1. Intake Capacity Commensurate with Closed Cycle, Recirculating Cooling System for All Facilities EPA considered a regulatory option that would require Phase II existing facilities having 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 makeup 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; migratory, sport or commercial species of concern) would have to select and implement design and construction technologies to minimize impingement mortality and entrainment. This option does not distinguish between facilities on the basis of the waterbody from which they withdraw cooling water. Rather, it would ensure that the same stringent controls are the nationally applicable minimum for all waterbody types. This is the regulatory approach EPA adopted for new facilities. Reducing the cooling water intake structure's capacity is one of the most effective means of reducing entrainment ( and impingement). For the traditional steam electric utility industry, facilities located in freshwater areas that have closed cycle, recirculating cooling water systems can, depending on the quality of the make up water, reduce water use by 96 to 98 percent from the amount they would use if they had once through cooling water systems, though many of these areas generally contain species that are less susceptible to entrainment. 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. 60 Of the 539 existing steam electric power generating facilities that EPA believes would potentially be subject to the Phase II existing facility proposed rule, 73 of these facilities already have a recirculating wet cooling system ( e. g., wet cooling towers or ponds). These facilities would meet the requirements under this option unless they are located in areas where the director or fisheries managers determine that fisheries need additional protection. Therefore, under this option, 466 steam electric power generating facilities would 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. A closed cycle recirculating cooling system is an available technology for facilities that currently have oncethrough cooling water systems. There are a few examples of existing facilities converting from one type of cooling system to another ( e. g., from oncethrough to closed cycle recirculating cooling system). Converting to a different type of cooling water system, however, is significantly more expensive than the technologies on which the proposed performance standards are based ( generally by a factor of 10 or greater) and significantly more expensive that designing new facilities to run on recirculating systems. EPA has identified four power plants that would be regulated by today's proposal that have converted from once through to closed cycle recirculating cooling systems. Three of these facilities   Palisades Nuclear Plant in Michigan, Jefferies Coal in South Carolina, and Canadys Steam in South Carolina   converted from once through to closed cycle recirculating cooling systems after significant periods of operation utilizing the once through system. The fourth facility   Pittsburg Unit 7   is not a full conversion in that it never operated with its once through system. In this case, the `` conversion'' occurred just prior to construction, after initial design of the once through system design and power plant had VerDate 11< MAY> 2000 20: 32 Apr 08, 2002 Jkt 197001 PO 00000 Frm 00034 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 09APP2. SGM pfrm01 PsN: 09APP2 17155 Federal Register / Vol. 67, No. 68 / Tuesday, April 9, 2002 / Proposed Rules occurred. A brief description of these conversions follows. The Technical Development Document for the Proposed Section 316( b) Phase II Existing Facilities Rule provides additional detail. The Palisades Nuclear Plant. Located in Covert, Michigan, the Palisades Nuclear Plant is a 812 MW ( nameplate, steam capacity) facility with a pressurized water reactor, utilizing a mechanical draft wood cooling tower to condense the steam load of the plant. The reactor began operation in 1972 utilizing a once through cooling system and subsequently converted to a closedcycle recirculating system at the beginning of 1974. Canadys Steam Plant. This 490 MW ( nameplate, steam capacity) coal fired facility with three generating units is located in Colleton County, South Carolina. The first unit initially came online in 1962, the second in 1964, and the third in 1967. All three units operated with a once through cooling water system for many years. The Canadys Steam plant was converted from a once through to a closed cycle recirculating cooling system in two separate projects. Unit 3 ( 218 MW) was first converted in 1972. Units 1 and 2, both with nameplate capacities of 136 MW, were converted from a oncethrough to a closed cycle, recirculating cooling system in 1992. Jefferies Coal Units 3 & 4. Located in Moncks Corner, South Carolina, this facility has a combined, coal fired capacity of 346 MW ( nameplate, steam). The coal units came online in 1970 and operated for approximately 15 years utilizing once through cooling. After the Army Corps of Engineers re diverted the Santee Cooper River, thereby limiting the plant's available water supply, the cooling system was converted from once through to recirculating towers. The plant conducted an empirical energy penalty study over several years to determine the economic impact of the cooling system conversion. Pittsburg Power Plant, Unit 7. Located in Contra Costa County, California, this 750 MW ( nameplate, gas fired steam) unit was designed and planned with a once through cooling water system. However, late in the construction process, the plant switched to a closedcycle recirculating cooling system with a mechanical draft cooling tower. The system utilizes the condenser, conduit system, and circulating pumps originally designed for the once through cooling water system. EPA did not select closed cycle, recirculating cooling systems as the best technology available for existing facilities because of the generally high costs of such conversions. According to EPA's cost estimates, capital costs for individual high flow plants to convert to wet towers generally ranged from 130 to 200 million dollars, with annual operating costs in the range of 4 to 20 million dollars. EPA estimates that the total annualized post tax cost of compliance for this option is approximately $ 2.26 billion. Not included in this estimate are 9 facilities that are projected to be baseline closures. Including compliance costs for these 9 facilities would increase the total cost of compliance with this option to approximately $ 2.32 billion. EPA also has serious concerns about the short term energy implications of a massive concurrent conversion and the potential for supply disruptions that it would entail. EPA requests comment on its decision not to base best technology available for all Phase II existing facilities on closed cycle, recirculating technology. The estimated annual benefits ( in $ 2001) for requiring all Phase II existing facilities to reduce intake capacity commensurate with the use of closedcycle recirculating cooling systems are $ 83.9 million per year and $ 1.08 billion for entrainment reductions.

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 be required for all facilities on certain waterbody types. Under this option, EPA would group waterbodies into the same five categories as in today's proposal: ( 1) 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 fin fish, including many species that are subject to intensive fishing pressures, these waterbody types would require 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 new facility 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. Under this alternative option, facilities that operate at less than 15 percent capacity utilization would, as in the proposed option, only be required to have impingement control technology. Facilities that have a closed cycle, recirculating cooling system would require 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 the same requirements as under the proposed rule. If a facility chose to comply with Track II, then the facility would have 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 to demonstrate the same or substantially similar level of protection. ( For additional discussion see the new facility final rule 66 FR 65256, at 65315 columns 1 and 2.) EPA has estimated that there are 109 facilities located on oceans, estuaries, or tidal rivers that do not have a closed cycle recirculating system and would 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. The other 430 facilities would be required to meet the same performance standards in today's proposal. The potential environmental benefits of this option have been estimated at $ 87.8 million and $ 1.24 billion for entrainment reductions annually. Although this option is estimated ( a full cost analysis was not done for this option) to be less expensive at a national level than requiring closed cycle, recirculating cooling systems for all Phase II existing facilities, EPA is not proposing this option. 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 VerDate 11< MAY> 2000 20: 32 Apr 08, 2002 Jkt 197001 PO 00000 Frm 00035 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 09APP2. SGM pfrm01 PsN: 09APP2 17156 Federal Register / Vol. 67, No. 68 / Tuesday, April 9, 2002 / Proposed Rules regions, there is the potential for short term energy impacts and supply disruptions in these areas. EPA also invites comment on this option.

3. Intake Capacity Commensurate With Closed Cycle, Recirculating Cooling System Based on Waterbody Type and Proportion of Waterbody Flow EPA is also considering a variation on the above approach that would require 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 closedcycle 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 to meet standards for reducing impingement mortality and entrainment based on the performance of wet cooling towers. These facilities would have the choice of complying with Track I or Track II requirements. If a facility on a tidal river or estuary has intake flow equal to or less than 1 percent of the source water tidal excursion, the facility would only be required to meet the performance standards in the proposed rule. These standards are based on the performance of technologies such as fine mesh screens and traveling screens with welldesigned and operating fish return systems. The more stringent, closedcycle recirculating cooling system based requirements would also apply to a facility that has a cooling water intake structure located in an ocean with an intake flow greater than 500 MGD. Regulatory language implementing the Waterbody Type and Intake Capacity Based Option could read as follows:

