- 5- n. 740). 74 fl) 74 M 74 ("^ 83 7^.1*74(I)V«' 83. 83. 74(l"j_70 Ss4 *W' 93^. -SJ5: Projections (ByYear) 05 (MM). 05 (CT) 1960 1970 1980 1990 2000 2010 2020 2030 Bulletin 160 agricultural water use scenarios have typically looked a little different from the urban scenarios (Figure 3). In the early 1960s, agricultural water use was growing rapidly, as the State Water Project and federal Central Valley Project infrastructure was being built and increasing the ability to deliver large volumes of water to irrigation and some municipalities. As a result, the earliest Bulletin 160s (the 1964 CALIFORNIA WATER 2030: AN EFFICIENT FUTURE 17 1 40-1 35- 30- 25 20- 15- 10- 5- DWB Agricultural Use _ DWR Urban Use 1960 1965 1970 1975 1980 1985 1990 1995 2000 18 A REPORT OF THE PACIFIC INSTITUTE, OAKLAND internal volume, and Bulletin 160-66) showed modest continued increases in agricultural water use through the 1990s. With few exceptions, however, all agricultural water scenarios generated in subsequent plans show a leveling off, and even a decrease, in total agricultural water use to between 30 and 35 MAP per year. One exception to this is the set of water-intensive scenarios produced in Bulletin 160-74, which projected high agricultural water use of over 41 MAP as one possible future. By Bulletin 160-93 and 98, however, projections of agricultural water use in 2020 were settling around 30 MAP per year—effectively equal to the base use in 1990. After criticisms that Bulletin 160-93 and Bulletin 160-98 were inappropriately ignoring the potential for efficiency and focusing on single projections of the future (see, for example, Gleick et al. 1995), the 2005 Draft California Water Plan introduced a long-term analytic effort to develop multiple scenarios of water supply and demand. To initiate this effort, the 2005 Water Plan staff and Public Advisory Committee developed three scenarios of future water demand in California. These scenarios of water demand are primarily narrative, do not reflect any new water-management strategies (such as new water-efficiency programs), and do not touch upon any water-supply issues. The three scenarios developed for the 2005 version provide estimates of the quantity of water demanded out to the year 2030 under specified demographic, economic, agricultural, and water management conditions. These scenarios are briefly described as: Current Trends. Water demand based on "current trends with no big surprises." Less Resource Intensive. "California is more efficient in 2030 water use than today while growing its economy within much more environmentally protective policies." More Resource Intensive. "California is highly productive in its economic sector. Its environment, while still important, is not the state's first priority for water management decisions. Water use in this scenario is less efficient in 2030 than it is in [the other] scenarios ..." (DWR 2005). Figures 4 and 5 show urban and agricultural water use for the three DWR scenarios for 2030, compared to current (year 2000) levels. Water use in the urban sector is projected to go from 8.9 MAP in 2000 to 10.3, 11.9, and 14.7 MAP for the Less Resource Intensive, Current Trends, and More Resource Intensive scenarios, respectively. Thus, as Figure 4 shows, even the most efficient of DWR's new scenarios shows increases in urban water use by 2030 of nearly 1.5 MAP, and the most inefficient scenario projects urban demand to increase by a huge and, we believe, implausible 5.8 MAP. CALIFORNIA WATER 2030: AN EFFICIENT FUTURE 19 16-| 14- 12- 10- 8- 6 4- 2 0 Figure 4 Urban Water Demand from DWR's Estimate for 2000 and for 2030 as Projected in the Three DWR Scenarios 2000 Current Trends 2030 Less Resource Intensive 2030 More Resource Intensive 2030 40 -, 35- 30- I 25- I,-8 10- 5- Figures Agricultural Water Demand from DWR's Estimate for 2000 and for 2030 as Projected in the Three DWR Scenarios 2000 Current Trends 2030 Less ResourceIntensive 2030 More ResourceIntensive 2030 The three DWR scenarios project slight decreases in agricultural water use over the next 30 years, similar to the agricultural forecasts of the last three Bulletin 160s. But the projected declines are small—from between a 5 and 10 percent decline. As Figure 5 shows, these three scenarios all cluster together around 32 MAP per year. Despite the fact that the new California Water Plan offers multiple scenarios for the first time in decades, a closer analysis reveals that the methods used to develop these scenarios are not radical, or even dramatic, departures from past analyses. The Water Plan still relies primarily on demographic and economic forecasts—albeit more sophisticated forecasts—to project future urban demand; agricultural demand is still largely based on estimates of irrigated crop area and the mix of crops grown. The current Plan intentionally includes only modest urban and agricultural efficiency improvements in its water demand estimates based on a "business as usual" approach of continuing current policies and practices. These estimates are nowhere near the levels already 20 A REPORT OF THE PACIFIC INSTITUTE, OAKLAND demonstrated to be technically achievable and largely cost-effective today. One purpose of the Pacific Institute High Efficiency scenario is to examine how reasonable levels of water-use efficiency can dramatically reduce future water needs. In addition to providing multiple scenarios of future demand, the 2005 California Water Plan identifies eight resource-management strategies capable of providing additional supply to meet future needs. Urban and agricultural efficiency provide the largest "supply" benefit and can meet California's water needs in 2030 for two of the three scenarios in the Water Plan. Rather than include this efficiency estimate, DWR chose a much more modest estimate for the three scenarios. As a result, we believe the three DWR scenarios offer a less-than-complete picture of the true alternatives available to California. And while it is possible that one of the DWR scenarios may ultimately be a more accurate forecast of the future, it doesn't have to be. It is the stated intention of the DWR staff to further develop analytic tools to evaluate several quantitative scenarios of demand and supply and to evaluate how different "response packages" might perform for the 2010 California Water Plan. We support that effort, but believe it is critical to begin evaluating, and implementing, stronger water-conservation and efficiency programs now. Waiting another five to ten years will make solving California's complex water challenges more difficult and expensive. We offer here a fourth scenario—a High Efficiency scenario. We don't claim to know what the future will look like, and this scenario is not a prediction. We can, however, explore, verbally and analytically, different assumptions, circumstances, and constraints for how the future could look. The Pacific Institute High Efficiency scenario projects 2030 water demand by adopting the demographic, economic, and agricultural forecasts used in the DWR's Current Trends scenario and including additional levels of efficiency that have been shown to be achievable and cost-effective using existing technology (Mayer et at. 1999, Gleick et al. 2003). Our High Efficiency scenario is then contrasted and compared with the DWR Current Trends scenario. This comparison reveals that sensible levels of water-use efficiency can be enormously effective in moderating demand and reducing the need to identify and provide new supplies. It provides an alternative vision of the future, one that can be achieved by concentrating on identifying and capturing improvements in the many ways Californians use water. Below, we describe the tool used to produce the scenario, the assumptions and methods, and the results. We used the same model to develop the High Efficiency scenario as used by DWR to generate their three future demand scenarios (Groves et al. 2005). The model estimates urban, agricultural, and environmental water CALIFORNIA WATER 2030: AN EFFICIENT FUTURE 21 use for each of California's ten hydrologic regions (Figure 6). Urban water demand includes the demand by households, the commercial and industrial sectors, and public institutions. Agricultural water demand includes irrigation use, delivery and conveyance losses, and other uses. Environmental water demand reflects the amount of water that the water management system would allocate to environmental purposes. It does not necessarily reflect all environmental needs. Each scenario is based upon average current conditions that evolve over time according to scenario-specific parameters representing the major factors believed to influence future water demand. Scenarios are distinguished from one another by the specification of a unique set of factors representing various trends and parameters in the model. See Groves et al. (2005) for a thorough description of the model structure. Figures California's Ten Hydrologic Regions NC: North Coast NL: North Lahontan SR: Sacramento River SF: San Francisco Bay SJ: San Joaquin River TL: Tulare Lake CC: Central Coast SL: South Lahontan SC: South Coast CR: Colorado River The model was implemented in a graphically based computer environment called Analytica™, available from Lumina Decision Systems (Figure 7). Water demand is estimated using a "top-down" modeling approach, aggregating individual uses of water by end user (e.g., persons in a household, employees of a business, and users of public institutions). This process is well suited for considering how changes in the number of water users and changes in their average water use will affect future demand. Alternative "bottom-up" approaches estimate future water use by multiplying the numbers of water-using devices, such as toilets, by their technical water requirements, or by estimating water-use behaviors and technical characteristics, such as numbers of showers per person per day, shower duration, and showerhead performance. This approach was used recently by Gleick et al. (2003) to assess California's water-conservation potential in the urban sector. It is particularly useful for evaluating the impact of specific technologies or water-use practices and thus can establish both state- or region-wide water-use baselines and efficiency targets. 