United States Office of Water EPA-821-B-00-007 Environmental Protection (4303) December 2000 Agency & EPA Cost-Effectiveness Analysis of Proposed Effluent Limitations Guidelines and Standards for the Metal Products and Machinery Industry ------- Cost-Effectiveness Analysis of Proposed Effluent Limitations Guidelines and Standards for the Metal Products and Machinery Industry U.S. Environmental Protection Agency Office of Science and Technology Engineering and Analysis Division Washington, DC 20460 December 2000 ------- This document was prepared by the Office of Water staff. Abt Associates provided assistance and support in performing the underlying analysis supporting the conclusions detailed in this report. ------- MP&M Proposed Effluent Guidelines Cost-Effectiveness Analysis Cost-Effectiveness Analysis INTRODUCTION This cost-effectiveness analysis supports the proposed effluent limitations guidelines and standards for the Metal Products and Machinery (MP&M) Industry. The report assesses the cost-effectiveness of three regulatory options for indirect dischargers, which discharge effluent to publicly-owned treatment works (POTWs), and direct dischargers, which discharge effluent directly to a surface water. Cost-effectiveness analysis is used in the development of effluent limitations guidelines to evaluate the incremental efficiency of different regulatory options. Cost- effectiveness is traditionally defined as the incremental annual cost (in 1981 constant dollars) per incremental toxic- weighted pound of pollutant removed. This definition includes the following concepts: «> Toxic-weighted removals Because pollutants differ in their toxicity, the reductions in pollutant discharges, or pollutant removals, are adjusted for toxicity by multiplying the estimated removal quantity for each pollutant by a normalizing weight, called a toxic weighting factor (TWF).' The TWF for each pollutant measures its toxicity relative to copper, with more toxic pollutants having higher TWFs. The use of toxic weights allows the removals of different pollutants to be expressed on a constant toxicity basis as toxic pound-equivalents (Ib- eq). The weighted quantities removed for the different pollutants may then be summed to yield an aggregate measure of the reduction in toxicity-normalized pollutant discharges that is achieved by a regulatory option. The cost-effectiveness analysis focuses on toxic pollutants in MP&M facility dischargers to surface waters. The analysis does not address the removal of conventional pollutants (oil and grease, biochemical oxygen demand (BOD), and total suspended solids (TSS)). nor does it address the removal of bulk parameters, such as chemical oxygen demand (COD). Although EPA has accounted for reductions to pollutants loadings due to treatment at publicly-owned treatment works (POTWs). the cost-effectiveness analysis does not address DOCUMENT CONTENTS: 1 Methodology 2 1.1 Overview 2 1.2 Regulatory Options 3 1.3 Pollutant Removals 5 1.4 Annualized Costs 6 1.5 Ranking Options 6 1.6 Incremental Cost-Effectiveness 6 2 Results 7 2.1 Indirect Dischargers 7 2.2 Direct Dischargers 9 3 Comparison with Values for Previous Effluent Guidelines and Standards 11 4 MP&M Pollutants of Concern 14 Glossary 19 Acronyms 21 References 22 Appendix A: Alternative CE Measures 23 A.I CE Including Costs to Closing Facilities 23 A.2 CE to Industry 24 1 The following formats are used in this document as an aid to readers: glossary: a term defined in the glossary section acronym: included in the acronym list routes of potential environmental damage and human exposure other than via surface waters, such as POTW inhibition problems and contamination of POTW biosolids (sewage sludge.) The cost-effectiveness ratio considers reductions in loadings from two sources: >• facilities that undertake pollution prevention and waste water treatment to comply with the rule, and * facilities that close as a result of the rule. Loadings eliminated by baseline closures (i.e., MP&M facilities that are projected to close even if there is no MP&M regulation) are not attributed to the rule and are not considered in the analysis. «> Annual costs The cost-effectiveness analysis uses the estimated annual costs of complying with the alternative regulatory options. The annual costs include annual expenses for operating and maintaining compliance equipment and for meeting monitoring requirements, and the annualized cost of capital outlays for pollution prevention and treatment systems. These costs are calculated on a pre-tax basis (i.e., without any adjustment for tax treatment of capital outlays and operating expenses), using an assumed opportunity cost of capital of 7 percent. ------- MP&M Proposed Effluent Guidelines Cost-Effectiveness Analysis Compliance costs are calculated in 1981 dollars to allow for comparison with cost-effectiveness values for regulations developed at different times for different industries. This analysis maintains this practice for comparability, but also presents cost-effectiveness results in 