( a)( 1) The owner or operator of an existing steam electric power generating facility must comply with: ( i) The requirements of ( b)( 1) if your cooling water intake structure has a utilization rate less than 15 percent; ( i) The requirements of ( b)( 2) if your cooling water intake structure withdraws water for use in a closed cycle, recirculating system; ( ii) The requirements of ( b)( 3) if your cooling water intake structure is located in a freshwater river or stream; ( iii) The requirements of ( b)( 4) if your cooling water intake structure is located in a lake ( other than one of the Great Lakes) or reservoir; ( iv) The requirements of ( b)( 5) or ( c) if your cooling water intake structure is located in an estuary or tidal river; ( v) The requirements of ( b)( 6) if your cooling water intake structure is located in one of the Great Lakes; ( vi) The requirements of ( b)( 7) or ( c) if your cooling water intake structure is located in an ocean. ( 2) In addition to meeting the requirements of ( b) or ( c), the owner or operator of an existing steam electric power generating facility must meet any more stringent requirements imposed under ( d). ( b) Track I Requirements. Based on the design characteristics of your facility and cooling water intake structure( s) you must meet the requirements of paragraphs ( b)( 1) through ( 10). ( 1) Requirements for Facilities With a Capacity Utilization Rates Less Than 15 Percent. If you own or operate an existing facility with a cooling water intake structure that has a capacity utilization rate less than 15 percent, you must select and implement design and construction technologies or operational measures to reduce impingement mortality by 80 to 95% for fish and shellfish. ( 2) Requirements for Cooling Water Intake Structures that Withdraw Water for Closed Cycle, Recirculating Systems Only. If you own or operate a cooling water intake structure that withdraws water from an estuary, tidal river, or ocean for a closedcycle recirculating system only, you must comply with the requirements in paragraphs ( b)( 2)( i) and ( ii) as follows: ( i) Impingement Design and Construction Technologies or Operational Measures. You must select and implement design and construction technologies or operational measures to minimize impingement mortality for fish and shellfish if: ( A) There are threatened or endangered or otherwise protected Federal, State, or Tribal species, or critical habitat for these species, within the hydraulic zone of influence of the cooling water intake structure; or ( B) There are migratory and/ or sport or commercial species of impingement concern to the Director or any fishery management agency( ies), which pass through the hydraulic zone of influence of the cooling water intake structure; or ( C) It is determined by the Director or any fishery management agency( ies) that the facility contributes unacceptable stress to the protected species, critical habitat of those species, or species of concern. ( ii) Entrainment Design and Construction Technologies or Operational Measures. You must select and implement design and construction technologies or operational measures to minimize entrainment for entrainable life stages of fish and shellfish if: ( A) There are threatened or endangered or otherwise protected Federal, State, or Tribal species, or critical habitat for these species, within the hydraulic zone of influence of the cooling water intake structure; or ( B) There are or would be undesirable cumulative stressors affecting entrainable life stages of species of concern to the Director or any fishery management agency( ies), and it is determined by the Director or any fishery management agency( ies) that the facility contributes unacceptable stress to these species of concern. ( 3) Requirements for Cooling Water Intake Structures Located in Freshwater Rivers or Streams. If you own or operate an existing facility with a cooling water intake structure located in a freshwater river or stream, you must comply with paragraphs ( b)( 3)( i) or ( ii) as follows: ( i) If your total design intake flow is equal to or less than 5 percent of the source water annual mean flow, you must select and implement design and construction technologies or operational measures to reduce impingement mortality by 80 to 95% for all life stages of fish and shellfish; or ( ii) If your total design intake flow is greater than 5 percent of the source water annual mean flow, you must select and implement design and construction technologies or operational measures to reduce impingement mortality by 80 to 95% and entrainment by 60 to 90% for all life stages of fish and shellfish. ( 4) Requirements for Cooling Water Intake Structures Located in Lakes ( Other Than one of the Great Lakes) or Reservoirs. If you own or operate an existing facility with a cooling water intake structure located in a lake ( other than one of the Great Lakes) or reservoir, you must comply with paragraphs ( b)( 4)( i) and ( ii) as follows: ( i) Your total 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 is determined to be beneficial to the management of fisheries for fish and shellfish by any fisheries management agency( ies); and ( ii) You must select and implement design and construction technologies or operational measures to reduce impingement mortality by 80 to 95% for fish and shellfish. ( 5) Requirements for Cooling Water Intake Structures Located in Estuaries or Tidal Rivers. If you own or operate an existing facility with a cooling water intake structure located in an estuary or tidal river you must comply with paragraphs ( b)( 5)( i) or ( ii) as follows: ( i) If your total design intake flow over one tidal cycle of ebb and flow is equal to or less than one ( 1) percent of the volume of the water column within the area centered about the opening of the intake with a diameter defined by the distance of one tidal excursion at the mean low water level, you must select and implement design and construction technologies or operational measures to reduce impingement mortality by 80 to 95% and entrainment by 60 to 90% for all life stages of fish and shellfish; or ( ii) If your total design intake flow over one tidal cycle of ebb and flow is greater than one ( 1) percent of the volume of the water column within the area centered about the opening of the intake with a diameter defined by the distance of one tidal excursion at the mean low water level, you must meet the requirements in paragraphs ( b)( 5)( ii)( A) or ( B): ( A) Reduce your intake flow to a level commensurate with that which can be attained by a closed cycle recirculating system and select and implement design and construction technologies or operational measures as follows: ( 1) Impingement Design and Construction Technologies or Operational Measures. You must select and implement design and construction technologies or operational VerDate 11< MAY> 2000 20: 32 Apr 08, 2002 Jkt 197001 PO 00000 Frm 00036 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 09APP2. SGM pfrm01 PsN: 09APP2 17157 Federal Register / Vol. 67, No. 68 / Tuesday, April 9, 2002 / Proposed Rules measures to minimize impingement mortality for fish and shellfish if: ( i) There are threatened or endangered or otherwise protected Federal, State, or Tribal species, or critical habitat for these species, within the hydraulic zone of influence of the cooling water intake structure; or ( ii) There are migratory and/ or sport or commercial species of impingement concern to the Director or any fishery management agency( ies), which pass through the hydraulic zone of influence of the cooling water intake structure; or ( iii) It is determined by the Director or any fishery management agency( ies) that the facility contributes unacceptable stress to the protected species, critical habitat of those species, or species of concern. ( 2) Entrainment Design and Construction Technologies or Operational Measures. You must select and implement design and construction technologies or operational measures to minimize entrainment for entrainable life stages of fish and shellfish if: ( i) There are threatened or endangered or otherwise protected Federal, State, or Tribal species, or critical habitat for these species, within the hydraulic zone of influence of the cooling water intake structure; or ( ii) There are or would be undesirable cumulative stressors affecting entrainable life stages of species of concern to the Director or any fishery management agency( ies), and it is determined by the Director or any fishery management agency( ies) that the facility contributes unacceptable stress to these species of concern. ( B) Comply with the requirements of Track II in ( c). ( 6) Requirements for Cooling Water Intake Structures Located in One of the Great Lakes. If you own or operate an existing facility with a cooling water intake structure located in one of the Great Lakes you must select and implement design and construction technologies or operational measures to reduce impingement mortality by 80 to 95% and entrainment by 60 to 90% for all life stages of fish and shellfish. ( 7) Requirements for Cooling Water Intake Structures Located in an Ocean. If you own or operate an existing facility with a cooling water intake structure located in an ocean you must comply with paragraphs ( b)( 7)( i) or ( ii) as follows: ( i) If your total design intake flow is less than 500 MGD, you must select and implement design and construction technologies or operational measures to reduce impingement mortality by 80 to 95% and entrainment by 60 to 90% for all life stages of fish and shellfish; or ( ii) If your total design intake flow is equal to, or greater than 500 MGD, you must meet the requirements in paragraphs ( b)( 7)( ii)( A) or ( B): ( A) Reduce your intake flow to a level commensurate with that which can be attained by a closed cycle recirculating system and select and implement design and construction technologies or operational measures as follows: ( 1) Impingement Design and Construction Technologies or Operational Measures. You must select and implement design and construction technologies or operational measures to minimize impingement mortality for fish and shellfish if: ( i) There are threatened or endangered or otherwise protected Federal, State, or Tribal species, or critical habitat for these species, within the hydraulic zone of influence of the cooling water intake structure; or ( ii) There are migratory and/ or sport or commercial species of impingement concern to the Director or any fishery management agency( ies), which pass through the hydraulic zone of influence of the cooling water intake structure; or ( iii) It is determined by the Director or any fishery management agency( ies) that the facility contributes unacceptable stress to the protected species, critical habitat of those species, or species of concern. ( 2) Entrainment Design and Construction Technologies or Operational Measures. You must select and implement design and construction technologies or operational measures to minimize entrainment for entrainable life stages of fish and shellfish if: ( i) There are threatened or endangered or otherwise protected Federal, State, or Tribal species, or critical habitat for these species, within the hydraulic zone of influence of the cooling water intake structure; or ( ii) There are or would be undesirable cumulative stressors affecting entrainable life stages of species of concern to the Director or any fishery management agency( ies), and it is determined by the Director or any fishery management agency( ies) that the facility contributes unacceptable stress to these species of concern. ( B) Comply with the requirements of Track II in ( c). ( 8) You must submit the application information required; ( 9) You must implement the monitoring requirements specified; ( 10) You must implement the recordkeeping requirements specified; ( c) Track II Requirements. If you are an existing steam electric power generating facility with a cooling water intake structure located in an estuary, tidal river, or ocean that chooses to meet the requirements of Track II in lieu of Track I in ( b)( 5)( ii) or ( b)( 7)( ii), you must comply with the following: ( 1) You must demonstrate to the Director that the technologies, operational measures, and supplemental restoration measures employed will reduce the level of adverse environmental impact from your cooling water intake structures to a level comparable to that which you would achieve were you to reduce your intake flow to a level commensurate with that which can be attained by a closed cycle recirculating system. ( 2) Except as specified in subparagraph ( c)( 4) below, your demonstration must include a showing that the impacts to fish and shellfish, including important forage and predator species, within the watershed will be comparable to those which would result if you were to reduce your intake flow to a level commensurate with that which can be attained by a closed cycle recirculating system. This showing may include consideration of impacts other than impingement mortality and entrainment. ( 3) Restoration Measures. Phase II existing facilities complying with the requirements of Track II may supplement technologies with restoration measures that will result in increases in fish and shellfish if you can demonstrate that they will result in a comparable performance for species that the Director, in consultation with national, State and Tribal fishery management agencies with responsibility for fisheries potentially affected by your cooling water intake structure, identifies as species of concern. ( 4) In cases where air emissions and/ or energy impacts that would result from reducing your intake flow to a level commensurate with that which can be attained by a closed cycle recirculating system would result in significant adverse impacts on local air quality, or significant adverse impact on local energy markets, you may request alternative requirements. ( 5) You must submit the application information required; ( 6) You must implement the monitoring requirements specified; ( 7) You must implement the recordkeeping requirements specified;

EPA notes that of these, some facilities would likely opt to comply through Track II and estimates that 21 facilities would select this option. These facilities would perform site specific studies and demonstrate compliance using alternative technologies, perhaps supplemented by habitat enhancement or fishery restocking efforts. Assuming as a high impact scenario that all 51 of these facilities install wet cooling towers, the energy impacts associated with these 51 facilities would comprise 0.2 percent of total existing electric generating capacity from facilities with an intake flow of 50 MGD or more. The environmental impacts associated with increased air emissions ( SO2, NOX, CO2, and Hg) associated with this option would be a 0.1 percent increase of emissions of these pollutants from the total existing electric generators. The Nuclear Regulatory Commission estimates that a steam electric plant utilizing a once through cooling system would consume approximately 40 percent less water than a comparably sized plant equipped with recirculating wet cooling towers because a wet cooling tower uses a small amount of water many times and evaporates most of this water to provide its cooling ( which can sometimes be seen as a white vapor plume). In contrast, a oncethrough cooling system uses a much larger volume of water, one time. While no cooling water evaporates directly to the air, once the heated water is discharged back into the waterbody, some evaporation occurs. Thus, in some areas, conversion to closed cycle cooling could raise water quantity issues.

VerDate 11< MAY> 2000 20: 32 Apr 08, 2002 Jkt 197001 PO 00000 Frm 00037 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 09APP2. SGM pfrm01 PsN: 09APP2 17158 Federal Register / Vol. 67, No. 68 / Tuesday, April 9, 2002 / Proposed Rules Based on an analysis of data collected through the detailed industry questionnaire and the short technical questionnaire, EPA estimates there are potentially 109 Phase II existing facilities located on estuaries, tidal rivers, or oceans which may incur capital cost under this option. Of these 109 facilities, EPA estimates 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 facilities estimated to fall below the applicable flow threshold, 10 facilities already meet these performance standards and would not require any additional controls, whereas 48 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. Total annualized post tax cost of compliance for the waterbody/ capacitybased option is approximately $ 585 million. Not included in this estimate are 9 facilities that are projected to be baseline closures. Including compliance costs for these 9 facilities would increase the total cost of compliance with this option to approximately $ 595 million. EPA also examined the annualized post tax compliance costs of the waterbody/ capacity based option as a percentage of annual revenues to assess the economic practicability of this alternative option. This analysis was conducted at the facility and firm levels. The revenue estimates are the same as those used in the analysis in Section VI. A. 3 above: facility specific baseline projections from the Integrated Planning Model ( IPM) for 2008. The results at the facility level are similar to those of the proposed rule: 355 out of 550 facilities, or 65 percent, would incur annualized costs of less than 0.5 percent of revenues; 60 facilities would incur costs of between 0.5 and 1 percent of revenues; 57 facilities would incur costs of between 1 and 3 percent; and 67 facilities would incur costs of greater than 3 percent. Nine facilities are estimated to be baseline closures, and for one facility, revenues are unknown. Exhibit 4 below summarizes these findings. EXHIBIT 4.   WATERBODY/ CAPACITYBASED OPTION ( FACILITY LEVEL)

Annualized cost torevenue ratio All phase II Percent of total phase II < 0.5 % ..................... 355 65 0.5   1.0 ...................... 60 11 1.0   3.0% ................... 57 10 > 3.0 % ..................... 67 12 Baseline Closure ...... 9 2 n/ a ............................. 1 0 Total ...................... 550 100 Similar to the preferred option, EPA estimates that the compliance costs for the waterbody/ capacity based option would also be low compared to firmlevel revenues. Of the 131 unique parent entities that own the facilities subject to this rule, 108 entities would incur compliance costs of less than 0.5 percent of revenues; 12 entities would incur compliance costs of between 0.5 and 1 percent of revenues; 6 entities would incur compliance costs of between 1 and 3 percent of revenues; and three entities would incur compliance costs of greater than 3 percent of revenues. Two entities only own facilities that are estimated to be baseline closures. The estimated annualized facility compliance costs for this option represent between 0.001 and 5.4 percent of the entities' annual sales revenue. Exhibit 5 below summarizes these findings.

