1989 TCR, some PWSs do currently engage in assessment activity (which
may or may not meet the RTCR criteria) following non-acute and acute
MCL violations. EPA estimates both the costs to PWSs to conduct
assessments under the RTCR as well as the level of effort that PWSs
already put toward assessment activities under the 1989 TCR. These
estimates are based on the work of the stakeholders in the Technical
Work Group (TWG) during the proceedings of the TCRDSAC. These estimates
allowed EPA to determine the average net costs to conduct assessments
under the RTCR. EPA assumes that the numbers of non-acute and acute MCL
violations would remain steady under a continuation of the 1989 TCR
based on the review of SDWIS/FED violation data. Under the RTCR, EPA
assumes that the numbers of assessment triggers decrease over time from
the steady state level estimate based on the 1989 TCR to a new steady
state level, as a result of reduced fecal indicator occurrence
associated with the beneficial effects of requiring assessments and
corrective action.
    The overall number of assessments is larger under the Alternative
option compared to the RTCR option. This is a result of the initial
monthly monitoring requirements for all PWSs under the Alternative
option. The modeling results indicate that a greater number of samples
early in the implementation period results in more positive samples and
associated assessments despite the predicted long term reductions in
occurrence as informed by the assumptions. This increase in total
assessments performed, combined with the higher unit cost of performing
assessments compared to existing practices under the 1989 TCR, results
in a higher net cost increase for the Alternative option than under the
RTCR. The total net increase in cost for the Alternative option is
estimated to be nearly twice that of the RTCR option. See Exhibit 7.15
of the RTCR EA.
    f. Corrective actions. Under the RTCR and Alternative option, all
PWSs are required to correct sanitary defects found through the
performance of Level 1 or Level 2 assessments. For modeling purposes,
EPA estimated the net change in the number of corrective actions
performed under the RTCR and Alternative option. For ground water
systems, EPA assumed that any corrective actions based on a positive
source water sample are accounted for

under the GWR and not under the RTCR. Based on discussions with State
representatives, EPA assumed that an additional 10 percent of
corrective actions will be performed as a result of the assessment and
corrective action requirements of the RTCR, representing the net
increase of the RTCR over the 1989 TCR.
    To estimate the costs incurred for the correction of sanitary
defects, EPA assumed the percent distribution of PWSs that perform
different types of corrective actions as presented in the compliance
forecast shown in Exhibit VI-20 (i.e., distribution of the additional
10 percent of corrective actions) based on best professional judgment
and stakeholder input. The compliance forecast presented in this
section was informed by discussions of the TCRDSAC Technical Work Group
and focuses on broad categories of types of corrective actions
anticipated. EPA used best professional judgment and stakeholder input
to make simplifying assumptions on the distribution of these categories
that are implemented by different systems based on size and type of
system. For each of the categories listed, a PWS is assumed to take a
specific action that falls under that general category. Detailed
compliance forecasts showing the specific corrective actions used in
the cost analysis are provided in Appendix D of the RTCR EA, along with
summary tables of the unit costs used in the analysis. Each corrective
action in the detailed compliance forecast is also assigned a
representative unit cost. Detailed descriptions of the derivation of
unit costs are provided in Exhibits 5-1 through 5-47 of the Technology
and Cost Document for the Revised Total Coliform Rule (USEPA 2012b).

                                               Exhibit VI-20--Compliance Forecast for Corrective Actions Based on Level 1 and Level 2 Assessments
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Maintenance                               Cross-     Addition                Development
                                                                              Replace/                      of                                 connection  or upgrade   Addition        and
                                                         PWS      Sampler     Repair of   Maintenance  appropriate    Storage       Booster      control    of online      of     implementation
       PWS Size (population served)  (percent)         flushing   training  distribution  of adequate   hydraulic     facility   disinfection      and     monitoring   security       of an
                                                      (percent)  (percent)     system       pressure    residence   maintenance    (percent)    backflow       and      measures    operations
                                                                             components    (percent)       time       (percent)                prevention    control   (percent)       plan
                                                                              (percent)                 (percent)                               (percent)   (percent)                (percent)
                                                              A          B            C            D            E            F             G            H           I          J             K
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Level 1 Compliance Forecast
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
<=100...............................................         39         15           12            9            8            6             4            1           3          1             2
101-500.............................................         39         15           12            9            8            6             4            1           3          1             2
501-1,000...........................................         39         15           12            9            8            6             4            1           3          1             2
1,001-4,100.........................................         39         15           12            9            8            6             4            1           3          1             2
4,101-33K...........................................         39         15           12            9            8            6             4            1           3          1             2
33,001-96K..........................................         39         15           12            9            8            6             4            1           3          1             2
96,001-500K.........................................         39         15           12            9            8            6             4            1           3          1             2
500,001-1M..........................................         39         15           12            9            8            6             4            1           3          1             2
>1M.................................................         39         15           12            9            8            6             4            1           3          1             2
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Level 2 Compliance Forecast
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
<=100...............................................         15          4           18           15           15           11             8            2           6          2             4
101-500.............................................         15          4           18           15           15           11             8            2           6          2             4
501-1,000...........................................         15          4           18           15           15           11             8            2           6          2             4
1,001-4,100.........................................         15          4           18           15           15           11             8            2           6          2             4
4,101-33K...........................................         15          4           18           15           15           11             8            2           6          2             4
33,001-96K..........................................         15          4           18           15           15           11             8            2           6          2             4
96,001-500K.........................................         15          4           18           15           15           11             8            2           6          2             4
500,001-1M..........................................         15          4           18           15           15           11             8            2           6          2             4
>1M.................................................         15          4           18           15           15           11             8            2           6          2             4
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Source: (A)-(K) Percent of PWSs performing corrective actions based on Level 1 and Level 2 assessments reflect EPA estimates.

    Level 1 assessments generally are less involved than Level 2
assessments and may result in finding less complex problems. As shown
in the compliance forecast in Exhibit VI-20, EPA estimated that
corrective actions found through Level 1 assessments result in
corrective actions that focus more on transient solutions or training
(columns A and B) than on permanent fixes to the PWS. However, in the
case of flushing, EPA assumed that in a majority of instances, PWSs
implement a regular flushing program as opposed to a single flushing,
based on EPA and stakeholder best professional judgment.
    Corrective actions taken as a result of Level 2 assessments are
expected to find a higher proportion of structural/technical issues
(columns C-K) resulting in material fixes to the PWSs and distribution
system. Consistent with the discussions of the TCRDSAC regarding major
structural fixes or replacements, EPA did not include these major costs
in the analysis. Distribution system appurtenances such as storage
tanks and water mains generally have a useful life that is accounted
for in water system capital planning. The assessments conducted in
response to RTCR triggers could identify when that useful life has
ended but are not solely responsible for the need to correct the
defect. In addition, EPA ran two sensitivity analyses to assess the
potential impacts of different distributions within the compliance
forecast. Results of the sensitivity analyses are presented in Exhibit
VI-21, which indicates that the low bound estimates of annualized net
change in costs at three percent discount rate are approximately $3M
for the RTCR and $17M for the Alternative option, and the high bound
estimates are approximately $25M for the RTCR and $43M for the
Alternative option. Varying the assumptions about the percentage of
corrective actions identified and the effectiveness of those actions
had less than a linear effect on outcomes, and the RTCR continues to be
less costly than the Alternative option under all scenarios modeled.

             Exhibit VI-21--Sensitivity Analysis--Annualized Net Change in Costs Based on Changes in Compliance Forecast ($Millions, 2007$)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                         3% discount rate                                7% discount rate
                                                         -----------------------------------------------------------------------------------------------
                                                               PWSs            State           Total           PWSs            State           Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
RTCR Net Change.........................................           14.15            0.15           14.30           13.75            0.42           14.17
RTCR Low Bound Net Change...............................            2.61            0.15            2.75            3.91            0.42            4.33
RTCR High Bound Net Change..............................           25.10            0.15           25.25           23.63            0.42           24.05
Alternative Option Net Change...........................           29.29            0.31           29.60           31.09            0.61           31.69
Alternative Option Low Bound Net Change.................           16.54            0.31           16.84           19.93            0.61           20.54
Alternative Option High Bound Net Change................           42.68            0.31           42.99           43.63            0.61           44.24
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Detail may not add due to independent rounding.
Source: RTCR cost model, described in chapter 7 of the RTCR EA (USEPA 2012a).

    As indicated in the more detailed analysis presented in chapter 7
of the RTCR EA, PWSs also incur reporting and recordkeeping burden to
notify the State upon completion of each corrective action. PWSs may
also consult with the State or with outside parties to determine the
appropriate corrective action to be implemented.
    Annualized cost estimates for PWSs to perform corrective actions
are estimated by multiplying the number of Level 1 and Level 2
corrective actions estimated by the predictive model, (i.e., 10 percent
of Level 1 and Level 2 assessments) by the percentages in the
compliance forecast and unit costs of corrective actions and associated
reporting and recordkeeping. Exhibit 7.13 of the RTCR EA presents the
estimated totals of non-acute and acute MCL violations (1989 TCR) and
Level 1 and Level 2 assessments (RTCR and Alternative option). The
model predicts a total of approximately 109,000 single non-acute MCL
violations, 58,000 cases of a second non-acute MCL violation, and
16,000 acute MCL violations for the 1989 TCR, under which some PWSs
currently engage in assessment activity which may or may not meet the
RTCR criteria (see section 7.4.5 of the RTCR EA for details). For the
RTCR, the model predicts approximately 104,000 Level 1 assessments and
52,000 Level 2 assessments. For the Alternative option, the model
predicts approximately 120,000 Level 1 assessments and 81,000 Level 2
assessments. EPA estimated a net increase in national annualized cost
estimates incurred by PWSs for conducting corrective actions of $12.44M
(three percent discount rate) and $10.63M (seven percent discount rate)
under the RTCR and a net increase of $13.79M (three percent discount
rate) and $12.09M (seven percent discount rate) under the Alternative
option. The annualized net present value total and net change cost
estimates for PWSs to perform corrective actions under the 1989 TCR,
RTCR, and Alternative option are presented in Exhibit VI-16 of this
preamble.
    The differences in the net change in corrective action costs
between the RTCR and Alternative option are a function of the different
number of assessments estimated to be performed in the predictive
model.
    g. Public notification. Estimates of PWS unit costs for PN are
derived by multiplying PWS labor rates from section 7.2.1 of the RTCR
EA and burden hour estimates derived from the Draft Information
Collection Request for the Public Water System Supervision Program
(USEPA 2008b). PWS PN unit cost estimates are presented in Exhibit 7.19
of the RTCR EA.
    Total and net change in annualized costs for PN under the RTCR and
Alternative option are estimated by multiplying the model estimates of
PWSs with acute (Tier 1 public notification) and non-acute (Tier 2
public notification) violations by the PWS unit costs for performing PN
activities. The RTCR cost model assumed that all violations are
addressed following initial PN, and no burden is incurred by PWSs for
repeat notification. EPA estimated a net decrease in national
annualized cost estimates incurred by PWSs for public notification of
$3.49M (three percent discount rate) and $3.35M (seven percent discount
rate) under the RTCR and a net decrease of $3.40M (three percent
discount rate) and $3.25M (seven percent discount rate) under the
Alternative option. The annualized total and net cost estimates for
PWSs to perform public notification under the 1989 TCR, RTCR, and
Alternative option are presented in Exhibit VI-16 of this preamble.
    A significant reduction in costs is estimated due to the
elimination of Tier 2 public notification for non-acute/monthly MCL
violations under both the RTCR and Alternative option.
3. State Costs
    EPA estimated that States as a group incur a net increase in
national annualized present value costs under the RTCR of $0.2M (at
three percent discount rate) and $0.4M (at seven percent discount rate)
and under the Alternative option of $0.3M (at three percent discount
rate) and $0.6M (at seven percent discount rate). State costs include
implementing and administering the rule, revising sample siting plans,
reviewing sampling results, conducting annual site visits, reviewing
completed assessment forms, tracking corrective actions, and tracking
public notifications. The costs presented in the RTCR EA are summary
costs; costs to individual states vary based on state programs and the
number and types of systems in the state. The following sections
summarize the key assumptions that EPA made to estimate the costs of
the RTCR and Alternative option to States. Chapter 7 of the RTCR EA
provides a description of the analysis.
    a. Rule implementation and annual administration. States incur
administrative costs to implement the RTCR. These implementation costs
are not directly required by specific provisions of the RTCR
alternatives, but are necessary for States to ensure the provisions of
the RTCR are properly carried out. States need to allocate time for
their staff to establish and maintain the programs necessary to comply
with the RTCR, including developing and adopting State regulations and
modifying data management systems to track new required PWS reports to
the States. Time requirements for a variety of State agency activities
and responses are estimated in this EA. Exhibit 7.4 of the RTCR EA
lists the activities required to revise the program following
promulgation of the RTCR along with their respective costs and burden
including, for example, the net change

