The Director may, based on a review of data submitted under § 122.21(r), conclude that the documented rate of impingement at the cooling water intake structures is so low that no additional controls are warranted.  As described in section I.A.H, low flow facilities may in particular be candidates for such consideration, although the authority of the Director is not limited to low flow facilities.  The Director may want to consider facility withdrawal rates in relation to the mean annual flow of the river and possible co-location with other CWISs when making a de minimis determination. Notice of this determination would be included in the draft permit made available for public comment, and the Director's response to any comment on this determination must be included in the record for the final permit. EPA considers low rates of impingement to be measured as an organism or age-one equivalent count, and not as the effect of impingement on fish populations. The Director may require data collection to demonstrate support for a de minimis level of impingement. In addition, EPA does not expect that a de minimis exemption would apply to facilities with no technology present other than trash racks, a technology that nearly all facilities employ. In making a determination that no additional controls are warranted, the Director may wish to consider factors such as whether the waters are subject to a TMDL for an aquatic life use, the waters are not attaining a designated use, and there would be more than minor detrimental effects on threatened or endangered species or critical habitat.  The Director will still establish proper operation and maintenance conditions in the permit whenever making a de minimis finding that no additional controls are warranted. EPA notes that the de minimis provision for impingement does not necessarily mean a facility has a de minimis level of entrainment. The life stages affected by impingement are different than those affected by entrainment, and low counts of impingeable life stages do not always mean the counts of entrained organism are similarly low. Since the entrainment requirements are already determined by the Director for each site, EPA concluded that specific regulatory language for de minimis entrainment was unnecessary.
5.	Low Capacity Utilization Units
      The Director may consider less stringent controls for intakes dedicated to low capacity utilization rate (CUR) power generating units.  If an existing facility has a cooling water intake structure used exclusively for one or more existing electric generating units, each with an annual average capacity utilization rating of less than 8 percent averaged over a 24-month block contiguous period, the owner or operator may request that the Director establish BTA standards for impingement mortality for that cooling water intake structure which are less stringent than (c)(1) to (c)(7). When determining the permit's IM requirements associated with the low CUR unit, the Director may consider, after conferring with any appropriate state co-regulators (such as public utility commissioners) and with regional transmission organizations, independent system operators or other planning authorities, the significance of the unit's operation to the overall reliability of electric power in the area.
      In addition, in determining the IM requirements associated with a low CUR unit, the Director should consider any seasonal factors for affected species that might justify seasonal limits on the unit's operation, for example any increased impacts resulting from the unit's operation during spawning runs.  Also, when considering the presence and potential effects to threatened and endangered species, the Director should consider whether the life stages present at the location are at risk of being impinged or entrained at the low CUR unit's cooling water intake.
      In the event that the Director determines less stringent controls for intakes dedicated to low capacity utilization power generating units are appropriate, they should consider, at a minimum, the following in establishing controls:
      Strategies for minimizing water withdrawal during stand by periods of operation, startup/shutdown, and on-line periods of operation;
      The effectiveness of installing variable speed pump drives to reduce water withdrawals during all periods of operation, particularly during stand-by periods of operation; and
      The effectiveness of installing alternative equipment (e.g. behavioral deterrents) to minimize impingement mortality.
      The owner or operator would demonstrate whether they have an intake only serving one or more low capacity utilization power generating units in permit application requirements at § 122.21(r)(3) and (8).  Under § 122.21(r)(6), the owner or operator would indicate a request that the Director establish alternative BTA standards that are less stringent than § 125.94(c)(1) through (7). EPA recognizes the contribution of peaking units in serving peak electricity demands, and maintaining a reliable electricity grid.  However, if peaking units are in standby mode for long periods relative to periods when they are generating electricity, the result is a capacity utilization of the cooling water intake that is greater than the capacity utilization of the generator.  Significant periods of standby could contribute to a greater impact on aquatic life.  While the 8 percent capacity utilization is an industry standard that distinguishes those units making the greatest contribution to a smoothly functioning electricity grid, a Director may still determine that the impacts to aquatic life are significant enough to deny a request that BTA at that intake should be less stringent than (c)(1) to (c)(7).  EPA anticipates the Director will have the information necessary to determine BTA in such circumstances based on the permit application requirements, including but not limited to an identification of the number of days the cooling water system is in operation, flow on those days, and seasonal changes in the operation of the system under § 122.21(r)(5) and the biological information under § 122.21(r)(4).
      As discussed previously, the Director will determine the BTA for entrainment for low CUR units on a site-specific basis.  EPA expects that many of the same factors discussed above  -  including the significance of the unit's operation to the overall reliability of electric power in the area, the diversity of fuels available for the unit, and the impact of the costs of any potential entrainment requirements on the unit's cooling water intake structure on overall reliability of electric power in the area  -  will be relevant in making site-specific BTA entrainment determinations for low CUR units.  The Director may consider the factors at § 125.98(f)(3) when making these determinations for low CUR units, which includes grid reliability, among other factors.
6.	Monitoring
      The Director will review any impingement mortality and entrainment monitoring reports submitted by the facility to ensure ongoing compliance. EPA is shifting toward an electronic discharge monitoring report system, and many of the impingement mortality and entrainment standards can be incorporated into the discharge monitoring report itself, rather than requiring a separate report. Except for facilities choosing alternatives § 125.94(c)(7), detailed biological data collection would only be included as part of the facility's permit application submission and not for compliance purposes. The Director has the discretion to request additional information, including inspection of the facility, at § 125.95 (d) (i.e., permit application and supporting information requirements) and § 125.96 (c) (i.e., additional monitoring requirements).
7.	Nuclear Units
      The rule includes a provision that permits the owner of a nuclear facility to demonstrate to the Director that compliance with the rule would result in a conflict with safety requirements for their facility. See § 125.94(f). EPA anticipates that this provision would be implemented as follows.  Initially, the Director will draft a permit and will share the draft permit with the owner or operator of the nuclear facility.  Upon reviewing the draft permit, the owner or operator will determine whether in their view a conflict with a safety requirement established by the Nuclear Regulatory Commission, the Department of Energy or the Naval Nuclear Propulsion Program exists.  If a conflict exists, the owner or operator should communicate the conflict to the NRC, Department or Program and the Director.  In all cases, whether a conflict exists or not, the Director should notify the NRC, Department or Program and the owner or operator of the facility that he or she wishes to informally confer regarding the permit.  Such interactions should be scheduled, conducted and documented.  Where a conflict is identified, the Director would make a site-specific BTA determination.
F.	What are Example Permit Conditions and Compliance Monitoring for Impingement Mortality?
      As previously discussed, the owner or operator must comply with BTA standards as soon as practicable on a schedule of requirements established by the Director. EPA did not specify dates by which the BTA standards for impingement mortality must be met because the specific method of compliance with the BTA standards for impingement mortality is tied to the determination of BTA requirements for entrainment. Further discussion of this alignment of compliance deadlines is provided in Section A. Today's final rule provides for several methods of compliance with the BTA for impingement mortality. This section discusses each of the methods for compliance, how they follow from the permit application requirements at § 122.21 (r), and any minimum monitoring and reporting requirements associated with each method.
1.	Closed-cycle recirculating system
      In this method of compliance, an existing facility must operate a closed-cycle recirculating system as defined at § 125.92(c). The facility would indicate the choice to use this compliance method under § 122.21(r)(6) in its permit application. As specified in § 122.21(r)(1), the facility would need to submit (r)(9) through (13), if it exceeds 125 mgd AIF and these requirements are not waived by the Director. The information still required at (r)(2) to (8) is considerably less burdensome. The monitoring must be representative of normal operating conditions, and must include measuring cooling water withdrawals, make-up water, and blowdown flows. The facility must monitor actual intake flows at a minimum frequency of daily, or may monitor the representative cycles of concentration at a minimum frequency of daily. These monitoring data would be used by the Director to determine that make-up and blowdown flows have been minimized. The owner or operator would submit these data with their existing DMR or equivalent state report. Facilities complying using closed-cycle cooling are not subject to biological compliance monitoring unless otherwise specified by the Director (see § 125.96(c)).
2.	0.5 Feet per Second Through-Screen Design Velocity
      In this method of compliance, the facility must operate a cooling water intake structure that has a maximum design through-screen intake velocity of 0.5 feet per second. The facility must submit information under § 122.21(r) to the Director that demonstrates that the maximum design intake velocity as water passes through the structural components of a screen measured perpendicular to the screen mesh could not exceed 0.5 feet per second. The maximum velocity must be achieved under all conditions, including during minimum ambient source water surface elevations (based on BPJ using hydrological data) and during periods of maximum head loss across the screens or other devices during normal operation of the intake structure.
      EPA notes a cylindrical wedgewire screen, in general, is designed for 0.5 feet per second. In Phase II, EPA pre-approved wedgewire screens under specific operational conditions. Today's final rule simplifies the demonstration requirements for a facility employing cylindrical wedgewire screens to that of demonstrating the maximum design through-screen velocity is 0.5 feet per second. As another example, a facility may have pumping and piping constrictions that physically limit the design intake velocity to less than 0.5 feet per second. The Director may choose to establish permit conditions that address the physical limitations of the intake, such as requiring a pump be removed from service, or that only one of two (redundant) pumps may operate at any time. Facilities choosing to comply under this section do not have monitoring requirements under this section.
3.	0.5 Feet per Second Through-screen Actual Velocity
      This method of compliance is similar to the design velocity alternative discussed above, except that the intake's maximum design velocity can exceed 0.5 fps, as long as the intake is operated such that the actual, measured velocity does not. As an example, a facility may have originally been constructed with a maximum design intake of 1.0 feet per second, but now, because it has retired generating capacity but not pumps, may only withdraw cooling water such that the actual intake velocity at the intake never exceeds 0.5 feet per second. This would constitute compliance with the impingement mortality standard. The maximum velocity must be achieved under all conditions, including during minimum ambient source water surface elevations (based on BPJ using hydrological data) and during periods of maximum head loss across the screens or other devices during normal operation of the intake structure.
      Monitoring the velocity at the screen face or immediately adjacent to the screen face must be conducted at a minimum frequency of daily. Monitoring of the approach velocity does not meet this requirement. However, in lieu of velocity monitoring at the screen face, the owner or operator may calculate the through-screen velocity using intake water flow, water depth, and the screen open area. EPA is requiring this point of measurement to ensure that fish are actually able to swim away (not into an embayment from which they cannot escape) from the location within the intake structure at which they are most susceptible to being impinged.
      Under today's final rule, the Director may authorize the facility to exceed the low velocity compliance alternative for brief periods for the purpose of maintaining the cooling water intake system, such as backwashing the screen face. In this compliance option, facilities are not subject to biological compliance monitoring unless otherwise specified by the Director (see § 125.96(c)).
4.	Existing Offshore Velocity Cap
	In this method of compliance, facilities will submit information under § 122.21(r) that they operate an offshore velocity cap that meets the definition at § 125.92(v) and that was installed prior to the effective date of this rule. The definition of offshore velocity cap includes the requirement that the velocity cap be located a minimum of 800 feet offshore. The velocity cap must include devices to exclude marine animals, such as bar screens. The velocity cap must be designed to change the direction of water withdraw from vertical to horizontal, thereby creating velocity patterns that can be sensed and trigger an avoidance response by fish and other aquatic organisms. Intake flow must be monitored at a minimum frequency of daily. This information will confirm the intended velocity patterns are created. In this compliance option, facilities are not subject to biological compliance monitoring unless otherwise specified by the Director (see § 125.96(c)).
      EPA notes that facilities choosing to construct a velocity cap at an offshore location after the effective date of this rule would use compliance options § 125.94(c)(6) (Systems of Technologies as the Site-specific BTA for Impingement Mortality) or § 125.94(c)(7) (Impingement Mortality Performance Standard).
5.	Modified Traveling Screens
	In this method of compliance, a facility must first operate a modified traveling screen that meets the definition at § 125.92(s). The definition identifies and requires those features of a traveling water screen that provide for an appropriate level of fish protection: collection buckets (or equivalent) to minimize turbulence to aquatic life; guard rails or barriers to prevent loss of fish from the collection system; screen panel materials such as smooth woven mesh, drilled mesh, molded mesh, or similar materials to protect fish from descaling; continuous or near-continuous rotation of screens and operation of collection equipment to recover impinged fish as soon as practical; low pressure wash or vacuum to remove collected organisms from the screens; fish handling and return with sufficient water flow to return fish directly to the source water in a manner that does not promote predation or the re-impingement of the fish, or a large vertical drop. EPA intends for this definition to generally include modified Ristroph screens (including Geiger screens, Beaudrey WIP screens, and Hydrolox screens), dual flow screens, and rotary screens.
      Modified traveling screens with a fish return and handling system is the technology basis for the impingement mortality standard, therefore the EPA fully expects biological monitoring of a properly designed, built, and operated modified traveling screen would consistently be able to meet the impingement mortality performance standard. If EPA were to simply set a performance standard based on the numeric performance levels achievable by modified traveling screens, a facility would have to conduct continual biological monitoring to demonstrate compliance. A far more efficient way to demonstrate compliance would be for facilities to optimize the operation of their technologies for their site-specific conditions and identify the conditions that distinguish proper operation at their facility. The optimized operation of the technology would be largely demonstrated through the biological data collection and studies required in the permit application at § 122.21(r)(4) and (6)(i), including an impingement technology performance optimization study. Biological data collection should follow the sampling protocols described in section7 below.
      The optimized operation documented by the impingement technology performance optimization study will result in more than just meeting the impingement mortality standard, and results in a facility achieving the best possible performance. The biological data collection and analysis in the impingement technology performance optimization study will identify the operating conditions that result in optimized performance, such as fish sluicing spray pressures, rotation speed and frequency of the screens, angle of the fish sluicing sprays, fish return trough water flows, and fish return trough location. The Director will then establish these operating conditions as permit conditions, along with an equipment inspection condition to assure proper functioning of the technology. As long as the permit conditions are met, the EPA does not expect any biological compliance monitoring will be required, unless otherwise specified by the Director, for example, for the protection of shellfish or fragile species (see § 125.96(c)). Note that EPA does not intend for facilities to install closed-cycle cooling solely for the purpose of meeting the IM requirements.
6.	Systems of Technologies as the BTA for Impingement Mortality
      In this method of compliance, a facility must demonstrate a system of technologies is employed that will meet the impingement mortality standard. This option will allow a facility the flexibility to choose the systems approach of technologies, management practices, and operational measures it will use to demonstrate compliance, including but not limited to flow reductions, intake location, behavioral deterrents, unit closures, seasonal operations, and newly installed velocity caps. Like the compliance option for modified traveling screens, the optimized operation of the system of technologies will be largely demonstrated through the biological data collection and studies required in the permit application at § 122.21(r)(4) and (6)(ii). However, the analysis and studies for combining the performance of varied technologies is more involved.
	If the system of technologies includes credit for reductions in the rate of impingement by the system, the impingement technology performance optimization study required at § 122.21(r)(6)(ii) will provide an estimate of those reductions including relevant supporting documentation. The estimated reductions in rate of impingement must be based on a comparison of the facility's system to a once-through cooling system with a traveling screen whose point of withdrawal from the surface water source is located at the shoreline of the source waterbody. EPA expects Phase II facilities will use information already collected as part of their calculation baseline (69 FR 41594, July 9, 2004). In addition, the study must include two years of biological data collection demonstrating the rate of impingement resulting from the system. For this demonstration, data collection must be conducted no less frequently than monthly. The Director may establish more frequent data collection or a longer period of study.
	If the system of technologies includes credit for reductions in impingement mortality already obtained at the facility, the study must include two years of monthly biological data collection demonstrating the level of impingement mortality the optimized system achieves. Biological data collection must be representative of the impingement and the impingement mortality at the intakes and should follow the sampling protocols described in section 7 below. The impingement technology performance optimization study must provide a description of any sampling approach used in measuring impingement mortality, including a taxonomic identification to the lowest taxon possible of all organisms to be sampled; the method in which naturally moribund organisms are identified and taken into account; and the method in which mortality due to holding times is taken into account. In addition, the study must describe how the location of the cooling water intake structure in the waterbody and the water column are accounted for in the sampling locations. EPA requires the entrapment of organisms, as well as organisms that are carried over the screen, to be counted as impingement mortality.
	If the system of technologies specifically includes flow reduction to reduce impingement, the impingement technology performance optimization study must include two years of intake flows, measured daily, as part of the demonstration, and must describe the extent to which flow reductions are seasonal or intermittent. The rule clarifies that credit for flow reductions must result from actual reductions in flow, therefore the AIF will be used as a point of comparison, and not the DIF. The study must document how the flow reduction results in reduced impingement, and how the reduction in impingement has reduced the site-specific impingement mortality. Today's final rule at § 125.98(f)(3)(iii) further clarifies that credit in reduced impingement or impingement mortality resulting from unit closures will be valid for a period of 10 years. This is also reflected in permit application requirements for an owner or operator planning to retire the facility in the current permit term at 40 CFR 122.21 (r)(1)(ii)(F), or in the following permit cycle at 40 CFR 122.21 (r)(1)(ii)(G).
	 The Director must determine the system of technologies, management practices, and operational measures that is the best technology available for impingement reduction at the site. As the basis for the Director's determination, the facility must demonstrate that the system of technology has been optimized to minimize impingement mortality of all non-fragile species. In addition to the impingement technology performance optimization study, the Director may also use the biological source water characterization and/or the entrainment characterization studies in the permit application. EPA expects the Director's decision will be informed by comparing the impingement mortality data under § 122.21(r)(6)(ii) to the impingement mortality performance standard that would otherwise apply under § 125.94(c)(7).
      In addition, the impingement technology performance optimization study requires documentation of the percent impingement mortality reflecting optimized operation of the total system of technologies, operational measures, and best management practices and all supporting calculations. The following example illustrates how these provisions will adjust for flow, location, and other technologies in demonstrating the IM performance for a system of technologies.
      The example uses values that simplify the calculations to better illustrate the adjustments, and are not intended to reflect values that EPA expects at any facility. To simplify the example further, the facility has only fish and does not have shellfish in its source waters. EPA has chosen a hypothetical facility that examined each change in a separate study. The hypothetical facility intake is located at a submerged offshore location, has an acoustical deterrent, and installed variable speed drives. For the purposes of this example, the facility has completed sampling at the forebay for two years as part of § 122.21(r)(4) and (6). During the most recent 12 months, the counts of non-fragile species totals 40,000 impinged fish. During the 24-hour holding period following each monthly sample collection, the total fish that died were counted, for a total of 12,000 dead fish for the preceding 12 months. The facility then calculated the average IM for the preceding 12 months at 30 percent as follows:
      	% IM  = (impinged fish that are killed)    x 100
      		(total number of impinged fish)