EXHIBIT 5.   WATERBODY/ CAPACITYBASED OPTION ( FIRM LEVEL)

Annualized cost torevenue ratio Number of phase II entities Percent of total phase II < 0.5 % ..................... 108 82 0.5   1.0 % ................. 12 9 1.0   3.0% ................... 6 5 > 3.0 % ..................... 3 2 Baseline Closure ...... 2 2 Total ...................... 131 100 The results of EPA's approach to estimating national benefits are $ 79.86 million per year for impingement reduction and $ 769.0 million annually for entrainment reduction. Additional details of EPA's economic practicability and benefits analysis of this and other options can be found in the Economic and Benefits Analysis for the Proposed Section 316( b) Phase II Existing Facilities Rule and the Technical Development Document for the Proposed Section 316( b) Phase II Existing Facilities Rule. While the national costs of this option are 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 could be substantial if they installed a cooling tower. Under this option, EPA would provide an opportunity to seek alternative requirements to address locally significant air quality or energy impacts. EPA notes that the incremental costs of this option relative to the proposed option ($ 413 million) significantly outweigh the incremental benefits ($ 146 million). While EPA is not proposing this option, EPA is considering it for the final rule. To facilitate informed public comment, EPA has drafted sample rule language reflecting this option ( see above). EPA invites comment on this alternative technology based option for establishing best technology available for minimizing adverse environmental impacts from cooling water intake structures at Phase II existing facilities.

4. Impingement Mortality and Entrainment Controls Everywhere Under an additional alternative being considered, EPA would establish national minimum performance requirements for the location, design, construction, and capacity of cooling water intake structures based on the use of design and construction technologies that reduce impingement and entrainment at all Phase II existing facilities without regard to waterbody type and with no site specific compliance option available. Under this alternative the Agency would set performance requirements based on the use of design and construction technologies or operational measures that reduce impingement and entrainment. EPA would specify a range of impingement mortality and entrainment reduction that is the same as the performance requirements proposed in § 125.94( b)( 3) ( i. e., Phase II existing facilities would be required to reduce impingement mortality by 80 to 95 percent for fish and shellfish, and to reduce entrainment by 60 to 90 percent for all life stages of fish and shellfish). However, unlike the proposed option, performance requirements under this alternative would apply to all Phase II existing facilities regardless of the category of waterbody used for cooling water withdrawals. Like the proposed option, the percent impingement and entrainment reduction under this alternative would be relative to the calculation baseline. Thus, the baseline for assessing performance would be an existing facility with a shoreline intake with the capacity to support once through VerDate 11< MAY> 2000 20: 32 Apr 08, 2002 Jkt 197001 PO 00000 Frm 00038 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 09APP2. SGM pfrm01 PsN: 09APP2 17159 Federal Register / Vol. 67, No. 68 / Tuesday, April 9, 2002 / Proposed Rules cooling water systems and no impingement or entrainment controls. In addition, as proposed, a Phase II existing facility could demonstrate either that it currently meets the performance requirements or that it would upgrade its facility to meet these requirements. Further, under this alternative, EPA would set technologybased performance requirements, but the Agency would not mandate the use of any specific technology. Unlike the proposed option, this alternative would not allow for the development of best technology available on a site specific basis ( except on a best professional judgment basis). This alternative would not base requirements on the percent of source water withdrawn or restrict disruption of the natural thermal stratification of lakes or reservoirs. It also would impose entrainment performance requirements on Phase II existing facilities located on freshwater rivers or streams, and lakes or reservoirs. 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 alternative would establish clear performance based requirements that are simpler and easier to implement that those proposed and are 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). Total annualized post tax cost of compliance for the modified proposed option is approximately $ 191 million. Not included in this estimate are 11 facilities that are projected to be baseline closures. Including compliance costs for these 11 facilities would increase the total cost of compliance with this option to approximately $ 195 million. The benefits calculated for reduced impingement under this option were $ 64.5 million per year; entrainment reduction benefits were estimated to be $ 0.65 billion annually.

C. Site Specific Based Options Under Consideration 1. Sample Site Specific Rule EPA also invites comment on sitespecific approaches for determining the best technology available for minimizing adverse environmental impact at existing facilities. In general, a site specific option is a formal process for determining the best technology available for minimizing adverse environmental impact at particular facilities that focuses on the site specific interactions between cooling water intakes and the affected environment and the costs of implementing controls. This approach would be based on the view that the location of each power plant and the associated intake structure design, construction, and capacity are unique, and that the optimal combination of measures to reflect best technology available for minimizing adverse environmental impact must be determined on a case by case basis. In order to focus public comment, EPA, in consultation with other interested Federal agencies, has drafted sample regulatory text for a site specific approach, which is set forth below. The Site Specific Sample Rule omits regulatory text on two key subjects: ( 1) The definition of adverse environmental impact; and ( 2) the components of the analysis that is used to determine the best technology available for minimizing adverse environmental impact. Instead, the Sample Rule contains references to the preamble discussion of these subjects ( see § 125.93, definition of `` adverse environmental impact'' and § 125.94( b)( 2), concerning analysis of the best technology available). Regulatory text is not offered on these subjects because the various sitespecific approaches described in the discussion following the Sample Rule deal with them in significantly different ways.

Site Specific Alternative: Sample Rule Sec. 125.90 What are the purpose and scope of this subpart? 125.91 Who is subject to this subpart? 125.92 When must I comply with this subpart? 125.93 What special definitions apply to this subpart? 125.94 As an owner or operator of an existing facility, what must I do to comply with this subpart? 125.95 As an owner or operator of an existing facility, may I undertake restoration measures to mitigate adverse environmental impact? 125.96 Will alternate State requirements and methodologies for determining the best technology available for minimizing adverse environmental impact be recognized? 125.97 As an owner or operator of an existing facility, what must I collect and submit when I apply for my reissued NPDES permit? 125.98 As an owner or operator of an existing facility, must I perform monitoring? 125.99 As an owner or operator of an existing facility, must I keep records and report? 125.100 As the Director, what must I do to comply with the requirements of this subpart? Section 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 have a design intake flow of equal to or greater than 50 million gallons per day ( MGD). The purpose of these requirements is to establish the best technology available for minimizing any adverse environmental impact associated with the use of cooling water intake structures. These requirements are implemented through National Pollutant Discharge Elimination System ( NPDES) permits issued under section 402 of the Clean Water Act ( CWA). ( b) This subpart implements section 316( b) of the CWA for existing facilities that have a design flow of equal to or greater than 50 MGD. Section 316( b) of the CWA provides that any standard established pursuant to sections 301 or 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. The process established in this subpart for determining the best technology available for intake design, location, construction, and capacity provides for a case by case determination based on the unique, sitespecific interactions between intakes and the environment and the costs of implementing controls at existing facilities.

Section 125.91 Who Is Subject to This Subpart?

( a) This subpart applies to an existing facility if it: ( 1) Is a point source that uses or proposes to use a cooling water intake structure; ( 2) Has at least one cooling water intake structure that uses at least 25 percent of the water it withdraws for cooling purposes as specified in paragraph ( c) of this section; and ( 3) Has a design intake flow equal to or greater than 50 MGD; ( b) Use of a cooling water intake structure includes obtaining cooling water by any sort of contract or arrangement with an independent supplier ( or multiple suppliers) of cooling water if the supplier or suppliers withdraw( s) water from waters of the United States. Use of cooling water does not include obtaining cooling water from a public water system or use of treated effluent that otherwise would be discharged to a water of the U. S. 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 point source. ( c) The threshold requirement that at least 25 percent of water withdrawn be used for cooling purposes must be measured on an average monthly basis.

Section 125.92 When Must I Comply With This Subpart?

You must comply with this subpart when an NPDES permit containing requirements consistent with this subpart is issued to you.

VerDate 11< MAY> 2000 20: 32 Apr 08, 2002 Jkt 197001 PO 00000 Frm 00039 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 09APP2. SGM pfrm01 PsN: 09APP2 17160 Federal Register / Vol. 67, No. 68 / Tuesday, April 9, 2002 / Proposed Rules Section 125.93 What Special Definitions Apply to This Subpart?

The definitions in Subpart I of Part 125 apply to this subpart. The following definitions also apply to this subpart: Adverse Environmental Impact [ Reserved; see discussion at V. C. 5. a below.] Existing facility means any facility that both generates and transmits electric power and any facility that generates electric power but sells it to another entity for transmission. This definition specifically includes ( 1) any major modification of a facility; ( 2) any addition of a new unit to a facility for purposes of the same industrial operation; ( 3) any addition of a unit for purposes of a different industrial operation that uses an existing cooling water intake structure but does not increase the design capacity of the cooling water intake structure; and ( 4) any facility that is constructed in place of a facility that has been demolished, but that uses an existing cooling water intake structure whose design intake flow has not been increased to accommodate the intake of additional cooling water.

Section 125.94 How Will Requirements Reflecting Best Technology Available for Minimizing Adverse Environmental Impact Be Established for My Existing Facility?

( a)( 1) Except as provided in paragraph ( a)( 2) of this section, an owner or operator of an existing facility covered by this subpart must conduct a baseline biological survey and provide any other information specified in § 125.97 that the Director concludes is necessary for determining the magnitude of any adverse environmental impact occurring at the facility. ( 2) A previously conducted section 316( b) demonstration may be used to determine whether the location, design, construction and capacity of the facility's cooling water intake structure reflect best technology available for minimizing adverse environmental impact if it reflects current biological conditions in the water body and the current location and design of the cooling water intake structure. A previously conducted section 316( b) demonstration generally would reflect current conditions or circumstances if: ( i) The previous section 316( b) demonstration used data collection and analytical methods consistent with guidance or requirements of the permitting agency and/ or the Administrator; ( ii) The available evidence shows that there have been no significant changes in the populations of critical aquatic species; and ( iii) The owner or operator can show there have been no significant changes in the location, design, construction, and capacity of the facility's cooling water intake structure that would lead to a greater adverse environmental impact. ( b) The determination of best technology available for minimizing adverse environmental impact required by paragraph ( c) of this section may be based on: ( 1) A previously conducted section 316( b) demonstration that is shown to be still valid in the current circumstances, as described in paragraph ( a)( 2) of this section; or ( 2) An analysis of best technology available based on the Design and Construction Technology Plan, operational measures, and any restoration measures allowed under § 125.95, that are submitted pursuant to § 125.97. This analysis may include use of risk assessment. [ See V. C. 5. c below for a discussion of possible additional components of this analysis.] ( c) In determining the best technology available for minimizing adverse environmental impact at an existing facility, the Director shall : ( 1) Minimize impingement mortality for fish and shellfish; ( 2) Minimize entrainment mortality for entrainable life stages of fish and shellfish; ( 3) Take into account non aquatic environmental impacts, including energy requirements, and impacts on local air quality or water resources; and ( 4) Not require any technologies for location, design, construction or capacity or operational and/ or restoration measures the costs of which would be significantly greater than the estimated benefits of such technology or measures. ( d) 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 requirements of paragraph ( c) would not ensure compliance with State or other Federal law. ( e) The owner or operator of an existing facility must comply with any permit requirements imposed by the Director pursuant to § 125.100( b) of this section.