in State burden associated with tracking the monitoring frequencies of
PWSs (captured under ``modify data management systems''). EPA estimated
a net increase in national annualized cost estimates incurred by States
for rule implementation of $0.18M (three percent discount rate) and
$0.26M (seven percent discount rate) under either the RTCR or the
Alternative option. Because time requirements for implementation and
annual administration activities vary among State agencies, EPA
recognizes that the unit costs used to develop national estimates may
be an over- or under-estimate for some States. The annualized total and
net change cost estimates for States to implement and administer the
rule under the 1989 TCR, RTCR, and Alternative options are presented in
Exhibit VI-16 of this preamble.
    b. Sample siting plan revision. Under the RTCR and Alternative
option, States are expected to incur one-time costs to review sample
siting plans and recommend any revisions to PWSs. Under the 1989 TCR
option, no additional burden or costs are incurred by States to review
sample siting plans, as these PWSs' sample siting plans have already
been reviewed and approved. State costs are based on the number of PWSs
developing revised sample siting plans each year. Based on previous
experience, EPA estimated that States require one to four hours to
review revised sample siting plans and provide any necessary revisions
to PWSs, depending on PWS size. EPA estimated a net increase in
national annualized cost estimates incurred by States for reviewing
sample siting plans of $0.42M (three percent discount rate) and $0.59M
(seven percent discount rate) under either the RTCR or the Alternative
option. The annualized net present value total and net change cost
estimates for States to review and revise sample siting plan under the
1989 TCR, RTCR, and Alternative option are presented in Exhibit VI-16
of this preamble.
    c. Monitoring. EPA assumed that States incur a monthly 15-minute
burden to review each PWS's sample results under the 1989 TCR. This
estimate reflects the method used to calculate reporting and
recordkeeping burden under the 1989 TCR in the Draft Information
Collection Request for the Microbial Rules (USEPA 2008a). Because the
existing method calculates cost on a per PWS basis and the total number
of PWSs is the same for cost modeling under the 1989 TCR and the RTCR
and Alternative option, the net change in costs for reviewing
monitoring results is assumed to be zero for the RTCR and Alternative
option (as shown in Exhibit VI-16 of this preamble). Specific actions
by States related to positive samples are accounted for under the
actions required in response to those samples.
    d. Annual site visits. Under the RTCR, any PWS on an annual
monitoring schedule is required to also have an annual site visit
conducted by the State or State-designated third party. A voluntary
Level 2 site assessment can also satisfy the annual site visit
requirement. In many cases a sanitary survey performed during the same
year can also be used to satisfy this requirement. Although similar
site visits are not currently required under the 1989 TCR, discussions
with States during the TCRDSAC proceedings revealed that some do, in
fact, conduct such site visits for PWSs on annual monitoring schedules.
Because of the high cost for an annual site visit by a State, for this
analysis EPA assumed that no States choose to conduct annual site
visits unless they already do so under the 1989 TCR. Therefore, for
overall costing purposes, no net change in State or PWS costs are
assumed for annual monitoring site visits under the RTCR or Alternative
option (as shown in Exhibit VI-16 of this preamble).
    e. Assessments. States incur burden to review completed Level 1 and
Level 2 assessment forms required to be filed by PWSs under the RTCR
and Alternative option. Although specific forms are not required under
the 1989 TCR, EPA assumes that PWSs engage in some form of consultation
with the State when they have positive sample results and MCL
violations. For costing purposes, EPA assumes that the level of effort
required for such consultations under the 1989 TCR is the same as that
which would be required for consultations that occur when an assessment
is conducted under the RTCR and Alternative option. State costs for the
RTCR and Alternative option are based on the number of PWSs submitting
assessment reports. EPA estimated that State burden to review PWS
assessment forms ranges from one to eight hours depending on PWS size
and type and the level of the assessment. This burden includes any time
required to consult with the PWS about the assessment report.
    Although some States may choose to conduct assessments for their
PWSs, EPA does not quantify these costs. The costs are attributed to
PWSs that are responsible for ensuring that assessments are done.
    As explained in chapter 7 of the RTCR EA, EPA assumes a certain
level of assessment activity already occurs under the 1989 TCR based on
discussions with the technical workgroup supporting the advisory
committee. Under the RTCR, the overall number of Level 1 and Level 2
assessment triggers decreases compared to the 1989 TCR as a function of
reduced occurrence over time. This reduction in assessments under the
RTCR is estimated to translate directly to a small national cost
savings ($0.08M at either three or seven percent discount rate) for
States. The overall number of Level 1 and Level 2 assessments is higher
under the Alternative option as a result of the initial monthly
monitoring requirements for all PWSs. The increase in the number of
assessments under the Alternative option is estimated to translate
directly to a national cost increase ($0.05M at three percent discount
rate and $0.08M at seven percent discount rate) for States. The
annualized net present value total and net change cost estimates for
States to review completed Level 1 and Level 2 assessment forms under
the 1989 TCR, RTCR, and Alternative option are presented in Exhibit VI-
16 of this preamble.
    f. Corrective actions. For each corrective action performed under
the RTCR and Alternative option, States incur recordkeeping and
reporting burden to review assessment forms and coordinate with PWSs.
This includes burden incurred from any optional consultations States
may conduct with PWSs or outside parties to determine the appropriate
corrective action to be implemented. There are no State costs for
corrective action under the 1989 TCR because corrective action is not
required under the 1989 TCR. The number of corrective actions under the
RTCR is estimated to translate to a national net annualized cost
increase to States of $0.01M at either three or seven percent discount
rate. The number of corrective actions under the Alternative option is
estimated to translate to a national net annualized cost increase to
States of $0.02M at either three or seven percent discount rate. See
Exhibit VI-16 of this preamble.
    g. Public notification. Under the 1989 TCR, RTCR, and Alternative
option, States incur recordkeeping and reporting burden to provide
consultation, review the public notification certification, and file
the report of the violation. A significant reduction in costs is
estimated due to the elimination of Tier 2 public notification for non-
acute MCL violations under the RTCR and Alternative option. Because
State costs are calculated on a per-violation basis, State costs
decline. Under the

Alternative option, some of the decrease in cost is offset by
additional Tier 1 public notification from the increase in the number
of E. coli MCL violations detected. Burden hour estimate for State unit
PN costs are derived from the Draft Information Collection Request for
the Public Water System Supervision Program (USEPA 2008b). EPA
estimated a net decrease in national annualized cost estimates incurred
by States for public notification of $0.38M (three percent discount
rate) and $0.36M (seven percent discount rate) under the RTCR and a net
decrease of $0.36M (three percent discount rate) and $0.34M (seven
percent discount rate) under the Alternative option. The annualized net
present value total and net change cost estimates for States to track
public notifications under the 1989 TCR, RTCR, and Alternative option
are presented in Exhibit VI-16 of this preamble.
4. Nonquantifiable Costs
    EPA believes that all of the rule elements that are the major
drivers of the net change in costs from the 1989 TCR have been
quantified to the greatest degree possible. However, cost reductions
related to fewer monitoring and reporting violations are not
specifically accounted for in the cost analysis, and their exclusion
from consideration may result in an overestimate of the net increase in
cost between the 1989 TCR option and the RTCR or Alternative option.
    Furthermore, under the 1989 TCR, RTCR, and Alternative option, Tier
3 public notification for monitoring and reporting violations are
assumed to be reported once per year as part of the Consumer Confidence
Reports (CCRs). Because of the use of the CCR to communicate Tier 3
public notification on a yearly basis, no cost differential between the
current 1989 TCR and the RTCR and Alternative option is estimated in
the cost model. However, the advisory committee concluded that
significant reductions in monitoring and reporting violations may be
realized through the revised regulatory framework of the RTCR, which
includes new consequences for failing to comply with monitoring
provisions such as the requirement to conduct an assessment or
ineligibility for reduced monitoring. These possible reductions have
not been quantified. System resources used to process monitoring
violation notices for the CCR and respond to customer inquiries about
the notices, as well as State resources to remind systems to take
samples, may be reduced if significant reductions in monitoring and
reporting violations are realized. Exclusion of this potential cost
savings may lead to an underestimate of the PN cost savings under both
the RTCR and Alternative option.
    Additionally, as an underlying assumption to the costing
methodology, EPA assumed that all PWSs subject to the RTCR requirements
are already complying with the 1989 TCR. There may be some PWSs that
are not in full compliance with the 1989 TCR, and if so, additional
costs and benefits may be incurred. EPA does not anticipate non-
compliance when performing economic analyses for NPDWRs, therefore
those costs and benefits are not captured in this analysis.

G. Potential Impact of the RTCR on Households

    The household cost analysis considers the potential increase in a
household's annual water bill if a CWS passed the entire cost increase
resulting from the rule on to their customers. This analysis is a tool
to gauge potential impacts and should not be construed as a precise
estimate of potential changes to household water bills. State costs and
costs to TNCWSs and NTNCWSs are not included in this analysis since
their costs are not typically passed through directly to households.
Exhibit VI-22 presents the mean expected increases in annual household
costs for all CWSs, including those systems that do not have to take
corrective action. Exhibit VI-22 also presents the same information for
CWSs that must take corrective action. Household costs tend to decrease
as system size increases, due mainly to the economies of scale for the
corrective actions.
    Exhibit VI-22 presents net costs per household under the RTCR and
Alternative option for all rule components spread across all CWSs.
Comparison to the 1989 TCR shows a cost savings for some households.
The average annual water bill is expected to increase by six cents or
less on average per year.
    While the average increase in annual household water bills to
implement the RTCR is well less than a dollar, customers served by a
small CWS that have to take corrective actions as a result of the rule
incur slightly larger increases in their water bills. The subsequent
categories of the exhibit present net costs per household for three
different subsets of CWSs: (1) CWSs that perform assessments but no
corrective actions, (2) CWSs that perform corrective actions, and (3)
CWSs that do not perform assessments or corrective actions.
Approximately 67 percent of households are served by CWSs that perform
assessments but do not perform corrective actions over the 25-year
period of analysis (because no sanitary defects are found). These
households experience a slight cost savings on an annual basis, due to
a slight reduction in monitoring and public notification costs. The
nine percent of households belonging to CWSs that perform corrective
actions over the 25-year period of analysis experience an increase in
annual net household costs of less than $0.70 on average for CWSs
serving greater than 4,100 people to approximately $4.50 on average for
CWSs serving 4,100 or fewer people on an annual basis. EPA estimated
that 24 percent of households are served by CWSs that do not perform
assessments or corrective actions over the 25-year period of analysis
because they never exceed an assessment trigger. This group of
households served by small systems (4,100 or fewer people) experiences
a slight cost change on an annual basis, comparable to those performing
assessments but no corrective actions. Overall, the main driver of
additional household costs under the RTCR is corrective actions.