22 A REPORT OF THE PACIFIC INSTITUTE, OAKLAND figure 7 Screen-Shot of the Graphical Interface of the Water Demand Model Note: The top pane shows the various components of urban demand. In the lower left is a table showing the 2030 population for the three regions of the state underlying the scenarios. The graph on the right shows the statewide urban demand estimates for the Water Plan scenarios (A-C) as well as the Pacific Institute High Efficiency scenario. «%' ,- -m, >•» 0 J03O 1 pn. -. Result - AH Oemand Z3 IM Vdluv a* M DBRUMS Z3 ;on«l O -I«at»- 0 O XAxki T«na Indeed, while we do not alter the population projections, it is clear that the lower the overall population, the easier it will be to address all problems associated with water scarcity, supply, transfer, and management. Efforts everywhere to address population problems should therefore be continued. Urban water demand is modeled using estimates of total population, households (including both single- and multi-family housing), employees, and the per-unit demand for each from the year 2000 to 2030. Future urban water demand is then computed by multiplying these future demand units and their average water use. The paragraphs below and Tables 1 to 3 summarize the parameters used to represent each scenario. For all of the demographic parameters, we accepted the same assumptions adopted by the DWR for their Current Trends scenario as shown in Table 1. We made no judgments about the likelihood of these population or housing trends; rather our goal was to ensure that the differences between the DWR scenario and our High Efficiency scenario were the result of differences in assumptions about water-use efficiency and water management alone.6 For the Current Trends and High Efficiency scenarios, annual population growth rates were developed by the California Department of Finance (DOF) by county for 2030 (DOF 2004). County estimates are aggregated into hydrologic regions by DWR. The DOF projects that California's population will reach 48.1 million by 2030. We note, however, that in April 2005, the U.S. Census Bureau projected that California's population will reach 46.4 million by 2030 (U.S. Census 2005), substantially less than the 48.1 million predicted by the DOF. This discrepancy alone suggests that water demand projections based on DOF data may overestimate urban demand. CALIFORNIA WATER 2030: AN EFFICIENT FUTURE 23 The household population, share of multifamily housing, and housing size assumptions for both the Current Trends and High Efficiency scenarios are based upon DWR housing projections (DWR 2004) calculated from DOF 2030 population projections (DOF 2004), Woods and Poole 2030 population projections (Woods 8c Poole Economics 2004), and 1980 to 2000 U. S. Censuses. In these assumptions, the housed population remains nearly constant from 2000 to 2030, the share of multi-family housing decreases from 35.5 percent to 33.9 percent (as a statewide average), and the household size decreases modestly for single and multi-family households. Finally, both scenarios used the same projections of mean income (in constant dollars) for each hydrologic region based on projections from Woods and Poole Economics (2004).7 Total population Inland and southern <SC, SU CR, SR, SJ, TL) Coastal and northern (NC, SF, CC, NL) Housed population fraction Multi-family housing share Single-family house size Multi-family house size Mean income (1996 dollars) Employment fraction 48.1 million (2030) 37.3 million (2030) 10.8 million (2030) Nearly constant (-98%)* 35.5% to 33.9%* 3.13 to 3.06* 2.41 to 2.38* $87,225 to $116,269* 58% to 60%* Table 1 Urban Water Scenarios: Demographic Assumptions for 2030 * Values for 2000 -> 2030. Trend varies by hydrologic region. Urban water demand is also affected by a number of other factors, including water price, income, and technology. One of the important differences between the Current Trends and High Efficiency scenarios is the assumption of changes in urban water prices (in constant dollars) over the period 2000 to 2030 (as shown in Table 2). The DWR Current Trends scenario specifies a modest statewide average increase in water price over 30 years of 20 percent. Ironically, this is not the "current trend" in urban price; according to the annual urban water-price surveys in California conducted by Black and Veatch between 1991 and 2001, actual increases have been about 1.1 percent annually (in constant dollars). If this continues to compound at the same rate, urban prices will go up an average of 41 percent between 2000 and 2030. We adopted this value for the High Efficiency scenario. Urban water price*2000 prices + 20%2000 prices+ 41% Table 2 Urban Water Scenarios: Water Price Assumptions for 2030 * Constant dollars. The relationships between water demand and some of the factors listed in Tables 1 and 2 are specified by elasticity factors. Elasticity is a measure of the responsiveness of one economic variable (water demand) to changes in another economic variable (water price, household size, and income). If the price doubles and water use drops 20 percent, the price elasticity of water is considered to be -0.2. Table 3 lists elasticity factor assumptions for the Current Trends and High Efficiency scenarios. For the Current Income and employment data were disaggregated by hydrologic region by Maria Hambright and Richard Le of the California Department of Water Resources. 24 A REPORT OF THE PACIFIC INSTITUTE, OAKLAND Trends scenario, the single-family price elasticity is adopted from the 1998 Water Plan Update (DWR 1998). Multi-family price, income, and household size elasticities are derived from a range recommended in a widely used urban water-demand model (IWR-MAIN from Planning and Management Consultants 1999). Elasticity factors adopted here for the High Efficiency scenario are quite similar, but have been adjusted based on a broader survey of the literature. Our survey revealed that the household size and income-elasticity factors used in the Current Trends scenario are within the published ranges reported in field surveys. A survey of price-elasticity factors, however, suggested that those used in the Current Trends scenario underestimate the effect of price on water demand (Table 4). Thus, for the High Efficiency scenario, income and household elasticities are assumed to be the same as in the Current Trends scenario, while price elasticity is somewhat higher. Price-elasticity factors for single-family homes (SF); multi-family homes (MF); and the commercial, industrial, and institutional uses (CII) in the High Efficiency scenario are calculated from the average of the literature values in Table 4. We note here that the average of the literature values may not be the most accurate method for estimating elasticity. Elasticity factors can be either long- or short-run, referring to the length of time that the individual has to respond to the change in question. They are likely to vary somewhat from place to place. They are unlikely to be constant over time. And they may be influenced by other factors, including education, new technology, and even whether or not a region has recently experienced a severe drought. Nevertheless, we believe using the observed average, as most analysts do, is a reasonable approach for this kind of forecasting. TaMe3 Residential and CII Water Demand Factors for 2030 Note: SF: Single-family MF: Multi-family CII: Commercial, Industrial, and Institutional Price elasticity-SF -0.16 Price elasticity - MF -0.05 Price elasticity-CII -0.085 Income elasticity - SF 0.4 Income elasticity - MF 0.45 HH size elasticity-SF 0.4 HH size elasticity-MF 0.5 Naturally occurring conservation - interior -10% Naturally occurring conservation - exterior -10% Naturally occurring conservation - CII -10% Efficiency - interior -5% Efficiency - exterior -5% Efficiency-CII -5% -0.2 -0.10 -0.25 0.4 0.45 0.4 0.5 -39% -33% -39% CALIFORNIA WATER 2030: AN EFFICIENT FUTURE 25 SF SF SF SF SF SF SF SF MF MF MF MF MF Cll Cll Cll Cll Cll Renwicketal. 1998 -0.16 Manwaring 1998 -0.20 Manwaring 1998 -0.28 Michelsonetal. 1997 -0.10 Kieferetal.1995 -0.18 Kieferetal. 1996 -0.09 Campbell etal. 1999 -0.27 Average -0.20 Manwaring 1998 -0.08 Manwaring 1998 -0.08 Kieferetal.1995 -0.16 Kieferetal. 1996 -0.09 Average -0.10 Manwaring 1998 -0.55 Dziegielewski and Opitz 1991 -0.28 Kieferetal.1995 -0.11 Kieferetal. 1996 -0.08 Average -0.25 Table 4 Price Elasticity Factors for Single Family (SF), Multi-Family (MF), and the Commercial, Industrial, and Institutional (Cll) Water Uses Note: SF: Single-family MF: Multi-family Cll: Commercial, Industrial, and Institutional The DWR Water Plan scenarios assume a level of conservation expected to occur without any new policies, such as through existing plumbing codes and continued implementation of current Best Management Practices (BMPs) in the Memorandum of Understanding (MOU) (CUWCC 2004). The Current Trends scenario uses a report prepared by A&N Technical Services (2004) on behalf of California Urban Water Agencies (CUWA) to estimate the total domestic conservation (termed the Gross effect) and the portion of total conservation due solely to the implementation of a subset* of BMPs (termed the Net effect).9 The difference between the Gross and Net effects is "naturally occurring conservation" (NOC), defined as conservation that can be achieved via the implementation of existing plumbing codes. The report presents Net and Gross savings for seven of the ten California hydrologic regions at years 2007, 2020, and 2030. Over time, the Net savings (and therefore the Gross savings as well) decrease from 2020 to 2030 because of fixed life spans for conservation technology or decay rates for the conservation achieved by the BMP programs. Using the data and assumptions contained in the A&N Technical Services report along with year 2000 DWR domestic water-use estimates, the Water Plan projects that 2030 NOC and efficiency due to the implementation of a subset of BMPs would decrease household water demand by about 10 percent and 5 percent of 2000 demand, respectively. The same estimates are used for the commercial, industrial, and institutional sectors. Because overall population rises much faster than this improvement in efficiency, total urban water use in all three of the DWR scenarios actually rises. Of the 14 BMPs, only eight of them were quantified in the A&N Technical Services study. A&N Technical Services (2004) estimate water savings for three different implementation scenarios: Existing Conditions, Cost-Effective Implementation, and Full Implementation. 26 A REPORT OF THE PACIFIC INSTITUTE, OAKLAND The assumptions used in the Current Trends scenario exclude a wide range of efficiency options that we know to be both cost-effective and achievable with existing technologies (Mayer et al. 1999, Gleick et al. 2003). The BMPs represent limited efforts by water utilities and are not comprehensive in either scope or magnitude. We believe the DWR assumption also overestimates the "decay" of conservation savings, as noted in Gleick et al. (2003). In contrast, the High Efficiency scenario developed here includes implementation of additional water-conservation programs. For the High Efficiency scenario, estimates of the conservation potential are based on the Pacific Institute's "Waste Not, Want Not" (WNWN) report (Gleick et al. 2003). This study uses a "bottom-up" approach to estimate future water use by multiplying the numbers of water-using devices, such as toilets, by their technical water requirements. The WNWN study conservatively estimated that the indoor and outdoor urban conservation potentials were 39 percent and 33 percent, respectively, from current use. The commercial, industrial, and institutional (CII) conservation potential was estimated at 39 percent, though it varied by industry and end use. Overall, this study estimated that one-third of current urban uses could be conserved cost-effectively. This is an especially conservative estimate to extend to 2030 because the report: • Assumes no new technological developments. • Assumes no new regulatory requirements. • Requires no change in behaviors or "benefits" of current water use (i.e., it excludes changes like shorter showers, smaller lawns, or a ban on car washing). • Ignores trends in the construction of more efficient homes, relative to the 2000 average. • Assumes no further cost reductions in efficiency equipment, despite continual reductions in such costs. • Assumes no increases in energy costs, despite recent substantial increases in such costs. Agricultural water demand is a function of many different things, ranging from climate and soil conditions to irrigation technology, crop type and area, water prices, water rights, and farmer behavior. These factors all vary over time. Indeed, there have been substantial changes in the kinds of crops grown in California over the past several decades, the areas under irrigation, water prices, and the method of irrigation. In the model used to generate the DWR scenarios, there are two sets of agricultural CALIFORNIA WATER 2030: AN EFFICIENT FUTURE 27 water demand parameters: agricultural land use and crop-water demand. Each of these sets of parameters has a number of factors that can be tested in the model. The paragraphs below and Tables 5 to 7 summarize the parameters and factors used to represent each scenario. Agricultural