      		= (12,000) / (40,000) x100
      		= 30 %

      To adjust the observed percent IM for a submerged offshore location and acoustical deterrent, the facility first extracts information from its previously conducted studies related to performance and calculation baseline. Alternatively, the facility could conduct a performance study during the same two year period in which it conducts its biological data collection as part of the permit application requirements at § 122.21(r). For the submerged offshore location adjustment, fish density and flow data show the offshore location reduces the rate of impingement for all species by 4,000 fish annually. For the acoustical deterrent, performance data show a reduction in the rate of impingement of fish by 11,000 organisms annually. For purposes of this example, assume none of the 15,000 fish are assumed to contribute to further mortality; in other words, all of the fish that avoided impingement in the first place survive. Therefore, the facility has reduced impingement by 15,000 fish (i.e., sum of both submerged offshore location and acoustical deterrent). The facility then takes credit for this reduction by adding the forgone impingement to the denominator of the percent IM calculations as follows:
      % IM  = (impinged fish that are killed)    x 100
      		(total number of impinged fish)

      		= (12,000) / (40,000+15,000) x100
      		= 22 %

      In summary, calculating percent IM at the forebay yields a 30 percent IM, and then applying the performance for existing technologies shows the effective percent IM is actually 22 percent. Next, to adjust for the variable speed drives, the facility has determined from flow monitoring that the volume of cooling water flow has been reduced by 11 percent. In this example, assume the flow reduction does not vary considerably each month. The volume of reduced flow multiplied by the density of fish near the intake is calculated each month for 12 months, and the facility projects that the reduced flow excludes an additional 8,000 fish from impingement each year. Then the facility would apply the reduction in annual counts of impinged fish to the denominator, as follows:
      % IM  = (impinged fish that are killed)    x 100
      		(total number of impinged fish)