Section 125.95 As an Owner or Operator of an Existing Facility, May I Undertake Restoration Measures To Mitigate Adverse Environmental Impact?

( a) An owner or operator of an existing facility may undertake restoration measures ( such as habitat improvement and fish stocking) that will mitigate adverse environmental impact from the facility's cooling water intake structure. ( b) In determining whether adverse environmental impact is minimized, the Director must take into account any voluntary restoration measures.

Section 125.96 Will Alternative State Requirements and Methodologies for Determining the Best Technology Available for Minimizing Adverse Environmental Impact Be Recognized?

Notwithstanding any other provisions of this subpart, if a State demonstrates to the Administrator that it has adopted alternative regulatory requirements 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 this subpart, the Administrator shall approve such alternative regulatory requirements.

Section 125.97 As an Owner or Operator of an Existing Facility, What Must I Collect and Submit When I Apply for My Reissued NPDES Permit?

( a) As an owner or operator of an existing facility covered by this part, you must submit the information required by § 125.94 and this section to the Director when you apply for a reissued NPDES permit in accordance with 40 CFR 122.21. ( b) Biological Survey. ( 1) The biological survey must include: ( i) A taxonomic identification and characterization of aquatic biological resources including a determination and description of the target populations of concern ( those species of fish and shellfish and all life stages that are most susceptible to impingement and entrainment), and a description of the abundance and temporal/ spatial characterization of the target populations based on the collection of a sufficient number of years of data to capture the seasonal and diel variations ( e. g., spawning, feeding and water column migration) of all life stages of fish and shellfish found in the vicinity of the cooling water intake structure; and ( ii) An identification of threatened or endangered or otherwise protected Federal, state or tribal species that might be susceptible to impingement and entrainment by the cooling water intake structure( s); and ( iii) A description of additional chemical, water quality, and other anthropogenic stresses on the source water body based on available information. ( 2) As provided in § 125.94( a)( 2) and ( d)( 1), biological survey data previously produced to demonstrate compliance with section 316( b) of the CWA may be used in the biological survey if the data are representative of current conditions. ( c) Design and Construction Technology Plan. ( 1) The Design and Construction Technology Plan must explain the technologies and measures you have selected to minimize adverse environmental impact based on information collected for the biological survey. ( 2) In place technologies implemented previously to comply with section 316( b), and information regarding their effectiveness, may be included in the Design and Construction Technology Plan for an existing facility. ( 3) Design and engineering calculations, drawings, maps, and costs estimates supporting the technologies and measures you have selected to minimize adverse environmental impact. ( d) Operational Measures. Operational measures that may be proposed include, but are not limited to, seasonal shutdowns or reductions in flow and continuous operation of screens. ( e) Restoration Measures. If you propose to use restoration measures to minimize adverse environmental impact as allowed in § 125.95, you must provide the following information to the Director for review: ( 1) Information and data to show that you have coordinated with the appropriate fish and wildlife management agency; ( 2) A plan that provides a list of the measures you have selected and will implement and how you will demonstrate that your restoration measures will maintain the fish and shellfish in the water body to the level required to offset mortality from entrainment and impingement; and ( 3) Design and engineering calculations, drawings, maps, and costs estimates VerDate 11< MAY> 2000 20: 32 Apr 08, 2002 Jkt 197001 PO 00000 Frm 00040 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 09APP2. SGM pfrm01 PsN: 09APP2 17161 Federal Register / Vol. 67, No. 68 / Tuesday, April 9, 2002 / Proposed Rules supporting the proposed restoration measures.

Section 125.98 As an Owner or Operator of an Existing Facility, Must I Perform Monitoring?

( a) Following issuance of an NPDES permit, an owner or operator of an existing facility must submit to the Director a program for monitoring that will be adequate to verify that the location, design, construction, and capacity of the cooling water intake structure reflect the best technology available for minimizing adverse environmental impact. ( b) The Director may require modifications of the monitoring program proposed by the owner or operator based on, but not limited to, consideration of the following factors: ( 1) Whether or not the facility has been determined to cause adverse environmental impacts under § 125.100; ( 2) The types of modifications and restoration that are required in the NPDES permit under § 125.100; ( 3) The amount and quality of the data or information available on the water body health and quality of the fishery; and ( 4) The stability or flux in the environmental factors that influence biological response in the water body. ( c) The monitoring program for an existing facility that the Director has determined is not causing adverse environmental impact must provide for monitoring sufficient for the Director to make the subsequent 5 year permit decision. ( d) The monitoring program for an existing facility that the Director has determined to cause adverse environmental impact must provide for monitoring sufficient to demonstrate that the modifications to facility operations and intake technology and any restoration measures included in the NPDES permit have been effective for minimizing adverse environmental impact. The monitoring must begin during the first year following implementation of the modifications and restoration measures, and must continue until the Director is satisfied that adverse environmental impact caused by the facility's cooling water intake has been minimized.

Section 125.99 As an Owner or Operator of an Existing Facility, Must I Keep Records and Report?

( a) As an owner or operator of an existing facility, you must keep records of all the data used to complete the permit application and show compliance with the requirements in the permit and any compliance monitoring data for a period of at least three ( 3) years from the date of permit issuance. ( b) The Director may require that these records be kept for a longer period.

Section 125.100 As the Director, What Must I Do To Comply With the Requirements of This Subpart?

( a) Permit Applications. As the Director, you must review materials submitted by the applicant under 40 CFR 122.21( r)( 3) and § 125.94 before each permit renewal or reissuance. ( 1) After receiving the permit application from the owner or operator of a new facility, the Director must determine if the applicant is subject to the requirements of this subpart. ( 2) For each subsequent permit renewal for a covered facility, the Director must review the application materials and monitoring data to determine whether requirements, or additional requirements, for design and construction technologies or operational measures should be included in the permit, as provided in paragraph ( b) of this section. ( b) Permitting Requirements. ( 1) Section 316( b) requirements are implemented for a facility through an NPDES permit. As the Director, you must: ( i) Determine whether the location, design, construction and capacity of the cooling water intake structure at the existing facility reflects best technology available for minimizing adverse environmental impact, based on the information provided under § 125.94( a) and § 125.97 and any other available, relevant information; and ( ii) If the location, design, construction and capacity of the cooling water intake structure at the existing facility does not reflect best technology available for minimizing adverse environmental impact, specify the requirements and conditions for the location, design, construction, and capacity of the cooling water intake structure( s) that must be included in the permit for minimizing adverse environmental impact. This determination must be based on information provided under § 125.94 and § 125.97 and any other available, relevant information. ( 2) ( i) Before issuing an NPDES permit containing section 316( b) requirements, the Director must consult with and consider the views and any information provided by interested fish and wildlife management agencies. ( ii) If any fish and wildlife management agency having jurisdiction over the water body used for cooling water withdrawal determines that the cooling water intake structure( s) of an existing facility contributes to unacceptable stress to aquatic species or their habitat, the fish and wildlife management agency may recommend design, construction, or operational changes to the Director that will minimize that stress. ( c) Monitoring Requirements. At a minimum, the Director must ensure that the permit requires the permittee to perform the monitoring required in § 125.98. You may modify the monitoring program when the permit is reissued and during the term of the permit based on changes in the physical or biological conditions in the vicinity of the cooling water intake structure.

The Agency invites comment on the above framework as an appropriate approach for implementing section 316( b) as an alternative to today's proposed requirements. The Agency also invites comments on the following site specific approaches for implementing section 316( b) on a sitespecific basis within the general framework set forth in the Sample Rule.

2. Site Specific Alternative Based on EPA's 1977 Draft Guidance Since the Fourth Circuit remanded EPA's section 316( b) regulations in 1977, decisions implementing section 316( b) have been made on a case bycase site specific basis. EPA published 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 guidance describes the studies recommended for evaluating the impact of cooling water intake structures on the aquatic environment, and it establishes a basis for determining the best technology 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 also is consistent with the approach described in the 1976 Development Document referenced in the remanded regulation. The 1977 Section 316( b) Draft Guidance recommends a general process for developing information needed to support section 316( b) decisions and presenting that information to the permitting authority. The process involves the development of a sitespecific 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 to minimize adverse environmental impact. Where adverse environmental impact is occurring and must be minimized by application of best technology available, the 1977 guidance suggests a `` stepwise'' approach that considers screening systems, size, location, capacity, and other factors. Although the Draft Guidance describes the information to be developed, key factors to be considered, and a process for supporting section 316( b) determinations, it does not establish national standards for best technology available to minimize adverse environmental impact. Rather, the guidance leaves the decisions on the appropriate location, design, capacity, and construction of each facility to the permitting authority. Under this framework, the Director determines whether appropriate studies have been performed and whether a given facility has minimized adverse environmental impact.