                      Exhibit VI-22--Summary of Net Annual Per-Household Costs for the RTCR
                                                     [2007$]
----------------------------------------------------------------------------------------------------------------
                                                         3% discount rate                7% discount rate
                                                 ---------------------------------------------------------------
                                                                    Alternative                     Alternative
            Population served by PWS               RTCR Net cost    option net     RTCR Net cost    option net
                                                   per household     cost per      per household     cost per
                                                                     household                       household
----------------------------------------------------------------------------------------------------------------
                                       All Community Water Systems (CWSs)
----------------------------------------------------------------------------------------------------------------
<= 4,100........................................            0.08            0.10            0.11            0.13

> 4,100.........................................            0.05            0.05            0.05            0.05
                                                 ---------------------------------------------------------------
    Total.......................................            0.06            0.06            0.05            0.05
----------------------------------------------------------------------------------------------------------------
        Community Water Systems (CWSs) performing Level 1/Level 2 Assessments (and no Corrective Actions)
----------------------------------------------------------------------------------------------------------------
<= 4,100........................................          (0.22)          (0.19)          (0.16)          (0.13)
> 4,100.........................................          (0.01)          (0.01)          (0.01)          (0.01)
                                                 ---------------------------------------------------------------
    Total.......................................          (0.02)          (0.02)          (0.01)          (0.01)
----------------------------------------------------------------------------------------------------------------
                          Community Water Systems (CWSs) performing Corrective Actions
----------------------------------------------------------------------------------------------------------------
<= 4,100........................................            4.47            4.51            3.93            3.98
> 4,100.........................................            0.66            0.66            0.55            0.55
                                                 ---------------------------------------------------------------
    Total.......................................            0.80            0.80            0.68            0.68
----------------------------------------------------------------------------------------------------------------
        Community Water Systems (CWSs) not performing Level 1/Level 2 Assessments, or Corrective Actions
----------------------------------------------------------------------------------------------------------------
<= 4,100........................................          (0.00)            0.02            0.04            0.06
> 4,100.........................................  ..............  ..............  ..............  ..............
                                                 ---------------------------------------------------------------
    Total.......................................          (0.00)            0.00            0.01            0.02
----------------------------------------------------------------------------------------------------------------
Source: RTCR EA (USEPA 2012a).

H. Incremental Costs and Benefits

    The RTCR regulatory options achieve increasing levels of benefits
at increasing levels of costs. The regulatory options for this rule, in
order of increasing costs and benefits (Option 1 lowest and Option 3
highest) are as follows:
     Option 1: 1989 TCR option
     Option 2: RTCR
     Option 3: Alternative option
    Incremental costs and benefits are those that are incurred or
realized to reduce potential illnesses and deaths from one alternative
to the next more stringent alternative. Estimates of incremental costs
and benefits are useful when considering the economic efficiency of
different regulatory alternatives considered by EPA. One goal of an
incremental analysis is to identify the regulatory alternatives where
net social benefits are maximized. However, incremental net benefits
analysis is not possible when benefits are discussed qualitatively and
are not monetized, as is the case with the RTCR.
    However, incremental analysis can still provide information on
relative cost-effectiveness of different regulatory options. For the
RTCR, only costs were monetized. While benefits were not quantified, an
indirect proxy for benefits was quantified. To compare the additional
net cost increases and associated incremental benefits of the RTCR and
the Alternative option, benefits are presented in terms of corrective
actions performed since performance of corrective actions is expected
to have the impact that is most directly translatable into potential
health benefits.
    Exhibit VI-23 shows the incremental cost of the RTCR over the 1989
TCR and the Alternative option over the RTCR for costs annualized using
three percent and seven percent discount rates. The non-monetized
corrective action endpoints are discounted in order to make them
comparable to monetized endpoints. The relationship between the
incremental costs and benefits is examined further with respect to cost
effectiveness in section VI.M of this preamble, Benefit Cost
Determination for the RTCR.

            Exhibit VI--23 Incremental Net Change in Annualized Costs ($Millions, 2007$) and Benefits
                                         [Number of Corrective Actions]
----------------------------------------------------------------------------------------------------------------
                                         Costs ($millions)               Benefits (L2 corrective actions)
        Regulatory option        -------------------------------------------------------------------------------
                                        3%              7%                  3%                      7%
----------------------------------------------------------------------------------------------------------------
1989 TCR........................           186.1           178.8  No change \3\.........  No change \3\
RTCR............................           200.4           193.0  208...................  202
Incremental RTCR \1\............            14.3            14.2  208...................  202
Alternative Option..............           215.7           210.5  336...................  355
Incremental Alternative Option              15.3            17.5  128...................  153
 \2\.
----------------------------------------------------------------------------------------------------------------
\1\ Represents the incremental net change of the RTCR over the 1989 TCR option.

\2\ Represents the incremental net change of the Alternative option over the RTCR. Add incremental net change
  for Alternative option to incremental net change for RTCR to calculate the total net change of the Alternative
  option over the 1989 TCR option.
Note: The RTCR occurrence model yields the number of corrective actions that are expected to be implemented in
  addition to (net of) those already implemented under the 1989 TCR. The model does not incorporate an estimate
  of the number of corrective actions implemented per year under the 1989 TCR and does not yield a total for the
  RTCR and Alternative option that includes the 1989 TCR corrective actions. Benefits shown include corrective
  actions based on L2 assessments. Detailed benefits and cost information is provided in Appendices A and C,
  respectively, of the RTCR EA (USEPA 2012a).
\3\ As explained in section VI.F.2.f of this preamble, Corrective actions, for modeling purposes, EPA estimates
  the net change only in the number of corrective actions performed under the RTCR and Alternative option
  compared to the 1989 TCR and thus did not quantify the (non-zero) baseline number of corrective actions
  performed under the 1989 TCR.

I. Benefits From Simultaneous Reduction of Co-occurring Contaminants

    As discussed in section VI.E of this preamble, Anticipated Benefits
of the RTCR, the potential benefits from the RTCR include avoidance of
a full range of health effects from the consumption of fecally
contaminated drinking water, including the following: acute and chronic
illness, endemic and epidemic disease, waterborne disease outbreaks,
and death.
    Systems may choose corrective actions that also reduce other
drinking water contaminants as a result of the fact that the corrective
action eliminates a pathway of potential contamination into the
distribution system. For example, eliminating a cross connection
reduces the potential for chemical contamination as well as microbial.
Due to a lack of contamination co-occurrence data that could relate to
the effect that treatment corrective action may have on contamination
entering through distribution system pathways, EPA has not quantified
such potential benefits.

J. Change in Risk From Other Contaminants

    All surface water systems are already required to disinfect under
the SWTR (USEPA 1989b, 54 FR 27486, June 29, 1989) but the RTCR could
impact currently undisinfected ground water systems. If a previously
undisinfected ground water system chooses disinfection as a corrective
action, the disinfectant can react with pipe scale causing increased
risk from some contaminants that may be entrained in the pipe scales
and other water quality problems. Examples of contaminants that could
be released include lead, copper, and arsenic. Disinfection could also
possibly lead to a temporary discoloration of the water as the scale is
loosened from the pipe. These risks can be addressed by gradually
phasing in disinfection to the system, by targeted flushing of
distribution system mains, and by maintaining an effective corrosion
control program.
    Introducing a disinfectant could also result in an increased risk
from disinfection byproducts (DBPs). Risk from DBPs has already been
addressed in the Stage 1 Disinfection Byproducts Rule (DBPR) (USEPA
1998a) and additional consideration of DBP risk has been addressed in
the final Stage 2 DBPR (USEPA 2006e). In general, ground water systems
are less likely to experience high levels of DBPs than surface water
systems because they have lower levels of naturally occurring organic
materials that contribute to DBP formation.
    EPA does not expect many previously undisinfected systems to add
disinfection as a result of either the RTCR or Alternative rule
options. Ground water systems that are not currently disinfecting may
eventually install disinfection if RTCR distribution system monitoring
and assessments, and/or subsequent source water monitoring required
under the GWR, result in the determination that source water treatment
is required.

K. Effects of Fecal Contamination and/or Waterborne Pathogens on the
General Population and Sensitive Subpopulations

    It is anticipated that the requirements of the RTCR will help
reduce pathways of entry for fecal contamination and/or waterborne
pathogens into the distribution system, thereby reducing risk to both
the general population as well as to sensitive subpopulations.
    As discussed previously in this preamble, fecal contamination may
contain waterborne pathogens including bacteria, viruses, and parasitic
protozoa. Waterborne pathogens can cause a variety of illnesses,
including acute gastrointestinal illness (AGI) with diarrhea, abdominal
discomfort, nausea, vomiting, and other symptoms. Most AGI cases are of
short duration and result in mild illness. Other more severe illnesses
caused by waterborne pathogens include hemolytic uremic syndrome (HUS)
(kidney failure), hepatitis, and bloody diarrhea (WHO 2004). Chronic
disease such as irritable bowel syndrome, reduced kidney function,
hypertension and reactive arthritis can result from infection by a
waterborne agent (Clark et al. 2008).
    Waterborne pathogens may subsequently infect other people through a
variety of other routes (WHO 2004). When humans are exposed to and
infected by an enteric pathogen, the pathogen becomes capable of
reproducing in the gastrointestinal tract. As a result, healthy humans
shed pathogens in their feces for a period ranging from days to weeks.
This shedding of pathogens often occurs in the absence of any signs of
clinical illness. Regardless of whether a pathogen causes clinical
illness in the person who sheds it in his or her feces, the pathogen
being shed may infect other people directly by person-to-person spread,
contact with contaminated surfaces, and other means, which are
collectively referred to as secondary spread.
    When sensitive subpopulations are exposed to fecal contamination
and/or waterborne pathogens, more severe illness (and sometimes death)
can occur. Examples of sensitive subpopulations are provided in chapter
2 of the RTCR EA. The potential health effects associated with
sensitive population groups--children, pregnant women, the elderly, and
the immunocompromised--are described in the following paragraphs.
1. Risk to Children, Pregnant Women, and the Elderly
    Children and the elderly are particularly vulnerable to kidney
failure (hemolytic uremic syndrome) caused by the pathogenic bacterium
E. coli O157:H7. Kidney failure in children and the elderly have
resulted from waterborne outbreaks due to exposure to E. coli O157:H7
from consuming ground water in Cabool, Missouri (Swerdlow et al. 1992);
Alpine, Wyoming (Olsen et al. 2002); Washington County, New York (NY
State DOH 2000); and Walkerton, Ontario, Canada (Health Canada 2000).
    The risk of acute illness and death due to viral contamination of
drinking water depends on several factors, including the age of the
exposed individual. Infants and young children have higher rates of
infection and disease from enteroviruses than other age groups (USEPA
1999). Several enteroviruses that can be transmitted through water can
have serious health consequences in children. Enteroviruses (which
include poliovirus, coxsackievirus, and echovirus) have been implicated
in cases of flaccid