      		= (12,000) / (40,000+15,000+8,000) x100
      		= 19%

      Thus, the facility's site-specific system of technologies including optimized operation of acoustical deterrents has a total system performance of 19 percent annual impingement mortality. This example is intended to illustrate how facilities would obtain credit for existing technologies in a systems approach. While this example includes acoustical deterrents, it does not imply that acoustical deterrents are an appropriate technology for all facilities. EPA expects a facility will use the required two years' worth of monthly biological data collection and studies to conduct a similar analysis for each month. The minimum required data collection and studies will result in annual average performance calculations for 12 consecutive months. The facility will use this information as part of its demonstration to the Director.
      If the Director determines the system of technologies, management practices, and operational measures is the best technology available for impingement reduction at the site, the Director will establish specific operating conditions as permit conditions, along with appropriate equipment inspection conditions to assure proper functioning of each technology. For example, a system with acoustical deterrents would likely have permit conditions related to frequency of tones, volume, location, and frequency of operation of the acoustical deterrents. The Director will also establish monitoring requirements for intake flow and velocity where such measures are an important part of the system of technologies, such as the case of variable speed drives. For example, a system that includes seasonal flow reductions would likely have permit conditions for flow monitoring. As long as the permit conditions are met, the EPA does not expect any biological compliance monitoring will be required, unless otherwise specified by the Director (see § 125.96(c)).
7.	Impingement Mortality Performance Standard
      In this method of compliance, facilities are required to monitor to demonstrate compliance with the impingement mortality performance standard at § 125.94(c)(7) by demonstrating a 12-month average mortality of 24 percent or less. The facility is required to monitor at a minimum frequency of monthly, unless a greater frequency is specified by the Director. For each monitoring event, the facility would determine the number of non-fragile organisms that are collected or retained on sieve with a maximum spacing of 0.56 inches (i.e., that are impinged [I]), and the number that die after impingement (i.e., impingement mortality [IM]). The facility must establish a post-impingement holding period of 18 to 96 hours otherwise specified by the Director. Under the definition at § 125.92(b), all life stages of fish and shellfish excludes specified nuisance species from the totals for both impingement and impingement mortality. Also, as defined at § 125.92(q), latent mortality means the delayed mortality of organisms that were initially alive upon being impinged or entrained but that do not survive the delayed effects of impingement and entrainment during an extended holding period. Delayed effects of impingement and entrainment may be due to stresses that include but are not limited to temperature change, physical stresses, and chemical stresses. The manner in which latent mortality is counted must be identified in the Entrainment Characterization Study at § 122.21(r)(9), and must also be counted in the Impingement mortality performance standard at § 125.94(c)(7). Fish that are included in any carryover from a traveling screen or removed from a screen as part of debris removal must be counted as impingement mortality. Fish that are entrapped by the cooling water intake system must be counted as impingement mortality.
      The 12-month average of impingement mortality is calculated as the sum of total impingement mortality over 12 months divided by the sum of the total impingement over the same 12 months, as shown by the following equation:
% IM=IMIx 100
      Note that this equation would be applicable to calculating the annual average for the previous 12 months. Although facilities will be conducting biological monitoring monthly (or more frequently) and reporting that data in their discharge monitoring reports, facilities are not required to meet a monthly impingement mortality performance standard. Therefore, in this equation, IM is the sum of all impingement mortality over the course of the previous 12 months, and I is the sum of all impinged fish for the previous 12 months. If the facility's calculated annual average percentage impingement mortality is less than the 12-month average performance standard, it will be deemed to be in compliance with the 12-month average performance standard.
	In establishing the monitoring requirements, EPA expects any approved monitoring protocols will consider the entire daily and (where appropriate) tidal cycles over which data collection should occur. Typically, facilities have collected impingement samples continuously for 6 or 8 hours and repeated this cycle to cover an entire 24-hour period. Stratifying collection in this manner allows an analysis of the diel variation exhibited by many aquatic organisms, which may be important. EPA also expects the approved monitoring protocols will ensure that sampling occurs during periods of representative intake flow and not during periods of non-peak flow or scheduled outages.
	The ideal point to measure impingement mortality is the location where organisms are returned to the waterbody. However, for ease of sampling and access, EPA envisions that most facilities will collect samples from the fish return system(s) at some point before the fish return discharge point. According to the studies in EPA's database, EPA envisions that facilities will either (1) divert some or all of the flow from the fish return into a fish collection and holding area, or (2) place a net or basket fitted with 3/8-inch mesh spacing in the fish return and collect and transfer the retained organisms to a holding tank. While nearly all studies in the record report the use of 3/8-inch mesh spacing, as discussed below, the final rule allows the use of other sieve and mesh spacings with a 0.56 inch maximum opening. A facility will handle the organisms in the collection device as little as possible and transfer them to a holding area with conditions as close as practicable to the source water. The facility will count the number of organisms in the holding area and subsequently hold the sample using proper technique to maintain the health of the collected organisms. At a period of 18 to 96 hours after the initial collection, the facility will count the number of dead organisms and determine the percentage of organisms that died in comparison to the total number of organisms measured initially. Any organisms not collected by the fish handling and return system, such as entrapped organisms, organisms in the carryover of a traveling screen, or organisms collected by a high-pressure wash and sent to debris bins, will be counted as 100 percent impingement mortality. The facility will keep records of this information and compare its result to the impingement mortality performance standard at § 125.94(c)(7).
	As explained in Section VI, the impingement mortality restrictions in the final rule are based on the operation of a modified traveling screen with a fish return. Because EPA wants to ensure that a facility's monitoring plan is consistent with the technical basis for today's requirements, EPA is requiring facilities to monitor impingement mortality using a sample that has been passed through a sieve or net with no more than 0.56 inches maximum opening, so that only organisms that do not pass through this mesh size are counted. In doing so, facilities would retain (and therefore count) only organisms that would have been impinged on a 3/8" mesh screen, which was the technological basis used for developing the impingement mortality performance standard. Facilities could similarly apply a "hypothetical net" in that they could elect to count only organisms that would not have passed through a net with mesh openings less than 0.56 inches. For example, a facility that uses a fine-mesh screen of 0.5 mm or diverts the flow directly to a sampling bay will need to count only organisms that remain if the flow passed through a net, screen, or debris basket fitted with 3/8-inch mesh spacing. EPA further expects the impingement mortality restrictions could be applied to other fish protection technologies and provides a compliance route for future technologies that are better performing.
      In today's rule, EPA is including provisions for reduced biological monitoring. EPA determined that monthly monitoring at a minimum is appropriate for at least the first full permit term. In permit terms subsequent to the first permit issued under today's rule, the owner or operator may request the Director to reduce monitoring requirements under § 125.95(c). EPA expects the Director would reduce monitoring requirements as appropriate, if the facility demonstrates that its operational and biological conditions have remained the same. Given that the source waterbody may change over time (including hosting different or increased numbers of individuals or species), the biological characterization required at § 122.21(r)(4) including two years of data serves to alert interested parties as to the status of the waterbody and any changes in the biology of the waterbody. Under the compliance option (7) impingement mortality performance standard, EPA expects that as new technologies are successfully demonstrated, in subsequent permits facilities would request less frequent monitoring, or be able to incorporate such technologies in a permit application choosing a § 125.94(c)(6), system of technologies, demonstration. Once the Director has determined the technology is fully demonstrated for that site, the facility would therefore reduce their biological data collection to the minimum required by the permit application at § 122.21(r) and any monitoring the Director determines to be appropriate for verifying permit operating conditions.
8.	Additional Measures
      Sections § 125.94(c)(8) and (9) provide the Director discretion to require additional measures to protect shellfish and fragile species.  An example of shellfish protection measures is a barrier net, including seasonal deployment of such nets.  An example of additional protection measures for fragile species is an acoustical deterrent system.
9.	Summary
	The following Exhibit VIII-4 summarizes the monitoring requirements for impingement mortality by compliance approach alternative. The Director has the discretion to require additional monitoring under § 125.96(c) and (d). Since all permits must have requirements for visual inspections, these are not included in the exhibit.
Exhibit VIII-4. Summary of monitoring requirements for impingement mortality
Compliance approach
Type of monitoring
 Frequency
Closed-cycle recirculating system
Intake, makeup and blowdown flows (or cycles of concentration)
 Daily
Velocity (DIF)
None
 None
Velocity (AIF)
Velocity (measured or calculated from flow)
 Daily
Velocity cap
Intake flow
 Daily
Modified traveling screens
TBD[a]
 TBD[a]
Systems of Technologies
TBD[b]
 TBD[b]
Impingement mortality performance standard
Biological monitoring
 Monthly
a Monitoring requirements may vary, depending on the permit-specific operating conditions.
b The monitoring requirements are based on the technologies employed. For example, seasonal flow reduction would require flow monitoring.