1999$. EPA does not include any costs for facilities that close due to the rule in the traditional cost-effectiveness calculation. Appendix A provides an alternative calculation that attributes costs to facilities that close due to the rule equal to the compliance costs they would have incurred if they instead continued to operate. This calculation overstates costs because these facilities are expected to find it more economic to shut down rather than incur the compliance costs. No costs or loadings reductions from facilities that close in the baseline are included in the analysis.2 «> Incremental calculations The incremental values that are calculated for a given option are the change in total annual compliance costs and the change in removals from the next less stringent option, or the baseline if there is no less stringent option, where regulatory options are ranked by increasing levels of toxic- weighted removals. Thus, the cost-effectiveness values for a given option are relative to another option, or, for the least stringent option, to the baseline. The result of the cost-effectiveness calculation represents the unit cost of removing the next pound-equivalent of pollutants. Cost-effectiveness is strictly a relative measure used for comparative purposes. This analysis does not provided an absolute scale by which a particular cost- effectiveness value can be assigned a qualitative judgment. Because cost-effectiveness values for different rules are expressed in the same year dollars per pound-equivalent removed, cost-effectiveness values for a given option may be roughly compared with those of other options being considered for a given regulation and also with those calculated for other industries in past regulations. Comparisons with CE values for past regulations are only somewhat approximate because scientific and engineering information changes over time. Thus, the estimated POTW removals, toxic weights, and treatment process removals may be quite different for the same pollutants in regulations that are developed in different years. Although not required by the Clean Water Act, cost- effectiveness analysis is a useful tool for evaluating options for the removal of toxic pollutants. It is not intended to analyze the removal of conventional pollutants, however, such as oil and grease, chemical oxygen demand and total suspended solids, and removals of these pollutant are not included in the cost-effectiveness calculation. 2 Chapter 5 of the Economic, Environmental, and Benefit Analysis document discusses baseline closures. The remaining parts of this report are organized as follows. Section 1 defines cost-effectiveness, discusses the cost- effectiveness methodology, and describes the relevant regulatory options. Section 2 presents the findings of the separate analyses for direct dischargers and for indirect dischargers. Section 3 compares the cost-effectiveness of the proposed regulation with the cost-effectiveness values calculated for previously promulgated rules. Section 4 lists the pollutants of concern, their CAS numbers, the Toxic Weighting Factor (TWF) for each pollutant, and the Publicly Owned Treatment Work (POTW) removal efficiencies used in this analysis. These removal efficiencies are the percentage of each pollutant that a typical POTW is expected to remove from indirect facility discharges. Appendix A presents an alternative measure of cost-effectiveness, which includes costs for facilities that close due to the rule. 1 METHO&OLoey 1.1 Overview Three factors are of particular importance in the calculation and use of cost-effectiveness values: *• normalizing pounds of pollutant removed to copper- based toxic pounds-equivalent; * calculating cost-effectiveness on an incremental basis; and * use of CE values for comparison rather than on an absolute basis. First, the analysis is based on removals of pounds-equivalent — a pound of pollutant weighted by its toxicity relative to copper. These toxic weighting factors are based on comparisons with copper, because it is a toxic metal commonly released in industrial effluent. By expressing removals in common terms, EPA can sum across pollutants to compare cost-effectiveness results among alternative regulatory options or different regulations. Cost-effectiveness analysis is done on an incremental basis to compare the incremental or marginal cost and removals of one control option to another control option or to existing treatment. It, therefore, measures the cost-effectiveness of more stringent controls in a step-wise comparison. In contrast, calculating average (rather than incremental) CE would show the cost per toxic pound removed for an option relative to the baseline, rather than relative to the next less stringent option. There are no absolute scales for judging CE values as indicating that an option is "cost-effective" or "not cost- effective." The values are considered comparatively high or low only within a given context, such as similar discharge ------- MP&M Proposed Effluent Guidelines Cost-Effectiveness Analysis