paralysis, myocarditis, encephalitis, hemorrhagic conjunctivitis, and
diabetes mellitus (Dalldorf and Melnick 1965; Smith 1970; Berlin et al.
1993; Cherry 1995; Melnick 1996; CDC 1997; Modlin 1997). Women may be
at increased risk from enteric viruses during pregnancy (Gerba et al.
1996). Enterovirus infections in pregnant women can also be transmitted
to the unborn child late in pregnancy, sometimes resulting in severe
illness in the newborn (USEPA 2000b).
    Other waterborne viruses can also be particularly harmful to
children. Rotavirus disproportionately affects children less than five
years of age (Parashar et al. 1998). However, the pentavalent rotavirus
vaccine licensed for use in the United States has been shown to be 74
percent effective against rotavirus gastroenteritis of any severity
(Dennehy 2008). For echovirus, children are disproportionately at risk
of becoming ill once infected (Modlin 1986). According to CDC,
echovirus is not a vaccine-preventable disease (CDC 2007).
    The elderly are particularly at risk from diarrheal diseases (Glass
et al. 2000) such as those associated with waterborne pathogens. In the
US, approximately 53 percent of diarrheal deaths occur among those
older than 74 years of age, and 77 percent of diarrheal deaths occur
among those older than 64 years of age. In Cabool, Missouri (Swerdlow
et al. 1992), a waterborne E. coli O157:H7 outbreak in a ground water
system resulted in four deaths, all among the elderly. One death
occurred from HUS (kidney failure), the others from gastrointestinal
illness. Furthermore, hospitalizations due to diarrheal disease are
higher in the elderly than younger adults (Glass et al. 2000). Average
hospital stays for individuals older than 74 years of age due to
diarrheal illness are 7.4 days compared to 4.1 days for individuals
aged 20 to 49 (Glass et al. 2000).
    It is anticipated that the requirements of the RTCR will help
reduce pathways of entry for fecal contamination and/or waterborne
pathogens into the distribution system, thereby reducing risk to both
the general population as well as to sensitive subpopulations such as
children, pregnant women, and the elderly.
2. Risk to Immunocompromised Persons
    AGI symptoms may be more severe in immunocompromised persons
(Frisby et al. 1997; Carey et al. 2004). Such persons include those
with acquired immune deficiency syndrome (AIDS), cancer patients
undergoing chemotherapy, organ transplant recipients treated with drugs
that suppress the immune system, and patients with autoimmune disorders
such as lupus. In AIDS patients, Cryptosporidium, a waterborne
protozoa, has been found in the lungs, ear, stomach, bile duct, and
pancreas in addition to the small intestine (Farthing 2000).
Immunocompromised patients with severe persistent cryptosporidiosis may
die (Carey et al. 2004).
    For the immunocompromised, Gerba et al. (1996) reviewed the
literature and reported that enteric adenovirus and rotavirus are the
two waterborne viruses most commonly isolated in the stools of AIDS
patients. For patients undergoing bone-marrow transplants, several
studies cited by Gerba et al. (1996) reported mortality rates greater
than 50 percent among patients infected with enteric viruses.
    It is anticipated that the requirements of the RTCR will help
reduce pathways of entry for fecal contamination and/or waterborne
pathogens into the distribution system, thereby reducing risk to both
the general population as well as to sensitive subpopulations such as
the immunocompromised.

L. Uncertainties in the Benefit and Cost Estimates for the RTCR

    A computer simulation model was used to estimate costs and
indicators of benefits of the RTCR. Exhibit VI-24 shows that these
outputs depend on a number of key model inputs. This section describes
analyses that were conducted to understand how uncertainties in these
inputs contributed to uncertainty in model outputs.

[GRAPHIC] [TIFF OMITTED] TR13FE13.007

1. Inputs and Their Uncertainties
    It is anticipated that the requirements of the RTCR will help
reduce pathways of entry for fecal contamination and/or waterborne
pathogens into the distribution system, thereby reducing exposure and
illness from these contaminants in drinking water. These exposure and
illness reductions could not be modeled and estimated quantitatively,
due to a lack of a quantitative relationship between indicators and
pathogens. Section VI.E.3 of this preamble, Nonquantifiable benefits,
and chapter 6 of the RTCR EA discuss this issue qualitatively.
    Model outputs include two important indicators that are used to
qualitatively describe benefits: E. coli occurrence in routine total
coliform samples and the occurrence of Level 1 and 2 assessments. These
outputs were monitored as endpoints in the sensitivity analyses
described in this section.
    Quantified national cost estimates include costs of required
monitoring, assessments, corrective actions, and public notifications.
Total costs were monitored as end-points in the sensitivity analyses
described in this section.
    None of the inputs shown in Exhibit VI-24 is perfectly known, so
each has some degree of uncertainty. Some of these inputs are informed
directly by data, so their uncertainties are due to limitations of the
data. For example, uncertainty about the statistical model used to
characterize occurrence is due to the limited numbers of systems and
measurements per system in the Six-Year Review 2 dataset. Other inputs
are informed by professional judgment, so their uncertainties are
expressed in terms of reasonable upper and lower bounds that are,
themselves, based on expert judgment. For example, 10 percent of
assessments (representing the incremental increase over the 1989 TCR)
are expected to result in effective corrective actions, based on
professional judgment, with reasonable upper and lower bounds of 20
percent and 5 percent, respectively.
    Sensitivity analyses were conducted to assess the degree to which
uncertainties about selected inputs contribute to uncertainty in the
resulting cost estimates. The analyses focused on the inputs that are
listed in Exhibit VI-24. Varying the assumptions about the percentages
of corrective actions identified and the effectiveness of those actions
has a less than linear effect on outcomes, and the RTCR continues to be
less costly than the Alternative option under all scenarios modeled.
Exhibits 5.22a and 5.22b of the RTCR EA provide summaries of the
driving model parameters and indicate where in the RTCR EA the full
discussion of uncertainty on each parameter is contained.

    Not shown in Exhibit VI-24 are some inputs that are very well
known. These are inventory data, which include the list of all PWSs
affected by the RTCR and, for each system, information on its source
water type, disinfection practice, and population served. Although this
information is not perfect, any uncertainty is believed to have
negligible impact on model outputs. EPA did not conduct sensitivity
analyses to evaluate the importance of these small uncertainties.
2. Sensitivity Analysis
    Default values of the model inputs are considered reasonable best-
estimates. Model outputs that are obtained when the inputs are set to
these default values are also considered to be reasonable best-
estimates. EPA conducted sensitivity analyses to learn how much the
outputs might change when individual inputs are changed from their
default values. The approach taken was to change each input to some
reasonable upper and lower bounds, based on professional judgment.
    Many of the uncertainties are expected to impact the model output
in a similar fashion for the 1989 TCR, RTCR, and the Alternative
option. For example, an increase in a total coliform occurrence tends
to increase the total cost and benefit estimates for all of the rule
alternatives. Because the benefit and cost analyses focus on net
changes among the 1989 TCR, RTCR, and Alternative option, these common
sources of uncertainty may tend to cancel out in the net change
analyses. Other uncertainties were expected to have stronger influence
on net changes among the 1989 TCR, RTCR, and Alternative option because
of their unequal influence on the options. For example, assumptions
about the effectiveness of corrective actions influences total costs of
the RTCR and Alternative option, but not the 1989 TCR option.
    Results of the sensitivity analyses (reported in the RTCR EA)
showed that the fundamental conclusions of the economic analysis do not
change over a wide range of assumptions. Both the RTCR and Alternative
option provide benefits as compared to the 1989 TCR. Varying key
assumptions has a less than linear effect on outcomes, and the RTCR
continues to be less costly than the Alternative option under all
scenarios modeled. See section <IP_ADDRESS> of the RTCR EA for details.

M. Benefit Cost Determination for the RTCR

    Pursuant to SDWA section 1412(b)(6)(A), EPA has determined that the
benefits of the RTCR justify the costs. In making this determination,
EPA considered quantified and nonquantified benefits and costs as well
as the other components of the HRRCA outlined in section 1412(b)(3)(C)
of the SDWA.
    Additionally, EPA used several other techniques to compare benefits
and costs including a break-even analysis and a cost effectiveness
analysis. EPA developed a break-even analysis to inform the discussion
of whether the benefits justify the cost of the regulation. The break-
even analysis (see chapter 9 of the RTCR EA) was conducted using two
example pathogens responsible for some (unknown) proportion of
waterborne illnesses in the United States: shiga toxin-producing E.
coli O157:H7 \2\ (STEC O157:H7) and Salmonella. In the break-even
analysis, CDC and Economic Research Service (ERS) estimates were used
for STEC O157:H7 and Salmonella infections, respectively. Valuations of
medical cases were developed using the ERS Foodborne Illness
Calculator. Chapter 9 of the RTCR EA has a complete discussion of the
break even analysis and how costs per case were calculated.
---------------------------------------------------------------------------

    \2\ According to the Web site of the American Academy of Family
Physicians (http://www.aafp.org/afp/20000401/tips/11.html), ``Shiga
toxin-producing Escherichia coli is a group of bacteria strains
capable of causing significant human disease. The pathogen is
transmitted primarily by food and has become an important pathogen
in industrialized North America. The subgroup enterohemorrhagic E.
coli includes the relatively important serotype O157:H7, and more
than 100 other non-O157 strains.''
---------------------------------------------------------------------------

    Based on either example pathogen considered in the breakeven
analysis, a small number of fatal cases annually would need to be
avoided, relative to the CDC's estimate of cases caused by waterborne
pathogens, in order to break even with rule costs. For example, under
the RTCR, just two deaths would need to be avoided annually using a
three percent discount rate based on consideration of the bacterial
pathogen STEC O157:H7. Alternatively, approximately 3,000 or 8,000 non-
fatal cases, using the enhanced or traditional benefits valuations
approaches,\3\ respectively, would need to be avoided to break even
with rule costs. As expected based on its costs, the lower cost of the
RTCR relative to the Alternative option means that fewer cases need to
be avoided in order to break even. See Exhibit VI-25.
---------------------------------------------------------------------------

    \3\ Both traditional and enhanced cost of illness (COI)
approaches count the value of the direct medical costs and of time
lost that would been spent working for a wage, but differ in their
assessment of the value of time lost that would be spent in
nonmarket work (e.g., housework, yardwork, and raising children) and
leisure (e.g., recreation, family time, and sleep). They also differ
in their valuation of (other) disutility, which encompasses a range
of factors of well-being, including both inconvenience and any pain
and suffering. A complete discussion of the traditional and enhanced
COI approaches can be found in Appendix E of the RTCR EA (USEPA
2012a).
---------------------------------------------------------------------------

    As Exhibit VI-25 shows, approximately 2 deaths would need to be
avoided from a Salmonella infection for the rule to break even. The
estimated number of non-fatal Salmonella cases that would need to be
avoided to break even is approximately 10,000 or 68,000 cases under the
enhanced and traditional benefits valuations approaches, respectively.
Given the large number of potential waterborne pathogens shown to occur
in PWSs and the relatively low net costs of the RTCR, EPA believes, as
discussed in this section and in the RTCR EA, that the RTCR is likely
to at least break even. Chapter 9 of the RTCR EA has a complete
discussion of the break-even analysis and how costs per case were
calculated.