G.	What Monitoring is Required for Entrainment?
      Where the Director establishes entrainment controls, the Director is required to establish monitoring requirements. The final rule requires that the permit application studies at § 122.21(r) be submitted for each permit renewal. For facilities that withdraw 125 mgd AIF, EPA expects that the Director will use these studies, including the Source Water Baseline Biological Characterization Data at § 122.21(r)(4) and the Entrainment Characterization Study at § 122.21(r)(9), as a basis for any monitoring requirements for entrainment. To facilitate the determination of entrainment requirements for facilities below 125 mgd AIF, a Director may require the owner or operator to submit some or all of the study requirements at § 122.21(r)(9) through (13) or variations thereof. The Director may require additional monitoring necessary to demonstrate compliance with § 125.94(d), additional measures to protect Federally-listed endangered and threatened species and designated critical habitat requirements under § 125.94(g), interim standards under § 125.94(h), and any more stringent standards under § 125.94(i).
      Under § 125.96(d), existing facilities with new units are required to conduct compliance monitoring to demonstrate flow reductions consistent with the requirements of § 125.94(e)(1), or equivalent impingement and entrainment reductions. The Director may establish flow monitoring or monitoring of cycles of concentration as discussed in Section F. Such measures will be used to document that the facility has minimized make-up and blowdown flows.
      For facilities complying under § 125.94(e)(2), the frequency of monitoring will be determined by the Director and will vary depending on the facility's chosen method of compliance.
      To meet requirements under § 125.94(e)(2), facilities must measure AIF to establish a site-specific baseline without any new technologies or employing additional operational measures. The facility must also measure the density of entrainable organisms (ED) at a proximity to the intake that is representative of the entrainable organisms present without the cooling water intake structure. Samples will be collected over a 24-hour period to monitor each species as required by the Director. Samples will be collected no less than biweekly during the primary period of reproduction, larval recruitment, and peak abundance identified during the Source Water Baseline Biological Characterization Data required under § 122.21(r)(4). Samples will be representative of the cooling water intake when the structure is in operation. In addition, sufficient samples must be collected to allow for calculation of 12-month average entrainment levels. The sampling will measure the total count of entrainable organisms or density of organisms, unless the Director approves of a different metric for such measurements. If the abundance varies seasonally, the Director may require several measurements of entrainment through the year, from which a 12-month average can be calculated.
      For the purpose of today's rule, entrainable is defined as any organism that passes through a sieve with a maximum opening of 0.56 inches. As discussed in Section VI, this would avoid any confusion as to which organisms are subject to which standards (i.e., requirements for IM or requirements for E). The regulation specifies that the sieve used for calculating impingement must be the same sieve used for calculating entrainment, so all organisms are accounted for. Facilities can also monitor the latent entrainment mortality in front of the intake structure. Entrainable organisms passing through the cooling water intake structure are to be counted as 100 percent entrainment mortality unless the facility demonstrates to the approval of the Director that the mortality for each species is less than 100 percent.
      In addition, facilities must monitor the AIF for each intake. The AIF must be measured at the same time as the samples of entrainable organisms are collected.
      The following equation illustrates how to calculate a baseline level of entrainment (EB):
                                EB = ED x AIF
      Performance commensurate with a closed-cycle recirculating system (ECCRS) can therefore be determined by reducing EB by the percentage of flow reduced through the use of a closed-cycle cooling system. For example, a facility withdrawing make-up water from a freshwater source (as described above, would achieve a reduction of 97.5 percent) will calculate its performance as follows:
                     ECCRS = (EB) x (100  -  97.5) / 100
      The resulting value, ECCRS, is the required level of entrainment performance (as measured by entrainment mortality). The facility could implement any combination of flow reduction, technologies, and operational measures to meet the required level of entrainment performance. For example, a facility withdraws 200 mgd AIF from a freshwater river. The annual average entrainment density in the proximity of the intake structure is 6,400 organisms per 100 cubic meters withdrawn.
                                EB = ED x AIF
      6,400 organisms/100m[3] x (100m[3] / 26,417 gallons) x 200,000,000 gallons per day
                           = 48 x 10[6] organisms per day
      The maximum entrainment mortality for a closed-cycle cooling system is thus
                     ECCRS = (EB) x (100  -  97.5) / 100
                  = (48 x 10[6] organisms per day) x (100  -  97.5) / 100
                  = 1.2 x 10[6] organisms per day.
      The minimum required level of performance for demonstrating entrainment mortality at a comparable level (EC) to a closed-cycle cooling system is the level corresponding to 90 percent of the reduction that a facility with a closed-cycle cooling system could achieve:
                  EC = (EB) x (100  -  (97.5 x .9)) / 100
                  = (48 x 10[6] organisms per day) x (100  -  (97.5 x .9)) / 100
                  = 5.88 x 10[6] organisms per day.
      The Director may require additional monitoring necessary to demonstrate compliance with § 125.94(d), endangered species requirements under § 125.94(g), interim standards under § 125.94 (h), and any more stringent standards under § 125.94(i).
      In addition, all facilities will either conduct visual inspections or employ remote monitoring devices when the cooling water intake structure is in operation. The facility will conduct such inspections at least weekly to ensure that any technologies installed to comply with § 125.94 are maintained and operated to ensure that they will continue to function as designed. EPA is aware that for some facilities, this requirement could pose a feasibility challenge (for example due to ice cover in the winter season, inability of divers to see through more than a few inches of water, or certain intakes in deep water). The rule, therefore, authorizes the Director to establish alternative procedures. See § 125.96(e).
H.	What Reports Am I Required To Submit?
1.	Status Reports
	If the Director establishes a compliance schedule, the Director will also establish any status reporting requirements. These reports may include updates on biological monitoring, technology testing results, construction schedules, or other appropriate topics and serve as milestones for the facility and the Director to evaluate the progress of the facility in meeting BTA. See §§ 125.94(b) and (d) and 125.97(b).
2.	Monitoring Reports
      The required reports for monitoring activities are similar to requirements that are already in NPDES permits for effluent discharges. EPA expects such reports to be included with the Discharge Monitoring Reports (DMRs) or equivalent state reports. Facilities would report any monitoring, demonstration, and other information required by the permit sufficient to determine compliance with the permit requirements established under § 125.94, as well as any other monitoring requirements specified in the permit. See 40 CFR 125.97(a).
      Entrainment requirements will be determined on a site-specific basis by the Director. For facilities that are required to install entrainment controls, EPA expects that these facilities would generally conduct ongoing flow (or other) monitoring as verification that entrainment has been reduced. See § 125.96(b) and (c). However, the Director may require facilities to report entrainment monitoring and analysis, including:
   * The compliance measurement location.
   * A description of the flow monitoring procedure.
   * Documentation of flow reductions.
   * Any other monitoring requirements specified in the permit.
      The report must include any monitoring and analysis required as part of additional measures for threatened and endangered species, shellfish, or fragile species as established by the Director. Further, your report will include documentation of cooling water that is process water, gray water, waste water, reclaimed water, or other water reused as cooling water in lieu of water obtained by an intake. The Director will evaluate these reports for compliance with permit requirements as appropriate.
3.	Annual Certifications
      Today's rule requires a facility to submit an annual certification statement signed by the responsible corporate officer. See § 125.97(c). In most cases, the statement would indicate the information from the previous statement is still pertinent. If modifications were made to the facility that impacts cooling water withdrawals or operation of the cooling water intake structures, the statement would indicate such, and the facility would submit revisions to the information required in their permit application at § 122.21(r).
4.	Other Reporting
	In addition, EPA notes that supplemental reporting may be required under the ESA as part of any incidental take statement or permit (50 CFR 402.14(i)) or a section 10 permit (50 CFR 222.307) that is issued by the United States Fish and Wildlife Service or the National Marine Fisheries Service to ensure compliance with the Endangered Species Act.
I.	What Records Will I Be Required to Keep?
      As described at § 125.97(d), facilities are required to keep all permit applications, status, monitoring, and annual reports and related supporting information and materials at least until the subsequent permit is issued. Facilities might wish to keep records for a longer period to maintain a complete regulatory history of the facility. For example, existing source water biological studies submitted with a facility's permit application could contain data that has been collected in the past 10 or more years. When the Director has approved a request for reduced information collection in the permit application, the rule requires that records of submissions that are part of a previous permit application be kept until the subsequent permit is issued. See § 125.95(e). Records supporting the BTA determination for entrainment must be kept until such time as the Director revises the determination. The Director may establish additional record-keeping requirements in the permit, such as additional records documenting compliance monitoring, data collection, or more frequent reports.
      Facilities must also keep records of all data used to complete the permit application and show compliance with the requirements of § 125.94, any supplemental information developed under § 125.95, and any compliance monitoring data submitted under § 125.96. The Director may require that these records be kept for a longer period.
J.	What Are the Respective Federal, State, and Tribal Roles?
      Today's final rule affects authorized State and Tribal NPDES permit programs. Under 40 CFR 123.62(e), any existing approved section 402 permitting program must be revised to be consistent with new program requirements within one year from the date of this promulgation, unless the NPDES-authorized State or Tribe must amend or enact a statute to make the required revisions. If a State or Tribe must amend or enact a statute to conform to today's final rule, the revision must be made within two years of this promulgation. States and Tribes seeking new EPA authorization to implement the NPDES program must comply with the requirements when authorization is approved. This final regulation does not alter State authority under section 510 of the CWA.
      In addition to updating their programs to be consistent with today's final rule, States and Tribes authorized to implement the NPDES program are required under NPDES State program requirements to implement the cooling water intake structure requirements of subpart J following promulgation of the final regulations. The permit requirements in this final rule must be implemented upon the first issuance or reissuance of permits following promulgation. Duties of an authorized State or Tribe under this regulation are described throughout this section and include reviewing permit application materials, determining appropriate requirements, reviewing monitoring and reporting data, and assessing whether a facility is complying with the final rule's requirements.
      EPA recognizes that some States have invested considerable effort in developing and implementing section 316(b) permits. This final regulation at § 125.98(b) and (g) allows the Director flexibility where there are ongoing permit proceedings or where a BTA determination has already been made based on substantially the same information required at § 122.21(r).
      EPA will implement these requirements where States or Tribes are not authorized to implement the NPDES program.
K.	Protection of Endangered and Threatened Species and Designated Critical Habitat
1.	Existing Requirements under section 9 of the Endangered Species Act
	The ESA imposes duties not just on Federal agencies but also on other entities.   Section 9 of the ESA specifically provides that it is unlawful for any person to "take" any endangered species of fish or wildlife except under defined circumstances.  The Services (National Marine Fisheries Service or U.S. Fish and Wildlife Service) may provide an exemption to the prohibition on take in one of two ways.  Take may be permitted under section 10 of the ESA (16 U.S.C. § 1539) or the Services may provide an exemption for take that is incidental to otherwise legal activity through a statement that is included with the Services' biological opinion developed during Federal agency consultation. (16 U.S.C. 1536(o))  The incidental take statement specifies the terms and conditions necessary to implement reasonable and prudent measures which minimize incidental take.
	Nothing in today's rule changes the existing, independent obligations of the facilities subject to this rule under section 9 of the ESA. Unless exempted by an incidental take statement or section 10 permit, facilities have been prohibited from taking (for example, harming or killing) endangered species of fish or wildlife. In order to obtain a section 10 permit, the facility would be required to develop a Habitat Conservation Plan (HCP), which is a mandatory component of an incidental take permit application. The HCP must specify the anticipated effects of the proposed taking, how those impacts will be minimized or mitigated, the alternative actions to the taking that the applicant considered, the reasons for not utilizing those alternatives, and other necessary or appropriate measures that the Secretary may require.
2.	 EPA's Consultation Under Section 7 of the ESA
	Under section 7 of the Endangered Species Act, each Federal agency must insure that any action authorized, funded, or carried out by the agency "is not likely to jeopardize the continued existence of any endangered species or threatened species or result in the destruction or adverse modification of habitat of such species which is determined by the Secretary, after consultation as appropriate with affected States, to be critical. . . ." 16 U.S.C. 1535(a)(2).  In the case of any Federal agency action subject to the ESA that may affect listed species or critical habitat, the Federal agency must consult with the concerned offices with responsibilities under the ESA, specifically NMFS and/or FWS. 50 CFR 402.14(a).
	In July 2012, EPA began informal consultation with the NMFS about the proposed section 316(b) regulations.  In October 2012, EPA began informal consultation with the FWS.  EPA prepared a draft biological evaluation of the effects of this rule on threatened and endangered species and in it concluded that the rule was not likely to adversely affect listed species or designated critical habitat. EPA was unable to obtain the Services' concurrence on EPA's "not likely to adversely affect" finding.  In June 2013, EPA requested formal consultation with the Services under the Endangered Species Act and with that request submitted a final biological evaluation to the Services.  EPA completed consultations with the Services and has included the Services' biological opinion and associated documents in the record for this rulemaking.