status or compared to effluent limitations guidelines for other industries. Cost-effectiveness analysis includes the following steps: * Determine the relevant wastewater pollutants; >• Estimate the relative toxic weights of priority and other pollutants; * Define the pollution control or regulatory approaches; * Calculate pollutant removals for each control or regulatory option; *• Determine the annualized cost of each control or regulatory option; *• Rank the options by increasing stringency and cost; * Calculate incremental cost-effectiveness values; and >• Compare cost-effectiveness values. These steps are discussed below. «> Pollutant discharges considered in the cost- effectiveness analysis Pollutants are selected for analysis based on their toxicity, frequency of occurrence, and amount of pollutant in the waste stream. This cost-effectiveness analysis is based on 132 of the 150 pollutants of concern listed in Section 4. «> Relative toxic weights of pollutants EPA has developed toxic weighting factors (TWFs) for a range of pollutants. A higher TWF indicates a more toxic pollutant. For example, a pound of nickel (TWF=0.11) in an effluent stream has significantly less potential effect on human health and aquatic life than a pound of cadmium (TWF=2.6). In the majority of cases, toxic weighting factors are derived from both chronic freshwater aquatic criteria (or toxic effect levels) and human health criteria (or toxic effect levels) for the consumption of fish. These factors are then standardized by relating them to copper. The resulting toxic weighting factors for each pollutant are provided in Section 4. Table 1 shows some examples of the effects of different aquatic and human health criteria on weighting factors. Table 1 : Weighting Factors Based on Copper Freshwater Chronic Criteria Pollutant Copperb Hexavalent Chromium Nickel Cadmium Benzene Human Health Criteria3 ( 8/1) 1,200 1,000,000 4,600 84 710 Aquatic Chronic Criteria ( g/1) 9.0 74.0 52.0 2.2 530 Weighting Calculation 5.6/1,200 + 5.6/9.0 5.6/1,000,000 + 5.6/74.0 5.6/4,600 + 5.6/52 5.6/84 + 5.6/2.2 5.6/710 + 5.6/530 Toxic Weighting Factor 0.63 0.076 0.11 2.6 0.018 Criteria are maximum contamination thresholds. Using the above calculation, the higher the thresholds, the lower the toxic weighting factor. Units for criteria are micrograms of pollutant per liter of water. a. Based on ingestion of 6.5 grams offish per day. b. While the water quality criterion for copper has been revised (to 9.0 g/1), the cost-effectiveness analysis uses the old criterion (5.6 g/1) to facilitate comparisons with cost-effectiveness values for other effluent limitations guidelines. The revised higher criteria for copper results in a toxic weighting factor for copper that is not equal to 1.0 but equal to 0.63. This value is used in the analysis to reflect the new estimates of copper toxicity, while still maintaining a scale that enables comparison with earlier CE analyses. Source: U.S. EPA analysis. As indicated in Table 1, the toxic weighting factor is the sum of two criteria-weighted ratios: the "old" copper criterion divided by the human health criterion for the particular pollutant, and the "old" copper criterion divided by the aquatic chronic criterion. For example, using the values reported in Table 1, 4.13 pounds of copper pose the same relative hazard in surface waters as one pound of cadmium, since cadmium has a toxic weight 4.13 times (2.6/0.63 = 4.13) as large as the toxic weight of copper. ------- MP&M Proposed Effluent Guidelines Cost-Effectiveness Analysis 1.2 Regulatory Options The regulatory options considered by EPA for the MP&M effluent guidelines are described in detail in the preamble accompanying the proposed rule and in Chapter 4 of the Economic, Environmental, and Benefit Analysis document. This section provides a brief summary of the technology and regulatory options. EPA selected subcategories within the MP&M industry based on similarity in effluent and economic characteristics. The subcategories differ in part based on the type of wastewater facilities discharge, including facilities that discharge wastewaters with high metals content (with or without oil and grease) and facilities that discharge wastewaters containing primarily oil & grease, with limited metals. The subcategories identified by EPA in each group are: Metal-bearing (with or without oil & grease): *• Non Chromium Anodizing * Metal Finishing Job Shops *• Printed Wiring Board >• Steel Forming & Finishing >• General Metals Oil-bearing only: *• Shipbuilding Dry Docks * Railroad Line Maintenance - Oily Waste EPA evaluated 10 technology options that might be used to treat wastes from the MP&M facilities. Table 2 lists these technology options: Table 2: Technology Options Option # Description For metal-bearing wastes 1 segregation of wastewaters, preliminary treatment (including oil-water separation), chemical precipitation, and sedimentation using a clarifier (chemical precipitation with gravity clarification) in-process flow control and pollution prevention + option 1 segregation of wastewaters, preliminary treatment (including oil removal by ultrafiltration), chemical precipitation, and solids separation using a micro filter in-process flow control and pollution prevention + option 3 For oil-bearing wastes oil-water separation by chemical emulsion breaking in-process flow control and pollution prevention + option 5 oil-water separation by ultrafiltration in-process flow control and pollution prevention + option 7 9 10 oil-water separation by dissolved air flotation (DAF) in-process flow control and pollution prevention + option 9 Source: U.S. EPA analysis. The even-numbered options add in-process flow controls and pollution prevention (pollution prevention, recycling and water conservation to allow recovery and reuse of materials) to the treatment technologies specified in the odd- numbered options. In all cases, options with in-process flow control and pollution prevention cost less and remove more pollutant than the comparable option without pollution prevention. Therefore, this document analyzes only the even-numbered options with flow control and pollution prevention. ------- MP&M Proposed Effluent Guidelines Cost-Effectiveness Analysis EPA selected Best Practicable Control (BPT) technologies for direct dischargers in each subcategory based on the average of the best performances within the industry of various ages, sizes, processes and other characteristics. EPA also considered the cost of these treatment technologies relative to the effluent reductions achieved, to assess the cost-reasonableness of these limitations. EPA then considered application of the Best Available Technology Economically Achievable (BAT). The Agency is proposing BAT equivalent to BPT for all subcategories except Railroad Line Maintenance and Shipbuilding Dry Docks, for which EPA is not proposing BAT limitations. EPA evaluated Pretreatment Standards for Existing Sources (PSES) for indirect dischargers by evaluating whether pollutants would "pass through" POTWs and whether a combination of POTW treatment and the PSES standards would achieve limitations equivalent to those required for direct dischargers. The same 10 technologies were considered for BPT and for PSES. (See the Technical Development Document for a discussion on the pass-through analysis.) The Agency also considered a range of low flow exclusions for indirect dischargers, to reduce burdens on permitting officials and reduce the economic impacts of the rule. Evaluation of the low flow cutoffs also considered the amount of pollutant discharged by each subcategory and flow size category. Table 3 lists the technology options and exclusions proposed for the MP&M effluent guidelines, along with two other regulatory options considered by EPA for this rule-making. These options include: * Option 2/6/10, which applies the same technologies for each subcategory, and eliminates the low-flow and subcategory exclusions of the proposed rule. * Option 4/8, which applies more stringent technology requirements for all subcategories and does not include low-flow exclusions. Table 3: Regulatory Options Considered in the Cost -Effectiveness Analysis Subcategory General Metals Metal Finishing Job Shop Non-Chromium Anodizing Printed Wiring Board Steel Forming & Finishing Oily Waste Railroad Line Maintenance Shipbuilding Dry Dock Proposed rule Lechnology option 2; 1MGY flow cutoff for indirect dischargers Lechnology option 2 Lechnology option 2; no PSES/PSNS for indirect dischargers Lechnology option 2 Lechnology option 2 Lechnology option 6; 2 MGY flow cutoff for indirect dischargers Lechnology option 10; no PSES/PSNS for indirect dischargers Lechnology option 10; no PSES/PSNS for indirect dischargers Option 2/6/10 Lechnology option 2 Lechnology option 2 Lechnology option 2 Lechnology option 2 Lechnology option 2 Lechnology option 6 Lechnology option 10 Lechnology option 10 Option 4/8 Lechnology option 4 Lechnology option 4 Lechnology option 4 Lechnology option 4 Lechnology option 4 Lechnology option 8 Lechnology option 8 Lechnology option 8 Source: U.S. EPA analysis. Technology options 1, 3, 5, 7 and 9 (without pollution prevention) were not further analyzed, because they remove fewer pollutants and cost more than the comparable technology options with pollution prevention. 