        Exhibit VI-25--Estimated Breakeven Threshold for Avoided Cases of E. coli O157:H7 and Salmonella
----------------------------------------------------------------------------------------------------------------
                                                               RTCR                     Alternative option
      Cost of illness (COI)        Discount rate ---------------------------------------------------------------
           methodology               (percent)       Non-fatal      Fatal cases      Non-fatal      Fatal cases
                                                    cases only       only \1\       cases only       only \1\
----------------------------------------------------------------------------------------------------------------
E. coli O157:H7
    Traditional COI.............               3           8,000             1.6          17,000             3.4
                                               7           8,000             1.6          18,000             3.6
    Enhanced COI................               3           3,000             1.6           6,000             3.4
                                               7           3,000             1.6           6,000             3.6
Salmonella

    Traditional COI.............               3          68,000             1.6         141,000             3.4
                                               7          68,000             1.6         151,000             3.6
    Enhanced COI................               3          10,000             1.6          21,000             3.4
                                               7          10,000             1.6          23,000             3.6
----------------------------------------------------------------------------------------------------------------
\1\ Calculations for fatal cases include the non-fatal COI component for the underlying illness prior to death.
Note: The number of cases needed to reach break-even threshold is calculated by dividing the net change in costs
  for the RTCR by the average estimated value of avoided cases.
E. coli O157:H7 and Salmonella are only two of multiple pathogenic endpoints that could have been used for this
  analysis. Use of additional pathogenic contaminants in addition to these single endpoints would result in
  lower threshold values.
Detail may not add due to independent rounding.
The breakeven threshold is higher using a 7% discount rate than a 3% discount rate under the Alternative option.
  This result is consistent with the costs of the Alternative option being higher using the 7% discount rate,
  which is caused by the frontloading of costs in the period of analysis, as explained further in Chapter 7 of
  the RTCR EA (USEPA 2012a).

    Cost-effectiveness is another way of examining the benefits and
costs of the rule. Exhibit VI-26 shows the cost of the rule per
corrective action implemented. The cost-effectiveness analysis, as with
the net benefits, is limited because EPA was able to only partially
quantify and monetize the benefits of the RTCR. As discussed previously
and demonstrated in the RTCR EA, the RTCR achieves the lowest cost per
corrective action avoided among the options considered. The incremental
cost-effectiveness analysis shows that the RTCR has a lower cost per
corrective action than the Alternative option.

    Exhibit VI-26--Total Net Annual Cost per Corrective Action Implemented Under RTCR and Alternative Option,
                        Annualized (Using Three Percent and Seven Percent Discount Rates)
                                               [$Millions, $2007]
----------------------------------------------------------------------------------------------------------------
                        Regulatory scenario                            3% discount rate       7% discount rate
----------------------------------------------------------------------------------------------------------------
RTCR--Net Change..................................................                 $14.3                  $14.2
RTCR--Incremental Number of Corrective Actions (L1 & L2)..........                 616                    594
RTCR--Cost Effectiveness Analysis.................................                  $0.02                  $0.02
Alternative Option--Net Change....................................                 $29.6                  $31.7
Alternative Option--Incremental Number of Corrective Actions (L1 &                 808                    819
 L2)..............................................................
Alternative Option--Cost Effectiveness Analysis...................                  $0.04                  $0.04
----------------------------------------------------------------------------------------------------------------
Note: Corrective actions include those conducted as a result of either Level 1 or Level 2 assessments. Total
  rule costs are shown in Exhibit 9.14 of the RTCR EA (USEPA 2012a). Detailed benefits and cost information is
  provided in Appendices A and C, respectively, of the RTCR EA (USEPA 2012a).

    The preferred option for the final rule is the RTCR. The analyses
performed as part of the RTCR EA (USEPA 2012a) support the collective
judgment and consensus of the advisory committee that the RTCR
requirements provide for effective and efficient revisions to the 1989
TCR regulatory requirements. The estimated net cost increase of the
RTCR is small ($14M annually) relative to the 1989 TCR and small
compared to the net cost increase of the Alternative option ($30M-$32M)
relative to the 1989 TCR. In addition, no backsliding in overall risk
is predicted.

N. Comments Received in Response to EPA's Requests for Comment

    In the proposal for the RTCR, EPA requested comment on the SAB's
concerns (selection of the RTCR option and measures for tracking long
term effectiveness of RTCR), on replacement and maintenance costs for
major distribution system appurtenances, on assumptions regarding State
use of annual monitoring and annual site visits, and on assumptions
regarding the results and effectiveness of Level 1 and Level 2
assessments. This section summarizes the comments EPA received on these
issues.
1. SAB's Concerns
    Most comments EPA received were in favor of the selection of the
RTCR option over the 1989 TCR and the Alternative option. Commenters
thought that the additional transition costs associated with the
Alternative option did not justify the relatively small increase in
benefits and noted that over the long term the benefits for both
options were extremely similar. Some commenters provided EPA with
specific input on what kind of data to collect in order to indicate the
long term effectiveness of the RTCR. However, most commenters instead
emphasized the need for SDWIS to be equipped to record the data, and
that necessary changes to SDWIS be made in time for the rule to take
effect. EPA remains committed to providing the necessary update to
SDWIS before the final rule goes into effect and will continue to work
with data users to identify system data collection needs and measures.
2. Costs of Major Distribution System Appurtenances
    Most comments supported EPA's decision not to include replacement
or maintenance costs of major distribution system appurtenances under
the RTCR. However, some commenters expressed concern that some systems,
in particular small systems, do not plan for capital expenditures, and
therefore these costs should be included. EPA continues to believe, as
informed by the TCRDSAC deliberations, that the assessment requirement
of the RTCR may help to identify when the useful life of an
appurtenance has occurred or

maintenance is required, but that these costs should be attributable to
regular maintenance and repair, not to the RTCR. Therefore, EPA has not
changed this assumption in the EA for the final rule.
3. Annual Monitoring and Annual Site Visits
    Comments on this subject were mixed. Most commenters thought that
the assumption that only states that currently allow annual monitoring
and conduct annual site visits would continue to do so under the RTCR
was a reasonable one. However, there were some commenters that pointed
out that some States that currently do not allow annual monitoring may
begin to allow it because of a lack of resources and because of the
desire to meet only the minimum aspects of the RTCR. Based on
stakeholder input and comments received, EPA continues to believe that
EPA's original assumption is valid, that only States that currently
allow annual monitoring and perform annual visits would continue to do
so.
4. Effectiveness of Assessments
    Several commenters agreed that EPA made a reasonable assumption
that 10 percent of assessments would lead to corrective action above
what is occurring under the 1989 TCR. For those that did not agree the
assumption was reasonable, the response was split between those that
thought the estimate was too high, and those that thought the estimate
was too low. Therefore, EPA has chosen to retain the estimate of 10
percent, which was originally derived with stakeholder input.
    Several commenters supported the assumptions regarding the
effectiveness of corrective actions. Many of these commenters stated
that it would be extremely difficult to determine if these assumptions
are accurate or not. Some commenters thought that these assumptions
were too optimistic and that little or no benefit would be realized by
the use of the assessments and corrective action. In the absence of
strong consensus for changing these assumptions, EPA has elected to
keep the assumptions in place.

O. Other Comments Received by EPA

    In addition to comments received as a result of requests for
comment, EPA also received comments on various technical aspects of the
EA. Those comments included concerns with the analysis in the following
areas: EPA's inability to quantify health benefits, small PWS's
possible inability to return to reduced monitoring after being
triggered into monthly monitoring, the shift of State resources from
public health related activities to tracking and compliance under the
RTCR, and estimates about the State burden.
1. Quantifying Health Benefits
    Some commenters expressed concern that EPA is not quantifying
benefits. Instead of quantifying the benefits, the RTCR EA examines the
benefits in terms of trade-offs between compliance with the 1989 TCR
and the other options considered (RTCR and Alternative option). As
allowed under and consistent with the HRRCA requirements outlined in
section 1412 (b)(3)(C) of the SDWA, EPA used several methods to
qualitatively evaluate the benefits of the RTCR and Alternative option.
The qualitative evaluation uses both the judgment of EPA as informed by
the TCRDSAC deliberations as well as quantitative estimates of changes
in total coliform occurrence and counts of systems implementing
corrective actions. EPA acknowledges that the predicted benefits of
changes in total coliform occurrence and numbers of corrective actions
implemented are a function of model assumptions, and EPA recognizes
that there is some uncertainty with the assumptions. However,
sensitivity analyses showed that the fundamental conclusions of the EA
do not change over a wide range of assumptions tested, and that the
RTCR provides benefits over the 1989 TCR.
    EPA notes that the supporting analyses that formed the foundation
of the RTCR EA were reviewed by the SAB. SAB noted in their report that
``in general, the Committee was impressed by the work the Agency
undertook. The Agency obviously did a great deal of work and put a
significant amount of thought into making use of the limited amount of
data.'' SAB also acknowledged that ``the EA represents the best
possible analysis given the paucity of available data'' (SAB 2010).
2. Return to Reduced Monitoring
    Some commenters stated that PWSs, in particular NCWSs, will never
again qualify for quarterly or annual monitoring under the RTCR once
they are triggered into increased monthly monitoring. EPA disagrees
with this statement. Under the RTCR, NCWSs that are triggered into
monthly monitoring could possibly meet the criteria to once again
qualify for (routine) quarterly or (reduced) annual monitoring in as
little as one year. Some commenters stated that EPA has underestimated
the numbers of systems that will be triggered into monthly monitoring
based on existing noncompliance rates, with particular emphasis on
systems with monitoring violations.
    Consistent with past EPA EA analyses, the occurrence model and cost
estimates in the EA do not include estimates for non-compliance with
EPA regulatory requirements such as monitoring. In addition, EPA
disagrees with many commenters' assumptions that monitoring violation
rates will remain the same under the RTCR. EPA believes that the rates
of monitoring violations will decrease because of strengthened
incentives for systems to monitor and the enhanced consequences of
noncompliance. A PWS on quarterly or annual monitoring has a greater
incentive under the RTCR to do its monitoring because if it doesn't, it
will be triggered into increased monitoring. The 1989 TCR did not
include such a requirement. Under the RTCR, if a PWS does not complete
its repeat samples, it will be triggered to conduct an assessment. With
greater consequences for not completing required sampling, systems will
be more likely to complete their monitoring. Thus, EPA believes that
rates of monitoring and reporting violations will be lower under the
RTCR than they are under the 1989 TCR.
    Many commenters had concerns with monitoring violation rates
specifically for those systems that are on annual monitoring. EPA
believes that the monitoring violation rates for these systems will not
be as high as predicted by commenters since one of the requirements to
remain on annual monitoring is an annual site visit by the State or a
Level 2 assessment. If, at the time of the site visit or the Level 2
assessment, that year's annual samples have not been taken, the State
or assessor will have the opportunity to remind the system to take the
required samples, assist the system in taking the sample at that time,
or include taking the sample as part of the site visit or assessment.
    All triggers to increased monitoring in the RTCR are consistent
with EPA's position, as informed by TCRDSAC discussions, that annual
monitoring is a privilege for only the most well run systems. Systems
that are not able to meet annual monitoring requirements would not be
considered among the most well run, and therefore would be triggered
into more frequent monitoring.
3. Shift of State Resources
    Some commenters assert that States will be overwhelmed by the
burden of tracking and enforcement activities of RTCR because all small
PWSs, especially NCWSs, will be triggered into monthly monitoring under
the RTCR