land-use changes over time are comprised of two major factors: the total amount of land in production, and the kinds of crops being grown. The total amount of land in production is affected by the conversion of agricultural land to urban uses, new land brought into agricultural production, land that is retired, and changes in the amount of land on which more than one crop is grown annually—called "multi- cropping." The choice of crops planted on any given piece of land also varies over time as diets and consumer preferences change, growers respond to crop and water price trends, and technological or other resource factors change. DWR's assumptions for these variables for 2000 and 2030 were developed using historical rates of land conversion from agriculture to urban development, tempered by increases in multi-cropping and some new lands coming into production. Tables 5 and 6 summarize the way these variables are integrated in the model and the assumptions made by DWR about the trends. Overall, the DWR Current Trends scenario assumes a modest five percent decrease in overall irrigated crop area over the next 25 years to just over nine million acres. We did not change these assumptions and adopted the DWR land-use assumptions for the High Efficiency scenario. Irrigated crop area (ICA) [1] Irrigated land area (ILA) [2] Multi-cropped area (MA) [3] -4.9% reduction (9.5 ma 19.05 ma)* 10% reduction (9.0 ma i 8.1 ma)* 80% increase (540 ta 1970 ta)* Agricultural land-use changes have not been uniform throughout the state over time; rather, they vary by hydrologic region and crop type. The scenario model adopts a rules-based procedure to disaggregate scenario- specific statewide changes in irrigated land, multi-cropped area, and irrigated crop area to changes at the hydrologic region and by crop type. Table 6 shows the parameters used to implement these rules. Based on discussions with DWR staff and the agricultural community, DWR set different rates of change from low-valued to high-valued crops, or in overall irrigated area, for different hydrologic regions. Upper limits were placed on the conversion from low-valued to high-valued crops, and on overall areas subject to multi-cropping. We've adopted these same assumptions for the High Efficiency scenarios. Table 5 Quantification of Statewide Agricultural Land-Use Changes for 2030 Note: 'Values for 2000-> 2030 ma: million acres ta: thousand acres [1] Changes in ICA described in narrative scenarios and computed from specified changes in ILA and MA. [2] Changes in ILA for Current Trends scenario derived from off-line regression analysis. [3] Changes in MA specified to produce the ICA changes shown. 28 A REPORT OF THE PACIFIC INSTITUTE, OAKLAND Table 6 Agricultural Land-Use Changes by Hydrologic Region and Crop Type for Each Scenario for 2030 Note: MA: Multi-cropped area ILA: Irrigated land area HR: Hydrologic region Irrigated land area statewide trend (as in Table 5) Multi-cropped area statewide trend (as in Table 5) Hydrologic regions with low ILA change Hydrologic regions with high ILA change Hydrologic regions with no MA change Hydrologic regions with low MA change Hydrologic regions with high MA change Low value crop reduction (upper limit) Potential multi-crop ratio (lower limit) Potential multi-crop ratio upper limit -10% +80% NC, SF, ML, SL CC,SC)SR,SJ,TL,CR CC NC,SF,SC,NL,SL,CR SR.SJ.TL Hydrologic regions with increases in low value crops NL 50% 2000 potential multi-crop ratio by HR 36% The third set of factors affecting agricultural water use is changes in crop water demand. We evaluated these in more detail for the High Efficiency scenario, with a focus on water prices and a set of "technological improvements" described in more detail below. The overall water demand of any given crop is a function of its location and the local climate, the relationship between yield and evapotranspiration, the effective precipitation, the price and price elasticity of water, irrigation technology, and irrigation technique. These variables are captured in various ways in the model, which permits us to explore the sensitivity of agricultural policy choices. These variables are listed in Table 7. Table? Crop Water Demand Parameters for Each Scenario for 2030 Note: * Value varies by crop and hydrologic region. Changes are from 2000 to 2030. [1] In both scenarios, yields are assumed to be constant. [2] Approximately the average long-term water price elasticity for Central Valley agriculture as reported by DWR Bulletin 160-98, Table 4A-5 (DWR 1998). Agricultural Yield Yield-ET Elasticity Effective Precipitation Agricultural Water Price Price-CF Elasticity ET Technique Factor Technology CF Effects Technological Improvement 2000 values* 0.2 [1] 2000 values 2000 values* 10% 0.28 [2] 0 2.5% 0 As Current Trends As Current Trends As Current Trends 2000 values + 68% As Current Trends 0 0% See below for details Some improvements in crop water-use efficiency result from changes in the price of water, which leads fanners to modify behavior, technology, and other factors. We assume that these improvements are cost-effective because the elasticity estimate indicates a level of conservation that by definition costs less to implement than the adjusted water price. Of course, no one is certain what the cost of agricultural products or CALIFORNIA WATER 2030: AN EFFICIENT FUTURE 29 irrigation technologies will be over the next 30 years. As a first approximation, however, our assumption about the cost-effectiveness of price-driven efficiency is valid. In the DWR scenarios, agricultural water price is projected to rise by only 10 percent over the next 30 years. As a result, total price-driven agricultural water demand drops only modestly when this price increase is coupled in the model with the price and consumed fraction elasticities. The High Efficiency scenario assumes that water price will change at the same rate as the historical trends, which is higher than the rate assumed in the Current Trends scenario. (As with the urban sector, this means the High Efficiency scenario for price is actually more like a real "current trends" scenario.) To project changes in agricultural water price between 2000 and 2030, we assume that recent increases in the cost of service (CoS) rates, which include operation and maintenance, capital, and deficit costs, for Central Valley Project (CVP) contractors will apply to all water supplies, regardless of source. As a baseline, we evaluated CoS rates for 120 water contractors between 1990 and 2005 (USER 1990 and 2005) and extended this increase through to 2030. This analysis suggests that basic agricultural water rates will increase by 39 percent between 2000 and 2030. We apply this price increase to all water supplied to agricultural users. Agricultural users served by the CVP will likely experience additional price increases. CVP contractors are currently behind on repaying the project costs. Under the original contracts, which were negotiated and signed in the late 1940s, the project was to be paid off 50 years after its construction (USBR 1988). By 2002, however, irrigators had repaid only 11 percent of the project cost (EWG 2004). According to Public Law 99-546, which was signed in 1986, all facilities built prior to the New Melones Dam and Reservoir in 1980 and all operation and maintenance deficits with interest incurred after 1985 must be fully paid by 2030. To meet this requirement, CVP contractors will be required to pay higher costs. Based on an analysis of 120 CVP irrigation contracts and a review of full cost rates, which include CoS and interest on unpaid capital costs since 1982 (USBR 2000), water contractors will need to pay on average an additional 196 percent to be brought up to full cost rates. Combining the estimated price increases for CVP contractors with rising CoS rates for the remainder of agricultural water users, we project that overall agricultural water price will increase by 68 percent statewide between 2000 and 2030. Some improvements result from changes in efficiency not captured by changes in water price ("non-price-driven efficiency"). Non-price efficiency drivers include innovation, education, rebates and incentives, regulations and ordinances, and, for agricultural users, unreliable supply. In the Current Trends scenario, non-price-driven efficiency is specified by two variables: the ET Technique Factor and Technology CF Effects. The ET Technique Factor represents reductions in evapotranspiration due to more efficient irrigation practices; the Technology CF Effects represent increases in the consumed fraction (and thus reductions in applied water) due to the adoption of more efficient irrigation technologies. The values 30 A REPORT OF THE PACIFIC INSTITUTE, OAKLAND for these variables are not well known and are used as placeholders in the model. The High Efficiency scenario uses a different approach to estimate non- price-driven efficiency. Non-price-driven efficiency is estimated using a "bottom-up" approach based on historical changes in irrigation method by crop type and the relative efficiency of each method. Surveys of irrigation methods by crop type in California have been conducted approximately every ten years since 1972. In 2001, Orang et al. (2005) conducted an irrigation method survey throughout California. That analysis shows that for all crops combined, the use of gravity/flood irrigation and sprinklers has declined, while micro/drip and subirrigation use has increased (Figure 8). Hgure8 Historical Data on the Percent of Irrigated Land Under each Irrigation Method Between 1972 and 2001, With Projections to 2030 Note: Historical data are represented by solid lines; projections are represented by clashed lines. 1970 Drip/Subirrigation 1980 1990 2000 2010 2020 2030 Using historical data on irrigation methods by crop type (grouped as field, vegetable, orchard, and vineyard crops) between 1972 and 2001, we use a linear trend to estimate the fraction of each crop type irrigated by each irrigation method in 2030. We then estimate the differences in water use among irrigation methods for each crop type based on data from field studies. We group studies according to crop type and calculate a relative efficiency for each irrigation method and crop type (see Appendix A for more detail). We combine the irrigation method and relative efficiency data to produce an adjusted 2030 irrigation water use. Using this approach, considerably more use of efficient irrigation technology occurs by 2030 than in the Current Trends scenario, which leads to considerably greater improvements in water-use efficiency. This is discussed in more detail in the Results section below. A cost-effectiveness analysis was not performed on non-price-driven efficiency. More efficient irrigation technologies, however, continue to be installed throughout California, indicating that they are in fact cost- effective under many circumstances. CALIFORNIA WATER 2030: AN EFFICIENT FUTURE 31 The DWR Bulletin 160 scenarios also include some rough estimates of "environmental demand" for water, defined as the official allocations of water for the environment under legal decisions or institutional operational conditions. Part of these estimates comes from an analysis prepared for the California Water plan by Environmental Defense, which produced a review of flow objectives for the year 2000 for some but not all of the major environmental objectives managed by the fisheries management agencies throughout the state (Rosekrans and Hayden 2003). While we do not evaluate environmental demands for water in this analysis, we understand how critical water is for ecosystem services, and the policy challenges for satisfying these demands. Indeed, one advantage of an "efficient" future is the opportunity to leave more water in rivers and streams for ecosystem