1.3 Pollutant Removals EPA calculated the reductions in pollutant loadings to the receiving water body for each regulatory option. At- stream and end-of-pipe pollutant removals may differ because a portion of the end-of-pipe loadings for indirect ------- MP&M Proposed Effluent Guidelines Cost-Effectiveness Analysis dischargers may be removed by a POTW. As a result, the at-stream removal of pollutants due to PSES regulations are less than end-of-pipe removals. The cost-effectiveness analysis is based upon removals at-stream, as shown in the following example calculation: Baseline facility discharge of pollutant x to POTW: 100 Ibs POTW removal of pollutant x: 40% Baseline discharge to surface water: 60 Ibs Reduced facility discharge due to the rule: 30 Ibs Post-rule discharge to POTW: 70 Ibs POTW removal (40%): 28 Ibs Post-rule discharge to surface water: 42 Ibs Reduced loading to surface water due to the rule: 18 Ibs In general, at-stream loadings for facilities that discharge to a POTW are calculated by multiplying end-of-pipe loadings by (1 - POTW removal efficiency). In this example, a reduction of 18 Ibs in loadings to surface waters would be included in the cost-effectiveness calculation. Because the cost-effectiveness analysis reflects changes in at-stream loadings, it does not address other environmental concerns such as POTW interference problems, or the quantities of pollutants transferred to biosolids (i.e., sewage sludge) as a result of being removed from the water by the POTW. 1.4 Annualizcd Costs Full details of the methods by which the costs of complying with the regulatory options were estimated can be found in the Technical Development Document and the Economic, Environmental, and Benefit Assessment Report. A brief summary of the compliance cost analysis is provided below. Two categories of compliance costs were included in the cost-effectiveness analysis: >• capital costs, and * operating and maintenance (O&M) costs (including monitoring costs.) Although O&M costs occur annually, capital costs are one- time "lump sum" costs. To express the capital costs on a annual basis, capital costs were annualized over the expected useful life of the capital equipment, 15 years, at an opportunity cost of capital of 7 percent. Total annualized costs are the sum of annualized capital costs and the annual operating and maintenance costs. The cost-effectiveness analysis presented here uses pre-tax costs as the basis for its calculations. Thus, these costs may be interpreted as the cost to society of the facility-level actions taken to comply with the MP&M regulatory options. Appendix A presents an alternative version of cost- effectiveness performed with after-tax costs in the appendix. This represents the incremental cost to industry of each additional pound removed. Compliance costs were originally calculated in 1996 dollars, the base year of the MP&M industry regulation analysis. The compliance costs are reported in 1999 dollars. They were inflated using Engineering News Record's Construction Cost Index (CCI). For comparing cost- effectiveness values of the options under review to those of other promulgated rules, the compliance costs used in the cost-effectiveness analysis were also deflated from 1999 to 1981 dollars using the CCI. This adjustment factor is: Adjustment factor = 1981 CCI 3535 1999 CCI 6060 = 0.583 1.5 Ranking Options The regulatory options were ranked to determine relative cost-effectiveness. Options were first ranked in increasing order of stringency, where stringency is aggregate pollutant removals, measured in pounds-equivalent. If two or more options remove equal amounts of pollutants, these options would then be ranked in increasing order of cost. For example, if two or more options specify zero discharge, the removals under each option would be equal. The options would then be ranked from least expensive to most expensive. There were no cases in the MP&M analysis where an option had the same removals but higher costs than the next less-stringent option. 1.6 Incremental Cost-Effectiveness EPA calculated incremental cost-effectiveness values for the options ranked by increasing stringency. Cost-effectiveness values were calculated separately for indirect and direct dischargers. For each discharger category, the cost- effectiveness value of a particular option is calculated as the incremental annual cost of that option divided by the incremental pounds-equivalent removed by that option: CEk = ATCk - ATCk_ PEk ~ PEk_, where: CEk ATCk Incremental cost-effectiveness of option k relative to option k-1, Total annualized compliance cost under option k; and Removals in pounds-equivalent under option k. ------- MP&M Proposed Effluent Guidelines Cost-Effectiveness Analysis When k corresponds to the least stringent option (k = 1), the incremental costs and removals are the increments in moving from the baseline case to Option k. 2 RESULTS 2.1 Indirect Dischargers Table 4 summarizes the cost-effectiveness analysis results for the PSES regulatory options applicable to indirect dischargers. Annual compliance costs are shown in 1999 dollars, as reported in the EEBA, and in 1981 dollars. The regulatory options are listed in order of increasing stringency on the basis of the estimated toxic-weighted pollutant removals. Costs presented here do not include costs for facilities that close in the baseline or close due to the technology option being analyzed. Therefore, these costs will not be the same as the engineering costs presented in the MP&M Technical Development Document. Table 4: Cost -Effectiveness for Indirect Dischargers (PSES) Regulatory Option Proposed Option Option 2/6/10 Option 4/8 Annual Before-Tax Compliance Costs (excluding regulatory closures) Total Cost (millions) 1999$ 1,730.1 2,421.9 3,795.1 