	Among the organisms potentially subject to impingement and entrainment at cooling water intake structures are those that are listed as threatened and endangered. In addition to impinging or entraining threatened and endangered species, operation of CWISs may also adversely affect their critical habitat. Today's rule includes a number of provisions specifically designed to address incidental take of all federally-listed threatened and endangered species and to insure that the rule is not likely to jeopardize the continued existence of listed species or result in the destruction or adverse modification of critical habitat.  These provisions are described below.
	The regulatory model adopted by EPA in the Phase I rule and later in the subsequently-withdrawn Phase II rule for large existing power producing facilities provided a structure to address and minimize adverse impacts to threatened and endangered species.  EPA's approach required that facilities subject to the 316(b) rules, at the permit application stage of the permitting process must, among other things, identify threatened and endangered species that might be subject to impingement and entrainment in order to ensure that the permitting authority would have the requisite information on which to make a decision about the need for controls to protect threatened and endangered species.  See 40 C.F.R. § 122.21(r)(4).
	The Phase I and Phase II regulations specifically authorized the permit writer (referred to as the "Director" in EPA's permitting regulations) to adopt measures designed to protect threatened and endangered species.  Thus, for example, EPA's Phase I regulations for cooling water intake structures at new facilities require that, under one of the compliance options, an owner or operator must select and implement impingement and entrainment minimization measures "if there are threatened or endangered or otherwise protected Federal, State or Tribal species."  Moreover, the permit writer may require additional impingement and entrainment reduction measures if the permit writer determines that the facility after meeting the required performance standard would "still contribute unacceptable stress to the protected species, critical habitat of those species or species of concern."  40 C.F.R. 125.84(b)(4) & (5).
	The Phase II regulation continued the general approach followed in the Phase I regulation for protection of threatened and endangered species.  Permit applicants needed to submit the same information on threatened and endangered species required in the Phase I rule.  In addition, building on the earlier information requirements, the regulation also would have required facilities selecting and implementing certain of the alternative BTA compliance measures to submit a Comprehensive Demonstration Study that, among other things, characterized impingement and entrainment at the facility. Further, the rule would have required a facility to submit an Impingement Mortality and/or Entrainment Characterization Study that included taxonomic identification, characterization and documentation of current impingement mortality and entrainment of all life stages of fish, shellfish and any species protected under Federal, State or Tribal law (including threatened or endangered species).  69 FR 41687-88, July 9, 2004.  In addition, the Phase I and II rules included a requirement for the facility to include in their permit application documentation of any public participation or consultation with Federal or State agencies on impacts of their cooling water intake structure on threatened and endangered species.  The regulation then would have required the permit writer to determine appropriate permit requirements and conditions.  EPA noted that its existing NPDES permitting regulations reference a number of Federal laws that might apply to Federally-issued NPDES permits, including the Endangered Species Act.  69 FR 41643-44, July 9, 2004.
	Threatened and endangered species were important considerations in the proposal to today's rule and were of particular concern to the EPA.  The preamble to the proposal reflects at a number of points that, in looking at the benefits of different regulatory options, EPA attempted to assess the benefits to threatened and endangered species.  See 76 FR 22174, 22197, 22207.  The proposal also noted the importance of obtaining information for the permit writer about potential entrainment reductions.  Thus, the proposal would have required certain facilities to develop and submit with their permit application detailed information on their operations as well as an engineering study of the technical feasibility and incremental costs of candidate entrainment mortality control technologies and a detailed discussion of the magnitude of non-water quality benefits.  EPA proposed that some facilities would need to submit an Entrainment Characterization Study that included an entrainment mortality data collection plan that would indicate, at a minimum, taxonomic identification, latent mortality identification, documentation of all methods, and quality assurance/quality control procedures or sampling and data analysis appropriate for a quantitative survey. Under the proposal, EPA would also have required peer review of the entrainment mortality data collection plan. Peer reviewers would be selected in consultation with the Director who may consult with EPA and Federal, State, and Tribal fish and wildlife management agencies with responsibility for fish and wildlife potentially affected by the cooling water intake structure(s). Further, facilities with greater than 125 mgd AIF would complete an entrainment study. The entrainment study could include information already collected to meet the Phase II requirements at § 122.21(r)(2)-(r)(4) before those requirements were suspended.
      EPA and the Services have completed consultations on the rule. EPA has received the final biological opinion and associated documents from the U.S. Fish and Wildlife Service and the U.S. National Marine Fisheries Service and has included them in the record for the rule.  The Services have concluded that the rule is not likely to jeopardize the continued existence of listed species or result in the destruction or adverse modification of designated critical habitat.
3.	  Final Rule Provisions Related to Threatened and Endangered Species
	As noted previously, establishing standards for cooling water intake structures to minimize impingement and entrainment of all aquatic organisms will promote and enhance protection of T&E species.  In addition, the rule contains a number of provisions that specifically concern T&E species; these provisions were developed in light of EPA's consultation with the Services and were established by EPA to insure that this rule is not likely to jeopardize listed species or result in the destruction or adverse modification of designated critical habitat. To be clear, the ESA provisions of the rule extend to all listed T&E species, not just fish and shellfish.
	The treatment of T&E species in today's rule follows directly from the Agency's longstanding approach as well as from EPA's proposed 2011 rule which indicated the EPA's intention to address protection of T&E species. The rule adopts the identical approach followed in the Phase I and II rules, while adding some refinements to that earlier model which EPA discussed in the proposed rule.  First, it adopts the proposed requirements that insure an adequate information base is submitted to the permit writer.  As was the case with the Phase I and withdrawn Phase II rule, apprising the permit writer of the presence and extent of T&E species at a facility's intake continues to be an important element of the permit application requirements for existing facilities.  While retaining the existing permit application requirement of 40 C.F.R. § 122.21(r), EPA has included in today's rule a provision at § 125.95(f) that requires a facility in its permit application to identify all Federally-listed threatened and endangered species and designated critical habitat that are or may be present in the action area. The action area can generally be considered the area in the vicinity of the cooling water intake structure.  The evaluation is to be based on information readily available to the facility at the time of the permit application.  In addition, the rule requires the largest withdrawing facilities to provide taxonomic identification of species in the vicinity of the intake, thus providing a mechanism for facilities to determine more accurately their potential impact on protected species.
	The rule requires that the Director transmit all permit applications to the Services upon receipt. The rule provides the Services with 60 days to review the permit application. This 60 day review takes place prior to the public notice of the State or Tribe's draft or proposed permit. EPA expects that the Services will respond within 60 days and provide to the Director (1) any corrections to the list of Federally-listed threatened and endangered species and critical habitat included in the permit application, (2) any measures that the Services recommend (including monitoring and reporting) for the protection of listed species, including any measures that would minimize any incidental take of listed species, and/or avoid likely jeopardy to a listed species or destruction or adverse modification of critical habitat, and/or (3) notify the State or Tribe that the Service(s) have no corrections to the list of species and critical habitat and/or that the Service(s) do not recommend any control measures. The Services' 60 day review period does not constrain the Director's ability to process the applicant's permit application; however, the Director may not propose/publish the draft permit until the 60 day review period has ended, unless the Director has received the Services' response prior to that time.
	In addition, the Services will receive, pursuant to existing regulations at 40 C.F.R. 124.10(c)(1)(iii) and (e), all permit applications, as well as fact sheets or statements of basis (for EPA-issued permits), draft permits, and public notices for all permits. At this stage of the process, the Services will have the opportunity to review the draft permit and other materials and provide any additional input or suggested control measures to address effects to listed species or critical habitat. Together, the existing and new requirements related to transmittal of permitting documents to the Services will ensure that the Services have the opportunity to provide information and recommendations to the permit writer relating to any facility that may affect listed species.  This information will be part of the public record for the permitting decision and the Director would be required to consider it as a relevant factor, along with all of the other relevant factors, in deciding what conditions to establish in the permit. Further, as explained in the MOA between EPA and the Services discussed elsewhere in today's notice, EPA will use the full extent of its CWA authority to object to a permit where EPA finds that issuance of the permit is likely to jeopardize the continued existence of a listed species or result in the destruction or adverse modification of designated critical habitat.  The rule's requirements insure a full vetting of information and concerns in the permitting process that must be considered by the Director. These requirements, coupled with the EPA's commitment to exercise its oversight authority, insure that today's rule is not likely to jeopardize the continued existence of a listed species or result in the destruction or adverse modification of designated critical habitat.
	Among the recommendations that may be made by the Services to the facility and the Director are measures to minimize incidental take.  EPA expects that any measures the Services recommend to minimize incidental take will be consistent with ESA regulations and guidances concerning reasonable and prudent measures. As stated in the ESA regulations under 50 CFR Part 402.14(i)(2), "Reasonable and prudent measures, along with the terms and conditions that implement them, cannot alter the basic design, location, scope, duration, or timing of the action and may involve only minor changes."  The Endangered Species Handbook (FWS and NMFS, 1998) explains that: "Measures are considered reasonable and prudent when they are consistent with the proposed action's basic design (e.g., narrowing of disturbed right-of-way at known species locations), location (e.g., temporary storage of equipment or other materials), scope, duration, and timing.  Reasonable and prudent measures and terms and conditions should be developed in coordination with the action agency and applicant, if any, to ensure that the measures are reasonable, that they cause only minor changes to the project, and that they are within the legal authority and jurisdiction of the agency or applicant to carry out."
	Installation of closed-cycle cooling is a major design alteration of a facility involving significant design and construction activities (the range of costs associated with closed-cycle cooling is described elsewhere in today's notice).   Because installation of closed-cycle cooling does alter the basic design of a facility and would involve more than minor changes, as described in the Services' regulations and Handbook, EPA does not expect that installation of closed-cycle cooling would be specified as a measure solely for purposes of minimizing incidental take.   The final rule at § 125.98(j) provides that nothing in this rule authorizes the take of threatened or endangered species of fish or wildlife. However, the Services may exempt take through an incidental take statement issued pursuant to ESA section 7(o) or a permit under ESA section 10.  See 16 U.S.C. 1536 (o) and 16 U.S.C. 1539.
      	This Clean Water Act rule cannot authorize take and does not purport to do so (nor can NPDES permits authorize take prohibited under the ESA). Accordingly, under § 125.98(b)(1), the permit writer, including EPA, must include, in the 316(b) permit requirements, standard language that states the permit does not authorize the take of Federally-listed threatened and endangered species. In addition, under § 125.96(g) (additional monitoring requirements) and § 125.97(g) (additional reporting requirements),where the Director requires additional measures to protect listed species, monitoring and reporting requirements associated with those measures will be included in the permit.
4.	EPA Oversight of State-issued NPDES Permits to Protect Threatened and Endangered Species.
	In 2001, the EPA, FWS, and NMFS signed a Memorandum of Agreement (MOA), (66 FR 11202, Feb. 22, 2001) with the objective of enhancing coordination between the agencies and to assist the agencies in executing their respective responsibilities under the Clean Water Act and Endangered Species Act.  The MOA reflects, in part, the EPA's longstanding commitment to overseeing the operation of state NPDES programs to ensure protection of endangered species with existing regulatory requirements.  The EPA reaffirms its commitment to ensure coordination of the EPA's and Services' programs and appropriate protection of listed species, and EPA will follow the procedures in the MOA in overseeing implementation of this rule.
	The MOA committed the EPA to a number of specific actions that are pertinent to    today's rule. Under the MOA, EPA committed, when contacted by the Services, to coordinate with the Services and the State/Tribe during the permit development process, in order to ensure that permits will comply with all applicable CWA requirements.  One way in which coordination between EPA and the Services is facilitated is through the exchange of information about permits.  The MOA facilitates such information exchange, as do EPA's NPDES permit regulations at 40 C.F.R. § 124.10, that preceded the MOA.  These regulations require the Director to provide public notice and a comment period for draft permits, and to notify persons identified at 40 C.F.R. § 124.10(c)(1)(iii) and (iv).  Such persons specifically include Federal and State agencies with jurisdiction over fish, shellfish, and wildlife resource and over coastal zone management plans and thus include the U.S. Fish and Wildlife Service and the National Marine Fisheries Service.
      EPA's commitment to coordinate effectively with the Services includes following the procedures in section IX.A.6 and 7 of the MOA:

      EPA may make a formal objection, where consistent with its CWA authority, or take other appropriate action, where EPA finds that a State or Tribal NPDES  permit will likely have more than minor detrimental effect on Federally-listed  species or critical habitat.
      For those NPDES  permits with detrimental effects on Federally-listed species or critical habitat that are minor, it is the intention of the Services and EPA that the Services will work with the State or Tribe to reduce the detrimental effects stemming from the permit. For those NPDES permits that have detrimental effects on Federally-listed species or critical habitat that are more than minor, including circumstances where the discharge fails to ensure the protection and propagation of fish, shellfish  and wildlife, and where the State or Tribe and the Services are unable to resolve the issues, it is  the intention of the Services and EPA that EPA would work with the State or Tribe to remove or reduce the detrimental impacts of the permit, including, in appropriate cases, by objecting to and Federalizing the permit where consistent with EPA's CWA authority.
      EPA will use the full extent of its CWA authority to object to a State or Tribal permit where EPA finds (taking into account all available information, including any analysis conducted by the Services) that a State or Tribal permit is likely to jeopardize the continued existence of any listed species or result in the destruction or adverse modification of critical habitat.
      EPA may review or waive review of draft State or Tribal NPDES permits (40 CFR 123.24(d)). EPA will work with the Services through the local/regional coordinating teams to help determine which categories of permits should be reviewed for endangered species concerns. If EPA finds that a draft permit has a reasonable potential to have more than a minor detrimental effect on listed species or critical habitat, and review of a draft permit has been waived, EPA will withdraw this waiver during the public comment period (see 40 CFR 123.24(e)(1)).
      	The grounds for EPA's exercise of its discretionary authority to object to State or Tribal permits are described in the NPDES regulations at 40 C.F.R. § 123.44.  These include that the proposed permit fails to comply, or to ensure compliance with, any applicable requirement of this part, for example, that a permit application did not contain information sufficient to demonstrate that the permit will ensure compliance with applicable requirements.  See 40 C.F.R. § 123.44(c)(1).
      If EPA objects to a NPDES permit under the MOA, EPA will follow the permit objection procedures outlined in 40 CFR 123.44 and coordinate with the Services in seeking to have the State or Tribe revise its permit. A State or Tribe may not issue a permit over an outstanding EPA objection. If EPA assumes permit issuing authority for a NPDES permit, EPA will consult with the Service prior to issuance of the permit (as a Federal action) as appropriate under section 7 of the ESA.