and that this will result in a significant increase in violations and
tracking and enforcement activities.
    In order to address these concerns, EPA made a change from the
proposal to this final rule by changing the result of a monitoring
violation trigger for systems on annual monitoring. Instead of a
monitoring violation triggering a system directly into monthly
monitoring, a monitoring violation will now trigger the system in
violation to quarterly monitoring. All other triggers (i.e., E. coli
MCL violation, a Level 2 assessment, a coliform treatment technique
violation) continue to move the system to monthly monitoring. This was
done to address concerns that too many systems would end up on monthly
monitoring and it would be too burdensome for both systems and States.
This change did not affect any cost numbers in the EA since the EA does
not model non-compliance. See sections III.C.1.b.iv, Increased
monitoring, and III.C.2.b, Ground water NCWSs serving <= 1,000 people,
of this preamble for a more detailed explanation of this change.
    EPA disagrees with any characterization of tracking and enforcement
activities as unrelated to public health protection. Tracking and
enforcement helps to ensure that systems take their samples, find
contamination when it is present, and assess the system and make any
necessary corrections improving public health protection. Thus,
tracking and enforcement serves an integral role in the protection of
public health that RTCR provides.
4. State Burden
    a. Monitoring and Level 2 assessments. Some commenters expressed
concern that States would ultimately bear the costs of conducting
monitoring and Level 2 assessments of PWSs. Other commenters indicated
that some States already cover the costs of monitoring and assessment-
type activities under the 1989 TCR but would no longer be able to do so
under the RTCR because the rule would require them to shift their
resources to enforcement activities. EPA notes that while States do
have the right to choose to cover the costs of conducting monitoring
and assessments, the PWSs themselves are ultimately responsible for
completing these activities. Neither the 1989 TCR nor the RTCR requires
States to conduct monitoring for PWSs. The RTCR allows Level 2
assessments to be conducted by parties approved by the State, including
the PWS where appropriate. EPA believes that there are many third
parties that can reliably conduct Level 2 assessments, including
certified operators, professional engineers, circuit riders and others.
This flexibility should allow the State to assure thorough assessments
without requiring the State to use its own resources to conduct them.
    b. Underestimation. Some commenters said that EPA underestimated
the cost for systems and States to read and understand the rule. Others
assert that EPA underestimated the cost for annual administration. In
calculating the estimates for systems and States to read and understand
the rule, EPA looked to estimates prepared for other recent
rulemakings, including the Aircraft Drinking Water Rule (USEPA 2009, 74
FR 53590, October 19, 2009) and the Lead and Copper Rule Short-Term
Revisions (USEPA 2007, 72 FR 57782, October 10, 2007). EPA then
considered the rule requirements in comparison to the 1989 TCR, given
that systems and States are well acquainted with the 1989 rule. The 4-
hour figure is a national average, and may vary due to individual
system complexity. EPA continues to believe that the estimated number
of hours to read and understand the RTCR is logical.

VII. Statutory and Executive Order Review

A. Executive Order 12866: Regulatory Planning and Review and Executive
Order 13563: Improving Regulation and Regulatory Review

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), this
action is a significant regulatory action. Accordingly, EPA submitted
this action to the Office of Management and Budget (OMB) for review
under Executive Orders 12866 and 13563 (76 FR 3821, January 21, 2011)
and any changes made in response to OMB recommendations have been
documented in the docket for this action.
    EPA estimates that the RTCR will have an overall annual impact on
PWSs of $14 M and that the impact on small entities (PWSs serving
10,000 people or fewer) will be $10.0M-$10.3M annualized at three and
seven percent discount rates, respectively. These impacts are described
in sections VI, Economic Analysis (Health Risk Reduction and Cost
Analysis), and VII.C, Regulatory Flexibility Act (RFA), of this
preamble, respectively, and in the analysis that EPA prepared of the
potential costs and benefits of this action, contained in the RTCR EA.

B. Paperwork Reduction Act

    The information collection requirements in this rule will be
submitted for approval to the OMB under the Paperwork Reduction Act, 44
U.S.C. 3501 et seq. The information collection requirements are not
enforceable until OMB approves them.
    The information collected as a result of this rule will allow
States/primacy agencies and EPA to determine appropriate requirements
for specific systems and evaluate compliance with the proposed RTCR.
Burden is defined at 5 CFR 1320.3(b) and means the total time, effort,
and financial resources required to generate, maintain, retain,
disclose, or provide information to or for a Federal agency. The burden
for this final rule includes the time needed to conduct the following
State and PWS activities:
    State activities:
     Read and understand the rule;
     Mobilize (including primacy application), plan, and
implement;
     Train PWS and consultant staff;
     Track compliance;
     Analyze and review PWS data;
     Review sample siting plans and recommend any revisions to
PWSs;
     Make determinations concerning PWS monitoring
requirements;
     Respond to PWSs that have positive samples;
     Recordkeeping;
     Review completed assessment forms and consult with the PWS
about the assessment report;
     Review and coordinate with PWSs to determine optimal
corrective actions to be implemented; and
     Provide consultation, review PN certifications, and file
reports of violations.
    PWS activities:
     Read and understand the rule;
     Planning and mobilization activities;
     Revise existing sample siting plans to identify sampling
locations and collection schedules that are representative of water
throughout the distribution system;
     Conduct routine, additional routine, and repeat
monitoring, and report the results as required;
     Complete a Level 1 assessment if the PWS experiences a
Level 1 trigger, and submit a form to the State to identify sanitary
defects detected, corrective actions completed, and a timetable for any
corrective actions not already completed;
     Complete a Level 2 assessment if the PWS experiences a
Level 2 trigger, and submit a form to the State to identify sanitary
defects detected, corrective actions completed, and a timetable for any
corrective actions not already completed;
     Correct sanitary defects found through the performance of
Level 1 or

Level 2 assessments and report on completion of corrective actions as
required;
     Develop and distribute Tier 1 public notices when E. coli
MCL violations occur;
     Develop and distribute Tier 2 public notices when the PWSs
fail to take corrective action; and
     Develop and distribute Tier 3 public notices when the PWSs
fail to comply with the monitoring requirements or with mandatory
reporting of required information within the specified timeframe.
    For the first three years after publication of the RTCR in the FR,
the major information requirements apply to 154,894 respondents. The
total incremental burden associated with the change in moving from the
information requirements of the 1989 TCR to those in the RTCR over the
three years covered by the ICR is 2,518,578 hours, for an average of
839,526 hours per year. The total incremental cost over the three-year
clearance period is $71.3M, for an average of $23.8M per year (simple
average over three years). (Note that this is higher than the
annualized costs for the RTCR because in the EA, the up-front costs
that occur in the first three years, as well as future costs, are
annualized over a 25-year time horizon.) The average burden per
response (i.e., the amount of time needed for each activity that
requires a collection of information) is 5.4 hours; the average cost
per response is $153. The collection requirements are mandatory under
SDWA section 1445(a)(1). Detail on the calculation of the RTCR's
information collection burden and costs can be found in the ICR for the
Revised Total Coliform Rule (USEPA 2012c) and chapter 8 of the EA
(USEPA 2012a). A summary of the burden and costs of the collection is
presented in Exhibit VII-1.

                                       Exhibit VII-1--Average Annual Net Change Burden and Costs for the RTCR ICR
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Cost
                                                                         ----------------------------------------------------------------
                                                           Annual burden                      Annual                                          Annual
                     Respondent type                           hours       Annual labor     operation &   Annual capital   Total annual      responses
                                                                               cost         maintenance        cost            cost
                                                                                (O&M) cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
PWSs....................................................         747,848     $20,171,639  ..............  ..............     $20,171,639         103,225
States and Territories..................................          91,678       3,595,421  ..............  ..............       3,595,421          51,669
                                                         -----------------------------------------------------------------------------------------------
    Total...............................................         839,526      23,767,060  ..............  ..............      23,767,060         154,894
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: Detail may not add exactly to total due to independent rounding.
``Annual Burden Hours'' reflects an annual average for all system sizes over the 3-year ICR period.
Source: ICR for the Revised Total Coliform Rule (USEPA 2012c).

    An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless it displays a
currently valid OMB control number. The OMB control numbers for EPA's
regulations in 40 CFR are listed in 40 CFR part 9. When this ICR is
approved by OMB, the Agency will publish a technical amendment to 40
CFR part 9 in the FR to display the OMB control number for the approved
information collection requirements contained in this final rule.

C. Regulatory Flexibility Act (RFA)

    The Regulatory Flexibility Act (RFA) generally requires an agency
to prepare a regulatory flexibility analysis of any rule subject to
notice and comment rulemaking requirements under the Administrative
Procedure Act or any other statute unless the agency certifies that the
rule will not have a significant economic impact on a substantial
number of small entities. Small entities include small businesses,
small organizations, and small governmental jurisdictions.
    The RFA provides default definitions for each type of small entity.
Small entities are defined as: (1) A small business as defined by the
Small Business Administration's (SBA) regulations at 13 CFR 121.201;
(2) a small governmental jurisdiction that is a government of a city,
county, town, school district or special district with a population of
less than 50,000; and (3) a small organization that is any ``not-for-
profit enterprise which is independently owned and operated and is not
dominant in its field.'' However, the RFA also authorizes an agency to
use alternative definitions for each category of small entity, ``which
are appropriate to the activities of the agency'' after proposing the
alternative definition(s) in the FR and taking comment. 5 USC 601(3)-
(5). In addition, to establish an alternative small business
definition, agencies must consult with SBA's Chief Counsel for
Advocacy.
    For purposes of assessing the impacts of the RTCR on small
entities, EPA considered small entities to be PWSs serving 10,000 or
fewer people. This is the cut-off level specified by Congress in the
1996 Amendments to the SDWA for small system flexibility provisions. As
required by the RFA, EPA proposed using this alternative definition in
the FR (63 FR 7620, February 13, 1998), requested public comment,
consulted with the SBA, and finalized the alternative definition in the
Agency's CCR regulation (63 FR 44524, August 19, 1998). As stated in
that Final Rule, the alternative definition would be applied for all
future drinking water regulations.
    After considering the economic impacts of the RTCR on small
entities, I certify that this action will not have a significant
economic impact on a substantial number of small entities. The small
entities directly regulated by this rule are small PWSs serving 10,000
or fewer people. These include small CWSs, NTNCWSs, and TNCWSs,
entities such as municipal water systems (publicly and privately
owned), and privately-owned PWSs and for-profit businesses where
provision of water may be ancillary, such as mobile home parks, day
care centers, churches, schools and homeowner associations. We have
determined that only 61 of 150,672 small systems (0.04%) will
experience an impact of more than 1% of revenues, and that none of the
small systems will experience an impact of 3% or greater of revenue.
This information is described further in chapter 8 of the RTCR EA.
    Although this final rule will not have a significant economic
impact on a substantial number of small entities, EPA nonetheless has
tried to reduce the impact of this rule on small PWSs. Provisions in
the RTCR that result in

reduced costs for many small entities include:
     Reduced routine monitoring for qualifying PWSs serving
1,000 or fewer people.
     Reduced number of repeat samples required for systems
serving 1,000 or fewer people.
     Reduced additional routine monitoring for PWSs serving
4,100 or fewer people.
     Reduced PN requirements for all systems, including small
systems.
    EPA also conducted outreach to small entities and convened a Small
Business Advocacy Review Panel to obtain advice and recommendations of
representatives of the small entities that potentially would be subject
to this rule's requirements. For a description of the Small Business
Advocacy Review Panel and stakeholder recommendations, please see
section VII.C of the preamble to the proposed RTCR, Regulatory
Flexibility Act (RFA).