1981$ 1,009.2 1,412.8 2,213.8 Incremental Cost (millions) 1999$ 1,730.1 691.8 1,373.2 1981$ 1,009.2 403.6 801.0 Weighted Pollutant Removals Total Removals (000 Ibs-eq) 9,372.3 9,755.5 9,936.9 Incremental Removals (000 Ibs-eq) 9,372.3 383.2 181.4 Cost-Effectiveness Ratio ($/lb-eq) 1999$ 185 1,805 7,570 1981$ 108 1,053 4,416 Source: U.S. EPA analysis. As shown in Table 4, the proposed option removes 9.4 million pounds. The proposed option is the least stringent of those considered, and the incremental cost-effectiveness for indirect dischargers is $108 per pound-equivalent removed (1981$). EPA considers this value to be acceptable when compared to values calculated for previous regulations. Option 2/6/10 would remove an additional 0.4 million toxic weighted pounds, at an incremental cost of $0.4 billion (1981$), for a cost-effectiveness ratio of $1,000 per additional pound-equivalent removed. This cost-effectiveness value is higher than the values calculated for other industrial discharge limitations previously promulgated by EPA. The differences between the proposed option and Option 2/6/10 for indirect dischargers include the proposed option's one million gallon per year cutoff for the General Metals subcategory, two million gallon per year cutoff for the Oily Wastes subcategory, and exclusion of pretreatment standards for the Non-Chromium Anodizing, Railroad Line Maintenance and Shipbuilding Dry Dock subcategories under the MP&M rule. These provisions of the proposed rule reduce before-tax compliance costs by 29 percent compared with Option 2/6/10, while losing 4 percent of the pound-equivalents removed. On the basis of this analysis, EPA determined that the proposed option is cost effective. The cost-effectiveness analysis supports the proposed PSES regulatory option for indirect dischargers. Table 5 presents the results of the cost-effectiveness analysis for indirect dischargers by subcategory. The proposed option for indirect dischargers in the Printed Wiring Board, Metal Finishing Job Shop, and Steel Forming and Finishing subcategories is the same as Option 2/6/10. The proposed option includes a flow cutoff of one million and two million gallons per year for the General Metals and Oily Wastes subcategories, respectively. Therefore, in these two subcategories, there are no proposed pretreatment standards under the MP&M rule for all indirect dischargers that fall below those cutoffs. There are also no proposed pretreatment standards for indirect dischargers in the Non Chromium Anodizing, Railroad Line Maintenance and Shipbuilding Dry Dock subcategories. (See the preamble for the proposed rule and the Technical Development Document for a discussion of EPA's rationale for proposing the low flow cutoffs and subcategory specific exclusions). ------- MP&M Proposed Effluent Guidelines Cost-Effectiveness Analysis Table 5: Cost- Effectiveness for Indirect Dischargers by Subcategory Subcategory & Regulatory Option Printed Wiring Boards Proposed Option Option 2/6/10 Option 4/8 Metal Finishing Job Shops Proposed Option Option 2/6/10 Option 4/8 General Metals Proposed Option Option 2/6/10 Option 4/8 Non-Chromium Anodizing Proposed Option Option 2/6/10 Option 4/8 Oily Wastes Proposed Option Option 2/6/10 Option 4/8 Railroad Line Maintenance Proposed Option Option 2/6/10 Option 4/8 Shipbuilding Dry Dock Proposed Option Option 2/6/10 Option 4/8 Steel Forming & Finishing Proposed Option Option 2/6/10 Option 4/8 Incremental Before-Tax Compliance Cost (million 1981$) 81.17 40.87 68.82 26.54 844.52 279.12 487.21 15.23 7.27 2.52 109.04 232.35 0.15 0.13 0.10 0.00 12.19 6.63 Incremental Removals (Ibs-eq) 1,195,260 8,010 1,766,063 62,554 6,216,887 318,594 103,514 13,598 434 14,140 51,008 5,885 17 132 0 26 179,900 865 Cost-Effectiveness Ratio (1981S/lb-eq) 68 5,103 39 424 136 876 4,707 1,120 16,756 178 2,138 39,484 8,560 995 767,794 0 68 7,659 Source: U.S. EPA analysis. ------- MP&M Proposed Effluent Guidelines Cost-Effectiveness Analysis 2.2 Direct Dischargers Table 6 summarizes the cost-effectiveness for the BPT/BAT regulatory options applicable to direct dischargers. As with indirect dischargers, regulatory options are listed in order of increasing stringency, measured by toxic-weighed pollutant removals. Table 6 shows that the proposed option achieves 1.3 million pounds of removals. The resulting cost-effectiveness is $107 per pound-equivalent (1981$). Because the only differences between Option 2/6/10 and the proposed option occur for indirects (i.e. flow cutoffs and no regulation options), Option 2/6/10 is the same as the proposed option for direct dischargers. Option 4/8 would remove an additional 0.003 million pound equivalents, as compared with the proposed option, at an additional cost of $0.08 billion, or $2,391 per pound- equivalent. On the basis of this analysis, EPA determines that the proposed option is cost-effective, and that the cost- effectiveness supports the choice of the proposed BPT/BAT option for direct dischargers. Table 6: Cost -Effectiveness For Direct Dischargers (BAT) Regulatory