VerDate 11< MAY> 2000 20: 32 Apr 08, 2002 Jkt 197001 PO 00000 Frm 00041 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 09APP2. SGM pfrm01 PsN: 09APP2 17162 Federal Register / Vol. 67, No. 68 / Tuesday, April 9, 2002 / Proposed Rules 3. The Utility Water Act Group ( UWAG) Approach The Utility Water Act Group ( UWAG), an association of more than 100 individual electric utility companies and three national trade associations of electric utilities, provided EPA with a recommended site specific regulatory framework, entitled `` 316( b) Decision Principles for Existing Facilities.'' UWAG's recommended approach for decision making under section 316( b) includes the following components:   A definition of `` Adverse Environmental Impact;   Use of Representative Indicator Species ( RIS) for the assessment of adverse environmental impact;   Making decisions under section 316( b) that complement, but do not duplicate, other Federal, state, and local regulatory programs;   Use of de minimis criteria to exempt small cooling water users that pose no appreciable risk of causing adverse environmental impact because only a small amount of cooling water is withdrawn from a water body at a location that does not require special protection;   Determination of adverse environmental impact or its absence using the facility's choice of three methods, either alone or in combination: ( 1) Use of previously conducted section 316( b) demonstrations that are still valid in light of current circumstances; ( 2) use of ecological risk assessment by means of demonstration of no appreciable risk of adverse environmental impact using conservative decision criteria; or assessment of risk using a structured decision making process consistent with EPA's Ecological Risk Assessment Guidelines;   A `` maximize net benefits'' approach for selecting the best technology available for minimizing adverse environmental impact;   At the option of the permittee, recognition of voluntary enhancements such as fish stocking or habitat improvements; and   Providing data or information with NPDES permit renewal applications if new information shows that previously conducted section 316( b) demonstrations are no longer scientifically valid. These features of UWAG's recommended approach are discussed in the Discussion of Site Specific Approach Issues and Questions for Comment that follows. UWAG's submission is included in the rulemaking record. 4. Site Specific Alternative Suggested by PSEG EPA also received a suggested sitespecific regulatory framework from the Public Service Electricity and Gas Company ( PSEG). The framework includes three alternative decisionmaking approaches that would allow permittees and permit writers to utilize prior analyses and data that may be appropriate and helpful, consider previous best technology available determinations that were based on these analyses and data, and take into account the benefits of prior section 316( b) implementing actions. The following summary of the framework suggested by PSEG closely tracks PSEG's submission, which is included in the rulemaking record. PSEG's submission states that EPA guidance and other precedents have identified certain ecological criteria as relevant factors for considering adverse environmental impact, including entrainment and impingement; reductions of threatened, endangered, or other protected 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 fishery stocks, and recreational fisheries; and stresses to overall communities or ecosystems as evidenced by reductions in diversity or other changes in system structure or function. Many existing section 316( b) decisions are based upon extensive data and analyses pertaining to those factors. Those factors would remain applicable for all existing facilities. Under PSEG's recommended approach, permitting authorities would have the authority to continue to place emphasis on the factors they believe are most relevant to a given situation. For example, when long term data are available that meet appropriate data quality standards, and when analyses using appropriate techniques such as models that already have been developed to allow population level analysis of the potential for adverse environmental impact, permit writers would focus on those adverse environmental impact factors related to population level impacts. In other situations, especially where permittees do not wish to invest the time and financial resources necessary for biological data gathering and analysis, permitting authorities would have the discretion to focus on other factors by applying different decision making paths. 5. Discussion of Site Specific Approach Issues and Associated Questions for Comment The following sections focus on several key aspects of any site specific approach, specifically requesting comment on an appropriate definition of adverse environmental impact and associated decision making criteria.

a. Determination of Adverse Environmental Impact EPA's 1977 Draft Guidance assumes there will be adverse environmental impact whenever there is entrainment or impingement `` damage'' as a result of a cooling water intake structure, and focuses study on the magnitude of the impact to determine the appropriate technologies needed to minimize the impact. The evaluation criteria for assessing the magnitude of an adverse impact are broad and recommend consideration both in terms of absolute damage ( e. g., numbers of fish) and percentages of populations. Although the UWAG and PSEG site specific approaches contain different definitions of the term `` adverse environmental impact,'' there is general agreement among them that the focus should be on the health of critical aquatic populations or ecosystems, rather than on absolute numbers of fish and other aquatic organisms impinged or entrained by the cooling water intake structure. UWAG offered the most detailed and specific recommendations for making a determination of adverse environmental impact.

( 1) EPA's 1977 Definition of Adverse Environmental Impact and Examples of Its Current Use In EPA's 1977 Draft Guidance, adverse environmental impact is defined as follows:

Adverse environmental impact means the adverse aquatic environmental impact that occurs 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 which should be estimated both in terms of short term and long term impact with respect to ( 1) absolute damage ( number of fish impinged or percentage of larvae entrained on a monthly or yearly basis); ( 2) percentage damage ( percentage 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 species yield; and ( 6) whether the impact would endanger ( jeopardize) the protection and propagation of a balanced population of shellfish and fish VerDate 11< MAY> 2000 20: 32 Apr 08, 2002 Jkt 197001 PO 00000 Frm 00042 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 09APP2. SGM pfrm01 PsN: 09APP2 17163 Federal Register / Vol. 67, No. 68 / Tuesday, April 9, 2002 / Proposed Rules 61 Drawing on the concept of `` critical aquatic organisms'' in EPA's 1977 draft guidance, UWAG would define a representative indicator species ( RIS) as a species of commercial or recreational importance, a Federal or state threatened or endangered or specially designated species, an important species for ecological community structure or function, or on the basis of species and life stage vulnerability. in and on the body of water from which the cooling water is withdrawn ( long term impact).

Over the past 25 years, permitting agencies have interpreted this definition in a variety of ways. Some agencies consider the absolute number of organisms subjected to impingement and entrainment by facility cooling water intakes. Permitting authorities that evaluate adverse environmental impact by enumerating losses of numbers of fish individuals find this approach removes much of the uncertainty associated with evaluating effects to species at higher organizational levels such as populations, communities, or ecosystems. Other permitting authorities have focused on evaluating effects on populations in determining whether an adverse environmental impact is occurring.

( 2) An Alternative Definition EPA solicits comment on an alternative definition of `` adverse environmental impact'' as follows:

Adverse environmental impact means one or more of the following: entrainment and impingement of significant numbers of a critical aquatic organisms or percentages of aquatic populations; adverse impacts to threatened, endangered or other protected species, or their designated critical habitat; significant losses to populations, including reductions of indigenous species populations, commercial fishery stocks, and recreational fisheries; and stresses to overall communities or ecosystems as evidenced by reductions in diversity or other changes in system structure or function.

( 3) Discussion of UWAG Recommendation for Determining Adverse Environmental Impact UWAG offers the following definition:

Adverse environmental impact is a reduction in one or more representative indicator species ( RIS) 61 that ( 1) creates an unacceptable risk to a population's ability to sustain itself, to support reasonably anticipated commercial or recreational harvests, or to perform its normal ecological function and ( 2) is attributable to operation of the cooling water intake structure.

In UWAG's view, defining adverse environmental impact in terms of `` unacceptable risk'' combines science with the judgments society makes about the value of different resources. UWAG argues that this recommended definition is scientifically sound and environmentally protective because it focuses on protecting populations or species that are subject to impingement and entrainment by cooling water intake structures and because it requires that the level of population protection be adequate to ensure protection of the integrity of the ecosystem ( community structure and function). However, it notes that this definition does not create a `` bright line'' test based on engineering or science. In addition to use of a valid, previously conducted section 316( b) demonstration, UWAG would allow facilities to use two risk assessment approaches to make a demonstration of `` no adverse environmental impact.'' The first approach involves demonstrating that the facility meets one or more of a set of conservative decision criteria. Under the second approach, a facility would cooperate with regulators and stakeholders to determine the benchmarks for a risk analysis to determine whether there is an appreciable risk of adverse environmental impact.

( a) Protective Decision Criteria for Determining Adverse Environmental Impact UWAG recommends protective decision criteria that it believes are conservative enough to eliminate the risk of adverse environmental impact for all practical purposes. The recommended physical and biological decision criteria are as follows:

Physical Criteria Locational Criterion: An existing cooling water intake structure would be considered not to create a risk of adverse environmental impact if it withdraws water from a zone of a water body that does not support aquatic life due to anoxia or other reasons, such as lack of habitat, poor habitat, or water quality conditions. Design Criterion: An existing cooling water intake structure would not be considered to create a risk of adverse environmental impact if it uses wet closed cycle cooling or technologies that achieve a level of protection reasonably consistent with that achieved by wet closed cycle cooling. However, wet closed cycle cooling or reasonably consistent protection would be considered insufficient if permit writers or natural resource agencies identify special local circumstances such as impacts to threatened, endangered, or otherwise protected species or areas designated for special protection. Proportion of Flow or Volume Criterion: On fresh water rivers, lakes ( other than the Great Lakes), and reservoirs, a cooling water intake structure would be considered not to create a risk of adverse environmental impact if it withdraws no more than 5% of either the source water body or the `` biological zone of influence.'' This criterion would apply only to entrainable life stages. Because it might not be appropriate for many RIS to consider the entire source water body in making this decision, determining the appropriate flow or volume would be of critical importance. UWAG recommends how the `` biological zone of influence'' would be determined for different RIS.

Biological Criteria Percent Population Loss Criterion: On freshwater rivers, lakes ( other than the Great Lakes), and reservoirs, a facility would be considered not to create a risk of adverse environmental impact if the cooling water intake structure causes the combined loss, from entrainment and impingement, of ( 1) no more than 1% of the population of any harvested RIS and ( 2) no more than 5% of the population of any non harvested RIS, with fractional losses summed over life stages for the entire lake, reservoir, or river reach included in the evaluation. UWAG explains that the 1%/ 5% population loss criteria are based in part on the recognition that these percentages are small relative to the inter annual fluctuations typical of fish populations and also small relative to the compensatory responses typical of many species. No Significant Downward Trend: On freshwater rivers, lakes ( other than the Great Lakes), and reservoirs, a cooling water intake structure would be considered to create no risk of adverse environmental impact if adequate data collected over a representative period of years, including preoperational data, show no statistically significant downward trend in the population abundance of RIS. The foregoing criteria would be applied independently. Passing a single criterion could serve as the basis for a successful demonstration of no risk of adverse environmental impact for a facility. If population based biological criteria are used, they would be applied independently to each RIS species, and each species would need to meet the criteria for the facility to demonstrate no risk of adverse environmental impact. UWAG states that most of these recommended criteria have limitations on their use, such as being limited to certain water body types or to use with either impingeable or entrainable organisms, but not both. Some facilities, therefore, might use the criteria for only VerDate 11< MAY> 2000 20: 32 Apr 08, 2002 Jkt 197001 PO 00000 Frm 00043 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 09APP2. SGM pfrm01 PsN: 09APP2 17164 Federal Register / Vol. 67, No. 68 / Tuesday, April 9, 2002 / Proposed Rules some of their RIS and would address the remainder through the structured adverse environmental impact decision making process discussed below. ( b) The Structured Adverse Environmental Impact Decision Making Process Consistent with EPA Ecological Risk Assessment Guidelines Under this alternative for determining adverse environmental impact, a facility would work with permit writers, resource managers, other appropriate technical experts, and stakeholders to determine what constitutes an `` unacceptable'' risk of adverse environmental impact in a water body. The process would be based on EPA's 1998 Ecological Risk Assessment Guidelines. The key steps would be as follows:   Stakeholders would be involved in identifying issues of concern caused by the cooling water intake structure relative to RIS. To focus the effort to identify RIS at risk, previous section 316 studies, the results of demonstrations using the criteria discussed above, information on the design and operation of the facility, water body fisheries management data and plans, and other relevant water body information could be used.   The permit writer, with input from the facility, would then determine what data collection and assessment studies are necessary to address the RIS of concern. Decisions regarding the scope of the assessment would include identification of RIS; study design, sampling methods, locations, and durations; and analytical methods and/ or models to be employed.   The facility and regulators also would identify explicit measurement endpoints and criteria for assessing adverse environmental impact before any studies are conducted. If the studies demonstrate that predetermined endpoints are not exceeded, the intake structure would be considered not to cause adverse environmental impact. If not, the facility would proceed to identify best technology available alternatives or to identify enhancements that would eliminate adverse environmental impact.