D. Unfunded Mandates Reform Act (UMRA)

    This rule does not contain a Federal mandate under the provisions
of Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2
U.S.C. 1531-1538 that may result in expenditures to State, local, and
Tribal governments, in the aggregate, or to the private sector, of
$100M or more in any one year. Expenditures associated with compliance,
defined as the incremental costs beyond the 1989 TCR, will not surpass
$100M in the aggregate in any year. Thus, this rule is not subject to
the requirements of sections 202 and 205 of UMRA.
    The RTCR is also not subject to the requirements of section 203 of
UMRA because it contains no regulatory requirements that might
significantly or uniquely affect small governments. Costs to small
entities are generally not significant, as described previously in
section VII.C of this preamble, Regulatory Flexibility Act (RFA), and
are detailed in the RTCR EA. The regulatory requirements of the final
RTCR are not unique to small governments, as they apply to all PWSs
regardless of size.

E. Executive Order 13132: Federalism

    This action does not have Federalism implications. It will not have
substantial direct effects on the States, on the relationship between
the national government and the States, or on the distribution of power
and responsibilities among the various levels of government as
specified in Executive Order 13132. The net change in cost for State,
local, and Tribal governments in the aggregate is estimated to be
approximately $0.2M and $0.4M at three percent and seven percent
discount rates, respectively. Thus, Executive Order 13132 does not
apply to this final rule.
    Although section 6 of Executive Order 13132 does not apply to the
RTCR, EPA conducted a Federalism Consultation, consistent with
Executive Order 13132, in July 2008. The consultation included a
stakeholder meeting where EPA requested comments on the impacts of the
potential revisions to the 1989 TCR with respect to State, county and
local governments. EPA did not receive any comments in response to this
consultation. In addition, the advisory committee included
representatives of State, local and Tribal governments, and through
this process EPA consulted with State, local, and Tribal government
representatives to ensure that their views were considered when the AIP
recommendations for the proposed RTCR were developed. EPA also included
representatives from four states on its workgroup for developing the
proposed RTCR.
    In the spirit of Executive Order 13132 and consistent with EPA
policy to promote communications between EPA and State and local
governments, EPA specifically solicited comment on the proposed action
from State and local officials. Some States were concerned with the
burden of implementing the rule, especially those States that have a
high proportion of NCWSs. Under this rule, expenditures for assessments
and corrective actions and increased monitoring are targeted to the
fraction of PWSs that are most vulnerable to pathways for contamination
of the distribution system, thereby minimizing the burden for the
majority of PWSs and for States implementing the rule. As described in
sections III.E.2, Assessment, and III.C.1.b.iv, Increased monitoring,
of this preamble, EPA is also providing flexibility on how the PWSs and
States conduct and track assessments, and by changing the consequence
for systems on annual monitoring that have RTCR monitoring violations
(i.e., increase to quarterly monitoring instead of monthly monitoring).
EPA also has plans to update SDWIS to maximize its efficiency in
support of rule implementation. These actions should address many of
the State concerns about burden.

F. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments

    This action does not have tribal implications, as specified in
Executive Order 13175 (65 FR 67249, November 9, 2000). EPA consulted
with Tribes throughout the development of the RTCR (as described in
this section) and no issues that were particular to Tribal entities
were identified.
    Although Executive Order 13175 does not apply to this action, EPA
consulted with Tribal officials in developing this action. EPA
consulted with Tribal governments through the EPA American Indian
Environmental Office; included a representative of the Native American
Water Association on the advisory committee who helped develop and
signed the AIP on recommendations on the proposed rule; and addressed
Tribal concerns throughout the regulatory development process, as
appropriate. The consultation included participation in three Tribal
conference calls (EPA regional Tribal call (February 2008), National
Indian Workgroup call (March 2008), and National Tribal Water
Conference (March 2008)). EPA requested comments on the 1989 TCR,
requested suggestions for 1989 TCR revisions (March 2008), and
presented possible revisions to the 1989 TCR to the National Tribal
Council (April 2008). In addition, the advisory committee included a
representative from the Native American Water Association who
represented Tribal entities, and through this process EPA ensured that
Tribal views were considered when the AIP recommendations for the
proposed RTCR were developed. None of these consultations identified
issues that were particular to Tribal entities. EPA also specifically
solicited additional comment on the proposed rule from Tribal
officials, and no additional issues were identified. As a result of the
Tribal consultations and other Tribal outreach, EPA has determined that
the RTCR is not anticipated to have a negative impact on Tribal
systems. Thus, Executive Order 13175 does not apply to this action.

G. Executive Order 13045: Protection of Children From Environmental
Health Risks and Safety Risks

    The RTCR is not subject to Executive Order 13045 (62 FR 19885,
April 23, 1997) because it is not economically significant as defined
in Executive Order 12866, and because the Agency does not believe the
environmental health or safety risks addressed by this action present a
disproportionate risk to children. This action's health and risk
assessments regarding children are contained in section VI.K.1 of this
preamble, Risk to children, pregnant women, and the elderly, and in the
RTCR EA. EPA expects that the RTCR would provide additional protection
to

both children and adults who consume drinking water supplied from PWSs.
EPA also believes the benefits of this rule, including reduced health
risk, accrue more to children because young children are more
susceptible than adults to some waterborne illnesses. For example, the
risk of mortality resulting from diarrhea is often greatest in the very
young and elderly (Rose 1997; Gerba et al. 1996), and viral and
bacterial illnesses often disproportionately affect children. Any
overall benefits of the rule would reduce this mortality risk for
children.

H. Executive Order 13211: Actions That Significantly Affect Energy
Supply, Distribution, or Use

    This rule is not a ``significant energy action'' as defined in
Executive Order 13211 (66 FR 28355, May 22, 2001), because it is not
likely to have a significant adverse effect on the supply,
distribution, or use of energy. Additionally, none of the requirements
of this rule involve the installation of treatment or other components
that use a measurable amount of energy.

I. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (NTTAA), Public Law 104-113, 12(d) (15 U.S.C. 272 note),
directs EPA to use voluntary consensus standards in its regulatory
activities unless to do so would be inconsistent with applicable law or
otherwise impractical. Voluntary consensus standards are technical
standards (e.g., materials specifications, test methods, sampling
procedures, and business practices) that are developed or adopted by
voluntary consensus standards bodies. NTTAA directs EPA to provide
Congress, through OMB, explanations when EPA decides not to use
available and applicable voluntary consensus standards.
    This rule involves technical voluntary consensus standards. As in
the 1989 TCR, under the provisions of the RTCR water systems are
required to use several analytical methods to monitor for total
coliforms and/or E. coli as they are described in Standard Methods for
the Examination of Water and Wastewater, 20th and 21st editions
(Clesceri et al. 1998; Eaton et al. 2005). Methods included in Standard
Methods are voluntary consensus standards. The 1989 TCR and RTCR
include the same 11 methods that can be used to test for total
coliforms. Four of the 11 are voluntary consensus methods described in
Standard Methods.

J. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Populations

    Executive Order 12898 (59 FR 7629, February 16, 1994) establishes
federal executive policy on environmental justice. Its main provision
directs federal agencies, to the greatest extent practicable and
permitted by law, to make environmental justice part of their mission.
Agencies must do this by identifying and addressing, as appropriate,
any disproportionately high and adverse human health or environmental
effects of their programs, policies, and activities on minority
populations and low-income populations in the U.S.
    EPA has determined that this action will not have
disproportionately high and adverse human health or environmental
effects on minority or low-income populations because it increases the
level of environmental protection for all affected populations without
having any disproportionately high and adverse human health or
environmental effects on any population, including any minority or low-
income population. The RTCR applies uniformly to all PWSs and
consequently provides health protection equally to all income and
minority groups served by PWSs. The RTCR and other drinking water
regulations are expected to have a positive effect on human health
regardless of the social or economic status of a specific population.
To the extent that contaminants in drinking water might be
disproportionately high among minority or low-income populations (which
is unknown), the RTCR contributes toward removing those differences by
assuring that all public water systems meet drinking water standards
and take appropriate corrective action whenever appropriate. Thus, the
RTCR meets the intent of the Federal policy requiring incorporation of
environmental justice into Federal agency missions.

K. Consultations With the Science Advisory Board, National Drinking
Water Advisory Council, and the Secretary of Health and Human Services

    In accordance with section 1412(d) and (e) of the SDWA, EPA
consulted with the SAB, the NDWAC, and the Secretary of the US
Department of Health and Human Services on the RTCR.
    EPA met with the Drinking Water Committee (DWC) of the SAB to
discuss the proposed RTCR on May 20, 2009 (teleconference) and June 9
and 10, 2009 (Washington, DC). The SAB DWC review focused on (1) the
data sources used to estimate baseline total coliform and E. coli
occurrence, public water system profile, and sensitive subpopulations
in the US; (2) the occurrence analysis used to inform the benefits
analysis; (3) the qualitative analysis used to assess the reduction in
risk due to implementation of the rule requirements; and (4) analysis
of the engineering costs and costs to States resulting from
implementation of the revisions.
    Overall, the SAB DWC supported EPA's analysis. SAB members
commended EPA for making use of the best available data to assess the
impacts of the proposed rule. The SAB DWC supported the decision by EPA
not to quantify public health benefits, acknowledging that EPA had
insufficient data to do so. However, they noted in their analysis of
the EA that they are not generally supportive of decreased monitoring,
and that overall, the Alternative option appears to address and protect
public health sooner in time than the AIP proposed implementation. The
SAB DWC recommended that EPA clarify rationales for assumptions; expand
explanations of sensitivity analyses that were included; provide
further justification in those areas in which sensitivity analyses were
not conducted; and collect data after promulgation of the rule to allow
EPA to better understand the public health impacts of the RTCR.
    In response to the SAB DWC recommendations, EPA conducted
sensitivity analyses to explore a wider range of assumptions regarding
the percentage of assessments leading to corrective actions and to
demonstrate that using an annual average for occurrence provided
results comparable to varying the occurrence based on the season. EPA
also added an exhibit in the EA that summarizes all significant model
parameters and assumptions, their influence on variability and
uncertainty, and their most likely effect on benefits or costs. The
added exhibits and expanded and clarified text can be found in the RTCR
EA. A copy of the SAB report (SAB 2010) is available in the docket for
this rule.
    EPA consulted with NDWAC on May 28, 2009, in Seattle, Washington,
to discuss the proposed RTCR. NDWAC members expressed concern that a
rule based on the AIP sounds complicated and recommended that EPA
provide the utilities and States with tools to help them understand the
revised rule provisions and to assist with providing public education.
In response to