use, or return water previously taken for urban or agricultural needs. The results of our High Efficiency scenario are presented here and compared with the DWR Current Trends scenario of the May 2005 public review draft of Bulletin 160-2005. The model computes water demands for each of the State's ten hydrologic regions, though we have little confidence in specific regional results. We focus here on the main trends and challenges facing California, with some comments about implications for the State's three major regions: north, central, and south (Figure 9). Separate results are reported for urban and agricultural water use. Figure 9 Geographic Division of California (3 Regions) 32 A REPORT OF THE PACIFIC INSTITUTE, OAKLAND Trends in statewide urban water demand differ significantly among the scenarios. Demand for water in California's urban sector between 2000 and 2030 is projected to increase by 3.0 MAP in the Current Trends scenario and decrease by 0.5 MAP in the High Efficiency scenario (Figure 10), a difference in urban water use of over 3.5 MAP annually. The Current Trends scenario assumes a modest increase in efficiency of 15 percent for all sectors between 2000 and 2030. We note this refers to efficiency improvements possible with current programs and policies. The High Efficiency scenario assumes greater efficiency improvements, ranging from 33 percent for outdoor residential uses to 39 percent for indoor residential uses and commercial, industrial, and institutional uses (CII), but still assumes no new technological developments. Some of these efficiency improvements require additional conservation programs and policies. The High Efficiency scenario also assumes that water demand is more price-elastic than is assumed in the Current Trends scenario and that overall urban price continues to rise at the historical rate, which is higher than assumed in Current Trends. Figure 10 Statewide Trend in Urtan Water Demand Between 1960 and 2000, with Projections to 2030 in the Current Trends and High Efficiency Scenarios DWR Current Trends 1960 1970 1980 1990 2000 2010 2020 2030 2040 Figure 11 shows urban demand changes between 2000 and 2030 by geographic region. Urban demand increases for all regions in the Current Trends scenario, with the largest absolute increases in the southern part of California (an increase of 1.5 MAP). Although demand increases by only 0.6 MAP in the North, this change is the largest in percentage terms, nearly 60 percent over 2000 use, driven largely by assumed population and income growth in that region. In the High Efficiency scenario, a slight water demand increase in the North is offset by a modest decrease in the Central region and a larger decrease in the South. Because overall urban water use is greater in the South than in the Central or Northern regions, the efficiency gains produce the greatest absolute savings (2 MAP) in the South. Demand increases slightly in the North even in the High Efficiency scenario because its more substantial efficiency gains are still not sufficient to offset the 60 percent projected growth in population and income-driven water use. CALIFORNIA WATER 2030: AN EFFICIENT FUTURE 33 Figure 11 Changes in Urban Water Demand (2000 to 2030) by Geographic Region for the Current Trends and High Efficiency Scenarios North ; Central • South Current THends High Efficiency Total urban demand is affected by changes in population, housing factors, income, price, and non-price-driven efficiency. Figure 12 shows how total urban demand is affected by the scenario assumptions about demographic factors (population size and distribution and housing assumptions), price and non-price-driven efficiency improvements, and income elasticity. As can be seen, the demographic and income assumptions drive increases in water demand, while price- and non-price- driven factors result in improvements in overall water-use efficiency. Assumptions about population, housing factors, and income are the same for both scenarios, thus the effect of these changes on urban demand is also the same. The difference between scenarios lies in the efficiency assumptions. Within the Current Trends scenario, price- and non-price- driven efficiency improvements lead to some reductions in the overall increases driven by growing income and population, yet total urban demand still increases by over 3 MAP per year by 2030. In the High Efficiency scenario, both price- and non-price-driven efficiency improvements are more substantial and effectively counterbalance increases in demand caused by increases in population and income, leading to an overall reduction in urban water use of around 0.5 MAP per year by 2030. Note that non-price-driven efficiency improvements reduce 2030 demand by nearly 5 MAP. This is substantially larger than the upper range of urban efficiency savings of 2.3 MAP included in DWR's resource management strategies. Both estimates, however, are based on the Pacific Institute's "Waste Not, Want Not" report. DWR incorrectly uses the absolute value (2.3 MAP) given in the Pacific Institute report, which refers to the conservation potential in 2000, not 2030. Because conservation lowers per-capita use, population growth leads to an even greater absolute savings. By specifying efficiency as a percent of use, the High Efficiency scenario captures the additional water savings due to a growing population. 34 A REPORT OF THE PACIFIC INSTITUTE, OAKLAND Rgun12 Changes hi Statewide Urban Water Demand from 2000-2030 due to Demographics, Income, Price, and Non-Price Efficiency Changes Non-Price Driven Efficiency • Price-Driven Efficiency Is Income >i Demographics Total Current Trends HW Efficiency Figure 13 shows actual and projected agricultural water demand between 1960 and 2030 for the Current Trends and High Efficiency scenarios. Agricultural water demand is projected to decline from 2000 by ten percent (3.5 MAP) and 23 percent (8 MAP) in these two scenarios, respectively, while overall crop production remains relatively unchanged. Water demand declines in both scenarios due to a reduction in irrigated crop area and changes in cropping patterns. 13 Statewide Trend in Agricultural Water Demand Between 1960 and 2000, with Projections to 2030 in the Current Trends and High Efficiency Scenarios DWR Current Trends I960 1970 1980 1990 2000 2010 2020 2030 2040 The difference between the scenarios—approximately 4.5 MAP in water savings—is due to explicitly modeled changes in irrigation technology (1.5 MAP) and greater price-driven efficiency (3 MAP) in the High Efficiency scenario. As described in the Data Constraints section, we may be assuming greater improvements than would result from a simple extension of the historical trend because of the way the model is set up. As noted in the Model Background and Assumptions section above, we CALIFORNIA WATER 2030: AN EFFICIENT FUTURE 35 tried to adopt conservative assumptions for other aspects of the High Efficiency scenario. If all of the savings from improvements in irrigation technology—approximately 1.5 MAF—are captured by actions farmers take due to rising prices, then overall reductions in agricultural water use by 2030 could be between 6.5 and 8 MAF. Figure 14 shows the agricultural demand changes by geographic region and scenario. Modeled reductions in agricultural demand are not distributed equally among the three regions of the State. In both scenarios, the largest absolute savings are expected in the Central region, where agricultural water use is highest and consequently potential efficiency gains are largest. A reduction in irrigated crop area of over 400,000 acres, or 7 percent, in the Central region (as assumed by DWR in the Current Trends scenario) also contributes to the expected savings. The largest savings as a percentage of 2000 use, however, are expected in the South, where the reduction in irrigated crop area due to urban encroachment is the highest among the three regions at nearly 14 percent. Current Trends High Efficiency figure 14 Agricultural Demand Change (2000 to 2030) by Geographic Region in the Current Trends and High Efficiency Scenarios North j!! Central • South Irrigation demand is a function of irrigated crop acreage (ICA) and crop water use (CWU). Figure 15 disaggregates irrigation demand reductions into changes in these factors. Changes in crop acreage reduce irrigation demand by 1.6 MAF in both scenarios. We would expect the same amount of demand reduction from this factor, because assumptions about agricultural land use are the same in both scenarios. Changes in crop water use reduce irrigation demand by 1.6 MAF and 5.8 MAF in the Current Trends and High Efficiency scenarios, respectively. The difference between the scenarios is 4.2 MAF. This suggests that additional policies and practices that promote water-use efficiency, as assumed in the High Efficiency scenario, can reduce irrigation demand by 4.2 MAF. Note that irrigation demand reductions are less than the agricultural demand reductions described above. Agricultural demand includes irrigation demand as well as delivery and conveyance losses. 36 A REPORT OF THE PACIFIC INSTITUTE, OAKLAND Figure 15 Disaggregated Irrigation Demand Change from 2000-2030 in the Current Trends and High Efficiency Scenarios CWU Change ICA Change • Residual Change * Total Demand Change Note: CWU: Crop water use ICA: Irrigated crop area The "residual change" term corrects for double- counting changes in CWA and ICA separately. See Graver et al. (2005) for details. g -3 •s . Current Trends * High Efficiency In addition, our analysis does not include technological advances or techniques that may further increase yield or reduce water use, or both. Assumptions about changes in agricultural land use and crop mix have economic implications for the agricultural sector. While this requires a far more detailed economic analysis than we were able to perform, we evaluated the production value of crops grown throughout the state under the different scenarios based on commodity data from 2000 (NASS 2000). We assume that farmers are price takers and that the price farmers receive for particular crops remains the same, in constant dollars. The High Efficiency scenario also assumes that improvements in irrigation efficiency do not increase total yields, but rather that farmers capture the savings by reducing total water demand. As a result, the total value per acre increases two percent between 2000 and 2030 due to shifts in crop types toward higher-valued crops, and total agricultural income declines a modest three percent, even with a five percent drop in total irrigated area and a 23 percent drop in irrigation water demand. This is a conservative assumption: irrigation studies examined in this report suggest improvements in irrigation efficiency both save water and substantially improve crop yields. Crop yields can rise in response to a number of factors, including reduced fungal infestations, more efficient fertilizer applications, and less water lost through evaporation (and consequently more available for transpiration). This effect is not included in this study, but may offset some of the production value loss due to agricultural land-use changes. Using some of the water savings to increase production on land previously not irrigated can also offset production value loss. This is a matter of policy at both the state and local levels. The more important issue is that the net well-being of growers, as measured by income or crop production, can be maintained with a significant reduction in water use.10 This analysis cannot be used to examine compliance with California legislation AB2587, which requires that California be a net exporter of table food. Our analysis covers all irrigated crops grown in California and does not explicitly address table food. Nevertheless, Brunke et