Option Proposed Option Option 2/6/10 Option 4/8 Annual Before-Tax Compliance Costs (excluding regulatory closures) Total Cost (millions) 1999$ 245.8 245.8 381.6 Total Cost (millions) 1981$ 143.4 143.4 222.6 Incremental Cost (millions) 1999$ 245.8 135.8 1981$ 143.4 79.2 Weighted Pollutant Removals Total Removals (000 Ibs-eq) 1,333.6 1,333.6 1,366.7 Incremental Removals (000 Ibs-eq) 1,333.6 33.1 Cost-Effectiveness Ratio ( $/lb-eq) 1999$ 184 4,103 1981$ 107 2,391 Source: U.S. EPA analysis. Table 7 presents the results of the cost-effectiveness analysis for direct dischargers by subcategory. The proposed option is more stringent and efficient than Option 4/8 for the Oily Wastes subcategory, in that it removes more toxic weighted pounds of pollutants and costs less than Option 4/8. It therefore dominates Option 4/8 from the perspective of toxic pollutant removals, and has an average cost per pound- equivalent removed of $399. Table 7 shows a high cost-effectiveness for the Railroad Line Maintenance and the Shipbuilding Dry Dock subcategories. EPA is not proposing BAT limitations for these subcategories because of the small quantities of toxic pollutants in the wastewater from facilities in these subcategories. However, EPA is proposing BPT limitations for these subcategories in order to control the discharge of conventional pollutants. ------- MP&M Proposed Effluent Guidelines Cost-Effectiveness Analysis Table 7: Cost- Effectiveness for Direct Dischargers by Subcategory Subcategory & Regulatory Option Printed Wiring Boards Proposed Option Option 2/6/10 Option 4/8 Metal Finishing Job Sh Proposed Option Option 2/6/10 Option 4/8 General Metals Proposed Option Option 2/6/10 Option 4/8 Non-Chromium Anodizi Proposed Option Option 2/6/10 Option 4/8 Oily Wastes Option 4/8 Proposed Option* Option 2/6/10 Railroad Line Maintena Proposed Option Option 2/6/10 Option 4/8 Shipbuilding Dry Dock Proposed Option Option 2/6/10 Option 4/8 Steel Forming & Finish Proposed Option Option 2/6/10 Option 4/8 Incremental Before-Tax Compliance Cost (million 1981$) 1.42 1.14 jps 0.69 0.52 114.54 52.20 ng° NA NA NA 31.34 -24.92 0.00 nee 0.67 0.05 1.24 -0.91 ng 18.39 1.28 Incremental Removals (Ibs-eq) 64,573 2,270 14,194 265 899,372 21,620 NA NA NA 15,703 366 0 174 23 111 335 339,147 8,977 Cost-Effectiveness Ratio (1981S/lb-eq) 22 501 49 1,968 127 2,414 1,996 -68,007 3,831 2,181 11,179 -2,728 54 143 a. EPA estimates that there are no direct discharging non-chromium anodizing facilities. b. The proposed option has a cost-effectiveness value of 399 when compared to the baseline. This is the number that is presented in the preamble. Source: U.S. EPA analysis. 10 ------- MP&M Proposed Effluent Guidelines Cost-Effectiveness Analysis 3 COMPARISON WITH VALUES FOR loadings and resulting cost-effectiveness values that were calculated for previous regulations. The values for the PREVIOUS EFFLUENT GUIDELINES AND proposed MP&M rule are also listed in these tables. All values are based on Toxic Weighting Factors normalized to copper and the cost-effectiveness values are presented in both 1981 and 1999 dollars. Tables 8 and 9 present, for indirect and direct dischargers respectively, the baseline and post-compliance pollutant ------- MP&M Proposed Effluent Guidelines Cost-Effectiveness Analysis Table 8: Industry Comparison of Cost -Effectiveness Values for Indirect Dischargers Toxic and Nonconventional Pollutants Only, Copper Based Weights)" Industry .Aluminum. Eomuug Battery Manufacturing Can Making Centralized Waste Treatment Coal Mining Coil Coating Copper Forming Electronics I Electronics II Foundries Inorganic Chemicals I Inorganic Chemicals II Iron & Steel Leather Tanning Metal Finishing Metal Products & Machineryb Nonferrous Metals Forming Nonferrous Metals Mfg I Nonferrous Metals Mfg II Organic Chemicals, Plastics... Pesticide Manufacturing (1993) Pesticide Formulating, Packaging... Pharmaceuticals Plastic. Molding & Forming Porcelain Enameling .Pulp.& Paper Transportation Equipment Cleaning Pounds Equivalent Currently Discharged (To Surface Waters) (000' s) r U6.0.2. U52 252 689 N/A 2,503 934 75 260 2,136 3,971 4,760 5,599 16,830 11,680 15,677 189 3,187 38 5,210 257 7,746 340 N/A 1,565 9,5.?.?. 38 Pounds Equivalent Remaining at Selected Option (To Surface Waters) (000' s) , 18 5 5 328-330 N/A 10 4 35 24 18 3,004 6 1,404 1,899 755 6,305 5 19 0.41 72 19 112 63 N/A 96 1Q3 19 Cost-effectiveness of Selected Option Beyond BPT (S/lb-eq. removed) 1981$ r 15.5. 15 38 70-110 N/A 10 10 14 14 116 9 < 1 6 111 10 108 90 15 12 34 18 <3 \ N/A 14 65 380 1999$ 26.7. 26 65 121-189 N/A 17 17 24 24 200 15 <2 10 191 17 185 155 26 21 59 31 <5 2 N/A 24 1.1.2 654 a. Toxic weighting factors for priority pollutants varied across these rules. This table reflects the factors used and the resulting cost-effectiveness values at the time of regulation. Estimates of POTW removals also changed over time. b. Proposed rule. N/A: Pretreatment Standards not promulgated, or no incremental costs will be incurred. Source: U.S. EPA analysis. 