NDWAC's concern, EPA requested comment on whether the proposed RTCR
would result in requirements that would be easier to implement compared
to the 1989 TCR.
    EPA heard from commenters that the RTCR will be difficult to
implement in States that have a lot of small NCWSs, especially the
reduced and increased monitoring provisions. To address this concern,
EPA provided flexibility to States to help them implement, and to PWSs
to help them comply, with the monitoring provisions of the RTCR. States
are given the flexibility to not count monitoring violations towards
eligibility for a TNCWS to remain on quarterly monitoring or to return
to quarterly monitoring as long as the system collects the make-up
sample by the end of the next monitoring period. EPA also changed the
consequence of having one RTCR monitoring violation for systems on
annual monitoring. Instead of having to go to monthly monitoring, the
system now moves to quarterly monitoring. See section III.C.2.b of this
preamble, Ground water NCWSs serving <= 1,000 people, for more details.
    NDWAC members also suggested that EPA request comment on the costs
and benefits of reduced monitoring. Specifically, NDWAC expressed
concern that a reduction in the number of certain samples taken (such
as the reduction in the number of repeat and additional routine samples
for some small systems) could lessen the opportunity for systems to
identify violations. Thus, EPA requested comment on the cost and
benefit of reduced monitoring.
    EPA received comment that expressed concern that a reduction in the
number of additional routine samples reduces the likelihood of
detecting both total coliforms and E. coli. EPA and the advisory
committee recognized that a reduction in the number of samples taken
could also mean a reduction in the number of positive samples found.
However, EPA and the advisory committee concluded that the new
assessment and corrective action provisions of the RTCR lead to a rule
that is more protective of public health and to improvement in water
quality despite the reductions in the number of samples taken. See
section III.C.2.b of this preamble, Ground water NCWSs serving <= 1,000
people, for more details.
    A few NDWAC members stated that they would like to provide EPA with
additional advice on PN. To follow up on this request, EPA met with
several NDWAC members on July 1, 2009, to review and discuss the 1989
TCR PN requirements, the advisory committee's recommendations on
revisions to the PN requirements, and to obtain feedback from NDWAC
members. EPA considered the recommendations from NDWAC in developing
the PN requirements and requested comment on these issues in the
preamble to the proposed RTCR.
    EPA consulted with NDWAC again on July 21, 2011, to discuss the
draft final rule and comments received on the proposed RTCR,
specifically regarding those areas where NDWAC made recommendations in
the March and July 2009 consultations. The NDWAC members recommended
that in finalizing the RTCR, EPA follow the recommendations of the
TCRDSAC.
    EPA completed its consultations with the US Department of Health
and Human Services on October 5, 2009, and August 8, 2011, as required
by SDWA section 1412(d). EPA provided an informational briefing to the
Center for Food Safety office of the Food and Drug Administration and
representatives from the Office of the Assistant Secretary for Health
and the Assistant Secretary for Planning and Evaluation at the
Department of Health and Human Services. No substantive comments were
received as a result of the briefing and consultation.

L. Considerations of Impacts on Sensitive Subpopulations as Required by
Section 1412(b)(3)(C)(i)(V) of the 1996 Amendments of SDWA

    As required by Section 1412(b)(3)(C)(i)(V) of the SDWA, EPA sought
public comment regarding the effects of contamination associated with
the proposed RTCR on the general population and sensitive
subpopulations. Sensitive subpopulations include ``infants, children,
pregnant women, the elderly, individuals with a history of serious
illness, or other subpopulations that are identified as likely to be at
greater risk of adverse health effects due to exposure to contaminants
in drinking water than the general population'' (SDWA section
1412(b)(3)(C)(i)(V), 42 U.S.C. 300g-1(b)(3)(C)(i)(V)).
    Pregnant and lactating women may be at an increased risk from
pathogens as well as act as a source of infection for newborns.
Infection during pregnancy may also result in the transmission of
infection from the mother to the child in utero, during birth, or
shortly thereafter. Since very young children do not have fully
developed immune systems, they are at increased risk and are
particularly difficult to treat.
    Infectious diseases are also a major problem for the elderly
because immune function declines with age. As a result, outbreaks of
waterborne diseases can be devastating on the elderly community (e.g.,
nursing homes) and may increase the possibility of significantly higher
mortality rates in the elderly than in the general population.
    Immunocompromised individuals are a growing proportion of the
population with the continued increase in Human Immunodeficiency Virus/
AIDS, the aging population, and the escalation in organ and tissue
transplantations. Immunocompromised individuals are more susceptible to
severe and invasive infection. These infections are particularly
difficult to treat and can result in a significantly higher mortality
than in immunocompetent persons.
    It is anticipated that the requirements of the RTCR will help
reduce pathways of entry for fecal contamination and/or waterborne
pathogens into the distribution system, thereby reducing exposure and
risk from these contaminants in drinking water to the entire general
population. The RTCR seeks to provide a similar level of drinking water
protection to all groups including sensitive subpopulations, thus
meeting the intent of this Federal policy. See also section VI.K of
this preamble, Effects of Fecal Contamination and/or Waterborne
Pathogens on the General Population and Sensitive Subpopulations, for a
more detailed discussion of this topic.

M. Effect of Compliance With the RTCR on the Technical, Financial, and
Managerial Capacity of Public Water Systems

    Section 1420(d)(3) of the SDWA, as amended, requires that, in
promulgating an NPDWR, the Administrator shall include an analysis of
the likely effect of compliance with the regulation on the technical,
managerial, and financial (TMF) capacity of PWSs. The following
analysis fulfills this statutory obligation by identifying the
incremental impact that the RTCR will have on the TMF capacity of
regulated water systems. Analyses presented in this document reflect
only the impact of new or revised requirements, as established by the
RTCR; the impacts of previously established requirements on system
capacity are not considered.
    EPA has defined overall water system capacity as the ability to
plan for, achieve, and maintain compliance with applicable drinking
water standards. Capacity encompasses three components: technical,
managerial, and financial. Technical capacity is the physical and
operational ability of a water system to meet SDWA requirements. This
refers to the physical infrastructure of the water system,

including the adequacy of source water and the adequacy of treatment,
storage, and distribution infrastructure. It also refers to the ability
of system personnel to adequately operate and maintain the system and
to otherwise implement requisite technical knowledge. Managerial
capacity is the ability of a water system to conduct its affairs to
achieve and maintain compliance with SDWA requirements. Managerial
capacity refers to the system's institutional and administrative
capabilities. Financial capacity is a water system's ability to acquire
and manage sufficient financial resources to allow the system to
achieve and maintain compliance with SDWA requirements. Technical,
managerial, and financial capacity can be assessed through key issues
and questions, including the following:

------------------------------------------------------------------------

------------------------------------------------------------------------
                           Technical Capacity
------------------------------------------------------------------------
Source water adequacy..................  Does the system have a reliable
                                          source of water with adequate
                                          quantity? Is the source
                                          generally of good quality and
                                          adequately protected?
Infrastructure adequacy................  Can the system provide water
                                          that meets SDWA standards?
                                          What is the condition of its
                                          infrastructure, including
                                          wells or source water intakes,
                                          treatment and storage
                                          facilities, and distribution
                                          systems? What is the
                                          infrastructure's life
                                          expectancy? Does the system
                                          have a capital improvement
                                          plan?
Technical knowledge and implementation.  Are the system's operators
                                          certified? Do the operators
                                          have sufficient knowledge of
                                          applicable standards? Can the
                                          operators effectively
                                          implement this technical
                                          knowledge? Do the operators
                                          understand the system's
                                          technical and operational
                                          characteristics? Does the
                                          system have an effective O&M
                                          program?
------------------------------------------------------------------------
                           Managerial Capacity
------------------------------------------------------------------------
Ownership accountability...............  Are the owners clearly
                                          identified? Can they be held
                                          accountable for the system?
Staffing and organization..............  Are the operators and managers
                                          clearly identified? Is the
                                          system properly organized and
                                          staffed? Do personnel
                                          understand the management
                                          aspects of regulatory
                                          requirements and system
                                          operations? Do they have
                                          adequate expertise to manage
                                          water system operations (i.e.,
                                          to conduct implementation,
                                          monitor for E. coli)? Do
                                          personnel have the necessary
                                          licenses and certifications?
Effective external linkages............  Does the system interact well
                                          with customers, regulators,
                                          and other entities? Is the
                                          system aware of available
                                          external resources, such as
                                          technical and financial
                                          assistance?
------------------------------------------------------------------------
                           Financial Capacity
------------------------------------------------------------------------
Revenue sufficiency....................  Do revenues cover costs?
Creditworthiness.......................  Is the system financially
                                          healthy? Does it have access
                                          to capital through public or
                                          private sources?
Fiscal management and controls.........  Are adequate books and records
                                          maintained? Are appropriate
                                          budgeting, accounting, and
                                          financial planning methods
                                          used? Does the system manage
                                          its revenues effectively?
------------------------------------------------------------------------

    EPA looked at the major requirements of the RTCR that may affect
the TMF capacity of PWSs. These requirements include: sample siting
plan revision, monitoring, assessments, corrective actions, and PNs.
Another factor that may affect the TMF capacity is the need for PWS
personnel to familiarize themselves with the RTCR requirements. EPA
developed a scoring system to analyze the impact of complying with
these requirements on the TMF capacity of PWSs. A detailed discussion
of EPA's analysis is presented in chapter 8.14 of the RTCR EA (USEPA
2012a).
    The RTCR will apply to all PWSs and may affect 51,972 CWSs, 18,729
NTNCWSs, and 84,136 TNCWSs--154,837 systems in all. While some systems
may require increased TMF capacity to comply with the new RTCR
requirements, or will need to tailor their compliance approaches to
match their capacities, most systems will not.
    Small systems will likely face only a small challenge to their
technical and managerial capacity as a result of efforts to familiarize
themselves with the monitoring requirements of the RTCR. Routine and
repeat monitoring requirements under the RTCR are essentially the same
as under the 1989 TCR, with more explicit criteria to qualify for
reduced monitoring. Therefore, understanding the RTCR monitoring
requirements is not expected to pose many new technical or managerial
capacity issues for small systems.
    Small system technical and managerial capacity may be affected by
the assessment requirements of the RTCR. Performing assessments may
require the system to increase staffing levels in addition to providing
training to ensure that system staff understand how those assessments
are to be performed. Reporting, record-keeping, and data administration
requirements will also affect the managerial capacity of small systems.
    Small systems that are required to take corrective action are
expected to experience the most significant financial challenge since
some corrective actions may consist of a large, one-time capital
expenditure to resolve the problem.
    Large systems will likely not face any significant challenge to
their technical and managerial capacity as a result of efforts to
familiarize themselves with the RTCR. Most large systems are familiar
with the 1989 TCR and there are no changes in the basic monitoring
requirements for large systems under the RTCR. They are therefore
assumed to already have the TMF capacity in place for the RTCR.
    Only large systems performing assessments and corrective actions
would be expected to face a significant challenge meeting the TMF
capacity requirements. However, this requirement is only necessary when
monitoring reveals potential problems, and this is not expected to
occur significantly in large systems above that experienced under the
1989 TCR. Many large systems already have the TMF capacity to conduct
assessments and

corrective actions if they are needed. These systems will be affected
less significantly than smaller systems that have to implement
corrective actions because it is recognized that they are typically
already implementing similar assessments and corrective actions when a
routine monitoring sample tests positive for fecal indicators under the
1989 TCR.

N. Congressional Review Act

    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the
Small Business Regulatory Enforcement Fairness Act of 1996, generally
provides that before a rule may take effect, the agency promulgating
the rule must submit a rule report, which includes a copy of the rule,
to each House of the Congress and to the Comptroller General of the US.
EPA will submit a report containing this rule and other required
information to the U.S. Senate, the U.S. House of Representatives, and
the Comptroller General of the US prior to publication of the rule in
the FR. A Major rule cannot take effect until 60 days after it is
published in the FR. This action is not a ``major rule'' as defined by
5 U.S.C. 804(2). This rule will be effective April 15, 2013.

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