( 4) Questions for Comment on the Determination of Adverse Environmental Impact ( a) EPA invites public comment on all aspects of the foregoing approaches to defining adverse environmental impact and for making the preliminary determination on adverse environmental impact, and on which approach should be included if the Agency adopts a site specific approach for the final rule. ( b) Should the final rule adopt the 1977 Draft Guidance approach to defining adverse environmental impact as any entrainment or impingement damage caused by a cooling water intake structure? ( c) Should the final rule state that any impingement and entrainment is an adverse environmental impact and focus site specific assessment on whether that impact is minimized by technologies already in place or potential changes in technology? Alternatively, should the final rule define adverse environmental impact in terms of population level or community level effects? ( d) Should EPA adopt an approach that makes more explicit use of threshold determinations of whether adverse environmental impact is occurring, If so, should EPA adopt any or all of the conservative decision criteria suggested by UWAG in a final rule? ( e) Should the structured risk assessment decision process that UWAG recommends for determining adverse environmental impact be adopted? b. Use of Previous Section 316( b) Demonstration Studies The Sample Site Specific Rule and the PSEG and UWAG approaches would all give the permittee an opportunity to show that a previously conducted section 316( b) demonstration study was conducted in accordance with accepted methods and guidance, reflects current conditions, and supports decisions regarding the existence of adverse environmental impact and the best technology available for minimizing adverse environmental impact.

( 1) Sample Site Specific Rule Approach for Using Previous Demonstration Studies Sections 125.94( a)( 2) and 125.94( c)( 1) of the Sample Rule would permit use of a previously conducted section 316( b) demonstration if the previous study was performed using data collection and analytical methods that conformed to applicable guidance or requirements of the permitting agency or EPA and there have been no significant changes to either the aquatic populations affected by the cooling water intake structure or to the design, construction, or operation of the facility. The burden would be on the owner or operator of the facility to show that these conditions were met.

( 2) PSEG Recommendation for Using Previous Demonstration Studies PSEG would permit use of previous section 316( b) determinations that were based upon analysis deemed to be thorough and based on the appropriate statutory factors and detailed, sitespecific data and information. In PSEG's view, such prior decisions need not be subject to a complete re evaluation in subsequent permit renewal proceedings absent indications that the current cooling water intake structure is allowing adverse environmental impacts to occur or that there have been material changes in any of the key factors the agency relied upon in reaching the prior determination. Under PSEG's approach, if a cooling water intake structure at an existing facility has previously been determined to employ best technology available based upon a diligent review of a section 316( b) demonstration that was conducted in conformance with the 1977 EPA Guidance, then the existing intake would continue to be determined to employ best technology available for the next permit cycle. The permit renewal application would have to include information sufficient to allow the permitting agency to determine that: ( 1) There has been no material change in the operation of the facility that would affect entrainment or impingement; ( 2) any in place technologies have been properly operated, maintained, and are not allowing losses to occur in excess of the levels the agency considered in its prior determination; ( 3) any conservation or mitigation measures included in prior permits are in place and are producing the intended benefits; ( 4) the economics of applying a different technology have not changed; and ( 5) data and/ or analyses show that fish species of concern are being maintained or that any declines in those species are not attributable to the cooling water intake structure. In the Fact Sheet accompanying the draft permit, the permitting agency would be required specifically to: ( 1) Make a finding of fact that the prior section 316( b) determination had been based upon a demonstration conducted in conformance with the Agency's 1977 Guidance; and ( 2) identify the data and information that the permittee provided in support of the reaffirmance of its prior section 316( b) determination. Interested third parties as well as Federal, state and interstate resource protection agencies ( e. g., National Marine Fisheries Service and the United States Fish and Wildlife Service) would have an opportunity to comment on the draft section 316( b) determination and to challenge the final determination if they were aggrieved by the agency's final decision.

VerDate 11< MAY> 2000 20: 32 Apr 08, 2002 Jkt 197001 PO 00000 Frm 00044 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 09APP2. SGM pfrm01 PsN: 09APP2 17165 Federal Register / Vol. 67, No. 68 / Tuesday, April 9, 2002 / Proposed Rules ( 3) UWAG Recommendation for Using Previous Demonstration Studies UWAG also would permit use of a previously conducted section 316 demonstration if the past demonstration reflects current biological conditions in the water body and the current location, design, construction, and capacity of the cooling water intake structure. UWAG argues that many States have developed section 316( b) regulatory programs with significant information gathering requirements and that this information would provide, for many existing facilities, a sufficient basis for determination of compliance with section 316( b). More specifically, UWAG's approach would consider ( 1) Whether the RIS used in past determinations are still the appropriate ones; ( 2) whether the data collection and analytical tools used were adequate in light of current circumstances; ( 3) whether water body biological conditions at the time of the study reflect current conditions; ( 4) whether the location, design, construction, or capacity of the cooling water intake structure has been altered since the previous section 316( b) demonstration; and ( 5) other factors that should be considered if there is reason to believe that the previous demonstrations are inadequate.

( 4) Questions for Comment on Using Previous Demonstration Studies EPA invites public comment on whether a final rule should permit the use of a previous section 316( b) demonstration for determining whether there is adverse environmental impact and the best technology available for minimizing adverse environmental impact. If such a provision is included in the final rule, what criteria or conditions should be included to ensure that the previously conducted demonstration is an adequate basis for section 316( b) decisions?

c. Process for Determining the Best Technology Available for Minimizing Adverse Environmental Impact and the Role of Costs and Benefits Once it is determined that there is adverse environmental impact attributable to a cooling water intake structure, the facility and permitting agency must decide on a site specific basis what changes to the location, design, construction, or capacity of the intake or what alternative voluntary measures, must be installed and implemented to minimize the impact. ( 1) EPA's Draft 1977 Guidance and Development Document EPA's draft 1977 draft guidance and development document provide guidance on how to select best technology for minimizing adverse environmental impact but are silent on the role of costs and benefits in determining best technology available for minimizing adverse environmental impact. In 1979, the U. S. Court of Appeals for the First Circuit found that cost is an acceptable consideration in section 316( b) determinations. Seacoast Anti Pollution League v. Costle, 597 F. 2d 306, 311 ( 1st Cir. 1979). Over the years, section 316( b) determinations have focused on whether the costs of technologies employed would be wholly disproportionate to the environmental gains to be derived from their use. See e. g., Seacoast Anti Pollution League v. Costle; Decision of the General Counsel No. 63 ( July 29, 1977); Decision of the General Counsel No. 41 ( June 1, 1976).

( 2) Sample Site Specific Rule The Sample Rule would require that the analysis of best technology available for minimizing adverse environmental impact be based on a biological survey of the part of the water body affected by the cooling water intake structure and a Design and Construction Technology Plan submitted by the permittee, together with any voluntary operational measures or restoration measures that would be implemented at the facility. ( See Sample Rule § § 125.94, 125.95 and 125.97.) Examples of appropriate technologies a facility could propose in the Design and Construction Technology Plan include wedgewire screens, fine mesh screens, fish handling and return systems, barrier nets, aquatic filter barrier systems, an increase in the opening of the cooling water intake structure to reduce velocity and, if warranted by site specific conditions, cooling tower technology. Under the Sample Rule, in place technologies implemented previously to comply with section 316( b), and information regarding their effectiveness, may be included in the Design and Construction Technology Plan. Operational measures that may be proposed include seasonal shutdowns or reductions in flow and continuous operation of screens. The Sample Rule also would provide that the Director could exclude any design or construction technology if the costs of such technology would be significantly greater than the estimated benefits of the technology ( § 125.94( f)( 2)). ( 3) Processes Structured on Incremental Cost Benefit Assessment EPA solicits comment on whether an evaluation of the cost effectiveness ( i. e., the incremental cost to benefit ratio) of cooling water intake structure technologies and any operational and/ or restoration measures offered by the owner or operator of a facility is an appropriate component of the analysis that would be undertaken in a sitespecific approach to determining best technology available for minimizing adverse environmental impact. The UWAG and PSEG recommendations for selecting technologies and other measures based on an evaluation of costs and benefits are discussed below.

( A) UWAG Recommendation for a Process Under the UWAG approach, if the facility is not able to demonstrate that its cooling water intake structure is not causing adverse environmental impact, it would then select and implement the best technology available. As the first step in choosing best technology available, a facility would identify technology alternatives. It would then estimate the costs and benefits of the alternatives. Relevant benefits typically would include preservation of fish and other aquatic life and economic benefits from recreational and commercial fisheries. Relevant costs typically would include the capital cost of constructing a technology, operation and maintenance costs ( including energy penalties), and adverse environmental effects such as evaporative loss, salt drift, visible plumes, noise, or land use. For those facilities for which the technologies will lower the generating output of the facility, the cost of replacement power and the environmental effects of increased air pollution and waste generation from generating the replacement power also would be considered. Facilities then would calculate the net benefits for each technology and rank them by cost effectiveness. Those with marginal costs greater than marginal benefits would be rejected. The technology with the greatest net benefit would be the `` best'' technology for the site. UWAG believes use of existing EPA cost benefit calculation methodologies, such as those used for natural resource damage valuation under CERCLA and under NEPA would be sufficient.

( B) PSEG Recommendation for a Process PSEG suggests two options for determining best technology available where prior section 316( b) determinations were not based upon VerDate 11< MAY> 2000 20: 32 Apr 08, 2002 Jkt 197001 PO 00000 Frm 00045 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 09APP2. SGM pfrm01 PsN: 09APP2 17166 Federal Register / Vol. 67, No. 68 / Tuesday, April 9, 2002 / Proposed Rules data and analyses sufficient to allow a permittee to seek renewal. Under the first option, the permittee would provide the permit writer with an assessment that would address: ( 1) The alternative technologies or other measures that are available for addressing the cooling water intake structure's effects, and ( 2) the incremental costs and benefits of alternative technologies or other measures relative to the existing cooling water intake structure's operation. The application would include: an engineering report identifying the suite of technologies potentially applicable to the facility; an analysis describing the bases for the selection of technologies applicable to the facility; an assessment of the issues associated with retrofitting the facility to include each of the applicable technologies and their costs; and an assessment of the reasonably likely reductions in entrainment and impingement losses that would be achieved if the facility were to be retrofitted to operate with the technology. The application also would include a cost benefit analysis that would address and assess: the effects of the reductions in entrainment and impingement losses on life stages of the species for which an economic value can be determined utilizing readily available information, such as market values of commercial species, and recreational costs based on methods determined to be appropriate by the Director and the appropriate fisheries management agencies. The Director would then select the best alternative technology or other measures, the costs of which are not wholly disproportionate to the benefits, unless the proposed technology or other measures clearly would not result in any substantial improvement to the species of concern. In evaluating the benefits of alternative technologies, and in determining whether there is likely to be a substantial improvement to the species of concern, permittees and permitting authorities would undertake the level of biological analysis that was appropriate to the situation, supported by the applicable data, and commensurate with the resources available for developing and reviewing the necessary studies. PSEG's second option would be appropriate where the permittee elects to undertake an in depth analysis of the potential adverse environmental impact attributable to its cooling water intake structure, followed by a site specific determination of the appropriate best technology available to minimize that adverse environmental impact. This path represents the most resourceintensive and scientifically rigorous approach to implementing section 316( b). Under this option, the permittee would provide the permit writer with a detailed assessment that evaluates the effects of the existing cooling water intake structure's operation, and demonstrates the extent to which the operation may be jeopardizing the sustainability of the populations of the species of concern, or assesses other appropriate factors for determining adverse environmental impact. If the permitting agency concurs in an assessment that no adverse environmental impact is being caused by the existing operation, then the existing cooling water intake structure would be deemed to be best technology available. If the assessment demonstrates that the cooling water intake structure is causing adverse environmental impact or the permitting authority rejects the applicant's determination, then the permit applicant would proceed to evaluate alternative technologies or other measures.