al. (2004) conducted an initial evaluation of various scenarios and concluded that California's agricultural sector in 2030 will likely continue to be a significant exporter of food. CALIFORNIA WATER 2030: AN EFFICIENT FUTURE 37 Figures 16 and 17 show total human water demands generated by the Current Trends and High Efficiency scenarios between 2000 and 2030, along with DWR estimates of actual water use during the latter half of the 20th century. The DWR 2000 estimates were used as the starting point/base case here. Overall statewide human water demand is projected to decline in both scenarios. In the Current Trends scenario, slight increases in the North and South are offset by decreases in the Central region (Figure 16). Water demand in the High Efficiency scenario declines by 8.5 MAP—a reduction of around 20 percent of California's total human water use in 2000—due to significant improvements in both urban and agricultural water use. 1960 DWR Current Trends Figure 16 Statewide Trend in Total Urban and Agricultural Water Demand Between 1960 and 2000, with Projections to 2030 in the Current Trends and High Efficiency Scenarios 1970 1980 1990 2000 2010 2020 2030 2040 0 -1- -2- •3- -4- -5 -6 -7- -8- -9- Rgure17 Urban and Agricultural Water Demand Change (2000-2030) by Geographic Region in the Current Trends and High Efficiency Scenarios North Central * South Current Trends High Efficiency 38 A REPORT OF THE PACIFIC INSTITUTE, OAKLAND We reiterate that these scenarios are not predictions. How much water Californians actually use in the future will depend on a very large number of uncertain factors, ranging from the total number of people in California to the nature and priorities of society a generation from now. The results described above, therefore, are inherently uncertain. Data problems, the potential for double counting savings or missing classes of savings opportunities, risks to overall water supply such as climate change, and many more factors remain unresolved, unforeseen, or simply poorly understood. We discuss a few of these issues in a more detail below. The greatest constraints on future improvements in water forecasts now come not from computer capability but from limitations on the quality, availability, and regional resolution of water data and from difficulties in doing certain kinds of assessments. This is true for California water planning as well. Some of the most important data problems are as follows: While precipitation, temperature, and runoff are relatively well measured in developed countries, many regions of the world suffer both from gaps in present-day instrumental coverage and from lack of any long-term records. And, even in California, pressures to cut funds for observation and monitoring stations threatens the continuity of time-series data. Far less data are collected on water use than on water supply and availability. Domestic water use is often not measured directly and details on how that water is used are rarely collected. A survey conducted for the American Water Works Association on U.S. domestic water use is a rare exception (Mayer et al. 1999), and even this study was limited in scope. Industrial and commercial water use are inventoried infrequently or not at all. Agricultural water-use data are even more uneven and unreliable. Groundwater withdrawals are rarely measured or regulated. Even when water-use data are collected, information on changing water-use patterns over time is often not available, making analysis of trends difficult. Even in this era of easy Internet access, some water users refuse to share water-related data with neighbors or even local governments. In regions where water is shared or disputed, restricting information may result from a perceived (or real) political or economic advantage in doing so. In California, most data that are collected are made available, but there are still difficulties accessing certain industrial and agricultural water use data, information on water bills and prices, and groundwater pumping. CALIFORNIA WATER 2030: AN EFFICIENT FUTURE 39 In all likelihood, some uses and needs are unlikely ever to be accurately determined or included in scenario projections. For example, ecological needs, recreational uses, water for hydropower production or navigation, and reservoir losses to seepage or evaporation are often difficult to calculate with any accuracy. Nevertheless, these water uses and activities will eventually need to be quantified and incorporated into future estimates if true water planning is to be done. Double counting of water savings (or even missing water savings entirely) is potentially a problem for agricultural and urban water demand in both scenarios. For urban demand, the model includes both price-driven efficiency and a separate efficiency factor. Some of the water savings accounted for in the efficiency factor, however, may have been driven by price. By including both factors, we may be double counting water savings. This is also true in the agricultural sector, where some fraction of the irrigation technology effect may have been driven by price. By using conservative estimates for price- and non-price-driven efficiency, one can argue that the potential for double counting is diminished. Insufficient data are currently available to adequately address this issue. Quantifying non-price-driven efficiency also poses a problem for modeling water demand. Non-price drivers, including innovation, education, ordinances, and, for agricultural users, unreliable supply, can lead to water demand savings. A study by Michelsen et al. (1998) on price and non-price conservation programs concludes that a lack of information on the implementation of non-price conservation programs limits an evaluation of the effect of these programs on water demand. As a result of these kinds of limitations, analysts should not assume that increasing model or scenario sophistication would lead to more accurate forecasts. In the end, even "perfect" models supplied with imperfect data are of limited value. Any scenarios must still be treated as "stories," as possible futures to be explored, with the understanding that choices we make today will determine which path we end up following and which future we move toward. The two scenarios described above—the DWR Current Trends and the Pacific Institute High Efficiency scenarios—offer different views of urban and agricultural water use in 2030. They are the result of making different assumptions about a range of water-use efficiency options, policies, technologies, and decisions. The Pacific Institute High Efficiency scenario projects that the statewide use of water will decline by 20 percent by 2030, through implementation of urban and residential water-use efficiency improvements. While we do not evaluate environmental demands for water in this analysis, we understand how critical water is for ecosystem services, and the policy challenges for satisfying these demands. Indeed, one advantage of an "efficient" future 40 A REPORT OF THE PACIFIC INSTITUTE, OAKLAND is the opportunity to leave more water in rivers and streams for ecosystem use, or return water previously taken for urban or agricultural needs. Neither scenario is a prediction. How much water will be needed and used to meet urban and agricultural demands in 2030 is unknowable and uncertain, because it depends on a vast array of factors. Some of these factors are partly or completely out of the hands of Californians, such as decisions about crop production in other countries, the extent and severity of climate changes, technological developments, national policies around efficiency standards or pricing of water from federal projects, and so on. Other factors, however, are well within our ability to influence, and some of these factors could have a huge effect on future water demands. 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Transactions of the ASAE. Vol. 47, No. 5, pp. 1477-1492. Davis, G.R. 1990. "Energy for Planet Earth," Scientific American. Vol. 263, No. 3, p. 57. Department of Finance (DOF). 2004. "Population projections by race/ethnicity, gender and age for California and its counties 2000-2050." Sacramento, California. Department of Water Resources (DWR). 1957. California Water Plan. Bulletin 3. Sacramento, California. Department of Water Resources (DWR). 1964. The California Water Plan Update. Status Report. Bulletin 160- 64. Sacramento, California. 42 REFERENCES Department of Water Resources (DWR). 1966. The California Water Plan Update. Bulletin 160-66. Sacramento, California. Department of Water Resources (DWR). 1970. The California Water Plan Update. Bulletin 160-70. Sacramento, California. Department of Water Resources (DWR). 1974. The California Water Plan Update. Bulletin 160-74. Sacramento, California. Department of Water Resources (DWR). 1983. The California Water Plan Update. Bulletin 160-83. Sacramento, California. Department of Water Resources (DWR). 1987. The California Water Plan Update. Bulletin 160-87. Sacramento, California. Department of Water Resources (DWR). 1993. The California Water Plan Update. Bulletin 160-93. Sacramento, California. Department of Water Resources (DWR). 1998. The California Water Plan Update. Bulletin 160-98. Sacramento, California. Department of Water Resources (DWR). 2004. Unpublished projections of housing based on U.S. Census data for 1980, 1990, and 2000 and Woods and Poole (2004), developed in support of California Water Plan Update 2005. Sacramento, California. Department of Water Resources (DWR). 2005. The California Water Plan Update. Public Review Draft (May 2005). Bulletin 160-05. Sacramento, California. Dziegielewski, B. and E.M. Opitz. 1991. Municipal and Industrial Water Use in the Metropolitan Water District Service Area: Interim Report No. 4. Consultant Report submitted to Metropolitan Water District. Los Angeles, California. Ellis, J.E., E.G. Kruse, A.E. McSay, C.M.U. Neale, and R.A. Horn. 1986. "A comparison of five irrigation methods on onions." HortScience. Vol. 21, No. 6, pp. 1349-1351. Environmental Working Group (EWG). 2004. Water Subsidies: Large Agribusiness Operations—Not Small Family Farmers—Are Reaping a Windfall From Taxpayer- Subsidized Cheap Water. Available at Fidell, M., P.H. Gleick, and A.K. Wong. 1999. "Converting to efficient drip irrigation: Underwood Ranches and High Rise Farms." In L. Owens-Viani, A.K. Wong, P.H. Gleick (eds). Sustainable Use of Water: California Success Stories. Pacific Institute for Studies in Development, Environment and Security. Oakland, California. Gleick, P.H., P. Loh, S. Gomez, and J. Morrison. 1995. California Water 2020: A Sustainable Vision. Pacific Institute for Studies in Development, Environment, and Security. Oakland, California. Gleick, P.H., D. Haasz, C. Henges-Jeck, V. Srinivasan, G. Wolff, K.K. Gushing, and A. Mann. 2003. Waste Not. Want Not: The Potential for Urban Water Conservation in California. Pacific Institute for Studies in Development, Environment, and Security. Oakland, California. Gieick, P.H. 2003. "Global freshwater resources: soft-path solutions for the 21st century." Science, Vol. 302, pp. 1524- 1528. Gleick, P.H., N.L. Cain, D. Haasz, C. Henges-Jeck, C. Hunt, M. Kiparsky, M. Moench, M. Palaniappan, V. Srinivasan, G.H. Wolff. 2004. The World's Water 2004-2005: The Biennial Report on Freshwater Resources. Island Press, Washington, D.C. Groves, D., S. Matyac, and T. Hawkins. 2005. "Quantified scenarios of 2030 water demand." In California Department of Water Resources (DWR). The California Water Plan Update. Bulletin 160-05. Sacramento, California. Hammond, A. 1998. Which World? Scenarios for the 21st Century. Island Press, Washington D.C. Hanak, E. 2005. Water for Growth: California's New Frontier. Public Policy Institute of California. San Francisco, California. Hope, William. 