      While the MOA was adopted by the agencies in the context of NPDES permits for discharges of pollutants, it applies equally to NPDES permits that contain conditions for cooling water intake structures.   Moreover, section 316(b) of the CWA accords EPA broad authority to protect waters of the United States from adverse environmental impacts associated with cooling water intake structures, including adverse effects to Federally-listed species and designated critical habitat.  In implementing this provision, EPA is authorized to consider costs and benefits of different approaches to minimizing these impacts.  The importance of listed species, and accordingly the benefits associated with preventing their extinction, animated Congress's enactment of the Endangered Species Act in 1973.  In the case of aquatic organisms that are listed as endangered or threatened, and designated critical habitat, EPA has the authority, and will exercise the full extent of its authority, to object to a permit proposed by a State where EPA finds (taking into account all available information, and giving, as appropriate, substantial weight to the views of the Services) that a State or Tribal permit is likely to jeopardize the continued existence of such species or result in the destruction or adverse modification of such critical habitat. If the State permit is not modified to address EPA's objections, EPA will issue the permit in consultation with the Services. EPA's commitment to use the full extent of its CWA authority to object to permits that are likely to jeopardize listed species or result in the destruction or adverse modification of critical habitat is a safeguard for the protection of listed species and critical habitat. Additionally, where the Service communicates in writing to EPA its conclusion that a proposed State permit is likely to jeopardize the continued existence of a listed species, EPA will, upon request, provide the Service a written response.  EPA's commitment to use the full extent of its CWA authority, along with the other provisions of the rule requiring the EPA, the Services, and State Directors to fully consider effects to threatened and endangered species and critical habitat and include appropriate protections in NPDES permits, insures that the rule is not likely to jeopardize the continued existence of listed species or result in the destruction or adverse modification of designated critical habitat.

L.	Permits for Existing Facilities Are Subject to Requirements under Other Federal Statutes
      EPA's NPDES permitting regulations at § 122.49 list Federal laws that might apply to the issuance of NPDES permits under the NPDES rules. These include the Wild and Scenic Rivers Act, 16 U.S.C. 1273 et seq.; the National Historic Preservation Act of 1966, 16 U.S.C. 470 et seq.; the Coastal Zone Management Act, 16 U.S.C. 1451 et seq.; and the National Environmental Policy Act, 42 U.S.C. 4321 et seq. For a brief description of each of these laws, see § 122.49. The provisions of the Magnuson-Stevens Fishery Conservation and Management Act, 16 U.S.C. 1801 et seq., relating to essential fish habitat might also be relevant. EPA's permit application requirements ensure that FWS and NMFS will have -- and other Federal agencies as well, should have -- a broader information base from which to make informed decisions. Note also that, in the case of EPA-issued permits, EPA's NPDES permitting regulations specifically require following the requirements of specific Federal laws that may apply to the issuance of NPDES permits.    16 U.S.C.

IX.	Cost Development and Economic Impact Analysis
      This section summarizes EPA's analysis of the social cost and economic impact for three regulatory options. In addition to today's rule, referred to as the Final Rule, EPA analyzed two other options similar to those options at proposal (see section VI.D Other Options Considered for Today's Final Regulation for more context).  The regulatory options can be described as follows:
         * Final Rule: Flexible impingement mortality performance standard for existing units based on modified traveling screens with fish returns for all facilities with DIF greater than 2 mgd, closed-cycle cooling or its equivalent for new units for impingement and entrainment, and a national BTA standard that requires a site determination of entrainment BTA for all other existing units at existing facilities;
         * Proposal Option 2: Intake flow commensurate with closed-cycle cooling for facilities that have a design intake flow of greater than 125 mgd, flexible impingement mortality limitations based on modified traveling screens with fish returns for all facilities with DIF greater than 2 mgd, and closed-cycle cooling or its equivalent for new units; and
         * Proposal Option 4: Flexible impingement mortality limitations based on modified traveling screens for all facilities with DIF greater than 50 mgd, closed-cycle cooling or its equivalent for new units, and a site-specific determination of entrainment BTA for all other facilities and for impingement mortality controls at facilities with flow less than or equal to 50 mgd.
	The first part of this section provides an overall summary of the costs of the regulatory options to regulated facilities and Federal and State governments. This discussion is followed by a review of the method for developing compliance cost estimates. The third part provides an estimate of the total social costs of the regulatory options. The final part reviews the economic impact of the regulatory options.
A.	Overview of Costs to Regulated Facilities and Federal and State Governments
      In estimating the total cost of the regulatory options, EPA estimated costs for the following components: capital costs and other one-time costs; installation downtime costs; annual operation and maintenance costs; and recordkeeping, monitoring, entrainment-related studies, and reporting costs. All of these costs are included in the economic impact analysis for the final rule. The cost estimates reflect the incremental costs attributed only to this final rule. For example, facilities already having closed-cycle recirculating systems as defined at § 125.92 will meet the impingement mortality and entrainment standards of today's rule and, therefore, will not incur costs to retrofit new technologies. These facilities, including those in New York and California, will still incur permitting costs. EPA has established that existing closed-cycle recirculating systems will comply with the impingement BTA requirements.
	For the economic analysis, EPA distinguished between the two industry groups regulated by the standards for existing facilities as follows:
   * Electric Power Producers (electric generators) -- facilities owned by investor-owned utilities, municipalities, States, Federal authorities, cooperatives, and nonutilities, whose primary business is electric power generation or related electric power services.
   * Manufacturing and Other Industries (manufacturers) -- facilities in the paper, aluminum, steel, chemicals, petroleum, food and kindred products (primary manufacturing industries), and other industries. In addition to engaging in production activities, some of these facilities also generate electricity for their own use and occasionally produce excess power for sale.
      For a more detailed discussion of costs to regulated facilities and costs to Federal, State, and local governments, see Chapter 8 of the TDD and Chapter 3 of the EA.
      Electric generators incurring costs include facilities owned by private firms, governments, and electric cooperatives. Manufacturers incurring costs include facilities owned by private firms only. The administrative costs to Federal, State, and local governments include the costs of rule implementation -- e.g., permits, monitoring, and working with facilities subject to the final rule to achieve compliance.
      In the economic analysis, EPA accounted for these costs on an as-incurred basis. They are reported on a pre-tax or after-tax basis, depending on the specific component of the analysis. These costs also underlie the analysis of the social costs of the regulatory options.
B.	Development of Compliance Costs
      This section describes the data and methods used to estimate compliance costs of the options considered for today's final rule. Costs were developed for technology controls to address impingement mortality separately from technology controls for entrainment because the requirements of the various rule options considered may lead to different technologies being used by each facility to comply. The options considered may impose different compliance timelines for impingement mortality and entrainment control technologies, although decision making has been synchronized to avoid investments in impingement BTA controls that could later be rendered obsolete by the BTA requirements for entrainment. Different methodologies were used and each is briefly described below. More detailed information on these methodologies and costs of other technologies and regulatory approaches are available in Chapter 8 of the TDD.
1.	Combined Facility-Specific and Model-Facility Approach
	EPA estimated national level costs for regulated facilities under the final rule and other regulatory options. In general, facility-specific data can be used to determine the requirements that apply to a facility and whether that facility already meets the final rule's requirements. This approach requires facility-specific technical data for the approximately 1,065 facilities that EPA estimates will be subject to the final rule. The change in the number of facilities subject to the final rule compared to the number estimated at proposal is attributable to changes in how EPA accounted for baseline closures. See Appendix H of the EA for more details. An alternative approach is to develop a series of model facilities that exhibit the typical characteristics of the regulated facilities and calculate costs for each model facility; EPA would then determine how many of each model facility would be needed to accurately represent the full universe of regulated facilities.
	The approach used in this effort involved calculating compliance technology costs for 338 individual facilities for which EPA had detailed technical data from its questionnaires regarding the intake design and technology. Specifically, these are the facilities that completed the detailed technical questionnaire. Where facilities reported data for separate cooling water intake structures, EPA derived compliance technology costs for each intake, and summed these intake costs to obtain total costs for each facility. EPA used the actual facility data to construct model facilities. Each model facility's costs were then multiplied by a specific weighting factor, derived from a statistical analysis of the industry questionnaire, to obtain industry-wide costs. The weighting factors are similar to the ones derived during the development of the 2004 Phase II and 2006 Phase III rules.
2.	Updates to the Survey Data
	For the 2004 Phase II rule analysis, EPA developed facility-specific cost estimates for all facilities and published those costs in an appendix (69 FR 41669, July 9, 2004). Since the initial implementation of the 2004 Phase II rule, EPA identified several concerns with using only the facility-specific costing approach, and the use of those costs in Appendix A. Since 2004 EPA has collected data from industry and other groups as described in Section III of the proposed rule (76 FR 22183, April 20, 2011). These data generally reflect changes to actual intake flow, design intake flow, intake velocity, technology in place, and operational status. EPA developed a new master database including this new data to supplement the data from the detailed technical questionnaire. Although it has been more than 10 years since the detailed technical questionnaire was initially collected, EPA has undertaken more than 50 site visits and reviewed available literature. In addition, EPA compared its data with that collected by Edison Electric Institute, Electric Power Research Institute, and the Energy Information Administration. On the basis of that review, EPA concluded that the master database is representative and reasonably reflects costs for all facilities. The following section describes how EPA used this new database to estimate compliance costs.
3.	Tools for Developing Compliance Costs
	During development of the 2004 Phase II rule, EPA began developing a spreadsheet-based tool that would provide facilities and permit authorities with a simple and transparent method for calculating facility-specific compliance costs. EPA refined the tool in developing the Phase III regulations. EPA has since made further refinements to the cost tool, which was used to calculate the compliance costs for impingement mortality for today's final rule. The cost tool employs a decision tree (for a graphical presentation of the decision tree, see Chapter 8 of the TDD) to determine a compliance response for each model facility. The decision tree assigns a technology costing "module" for the retrofit to a given technology. Impingement cost estimates are derived through a series of computations that apply facility-specific data (such as DIF, width of intake screens, and such) to the selected technology module. Cost tool outputs include capital costs, incremental operation and maintenance costs, and installation downtime (in weeks).
	To calculate the compliance costs of retrofitting to closed-cycle cooling for controlling entrainment, EPA used a second tool based on a cost-estimating spreadsheet using a modified version of a similar tool developed by the Electric Power Research Institute (EPRI). EPRI's first draft methodology presented three levels of capital cost according to the relative difficulty of the retrofit project (easy, average, and difficult). For electric generators, EPA used costs for the average level of difficulty because it was developed across a broad spectrum of facilities and is the most appropriate for estimating national level costs rather than lower or upper bounds. For manufacturers, EPA used the difficult level of retrofit costs. This reflects the more complex water systems and technical challenges to retrofitting closed-cycle cooling at multiple locations within a manufacturing facility. In site visits, EPA found the largest manufacturing facilities had multiple intakes, distributed the water to multiple production processes, have already significantly increased water reuse as a result of water audits, and generally operate a complicated water distribution network at the entire facility, and would therefore require multiple retrofits to convert the facility to be commensurate with closed-cycle recirculating system. Accordingly, EPA determined that the difficult level of retrofit costs is more representative for purposes of estimating national level costs. EPA's tool includes additional modifications to EPRI's methodology, such as increased compliance costs for approximately 25 percent of facilities to reflect the additional expense of noise control or plume abatement, and using only the cooling water flow rate for non-contact cooling water flow for purposes of estimating costs for closed-cycle cooling. EPA has included the spreadsheet tools in the docket for today's final rule to assist both facilities and permit authorities in estimating compliance costs (see DCNs 12-6650 and 12-6651 for the cost tool, as well as and DCN 10-6930 for EPRI's retrofit analysis).
4.	Which Technologies Form the Basis for Compliance Cost Estimates?
	EPA identified two broad classes of control technologies that may be used singularly or in combination to comply with the final rule. These classes of control technologies are (1) technologies that address impingement mortality, and (2) technologies that address entrainment. For further details, see Section VI.
	For the impingement mortality requirements, EPA analyzed data from a wide variety of technologies and facilities, and concluded that modified (Ristroph or equivalent) 3/8" mesh traveling screens with fish-friendly fish handling and returns are the most appropriate basis for determining compliance costs. As discussed in Section VI of this preamble, a facility may also comply with impingement mortality requirements by meeting a low velocity compliance alternative, operating a closed-cycle recirculating system as defined at § 125.92(c), or employing an existing offshore velocity cap as defined at § 125.92(v). On the basis of facility-specific data, EPA made a preliminary assessment of which model facilities would not currently meet impingement mortality requirements through any of these pre-approved technologies, and assigned technology costs on the basis of modified traveling screens with a fish handling and return system if the existing intake used traveling screens. If the intake does not currently use traveling screens, EPA assigned costs for installing technologies that would comply with the low velocity compliance alternative (larger intakes, wedgewire screens, or variable speed pumps) based on site-specific conditions. These assigned technologies will meet the BTA standard (see § 125.94(b)). Although EPA no longer requires installation of barrier nets or equivalent technologies to protect shellfish in all tidal waters, EPA included the cost of barrier net technology at approximately 10 percent of the intakes as a cost component for the "systems" approach to compliance with the IM standards.
	EPA also analyzed the costs of those options associated with entrainment requirements based on wet cooling systems. EPA also evaluated other technologies for reducing entrainment, such as seasonal operation of cooling towers, partial towers, variable speed pumps, and fine-mesh screens. The costs of the final rule include but are not limited to permit applications; characterization of the source water, intake structures and any technologies in place; studies of impingement and entrainment; and recordkeeping, monitoring, and reporting. The costs also include costs of technologies for complying with the BTA for IM; the cost of additional technologies that may be required to meet the site-specific BTA for entrainment are not included, nor are costs for additional measures that may be required for protection of listed threatened and endangered species.  Section VI further describes the performance of these technologies. A detailed discussion of how the costs were developed is in Chapter 8 of the TDD.
5.	How is Installation Downtime Assessed?
	Installation downtime is the length of time that a facility might need to shut down for installing a compliance technology. Downtime estimates primarily assume that the facility would need to completely shut down operations for some portion of the installation period to retrofit an intake, such as relocating an intake, connecting wet cooling systems into the facility, or reinforcing condenser housings. EPA estimated downtime as incremental outages, taking into account the periodic outages all facilities incur as part of preventative maintenance or routinely scheduled outages. For example, nuclear facilities have refueling outages approximately every 18 months lasting approximately 40 days. The entrainment control implementation periods under Proposal Option 2, 10 years for fossil fuel facilities and 15 years for nuclear facilities, would provide facilities with an opportunity to schedule the retrofit when other major upgrades are being done, thereby significantly reducing downtime.
	For most facilities subject to impingement mortality, EPA assigned no incremental downtime. Facilities that are replacing or rehabilitating existing traveling screens typically do so one intake bay at a time without affecting the overall operations. EPA has also found that facilities that need to scrub screens do so during other routinely scheduled outages. For some compliance technologies, however, such as relocating an intake or expanding an existing intake to lower the intake velocity, several weeks of downtime may be incurred because these are more invasive tasks. See TDD Exhibit 8-4 for EPA's net construction downtime for the various IM compliance technologies.
	EPA reviewed historical retrofit data and site visits conducted since 2004 and has largely retained its assumptions for downtime from the Phase II and Phase III rules for facilities retrofitting to closed-cycle cooling. On average, EPA assumes the net installation downtime for retrofitting to closed-cycle cooling for non-nuclear electric generators is 4 weeks. This total downtime allows for the tie-in of the closed-cycle system to the existing cooling water system. The refueling outage downtime, the safety-sensitive nature of nuclear facility retrofits, and other data in EPA's record supports 28 weeks as the net construction downtime for nuclear facilities. EPA converted downtime for manufacturing facilities that use cooling water for power and steam generation into the incremental cost for purchasing electricity during the outage. For individual process units other than power generation units at a manufacturing facility, on average the downtime was assumed to be zero. In EPA's extensive experience with manufacturers, EPA's record reflects that manufacturers are generally able to shut down individual intakes for specific process lines, use inventory approaches such as temporary increases of intermediate products, and develop other workarounds without interrupting the production of the entire facility. For further discussion of how EPA accounted for installation downtime in estimating national costs, see below.
6.	How is the Energy Penalty Assessed?
	The term energy penalty in relation to a conversion to closed-cycle cooling has a number of different interpretations. The first is the extra power required to operate fans at a mechanical draft cooling tower and additional pumping requirements (sometimes referred to as auxiliary energy requirements or parasitic loads). The second is the lost power output because of the reduction in steam turbine efficiency from an increase in cooling water temperature relative to once-through cooling (often referred to as the turbine efficiency penalty or turbine backpressure penalty). EPA is clarifying that it views the former as incremental O&M costs, and the latter is EPA's interpretation of the energy penalty. Energy penalty costs apply only to facilities retrofitting to closed-cycle cooling without replacing the condenser. Facilities installing a new impingement mortality technology will not generally face an energy penalty and will generally see little or no measureable change in auxiliary power consumption. EPA's national-level costs include both these costs. The auxiliary power consumption was included as a separate component in the operation and maintenance costs and was assessed for all facilities. The turbine efficiency penalty was typically expressed as a percentage of power output. EPA estimates the turbine efficiency energy penalty for nuclear and non-nuclear power generation would be 2.5 and 1.5 percent, respectively (see Chapter 8 of the TDD). For most manufacturers generating their own electricity, EPA assumed the same energy penalty for turbine efficiency loss as estimated for non-nuclear power facilities (i.e., 1.5 percent).
7.	How Did EPA Assess Facility-Level Costs for the National and Regional Economic Impacts Analysis?
	As part of the economic impact analysis, EPA assessed the impact of the final rule's requirements on electric generators in the context of national and regional electricity markets. For this analysis, EPA used the Integrated Planning Model (IPM[(R)]), a comprehensive electricity market optimization model that assesses such impacts within the context of regional and national electricity markets. EPA has used IPM to analyze the impacts of various regulatory actions affecting the electric power sector over the last decade, particularly Clean Air Act regulations.
      Because IPM requires facility-specific costs for each analyzed facility, yet compliance costs were developed as weighted sums of model facility costs, EPA developed a method to distribute the aggregate costs to facilities that were not themselves model facilities. For these facilities, EPA converted facility-level costs developed for model facilities to a cost per mgd DIF and then averaged these values to derive cost equations using DIF as the independent variable. These cost equations provide average costs that can be applied to any facility by simply scaling to that facility's DIF. For details on the IPM analysis, see the EA, Chapter 6. For details on facility cost development, see the TDD, Chapter 8.
8.	How Did EPA Assess Costs for New Units?
Power generation and manufacturing units that are a new unit as defined at § 125.92(u) must meet an entrainment reduction performance standard based on closed-cycle cooling or an equivalent reduction in entrainment for the cooling water component of the intake flow based on the DIF. This section briefly describes the data and methods used to estimate compliance costs for new units at existing electric generators and manufacturers. Chapter 8 of the TDD has a complete description of the methodology.
a. 	New Units at Existing Electric Generators
Compliance costs for new units at existing electric generators are estimated using a similar methodology to that used for estimating compliance costs for existing facilities. As described in Chapters 6 and 8 of the TDD, however, there are a number of differences in costs between a closed-cycle cooling retrofit at an existing facility compared to installing closed-cycle cooling at a new unit. In general, these differences result in lower costs for the installation of a closed-cycle recirculating system at a new unit (as compared to a retrofit scenario), due to improved efficiency of the turbine, the elimination of construction downtime, greater ease of integrating the closed-cycle system into the design and construction of the new unit, offsetting costs of certain system and construction components, and greater overall system optimization.
EPA could not determine precisely which facilities will construct new units. Instead, EPA used an approach to estimate what portion of the new capacity (i.e., additional megawatts capacity to be constructed each year) would be subject to the final rule. Using national projections of increased generating capacity, EPA categorized the new capacity into three groups for 316(b) compliance purposes: 1) subject to the Phase I rule, 2) subject to today's final rule, but projected to install a cooling system that complies with the rule regardless of the rule requirements, and 3) subject to today's rule and projected to incur compliance costs. Exhibit IX-1 presents the estimated total new capacity and the estimated capacity for new stand-alone units.