( 4) Questions for Comment on a Process for Determining the Best Technology Available for Minimizing Adverse Environmental Impact and the Role of Costs and Benefits EPA invites public comment on the standard that would be included in any site specific final rule for determining best technology available for minimizing adverse environmental impact, including the appropriate role for a consideration of costs and benefits. EPA invites comment on whether the long standing `` wholly disproportionate'' cost to benefit test is an appropriate measure of costs and benefits in determining best technology available for minimizing adverse environmental impact. EPA also invites comment on the use of the `` significantly greater'' cost to benefit test in today's sample site specific rule. EPA also invites comment on whether a test based on the concept that benefits should justify costs would be more appropriate, as is used in various other legal and regulatory contexts ( see, e. g., Safe Drinking Water Act Section 1412( b)( 6)( A) and Executive Order 12866, Section 1( b)( 6)). EPA also invites public comment on whether variances are appropriate and, if so, what test or tests should be used for granting a variance.

d. Use of Voluntary Restoration Measures or Enhancements The Sample Site Specific Rule and the UWAG and PSEG approaches would all permit the owner or operator of an existing facility to voluntarily undertake restoration ( or enhancement) measures in combination with, or in lieu of, technologies to minimize adverse environmental impact. Section 125.95 of the Sample Rule provides that an owner or operator of an existing facility may undertake restoration measures, and the Director would be required to take into account the expected benefits of those measures to fish and shellfish in determining whether the facility has minimized adverse environmental impact. The permittee would include in its section 316( b) plan a list of the measures it proposed to implement and the methods for evaluating the effectiveness of the restoration measures. UWAG gives the following as examples of potential enhancements: ( 1) Stocking fish to replace impaired RIS; ( 2) creating or restoring spawning or nursery habitat for RIS; ( 3) raising the dissolved oxygen in anoxic areas to expand the carrying capacity of the RIS in a water body; and ( 4) removing obstructions to migratory species. UWAG would require the objectives of particular enhancements to be established in advance, and appropriate monitoring and/ or reporting obligations would be included in the facility's permit to confirm that enhancement objectives have been achieved. UWAG argues that using enhancements might lower compliance costs, might possibly be of more benefit to RIS than technologies, and might provide a longer term benefit to RIS. EPA invites public comment on whether a final site specific rule should permit voluntary restoration or enhancement measures to be taken into account in determining compliance with section 316( b) and, if so, what criteria should be included for evaluating the effectiveness of such measures.

e. Consultation With Fish and Wildlife Management Agencies Because the central focus of any sitespecific approach is the effect of the cooling water intake structure on the aquatic populations or ecosystems, it is important that fish and wildlife management agencies with jurisdiction over the affected water body have an opportunity to provide information and views to the Director before section 316( b) determinations are made. The Sample Rule would provide for this in § 125.100( b)( 2). The UWAG recommendations also recognize the important role of stakeholders, including fish and wildlife management VerDate 11< MAY> 2000 20: 32 Apr 08, 2002 Jkt 197001 PO 00000 Frm 00046 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 09APP2. SGM pfrm01 PsN: 09APP2 17167 Federal Register / Vol. 67, No. 68 / Tuesday, April 9, 2002 / Proposed Rules 62 Information provided by EPA Region I. Region I serves as permitting authority for the nondelegated states of Massachusetts and New Hampshire. 63 See communications from Mr. William McCracken, Chief of the Permits Section, Surface Water Quality Division, Michigan Department of Environmental Quality, January 24, 2002. 64 Backlog counts for these facilities are based on permits expired as of November 21, 2001 or if the permit expired field in the database is blank. 65 NPDES Permit Backlog Trend Report: October 31, 2001, issued on November 30, 2001 by EPA's Water Permits Division, US EPA, Washington, DC. 66Decision Memorandum from the Deputy Chief Financial Officer of EPA to the Administrator, December 18, 2001. 67 The Environmental Council Of States is a national non profit association of state and territorial environmental commissioners. See website: www. sso. org/ ecos/. When the Axe Falls: How State Environmental Agencies Deal with Budget Cuts by R. Steven Brown, Deputy Executive Director and Chief Operating Officer of ECOS. ( See Docket for today's proposed rule.) 68 This state budget outlook is supported by a report published on October 31, 2001, by the National Conference of State Legislatures ( NCSL). agencies, in a structured site specific alternative ( UWAG, pp. 8   9). EPA invites public comment on the appropriate role of fish and wildlife management agencies if the final rule implements a site specific approach.

6. Implementation Burden Under Any Site Specific Approach Although well implemented, sitespecific approaches for determining best technology available to minimize adverse environmental impact can ensure that technologies are carefully tailored to site specific environmental needs, EPA also recognizes that sitespecific regulatory approaches can lead to difficult implementation challenges for State and Federal permitting agencies. EPA invites comment on the following discussion of the burdens associated with implementing section 316( b) on a site specific basis, the competing demands on permitting agencies, and resources available to permitting agencies. EPA invites comment on ways to employ a sitespecific approach while minimizing implementation burdens on permitting agencies. The site specific decision making process requires each regulated facility to develop, submit, and refine studies that characterize or estimate potential adverse environmental impact. Although some approaches allow facilities to use existing studies in renewal applications, States must still conduct evaluations to ascertain the continued validity of these studies and assess existing conditions in the water body. Such studies can be resource intensive and require the support of a multidisciplinary team. A Director's determinations as to whether the appropriate studies have been performed and whether a given facility has minimized adverse environmental impact have often been subject to challenges that can take significant periods of time to resolve and can impose significant resource demands on permitting agencies, the public, and the permit applicant. Some examples of the workload that can be required for permitting agencies to implement a site specific approach follow. Since, 1999, EPA New England has devoted 0.6 full time employees a year, including a permit writer, a biologist and attorney, to reissuance of a permit for the Pilgrim Nuclear Power Station ( PNPS), 62 At the Seabrook Nuclear Power Station, EPA Region I has invested about one full time employee per year over four years to determine the nature and degree of adverse environmental impacts and the appropriate permit conditions the permit renewal. The State of New York Department of Environmental Conservation's Division of Fish, Wildlife and Marine Resources spent $ 169,587 in 1997 and $ 167,564 in 1998 to review cooling systems at steammotivated electricity generating facilities. The Division estimated a total effort expenditure of approximately 2.2 full time employees in 1997 and 1998 and 4.3 full time employees for 2001. These figures do not include the level of effort associated with review time spent by the Division of Environmental Permits, the Division of Water, or the Division of Legal Affairs. ( See Docket W   00   03.) Because of workload concerns, some States have requested that EPA adopt regulations that set clear requirements specifying standards of performance, monitoring and compliance. 63 These levels of burden are of particular concern to the Agency and to some State permitting agencies given the heavy permit workloads, pressure on resources available to permitting agencies, and the complexity of finalizing permits required to address 316( b) requirements. Recent data indicate that most States are struggling to meet their major permits issuance targets set for decreasing the permit backlog. For example, these data indicate that for major facilities engaged in the generation, transmission and/ or distribution of electric energy for sale ( SIC 4911), the permit backlog is 30.3 percent 64, that is, higher than other categories of major permits ( data indicate a backlog of 23.1 percent for major permits in general), 65 In 1998, the EPA Office of Inspector General identified the backlog in issuance of National Pollutant Discharge Elimination System permits as a material weakness pursuant to the Federal Managers' Financial Integrity Act ( FMFIA). As part of its Fiscal Year 2001 FMFIA Report, EPA recommended that the permit backlog be identified as a continuing material weaknesses in its programs. EPA's Office of Water is examining strategies to correct this weakness. 66 The evidence does not, however, establish that section 316( b) determinations are a factor in the backlog in issuance of National Pollutant Discharge Elimination System permits. EPA is also aware that resources available to State permitting agencies are limited. In a recent survey conducted by ECOS ( Environmental Council of States) 67 on States environmental agency budget reductions during the current fiscal year and for the upcoming fiscal year, 42 States reported that their agency was asked to cut or reduce their budgets for the current fiscal year. 68 For the following fiscal year, 23 of the responding States expected additional budget cuts. EPA is aware that at least one State, the State of Maryland, has used State law to impose a small surcharge on electric bills in the State to support a State research program, and that funds from that program are used for section 316( b) studies. EPA seeks additional information and data on the resources necessary and available for the review of section 316( b) determinations in existing facilities' permit renewals. EPA invites comment on whether the resource requirements of the sitespecific approach also have served as a disincentive to a comprehensive revisiting of section 316( b) permit conditions during each renewal ( typically every 5 years), despite advances in technologies for reducing impingement mortality and entrainment. EPA seeks comment on the above discussion of the resource implications of implementing the requirements of section 316( b) on a case by case basis. EPA invites comment on how the workload of a site specific approach could be streamlined so as to provide for the benefits of a site specific approach ( e. g., application of technologies specifically tailored to sitespecific conditions) while recognizing the resource constraints faced by so many permitting agencies.

VerDate 11< MAY> 2000 20: 32 Apr 08, 2002 Jkt 197001 PO 00000 Frm 00047 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 09APP2. SGM pfrm01 PsN: 09APP2 17168 Federal Register / Vol. 67, No. 68 / Tuesday, April 9, 2002 / Proposed Rules D. Why EPA Is Not Considering Dry Cooling Anywhere?

EPA conducted a full analysis for the new facility rule ( Phase I) and rejected dry cooling as an economically practicable option 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 new facility rule, EPA evaluated zero or nearly zero intake flow 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 facilities having to install dry cooling. The cost for Phase II existing facilities would be significantly higher. EPA estimates that 539 Phase II existing facilities would be subject to this proposal. 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 need to 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 U. S. would be at an unfair competitive disadvantage compared to those in cooler northern climates. Even under a regional subcategorization strategy for facilities in cool climatic regions of the U. S., adoption of a minimum requirement based on dry cooling could impose unfair competitive restrictions for steam electric power generating facilities. This relates primarily to 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. EPA does not consider dry cooling a reasonable option for a national requirement, nor for subcategorization under this proposal, because the technology of dry cooling carries costs that are sufficient to cause significant closures for Phase II existing facilities. Dry cooling technology would also have a significant detrimental effect on electricity production by reducing 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 an indirect 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 penalties 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 and would yield annual benefits of $ 138.2 million for impingement reductions and $ 1.33 billion for entrainment reductions, it does so at a cost that would be unacceptable. EPA recognizes that dry cooling technology uses extremely low level or no cooling water intake, thereby reducing impingement and entrainment of organisms to dramatically low levels. However, EPA interprets the use of the word `` minimize'' in section 316( b) in a manner that allows EPA the discretion to consider technologies that very effectively reduce, but do not completely eliminate, impingement and entrainment and therefore meet the requirements of section 316( b). Although EPA has rejected dry cooling technology as a national minimum requirement, EPA does not intend to restrict the use of dry cooling or to dispute that dry cooling 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. A State may choose to use its own authorities to require dry cooling in areas where the State finds its fishery resources need additional protection above the levels provided by these technology based minimum standards.