1891. "The waste of water in public supplies, and its prevention." In Bircumshaw, J. 1996. Proc. Instn. Civ. Engrs. Mun. Engr., Vol. 115, pp. 68-75. Kamilov, B., N. Ibragimov, Y. Esanbekov, S. Evert, and L. Heng. 2003. "Drip irrigated cotton: irrigation scheduling study by use of soil moisture neutron probe." International Water and Irrigation. Vol. 23, No. 1, pp. 38-41. Kiefer, J.C., J.W. Kocik, B. Dziegielewski, and E.M. Opitz. 1995. Development of Water Use Models for the Interim #5 Forecast: Memorandum Report. Planning and Management Consultants, Ltd. Carbondale, Illinois. Kiefer, J.C., J.W. Kocik, E.M. Opitz, J.S. Willett, and D.W. Hayes. 1996. Development of Municipal and Industrial Water Use Forecasts for the San Diego County Water Authority. Planning and Management Consultants, Ltd. Carbondale, Illinois. Manwaring, James F. 1998. The Impacts of Water Pricing and the Willingness to Pay by Consumers. Federgasacqua Conference, Venezia, Italy. CALIFORNIA WATER 2030: AN EFFICIENT FUTURE 43 Mayer, P.W., W.B. DeOreo, E.M. Opitz, J.C. Kiefer, W.Y. Davis, B. Dziegielewski, and J.O. Nelson. 1999. Residential End Uses of Water. Final Report. American Water Works Research Foundation. Denver, Colorado. Michelsen, A.M., J.T. McGuckin and D.M. Stumpf. 1998. Effectiveness of Residential Water Conservation Price and Nonprice Programs. AWWA Research Foundation and the American Water Works Association. Denver, Colorado. National Agricultural Statistics Survey (NASS). 2000. California Historic Commodity Data. Available at Orang, M.N., R.L. Snyder, and J. S. Matyac. 2005. "Survey of irrigation methods in California in 2001." In California Department of Water Resources (DWR). The California Water Plan Update. Bulletin 160-05. Sacramento, California. Peacock, W.L., D.E. Rolston, F.K. Aljibury, and R.S. Rauschkolb. 1977. "Evaluating drip, flood, and sprinkler irrigation of wine grapes." Am. J. Enol. Vitic.. Vol. 28, No. 4, pp. 193-195. Planning and Management Consultants, Limited. 1999. IWR-MAIN Water Demand Management Suite. User's Manual and System Description. Carbondale, Illinois. Renwick, M., R. Green, and C. McCorkle. 1998. Measuring the Price Responsiveness of Residential Water Demand in California's Urban Areas. Report prepared for the California Department of Water Resources. Roselcrans, S. and A. Hayden. 2003. "Quantification of unmet environmental objectives in State Water Plan 2003 using actual flow data for 1998, 2000, and 2001." Environmental Defense. Oakland, California. Rumayor-Rodriguez, A. and A. Bravo-Lozano. 1991. "Effects of three systems and levels of irrigating apple trees." Scientia Horticulturae. Vol. 47, pp. 67-75. Sammis, T.W. 1980. "Comparison of sprinkler, trickle, subsurface, and furrow irrigation methods for row crops." Agronomy lournal. Vol. 72, No. 5, pp. 701-704. Schwartz, P. 1991. The Art of the Long View. Currency/Doubleday Press, New York. Schwartz, P. 2003. Inevitable Surprises. Gotham Books/Penguin, New York. Srinivas, K., S.D. Shikhamany, and N.N. Reddy. 1999. "Yield and water-use of 'Anab-e-Shahi' grape (Vitis vinifera) vines under drip and basin irrigation." Canadian Journal of Agricultural Sciences. Vol. 69, No. 1, pp. 21-23. Tarantino, E., H. Singh, and W.O. Pruitt. 1982. "The microclimate and evapotranspiration of processing tomatoes under drip and furrow irrigation." Rivista di Agronomia. Vol. 16, pp. 21-29. Trout, T.J., D.C. Kincaid, and D.T. Westermann. 1994. "Comparison of Russet Burbank yield and quality under furrow and sprinkler irrigation." American Potato Tournal. Vol. 71, pp. 15-28. United States Bureau of Reclamation (USER). 1988. Irrigation Ratesetting Document. Central Valley Project. Sacramento, California. United States Bureau of Reclamation (USER). 1990. Irrigation Annual Ratebook. Central Valley Project. Sacramento, California. United States Bureau of Reclamation (USER). 2000. Irrigation Annual Ratebook. Central Valley Project. Sacramento, California. United States Bureau of Reclamation (USBR). 2005. Irrigation Annual Ratebook. Central Valley Project. Sacramento, California. United States Census (U.S. Census). 2005. "State Interim Population Projections by Age and Sex: 2004-2030 (California)." Washington, D.C. Wolff, G. and P.H. Gleick. 2002. "The soft path for water." In P. Gleick, W.C.G. Burns, E.L. Chalecki, M. Cohen, K.K. Gushing, A.S. Mann, R. Reyes, G.H. Wolff, and A.K. Wong. The World's Water 2002-2003. Island Press, Washington, D.C. Woods & Poole Economics. 2004. 2004 State Profile—State and County Projections to 2030 (California). Washington, D.C. Yohannes, F. and T. Tadesse. 1998. "Effect of drip and furrow irrigation and plant spacing on yield of tomato at Dire Dawa, Ethiopia." Agricultural Water Management. Vol. 35, pp. 201-207. 44 APPENDIX Note: The following appendix is available online at Appendix A Agricultural Efficiency Step 1: Calculate the percentage of irrigated land by crop type and irrigation method Step 2: Calculate the relative efficiency of each irrigation method for each crop type Step 3: Project the applied water for each crop and hydrologic region in 2030 Caveats and Suggested Improvements BILL LOCKYER State of California Attorney General DEPARTMENT OF JUSTICE RONALD REAGAN BUILDING 300 SOUTH SPRING STREET, SUITE 1700 LOS ANGELES, CA 90013 Public: (213)897-2000 Telephone: (213)897-0628 Facsimile: (213)897-2802E-Mail: kathryn.egolf@doj.ca.gov March 30,2006 VIA OVERNIGHT MAIL AND U.S. MAIL Glenn Campbell, Principal Transportation Analyst Orange County Transportation Authority 550 South Main Street P.O. Box 14184 Orange, CA 92863-1584 RE: Orange County Transportation Authority 2006 Long-Range Transportation Plan Draft Program Environmental Impact Report Dear Mr. Campbell: The Attorney General of the State of California submits the following comments regarding the Orange County Transportation Authority ("OCTA") 2006 Long-Range Transportation Plan ("Plan") Draft Program Environmental Impact Report ("DPEIR"). The Attorney General provides these comments pursuant to his independent power and duty to protect the natural resources of the State from pollution, impairment, or destruction in furtherance of the public interest. (See Cal. Const, art. V, § 13; Cal. Gov. Code, §§ 12511, 12600-12; D 'Amico v. Board of Medical Examiners, 11 Cal.3d 1,14-15 (1974).) These comments are made on behalf of the Attorney General and not on behalf of any other California agency or office. While these comments focus on some of the primary issues raised by the Draft PEIR, they are not an exhaustive discussion of all issues. I. Introduction The Plan is described as being OCTA's "blueprint" for maintaining and improving Orange County's transportation network, including freeways, roadways and bus and rail systems through 2030. The Plan focuses much of its attention and planned spending on freeways and roadways, with a much smaller emphasis on public transit. Consequently, the Plan forecasts huge increases (approximately 45%) in vehicle miles traveled ("VMT") per day in the coming years. The environmental analysis in the DPEIR fails to adequately analyze air quality impacts and contains no analysis at all of the impact of the Plan on climate change, both in violation of the California Environmental Quality Act ("CEQA"), Pub. Resources Code §§ 21000, et seq. Orange County is one of the most populous counties in the State, in one of the worst air quality Glen Campbell March 30,2006 Page 2 regions in the country. The environmental and public health concerns raised by the projected increases in vehicular travel under the proposed plan deserve, and CEQA requires, serious and thorough environmental analysis. II. The DPEIR Should Discuss The Plan's Impact On Climate Change. Despite the Plan's heavy reliance on vehicular travel and improvements to freeways, roads and streets, and the acknowledged increase in vehicle travel that the Plan will encourage, the DPEIR never analyzes one of the most important environmental impacts of vehicle emissions—greenhouse gases and resulting climate change Climate change results from the accumulation in the atmosphere of "greenhouse gases" produced by the burning of fossil fuels for energy. Because greenhouse gases (primarily, carbon dioxide("CO2"), methane and nitrous oxide) persist and mix in the atmosphere, emissions anywhere in the world impact the climate everywhere. The impacts on climate change from greenhouse gas emissions have been extensively studied and documented. (See Qreskes, Naomi, The Scientific Consensus on Climate Change, 306 Science 1686 (Dec. 3,2004) [review of 928 peer reviewed scientific papers concerning climate change published between 1993 and 2003, noting the scientific consensus on the reality of anthropogenic climate change]; J. Hansen, et al, Earth's Energy Imbalance: Confirmation and Implications, Sciencexpress (April 28,2004) (available at http://pubs.giss.nasa.gov/abstracts/2005/HansenNazarenkoR.html) [NASA and Department of Energy scientists state that emission of CO2 and other heat-trapping gases have warmed the oceans and are leading to energy imbalance that is causing, and will continue to cause, significant wanning, increasing the urgency of reducing CO2 emissions].) hi California, the state government has acknowledged the true environmental impacts of greenhouse gas emissions on climate change. Governor Schwarzenegger, in his Executive Order S-3-05 issued on June 1,2005, recognized the significance of the impacts of climate change on the State of California, noting that "California is particularly vulnerable to the impacts of climate change." The Order goes on to itemize a litany of the direct impacts that climate change and the increased temperatures resulting from the increased presence of greenhouse gases in the atmosphere, will have on the state: • "[Fjncreased temperatures threaten to greatly reduce the Sierra snowpack, one of the State's primary sources of water;" "[rjncreased temperatures also threaten to further exacerbate California's air quality problems and adversely impact human health by increasing heat stress and related deaths;" Glen Campbell March 30,2006 Page 3 • "[RJising sea levels threaten California's 1,100 miles of valuable coastal real estate and natural habitats;" and • "[T]he combined effects of an increase in temperatures and diminished water supply and quality threaten to alter micro-climates within the state, affect the abundance and distribution of pests and pathogens, and result in variations in crop quality and yield." Executive Order S-3-05, June 1,2005. The California legislature, also recognized all of these severe impacts resulting from climate change, as well as a ''projected doubling of catastrophic wildfires due to faster and more intense burning associated with drying vegetation." (Stats. 