Exhibit IX-1

                                   Fuel Type
                            Total Including Phase I
                       Existing Facility New Units Only

                                 New Capacity

                                  Stand-Alone

                                      MW
                                      MW

Fossil Fuel
295

80

Combined Cycle
3,264

147

Total
3,559

227

Costs for closed-cycle cooling are assigned to a portion of new stand-alone units, as shown the generating capacities in Exhibit IX-3.

Exhibit IX-3

                                   Fuel Type
                                  Annual Only
                              24-year Total Only

                                  Stand-Alone

Stand-Alone

                                      MW
                                      MW

Fossil Fuel
                                       8

                                      191

Combined Cycle
                                      15

                                      353

Total
                                      23

                                      544

EPA then estimated the total costs for the third group (i.e., those units that would incur compliance costs) to comply with requirements for new units. EPA used certain assumptions regarding cooling system design to modify cost equations used for estimating closed-cycle retrofit costs at existing units and then applied the cost equations to the portion of projected new unit generating capacities that would be subject to the new unit provisions of today's rule. These costs include capital and O&M costs, as well as a reduction in net generating capacity due to auxiliary power consumption to operate the closed-cycle recirculating system. Due to the complex nature of constructing a new unit, there is no increase in the length of the construction project as a result of employing a closed-cycle system; similarly, there is no downtime, as the unit has not yet begun operating. See Chapter 8 of the TDD for more information.
b.	New Units at Existing Manufacturers
On the basis of site visits to manufacturing facilities, EPA has observed that manufacturers are increasingly taking advantage of water conservation and reuse measures as a means of cost-cutting. EPA also notes that manufacturers are subject to a wide variety of ELGs and that, in the course of complying with requirements for those ELGs, a facility may also reduce its intake flow. (See Chapter 4 of the TDD.) A new unit provides the opportunity to employ such measures to the fullest extent in designing the new unit. The availability of water conservation and reuse opportunities, coupled with operational flexibility at facilities with multiple industrial processes, leads EPA to conclude that facilities installing new units at existing manufacturers will comply with the new unit provisions through achieving the 90 percent reduction required at § 125.94(e)(2). Thus, EPA concluded that the new unit provisions would result in no additional compliance costs for achieving flow commensurate with closed-cycle cooling at new units.
      To the extent that manufacturers are not able to incorporate water reuse measures as a means of complying with the new unit provision, EPA's estimate of new unit costs for manufacturers may be an underestimate. Manufacturers generally withdraw less water than electric generators (including manufacturers who generate their own electricity). Thus EPA has concluded that any underestimation would be insignificant.
C.	Social Costs
      EPA assessed the costs to society resulting from the final rule and other options considered in development of this rule. The findings presented in this section assume that facilities with impoundments will qualify as having closed-cycle recirculating systems in the baseline. As a result, EPA assigned no compliance technology costs to these facilities; however, these facilities remain subject to today's rule and are assigned administrative costs. To the extent that some of these facilities do not qualify as having closed-cycle recirculating systems in the baseline, the costs reported in this section may be underestimates. The social cost of regulatory actions includes costs to electric generators and manufacturers to comply with the final rule, and costs to States and the Federal government to administer the rule. These costs are the opportunity costs to society of employing scarce resources to prevent the environmental damage that would occur without today's rule. EPA estimated total social costs for existing and new units at existing facilities.
      In estimating social costs, EPA assumed that the final rule and other options considered in development of this rule will not affect the aggregate quantity of electricity or other affected goods and services sold to consumers. Thus, the social cost of regulatory requirements includes no loss in consumer and producer surplus from reduced sales of electricity or other goods and services produced by regulated facilities. The Agency calculated the social cost of the final rule and the other options considered using two discount rates: 3 percent and 7 percent.
      For existing facilities, EPA assumes that all facilities subject to the final rule will begin bearing costs associated with today's rule beginning as soon as 2014, and likely complete investments associated with today's rule by 2030, depending on the technology-installation schedules for the final rule and other regulatory options considered. EPA performed the social cost analysis over a 51-year period to reflect (1) the last year in which individual facilities are expected to achieve compliance (2030) under the final rule or any of the options considered, (2) the life of the longest-lived compliance technology installed at any facility (30 years), and (3) a period of five years after the last year of compliance technology operation during which benefits continue to accrue. Under this framework, the last year for which EPA has calculated projected costs is 2059, with benefits continuing beyond 2059, though on a diminishing basis, through 2064.
      To estimate social costs for existing facilities, EPA developed a year-explicit schedule of compliance outlays over the 46-year period from 2014 to 2059 according to cost-incurrence assumptions (for details on cost-incurrence assumptions, see EA, Chapter 3). EPA then adjusted these costs for predicted real change (i.e., adjusted for inflation) to the year of their incurrence and discounted all costs to the beginning of 2013, the promulgation year used for the analysis. Because the analysis period extends beyond the useful life of some compliance equipment, the social cost analysis accounts for re-installation of impingement mortality compliance technologies after the end of their initial useful life periods. However, for the regulatory option that requires a specific entrainment control technology (e.g., wet cooling systems) -- Proposal Option 2 -- EPA does not expect regulated facilities to completely rebuild these systems (components such as piping and the concrete basin can be reused). EPA accounted for other technology replacement costs (such as pumps and fill material) as part of ongoing operations and maintenance expenses.
      For new units at existing electric generators, EPA calculated an average annual amount of new capacity to be constructed during the 46-year social cost analysis period, beginning in 2014. While EPA does not expect the annual construction of new units to be constant, predicting the year-to-year fluctuations would be resource intensive. On average, EPA assumes that its estimate of new unit costs is reasonable. EPA accounted for compliance costs for these units on an as-incurred basis, as done for existing facilities. Similar to compliance costs for facilities subject to the final rule, EPA analyzed costs incurred by State and Federal governments for administering the regulation on a year-explicit basis over the 46-year social cost analysis period.
      Exhibit IX-4 presents social costs for existing units at existing facilities under the final rule and other options considered, calculated using 3 percent and 7 percent discount rates. At the 3 percent discount rate, EPA estimates total annualized social costs of $272 million for the existing unit provision of today's rule, $252 million for Proposal Option 4, and $3,643 million for Proposal Option 2. At the 7 percent discount rate, these costs are $295 million for today's rule, $272 million for Proposal Option 4, and $3,583 million for Proposal Option 2. See the EA (Chapter 7) for an explanation of why the annualized costs at the 3 percent discount rate are lower than the annualized costs at the 7 percent discount rate for the final rule and Proposal Option 4, while the inverse is the case for Proposal Option 2 (annualized costs at the 3 percent discount rate are higher than at the 7 percent discount rate). The largest component of social cost is the cost of regulatory compliance incurred by regulated facilities (as opposed to administrative costs estimated for States and the Federal government). These costs include (1) one-time technology and other initial costs of complying with the rule, (2) one-time costs of installation downtime, (3) annual fixed and variable operating and maintenance costs, including auxiliary energy requirement, (4) value of energy penalty from operation of compliance technology, and (5) permitting costs (initial and follow-up start-up costs, initial permit costs, annually recurring costs associated with monitoring, and non-annually recurring permitting costs).
      Compliance costs estimated for electric generators account for the largest share of total compliance-related social cost and direct compliance cost under all three options. On a per-facility basis and at the 3 percent discount rate, the annualized pre-tax compliance costs for the electric generators segment under today's final rule are $0.4 million, $0.4 million under Proposal Option 4, and $6 million under Proposal Option 2. For manufacturers, the average cost per regulated facility at the 3 percent discount rate is $0.1 million under the final rule and Proposal Option 4, and $0.4 million under Proposal Option 2. EPA's analysis found a similar profile of per facility costs using the 7 percent discount rate (see EA Chapter 7 for additional detail). EPA's estimate of Federal and State government costs for administering this rule is small in relation to the estimated direct cost of regulatory compliance. EPA estimates $1 million in annual administrative costs to States and Federal government for the final rule, using both the 3 and 7 percent discount rates. These cost values are the same for Proposal Option 4. EPA estimates $0.7 million in annual administrative costs to States and the Federal government for Proposal Option 2, regardless of the discount rate used.
Exhibit IX-4. Total annualized social costs  - existing units at existing facilities (in millions, 2011 dollars)[a]

                               Proposal Option 4
                                  Final Rule
                               Proposal Option 2
Using 3 percent discount rate
Direct Compliance Costs
    Electric Generators
                                                                         $202.9
                                                                         $203.7
                                                                       $3,413.3
    Manufacturers
                                                                          $47.8
                                                                          $67.7
                                                                         $229.2
Total Direct Compliance Cost
                                                                         $250.7
                                                                         $271.4
                                                                       $3,642.5
State and Federal Administrative Costs
                                                                           $1.0
                                                                           $1.0
                                                                           $0.7
Total Social Costs
                                                                         $251.8
                                                                         $272.4
                                                                       $3,643.2
Using 7 percent discount rate

Direct Compliance Cost:

    Electric Generators
                                                                         $219.2
                                                                         $220.0
                                                                       $3,339.3
    Manufacturers
                                                                          $51.9
                                                                          $74.2
                                                                         $243.0
Total Direct Compliance Cost
                                                                         $271.1
                                                                         $294.3
                                                                       $3,582.3
State and Federal Administrative Costs
                                                                           $1.0
                                                                           $1.0
                                                                           $0.7
Total Social Costs
                                                                         $272.1
                                                                         $295.3
                                                                       $3,583.0
a Cost estimates exclude costs associated with baseline closure facilities.

      EPA also estimated the cost for installing closed-cycle recirculating systems at new units at existing electric generators, to reflect the costs of today's rule. As shown in Exhibit IX-5, EPA estimated that the new unit provision of the final rule will result in an annualized cost of $2.5 million and $2.0 million using 3 percent and 7 percent discount rates, respectively, including compliance costs to facilities and administrative costs to States and Federal government.
      The Agency estimated that at a 3 percent discount rate, the total social cost of the final rule, including the existing and new unit provisions, will be $275 million. At a 7 percent discount rate, this cost is $297 million.
Exhibit IX-5. Annualized total social cost of the final rule  -  existing and new units at existing facilities (in millions, 2011 dollars)[a][,b]

                               3% Discount Rate
                               7% Discount Rate
New Units
                                                                           $2.5
                                                                           $2.0
Existing Units
                                                                         $272.4
                                                                         $295.3
Existing and New Units
                                                                         $274.9
                                                                         $297.3
a Cost estimates exclude costs associated with baseline closure facilities.
[b] Values may not add due to rounding.

D.	Economic Impacts
      EPA used several analytic approaches to assess the economic impact of today's rule and the other options considered, on electric generators and manufacturers. EPA conducted separate analyses for electric generators and manufacturers using different methodologies for each regulated facilities segment. The following sections summarize the methodologies EPA used to conduct the economic impact analyses and the findings of these analyses. EPA conducted the economic impact analyses discussed in this section for existing facilities; the Agency used compliance cost estimates from the EPA engineering analysis (see TDD Section X.B).
1.	Electric Generators
      For the electric generators segment, EPA assessed the economic impact of the existing unit provision of the final rule and other options it considered in three ways: (1) the financial burden associated with a particular regulatory option on facilities and entities that own them, (2) how potential changes in the price of electricity would affect electricity consumers, in general, and residential households, in particular, and (3) broader economic impacts on the electricity market, taking into account the interconnectedness of regional and national electricity markets. In preparing the first two sets of analyses, EPA developed and used sample weights to extrapolate impacts assessed initially at the level of sample of facilities, to the full population of facilities subject to the final rule. For information on how EPA developed and used sample weights, see the EA, Appendix H.
      In addition, EPA assessed the impact of the new unit provision of the final rule on decisions of existing facilities to construct stand-alone new units that would be subject to the new unit provision. EPA made this assessment in two ways:  (1) on the basis of comparison, on a per MW basis, of compliance costs for new units to the overall cost of building and operating generating units and (2) as is the case with the existing unit provision, in the context of regional and national electricity markets, taking into account their interconnectedness.
a.	Cost-to-Revenue Analysis for Regulated Facilities and Their Parent Entities  -  Existing Unit Provision of the Final Rule
      EPA assessed the cost to regulated facilities and their parent entities on the basis of a cost-to-revenue analysis. For each analysis level (facility and parent entity), the Agency assumed, for analytic convenience and as a worst-case scenario, that none of the compliance costs would be passed on to consumers through electricity rate increases and, instead, would be absorbed by regulated facilities and their parent entities. EPA developed this analysis for 544 electric generators.
i.	Cost-to-Revenue Analysis for Regulated Facilities
      To provide insight into the potential significance of the compliance costs to regulated facilities, EPA calculated the ratio of annualized after-tax compliance costs to baseline annual facility-level revenues. In the cost-to-revenue comparisons, EPA used cost-to-revenue thresholds of 1 and 3 percent to categorize facilities according the potential economic impact of the rule. EPA concludes that facilities incurring costs below 1 percent of revenue will not face significant economic impacts, while facilities with costs of at least 1 percent but less than 3 percent of revenue have a chance of facing economic impacts, and facilities incurring costs of at least 3 percent of revenue have a higher probability of significant economic impacts. For a more detailed discussion of the methodology EPA used for the facility-level cost-to-revenue analysis, see EA Chapter 4.
      Exhibit IX-6 presents a summary of the facility-level cost-to-revenue analysis results for the final rule and other options considered. EPA estimates that overall, under the final rule, 86 percent of regulated facilities will incur compliance costs of less than 1 percent of revenue. Under Proposal Option 4, 87 percent of regulated facilities would also incur costs of less than 1 percent of revenue. EPA estimates that Proposal Option 2 would result in 42 percent of facilities incurring costs exceeding 1 percent of revenue, and 43 percent incurring costs exceeding 3 percent of revenue.
      Exhibit IX-6. Facility-level cost-to-revenue analysis results for the final rule and options considered[a]
Option
Number of facilities with cost-to-revenue ratio

                                    < 1%
                              >= 1% and < 3%
>= 3%

                                       #
                                       %
                                       #
                                       %
                                       #
                                       %
Proposal Option 4
                                                                            475
                                                                          87.4%
                                                                             35
                                                                           6.5%
                                                                             31
                                                                           5.7%
Final Rule
                                                                            470
                                                                          86.5%
                                                                             40
                                                                           7.4%
                                                                             31
                                                                           5.7%
Proposal Option 2
                                                                            228
                                                                          41.9%
                                                                             79
                                                                          14.5%
                                                                            235
                                                                          43.2%