E. What Is the Role of Restoration and Trading?

1. Restoration Measures Restoration measures, as used in the context of section 316( b) determinations, include practices that seek to conserve fish or aquatic organisms, compensate for lost fish or aquatic organisms, or increase or enhance available aquatic habitat used by any life stages of entrained or impinged species. Such measures have been employed in some cases in the past as one of several means of fulfilling the requirements imposed by section 316( b). Examples of restoration measures that have been included as conditions of permits include creating, enhancing, or restoring wetlands; developing or operating fish hatcheries or fish stocking programs; removing impediments to fish migration; and other projects designed to replace fish or restore habitat valuable to aquatic organisms. Restoration measures have been used, however, on an inconsistent and somewhat limited basis in the context of the 316( b) program. Their role under section 316( b) has never been explicitly addressed in EPA regulations or guidance until EPA promulgated the final section 316( b) regulations for new facilities, which is discussed below in more detail. Prior to the section 316( b) new facility regulations, restoration projects were undertaken as part of section 316( b) determinations at Phase II existing facilities and in permitting actions where the cost of the proposed technology was considered to be wholly disproportionate to the demonstrated environmental benefits that could be achieved. Often such cases involved situations where retrofitting with a technology such as cooling towers was under consideration. In addition to the role for restoration outlined as part of the today's proposed rule ( see Section VI. A. above), EPA invites comment on the following alternatives for restoration as part of regulations for Phase II existing facilities.

a. The Role of Restoration in the Section 316( b) New Facility Regulations The final rule for new facilities includes restoration measures as part of Track II. EPA did not include restoration in Track I because it was VerDate 11< MAY> 2000 20: 32 Apr 08, 2002 Jkt 197001 PO 00000 Frm 00048 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 09APP2. SGM pfrm01 PsN: 09APP2 17169 Federal Register / Vol. 67, No. 68 / Tuesday, April 9, 2002 / Proposed Rules 69 In re Tennessee Valley Authority John Sevier Steam Plant, NPDES Permit No. TN0005436 ( 1986); In re Florida Power Corp. Crystal River Power Plant Units 1, 2, & 3, NPDES Permit FL0000159 ( 1988); Chalk Point, MDE, State of Maryland, Discharge Permit, Potomac Electric Power Co., State Discharge Permit No. 81   DP   0627B, NPDES Permit No. MD0002658B ( 1987, modified 1991); Draft NJDEP Permit Renewal Including Section 316( a) Variance Determination and Section 316( b) BTA Decision: NJDEP Permit No. NJ0005622 ( 1993). intended to be expeditious and provide certainty for the regulated community and a streamlined review process for the permitting authority. To do this for new facilities, EPA defined the best technology available for minimizing adverse environmental impact in terms of reduction of impingement and entrainment, a relatively straightforward metric for environmental performance of cooling water intake structures. In contrast, restoration measures in general require complex and lengthy planning, implementation, and evaluation of the effects of the measures on the populations of aquatic organisms or the ecosystem as a whole. EPA included restoration measures in Track II to the extent that the Director determines that the measures taken will maintain the fish and shellfish in the waterbody in a manner that represents performance comparable to that achieved in Track I. Applicants in Track II need not undertake restoration measures, but they may choose to undertake such measures. Thus, to the extent that such measures achieve performance comparable to that achieved in Track I, it is within EPA's authority to authorize the use of such measures in the place of Track I requirements. This is similar to the compliance alternative approach EPA took in the effluent guidelines program for Pesticide Chemicals: Formulating, Packaging and Repackaging. There EPA established a numeric limitation but also a set of best management practices that would accomplish the same numeric limitations. See 61 FR 57518, 57521 ( Nov. 6, 1997). EPA believed that section 316( b) of the Clean Water Act provided EPA with sufficient authority to allow the use of voluntary restoration measures in lieu of the specific requirements of Track I where the performance is substantially similar under the principles of Chevron USA v. NRDC, 467 U. S. 837, 844   45 ( 1984). In section 316( b) of the Clean Water Act, Congress is silent concerning the role of restoration technologies both in the statute and in the legislative history, either by explicitly authorizing or explicitly precluding their use. In the context of the new facility rule EPA also believes that appropriate restoration measures or conservation measures that are undertaken on a voluntary basis by a new facility to meet the requirements of that rule fall within EPA's authority to regulate the `` design'' of cooling water intake structures. Bailey v. U. S., 516 U. S. 137 ( 1995) ( In determining the meaning of words used in a statute, the court considers not only the bare meaning of the word, but also its placement and purpose in the statutory scheme.) In the new facility rule EPA recognized that restoration measures have been used at existing facilities implementing section 316( b) on a caseby case, best professional judgment basis as an innovative tool or as a tool to conserve fish or aquatic organisms, compensate for the fish or aquatic organisms killed, or enhance the aquatic habitat harmed or destroyed by the operation of cooling water intake structures. Under Track II, that flexibility will continue to be available to new facilities to the extent that they can demonstrate performance comparable to that achieved in Track I. For example, if a new facility that chooses Track II is on an impaired waterbody, that facility may choose to demonstrate that velocity controls in concert with measures to improve the productivity of the waterbody will result in performance comparable to that achieved in Track I. The additional measures may include such things as reclamation of abandoned mine lands to eliminate or reduce acid mine drainage along a stretch of the waterbody, establishment of riparian buffers or other barriers to reduce runoff of solids and nutrients from agricultural or silvicultural lands, removal of barriers to fish migration, or creation of new habitats to serve as spawning or nursery areas. Another example might be a facility that chooses to demonstrate that flow reductions and less protective velocity controls, in concert with a fish hatchery to restock fish being impinged and entrained with fish that perform a similar function in the community structure, will result in performance comparable to that achieved in Track I. Finally, in the new facility rule, EPA recognized that it may not always be possible to establish quantitatively that the reduction in impact on fish and shellfish is comparable using the types of measures discussed above as would be achieved in Track I, due to data and modeling limitations. Despite such limitations, EPA stated that there may be situations where a qualitative demonstration of comparable performance could reasonably assure substantially similar performance. For that reason, EPA provided, in § 125.86 of the new facility rule, that the Track II Comprehensive Demonstration Study should show that either: ( 1) The Track II technologies would result in reduction in both impingement mortality and entrainment of all life stages of fish and shellfish of 90 percent or greater of the reduction that would be achieved through Track I ( quantitative demonstration) or, ( 2) if consideration of impacts other than impingement mortality and entrainment is included, the Track II technologies would maintain fish and shellfish in the waterbody at a substantially similar level to that which would be achieved under Track I ( quantitative or qualitative demonstration).

b. Restoration Approaches Being Considered for the Existing Facilities Rule In the existing facilities rule, EPA is proposing to allow restoration as one means of satisfying the compliance requirements for any one of the three alternatives in § 125.94( a). The demonstration a facility would make to show that the restoration measures provide comparable performance to design and construction technologies and/ or operational measures would be similar to the demonstration that a facility would make under Track II in the new facility rule. EPA is also inviting comment on other restoration approaches it is considering. These include discretionary and mandatory regulatory approaches involving restoration measures as well as restoration banking, which are discussed below.

( 1) Discretionary Restoration Approaches An approach being considered by EPA would provide the Director with the discretion to specify appropriate restoration measures under section 316( b), but would not require that he or she do so. This approach is consistent with several precedents in which the permitting authority allowed the use of restoration measures when the cost to retrofit an existing facility's cooling water intake structures with control technologies was determined to be wholly disproportionate to the benefits the control technology would provide ( e. g., John Sevier, Crystal River, Chalk Point, Salem). 69 ( 2) Mandatory Restoration Approach Under this approach, the use of restoration measures would be required as an element of a section 316( b) determination in all cases or in some defined set of cases ( e. g., for intake structures located on oceans, estuaries,

VerDate 11< MAY> 2000 20: 32 Apr 08, 2002 Jkt 197001 PO 00000 Frm 00049 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 09APP2. SGM pfrm01 PsN: 09APP2 17170 Federal Register / Vol. 67, No. 68 / Tuesday, April 9, 2002 / Proposed Rules or tidal rivers). Restoration would be required to compensate for organisms that were not protected following facility installation of control technologies. Phase II existing facilities with cooling water intake structures would be required to implement some form of restoration measures in addition to implementing direct control technologies to minimize adverse environmental impact. Under this approach, an existing facility would submit a plan to restore fish and shellfish to the extent necessary for offsetting fish and shellfish entrainment and impingement losses estimated to continue to occur after any required control technology is installed. This restoration plan would be reviewed and approved by the Director and incorporated in the permit. This is similar to the mitigation sequence used under CWA section 404, wherein environmental impacts are avoided and minimized prior to consideration of compensatory mitigation measures although in section 404, not all projects require mitigation. The development of restoration measures applicable to a cooling water intake structure would focus on the unique situation faced by each facility and would allow for review and comment by the permitting agency and the public.

( 3) Restoration Banking Restoration plans could potentially use a banking mechanism similar to those used in the CWA section 404 program, that would allow the permittee to meet requirements by purchasing restoration credits from an approved bank. For example, should wetlands restoration be an appropriate mechanism for offsetting the adverse impact caused by a cooling water intake structure, the permittee could purchase credits from an existing wetlands mitigation bank established in accordance with the Federal Guidance for the Establishment, Use and Operation of Mitigation Banks ( 50 FR 58605; November 28, 1995). As in the CWA section 404 program, public or private entities could establish and operate the banks providing mitigation for impacts under 316( b). EPA views the use of restoration banking for the purposes of this proposed rule as one way to facilitate compliance and reduce the burden on the permit applicant, while at the same time potentially enhancing the ecological effectiveness of the required restoration activities.

2. Entrainment Trading Under § 125.90( d) of today's proposed rule, States may adopt alternative regulatory requirements that will result in environmental performance within a watershed that is comparable to the reductions of impingement mortality and entrainment specified in the proposed § 125.94. EPA is considering an approach for implementing section 316( b) that would allow specific Phase II existing facilities to trade entrainment reductions to achieve an overall standard of performance for entrainment reduction in a watershed at a lower cost through a voluntary State or authorized Tribal section 316( b) trading program. EPA believes such an approach might be appropriate in light of section 316( b)' s objective of minimizing adverse environmental impact. The goal of the trading approach is to provide an incentive for some Phase II existing facilities to implement more protective technologies than required by today's proposed rule, resulting in credits that can be traded with other facilities that may not find the most protective technologies economically practicable. EPA acknowledges that the trading framework that EPA is contemplating under section 316( b) differs from previous trading strategies implemented by EPA because it involves trading living resources rather than pollutant loads. Because this is a novel approach to trading, it raises many questions. For example, how would the program address concerns that some species have greater economic value than others, or the counter argument that some species may not be economically valuable but nonetheless have high ecological value? What is an appropriate spatial scale under which trading can occur to ensure protection of water quality and aquatic organisms? The following section addresses these questions and others and seeks comment on the appropriate elements of a trading approach under section 316( b) that would conserve and protect water quality and aquatic resources.