2002, ch, 200, Section 1, subd. (c)(4), enacting Health & Saf. Code § 43018.5) In the particular realm of vehicular travel and emissions from cars and truck, the California legislature went on to recognize that "passenger vehicles and light-duty trucks are responsible for 40 percent of the total greenhouse gas pollution in the state." (Ibid., subd. (e)(emphasis added).) Despite the increasing attention that governments, climate scientists, environmentalists, and other members of the public are rightfully directing to the issue of climate change, OCTA does not even mention the issue in its long term transportation plan, which is meant to cover the next quarter century. The DPEIR never once mentions carbon dioxide, climate change or global warming, and mentions greenhouse gases only by passing reference, when discussing other emissions, without explaining either the importance, or the projected impacts, of greenhouse gases. Under CEQA, an environmental impact report must identify and focus on the "significant environmental effects" of a proposed project. (Pub. Res. Code § 21100(b)(l); Cal. Code Regs., Title 14, §§ 15126(a), 15126.2(a), 15143.) "'Significant effect on the environment'means a substantial, or potentially substantial, adverse change in the environment." (Pub. Res. Code § 21068). CEQA also provides that the CEQA guidelines "shall" specify certain criteria that require a finding that a project may have a significant effect on the environment: "(1) A proposed project has the potential to degrade the quality of the environment, curtail the range of the environment, or to achieve short-term, to the disadvantage of long-term, environmental goals. (2) The possible effects of a project are individually limited but cumulatively considerable. As used in this paragraph, "cumulatively considerable" means that Glen Campbell March 30,2006 Page 4 the incremental effects of an individual project are considerable when viewed in connection with the effects of past projects, the effects of other current projects, and the effects of probable future projects. (3) The environmental effects of a project will cause substantial adverse effects on human beings, either directly or indirectly." (Pub. Res. Code § 21083(b).) In other words, if these criteria are present with regard to a project's impacts on the environment, they must be considered in an EIR. The Plan under consideration in this DPEIR, with its projected 45% increase in vehicular miles traveled by the year 2030, when considered in light of the severe impacts cars and trucks have on the level of greenhouse gas emissions in this state, clearly "has the potential to degrade the environment." (See ibid., subd. (b)(l).) Moreover, the cumulative effects of this project on greenhouse gas emissions, when taken in consideration with the impacts statewide of increased population and vehicular travel over the next quarter century, are undeniable. (See ibid,, subd. (b)(2).) When considering the impacts of climate change on California, it is impossible to ignore that the impacts of this project will have either direct or indirect effects on human beings. (See ibid., subd. (b)(3).) Given the scope of the Plan (both in years, and geographically), the projected increase in vehicle travel it calls for, and the fact that it covers one of the most heavily populated regions in the State, there is no question that the impacts of this Plan on greenhouse gas emissions and climate change may, and likely will, have significant cumulative environmental impacts for California. These impacts should have been considered and analyzed in the DPEIR. There could be such analysis in the DPEIR; the data is obtainable. Carbon dioxide emissions from cars can be quantified. The California Air Resources Board has information that could be applied to the projected increase in VMT. The impacts could be assessed as to their cumulative impact on climate change, assuming (as is highly probable in this Plan) that there would be a considerable impact from the increase in CO2 resulting from the increased VMT. (See Cal. Code Regs., title 14, § 15130(a) ["an EIR shall discuss cumulative impacts of a project when the project's incremental effect is cumulatively considerable.] See also Cal. Code Regs., title 14, § 15065(a)(3) ['"Cumulatively considerable' means that the incremental effects of an individual project are significant when viewed in connection with the effects of past projects, the effects of other current projects, and the effects of probably future projects."].) Moreover, the Plan could include mitigation for these impacts. The Governor has recognized, "mitigation efforts will be necessary to reduce greenhouse gas emissions and adaptation efforts will be necessary to prepare Californians for the consequences of global warming." (Executive Order S-3-05, June 1,2005.) Increased public transportation, increased Glen Campbell March 30, 2006 PageS support of alternative fuels and technologies, the purchase of carbon offsets (or mitigation "credits"), installation of electric vehicle charging stations, and other affirmative steps to reduce the transportation impacts of CO2 could be considered as potential mitigation projects. These are real, achievable and available mitigation measures that could be considered when OCTA recognizes its obligations to analyze greenhouse gas emissions and their impact on climate change as part of its long term transportation planning. III. The DPEIR Does Not Adequately Discuss The Plan's Impact On Air Quality. The DPEIR's discussion of air quality fails to address potentially serious impacts on Orange County and the South Coast air basin. In the DPEIR chapter on air quality the drafters concluded that there would be no significant unavoidable adverse long-term air quality impacts from the Plan (see DPEIR, 4.1-17 through 4.1-20), that the plan would have a neutral effect on air quality (see id.), and that the only potentially significant impacts relate solely to regional and local short term impacts from the construction of individual projects (e.g., construction of individual road widening, or lane building projects anticipated under the Plan). (See id. at 4.1-21 through 4.1-23^'. The DPEIR bases these optimistic conclusions on a comparison of the future, year 2030, emissions under the Plan to the emissions budgets of the federally mandated, local Air Quality Management Plan (AQMP), prepared by the South Coast Air Quality Management District (SCAQMD) and projected for 2030. The DPEIR finds that the Plan's emissions are within the projected emissions for the AQMP in 2030, and thus there are no significant impacts. The fundamental basis on which all of the DPEIR's assumptions rests, however, is that by the year 2030, "better fuels" and "improved emission controls" will result in overall emission reductions from vehicles. (See DPEIR at 4.1-18.) There are a number of things wrong with this analysis. First, the comparison fails to analyze all phases of this 24-year project. The CEQA Guidelines require that an EIR consider "all phases of a project when evaluating its impact on the environment." (Cal. Code Regs., title 14, §15126.) The huge emission reductions anticipated in the Plan by the year 2030 as an anticipated result of "better fuels" and "improved emission controls" will surely take some time. The DPEIR must look at the all phases of the 24-year project time frame, not just 2030, to discern if the project will have significant impacts on health and air quality. The DPEIR contains no analysis of whether the impacts on air quality in the "in between" years, before all of the "better fuels" and "improved emission controls" have been implemented, will be significant; there is no way to discern, from the information available in the DPEIR what the emissions during those years will be. 1. These impacts, according to the DPEIR, would be addressed through mitigation measures, but the mitigation measures include no monitoring requirements. Glen Campbell March 30,2006 Page 6 Second, there is no detailed comparison of the project with the emissions budgets of the AQMP. The DPEIR states that "[c]umulative impacts were assessed by comparing projected vehicle emissions in 2030 to the emission budgets established in the local AQMP." (DPEIR at 4.1-16.) Nowhere in the document, however, is a detailed comparison shown to the public, nor is there any indication of how the project emission budgets compare year by year with the AQMP emission budgets. This failing is linked to the failure to consider "all phases" of the project, but displays as well the fundamental lack of detailed information in this DPEIR. The conclusory statement that "the impacts were assessed," without any backup, is not sufficient disclosure for the public to make its own evaluation, and, in fact, this lack of information precludes the informed decision making and public participation required by CEQA. (See Pub. Res. Code § 21061; Cal Code Regs, title 14, § 15121(a) [an EIR is an informational document which will inform public agency decision-makers and the public generally].) The purpose of an EIR, inter alia, is to provide public agencies and the public in general with detailed information about the effect of die proposed project on the environment. (Pub. Resources Code § 21061; Laurel Heights Improvement Association v. Regents of the University of California (1988) 47 Cal.3d 376,391.) An EIR should, when viewed as a whole, provide a reasonable, good faith analysis of known environmental impacts. (Al Larson Boat Shop, Inc. v. Board of Harbor Commissioners (1993) 18 Cal.App.4th 729,749.) Third, the air quality appendix does not contain any actual useful emissions data or modeling to allow the public to evaluate the accuracy or appropriateness of the model. Appendix B, Air Quality, contains only summary tables of the results of some computer modeling performed by OCTA for criteria pollutant emissions. The tables may represent various alternative scenarios (perhaps for the proposed Plan and for some plan alternatives; it is not clear), but there are no explanations of the assumptions and data (or "inputs") that went into the modeling program that produced these results. There is no explanation of what the various summaries (or "outputs") represent. Without an explanation of the data inputs for the modeling done to support the DPEIR, or an explanation of what the summaries show, it is impossible for the public or the public agency decision makers to make informed decisions. (See Pub. Res. Code §21061.) Fourth, the toxics analysis is inadequate. In its discussion of impacts on hydrology and water quality, the DPEIR acknowledges that there will be "new roadways in undeveloped areas" under the Plan. (DPEIR at 4.7-11.) In its discussion of toxic air contaminants, however, there is no discussion of the impacts of those "new roadways in undeveloped areas" which will expose new populations to both criteria and toxic pollutants. There should be a risk assessment in order to draw valid conclusions about public health, and such an assessment should be done for each phase of the project (just as with the overall air quality assessment). The DPEER recognizes that diesel emissions are a known carcinogen, but limits its analysis of cancer risk from the project to Glen Campbell March 30,2006 Page? construction emissions and to the expected situation in 2030. The DPEIR does not consider the cancer risks resulting from the operation of current and new roadways, expanded freeways, etc. In Health & Safety Code Section 39606(b), the Legislature recognized the special susceptibility of children and infants to air pollution, and the DPEIR itself recognizes that there are particularly sensitive receptors (DPEIR at 4.1-16), yet the DPEIR makes no effort to evaluate the project's effects on them.^ Fifth, where the DPEIR does provide some mitigation for the few significant air quality impacts it does recognize (related to construction), the document makes no assignments, not even tentatively, of responsibility for enforcing them through mitigation monitoring. The DPEIR recognizes only two categories of potentially significant impacts on air quality: Short-term (construction) regional impacts (from a number of construction-related activities and materials) and short-term localized impacts (from construction vehicles which are sources of carcinogenic pollutants and diesel exhaust). (See DPEIR at 4.1-21 through 4.1-23.) With regard to the construction impacts, the DPEIR acknowledges that "a large, number of the projects in the [Plan] would involve extensive construction or reconstruction" and that it is "very likely" that some of the projects would be under construction at the same time. (DPEIR at 4.1-21.) Notwithstanding the acknowledged significant air quality impacts the construction activities are expected to produce, there are no monitoring requirements for the list of mitigation measures that the DPEIR says "should be considered" when EIR's are prepared for the individual projects. Likewise, there are no monitoring requirements incorporated in the mitigation measures to address the emissions from construction equipment. Moreover, Chapter 7, Mitigation Monitoring and Reporting Program, does not indicate any monitoring actions, or responsible implementation agencies for the proposed mitigation measures. (DPEIR at 7-1 through 7-34.) OCTA is required to "provide that measures to mitigate or avoid significant effects on the environment are fully enforceable through permit conditions, agreements or other measures." (Pub. Res. Code § 21081.6(b).) The DPEIR should disclose and discuss such mitigation monitoring measures, or at least make tentative assignments of responsibility for enforcing them, so that the public can take these proposed measures into account.2' 2. In addition to these failures to address toxic air contaminants, in the chapter on Hazardous Materials, the DPEIR does not examine the indirect effects of the 45 % increase in VMT, such as increased cancer risk from benzene and other petrochemical toxic emissions released from gas stations, increased refinery emission, and the like. 3. In addition, the Plan should contemplate, discuss and disclose whether funding for the mitigation measures it will require is or will be available. Glen Campbell March 30,2006 PageS Finally, given the inadequacies and lack of detail in the air quality impacts analysis it is not appropriate for all future projects contemplated under this Plan to be able to "tier" off of a document as deficient as this DPEIR.* The DPEIR states "[t]he lead agencies for individual projects may use this PEIR as the basis of their regional and cumulative analysis." (DPEIR at 2- 13.) The deficient analysis of the air quality impacts would make any meaningful project-level analysis of regional and cumulative of air quality impacts for an individual project nearly impossible. For example, it is possible that a project-level EIR could be prepared next year for a project such as a lane-addition to a freeway. Based on "tiering" from this DPEIR, the planners of such a project would have only the conclusory statements regarding air quality impacts in the year 2030 from this DPEIR upon which to base cumulative and regional impacts analyses in their EIR, whereas the new hypothetical freeway lane might be operational in 2009. There would be no analysis of the cumulative and regional impacts of that project for years 2009 through 2029. While this example pertains only to the air quality analysis, the other failings of the DPEIR discussed below also contribute to the inappropriateness of allowing future project level EIR's to "tier" off of this deficient CEQ A document. IV. The DPEIR Contains Many Other Inadequacies. In addition to the failure of the DPEIR to adequately address air quality, and to address greenhouse gas emissions impacts at all, the DPEIR is inadequate in a number of other areas. A. The DPEIR Does Not Contain An Adequate Description of the Project Chapter 2 of the DPEIR, is titled "Project Description" and it does contain a list of the projects that the Plan envisions. The description, however, is lacking. The list of projects contemplated under the plan includes one-line, bullet-point descriptions of various freeway and interchange improvements, lane additions and ramp construction projects that will make up the improvements to freeways under the Plan. (There are also one-line, bullet-point descriptions of the other planned projects.) Despite the fact that the primary focus of projects and spending under the Plan is on freeway construction projects, however, the Project Description does not contain any maps or visual drawings of the Plan's contemplated improvements. It is very difficult to ascertain what the impacts on the ground will be from the brief descriptions of the planned projects. Guidelines indicating areas of disturbance, or footprints, for planned projects 4. "'Tiering' or 'tier' means the coverage of general matters and environmental effects in an [EIR] prepared for a policy, plan, program or ordinance followed by narrower or site-specific [EIRs] which incorporate by reference the discussion in any prior EIR ..." (Pub. Res. Code §§ 21068.5.) Glen Campbell March 30,2006 Page 9 should be included. From the descriptions in the DPEIR, an understanding of the true impact of the Plan is not possible. The public should be able to understand from the DPEIR what implementation of the Plan will mean to their communities and their surroundings in physical terms. "Only through an accurate view of the project may affected outsiders and public decision-makers balance the proposal's benefit against its environmental cost, consider mitigation measures, assess the advantage of terminating the proposal (i.e., the "no project" alternative) and weigh other alternatives in the balance. An accurate, stable and finite project description is the sine qua non of an informative and legally sufficient EIR." County oflnyo v. City of Los Angeles, (1977) 71 Cal.App.3d 185,192-193. B. The DPEIR Does Not Contain An Adequate Analysis of Alternatives. The alternatives considered in the DPEIR consist entirely of plans that envision varying degrees of funding, as opposed to plans that envision alternative mixes of various transportation improvements or projects. The four alternatives to the Proposed Plan are: (i) the No Project (Baseline) Alternative, which "includes projects and programs that have secured funding, have been assessed for their environmental impacts, and have been approved to be implemented" (a small sub-set of the projects in the Proposed Plan) (DPEIR at 5-4,); (ii) the Constrained Alternative, which is "a set of projects and services that can be completed within the County's traditional revenue sources for transportation improvements" (a sub-set, larger than the No Project Alternative sub-set, of the same projects that are included in the Proposed Plan) (DPEIR at 5-11, 5-17); (iii) the Balanced II Alternative, which "includes all of the projects from the Proposed Plan with the exception of the High Occupancy Toll (HOT) projects proposed along [SR 91, including the direct connectors between SR-241 and the SR-91 toll lanes" (DPEIR at 5-29); and (iv) the "Unconstrained" Alternative, which "includes projects and services that could be implemented ... if funding was not an issue." (DPEIR at 5-43.) It is clear from the alternatives considered that the planners looked only at alternative levels of funding that would allow variable numbers of projects off a master-list of desired projects, and not at alternatives designed to provide alternative levels of environmental impact, Glen Campbell March 30,2006 Page 10 or a different master-list of projects. For example, nowhere does the DPEIR consider a potential alternative that changes the balance of spending to focus more on improvements to mass transit services rather than on improvements to freeways and roadways. The decision to focus so much attention on freeway upgrades was pre-determined by the planners' view that the only solution to increased congestion is to build more freeways. The planners exhibit this view when they explain that "the projections for 2030 indicate that vehicle miles will increase faster than population and employment, mostly due to longer trips or commutes. In short, freeway capacity must grow to meet future freeway travel demand." (DPEIR at 2-5) This conclusion ignores the obvious alternative viewpoint: some of the increased travel demand might be more properly diverted to mass transit solutions, as opposed to simply concluding that increased freeway capacity is the only solution. Based on a review of the Plan "objectives" to increase mobility, protect transportation resources and enhance the quality of life (see DPEIR at 2-3), other types of alternatives - alternatives that examine variable mixes of modes of transportation as opposed to just variable mixes of dollars - that still met the objectives of planners could have been considered. Given that the impacts on the environment from the proposed Plan are projected to be significant, such alternatives should have been considered. One of the purposes of the discussion of alternatives in an EIR is to diminish or avoid adverse environmental effects. (See Laurel Heights Improvement Ass 'n v. Regents of Univ. ofCal. (1988) 47 Cal.3d 376,403 [discussion of only three alternatives, where planners claimed they had already ruled out other alternatives as infeasible, was inadequate]; Pub. Res. Code § 21002 [EIR should consider alternatives which would substantially lessen the significant environmental effects].) C. The DPEIR Does Not Contain Adequate Discussion of Biological Resource Impacts. The DPEIR does not quantify the biological resource impacts that it recognizes will be more significant under the proposed Plan than under the No Project alternative. (See DPEIR at 5-6 through 5-7.) Additional detail on the magnitude of direct impacts of the project must be provided for the Proposed Project and all project alternatives. All of the proposed alternatives and the proposed Plan contain lists of the projects they include. The Program EIR should make an attempt to quantify the impacts. Instead, the DPEIR puts off the analysis of the biological resource impacts of all the projects until the EIR for the individual project is prepared. (See DPEIR at 4.2-22.) It is impossible to analyze the difference between alternatives on this subject, when the impacts have not been described. Glen Campbell March 30, 2006 Page 11 D. The Plan And DPEIR Should Include Plans For Improving Air Quality And Reducing Greenhouse Gas Emissions In Its Discussion Of "Environmental Programs." The only "environmental program" contemplated under the Plan is a program for augmenting urban runoff treatment and mitigation to create a "coordinated high-quality urban runoff program." (DPEIR at 2-11.) As discussed in detail above, the impacts of the Plan on greenhouse gas emissions and the cumulative impacts of those emissions on climate change, warrant close examination in this DPEIR. Likewise, a plan like this one which places so much of its emphasis for transportation planning and spending on automobile and truck travel versus mass transit will likely result in greater emissions of criteria pollutants and toxic air contaminants than would an alternative that focuses on improving mass transit and reducing vehicular miles traveled. Given these considerations, the state of air quality in the South Coast air basin and the severe impacts climate change can inflict on the citizens of Orange County, it would be a responsible and reasonable planning measure to include some "environmental program" aimed at reducing the air quality and climate impacts of the proposed Plan. As mentioned in above, there are some easily implemented steps that might be considered, such as the purchase of mitigation credits. There are also programs that might encourage greater use of alternative technologies and fuels (e.g., electric and hybrid vehicles) or that might add incentives for increased use of public transit (enhanced employer managed discount programs that reward use of transit when compared with parking costs) that could be explored. This long term plan is an opportunity for OCTA to take a truly "visionary" role in shaping the transportation and environmental landscape of Orange County for the next quarter century. We hope mat the opportunity will not be missed. V. Conclusion If you or your staff have questions regarding these comments, please contact me at 213- 897-0628. Sincerely, miRYN W. EGOLF Deputy Attorney General For BILL LOCKYER Attorney General Glen Campbell March 30,2006 Page 12 bcc: Theodora Berger Mary Hackenbracht Ken Alex Susan Durbin Ellen Peter