12 ------- MP&M Proposed Effluent Guidelines Cost-Effectiveness Analysis Table 9: Industry Comparison of Cost- Effectiveness Values for Direct Dischargers Toxic and Nonconventional Pollutants Only, Copper Based Weights)0 Industry Aluminum Fanning Battery Manufacturing Can Making Centralized Waste Treatment Coal Mining Coastal Oil and Gas - Produced Water - Drilling Waste -TWCd Coil Coating Copper Forming Electronics I Electronics II Foundries Inorganic Chemicals I Inorganic Chemicals II Iron & Steel Leather Tanning Metal Finishing Metal Products & Machinery0 Nonferrous Metals Forming Nonferrous Metals Mfg I Nonferrous Metals Mfg II Offshore Oil and Gasb Organic Chemicals^ Plastics... Pesticide Manufacturing (1993J Pharmaceuticals Plastics Molding & Forming Porcelain Enameling, Petroleum Refining Pulp & Paper Textile Mills Transportation Equipment Cleaners Pounds Equivalent Currently Discharged (To Surface Waters) (000' s) 1.340 4126 12 3,372 BAT=BPT 5,998 7 2 r 2:28.9. 70 9 NA 2:308 32:503 605 40;746 259 3:305 3,103 34 6:653 L004 3;808 54;225 r 2,461. 208 44 1.086 BAT=BPT 6L713 BAT=BPT BAT=BPT 1 Pounds Equivalent Remaining at Selected Option (To Surface Waters) (000' s) 90 0.2 L2671.:271 BAT=BPT 506 0 0 9 8 NA 39 1,290 27 1,040 112 3:268 1,769 2 313 12 2;328 9;735 371 4 41 63 BAT=BPT 2:628 BAT=BPT BAT+BPT NTV Cost-effectiveness of Selected Option Beyond BPT (S/lb-eq. removed) 1981$ 121 2 10 5-7 BAT=BPT 3 292 200 49 27 404 NA 84 <1 6 2 BAT=BPT 12 BAT=BPT 69 4 6 33 5 15 1 BAT=BPT 6 BAT=BPT 39 BAT=BPT BAT=BPT 3^ 1999$ 208 3 17 9-12 BAT=BPT 5 503 344 84 46 696 NA 145 <2 10 3 BAT=BPT 21 BAT=BPT 118 7 10 57 9 26 2 BAT=BPT 10 BAT=BPT 67 BAT=BPT BAT+BPT 5^ a. Toxic weighting factors for priority pollutants varied across these rule This table reflects the factors used and resulting cost-effectiveness values at the time of regulation. Estimated POTW removals have also changed over time. b. Produced water only. For produced sand and drilling fluids and drill cuttings, BAT=BPT. c. Proposed rule. d. Treatment, workover, and completion fluids. Source: U.S. EPA analysis. 13 ------- MP&M Proposed Effluent Guidelines Cost-Effectiveness Analysis 4 MP&M POLLUTANTS OF CONCERN Table 10 shows the 150 MP&M pollutants of concern with their CAS number, toxic weighting factor (TWF), and POTW removal percent. Nineteen of the pollutants did not appear in MP&M facility loadings and were therefore not included in the cost-effectiveness analysis. Table 10: MP&M Pollutants of Concern Name Bod 5-day (Carbonaceous) Oil and Grease Oil and Grease (As HEM) Total Suspended Solids Aluminum Gold Boron Barium Bismuth Calcium Cobalt Iron Iridium Potassium Magnesium Manganese Molybdenum Sodium Niobium Osmium Phosphorus Silicon Tin Strontium Sulfur Tantalum Titanium Vanadium Tungsten Yttrium CAS Number Conventional Po COOS C036 C009 Non-Conventiona 7429905 7440575 7440428 7440393 7440699 7440702 7440484 7439896 7439885 7440097 7439954 7439965 7439987 7440235 7440031 7440042 7723140 7440213 7440315 7440246 7704349 7440257 7440326 7440622 7440337 7440655 POTW Removal Efficiency % llutants 89.12 88.25 86.08 89.55 il Metals 91.36 32.52 30.42 15.98 32.52 8.54 6.11 81.99 32.52 32.52 14.14 35.51 18.93 2.69 32.52 32.52 32.52 32.52 42 32.52 32.52 32.52 91.82 9.51 32.52 32.52 Toxic Weighting Factor (TWF) 0.064 0.18 0.002 0.000028 0.11 0.0056 0.0011 0.00087 0.07 0.2 0.0000055 0 0.3 0.0000082 0.0000056 0.06 0.029 0.62 0.0053 14 ------- MP&M Proposed Effluent Guidelines Cost-Effectiveness Analysis Table 10: MP&M Pollutants of Concern Name N,n-dimethylformamide N-decane N-docosane N-dodecane N-eicosane N-hexacosane N-hexadecane N-nitro sopiperidine N-octacosane N-octadecane N-tetracosane N-tetradecane N-triacontane O+p Xylene O-cresol P-cresol P-cymene Pyridine Styrene 1 ,4-dioxane Trichlorofluoromethane Tripropyleneglycol Methyl Ether M+p Xylene O-xylene 1 -bromo-2-chlorobenzene 1 -bromo-3-chlorobenzene 1 -methy Ifluorene 1 -methy Iphenanthrene 2-butanone 2-hexanone 2-isopropylnaphthalene 2-methyhiaphthalene 2-propanone 3 ,6-dimethy Iphenanthrene 4-methyl-2-pentanone Acetophenone Alpha-terpineol Aniline CAS Number Non-Conventional 68122 124185 629970 112403 112958 630013 544763 100754 630024 593453 646311 629594 638686 136777612 95487 106445 99876 110861 100425 123911 75694 20324338 179601231 95476 694804 108372 1730376 832699 78933 591786 2027170 91576 67641 1576676 108101 98862 98555 62533 POTW Removal Efficiency % Organic* 87 9 88 95.05 92.4 71.11 71.11 77.32 71.11 71.11 71.11 71.11 77.32 65.4 52.5 71.67 99.79 95.4 93.65 45.8 77.32 52.4 77.32 77.32 77.32 77.32 84.55 84.55 96.6 77.32 77.32 28 83.75 84.55 87.87 95.34 94.4 93.41 Toxic Weighting Factor (TWF) 0.0000079 0.0043 0.000082 0.0043 0.0043 0.000082 0.0043 0.00002 0.000082 0.0043 0.000082 0.0043 0.000082 0.0047 0.0027 0.004 0.024 0.0013 0.014 0.00023 0.00096 0.0000082 0.0047 0.0043 0.0047 0.0082 0.049 0.1 0.000025 0.00023 0.072 0.08 0.000005 0.27 0.00013 0.00024 0.0011 1.4 15 ------- MP&M Proposed Effluent Guidelines Cost-Effectiveness Analysis Table 10: MP&M Pollutants of Concern Name Benzoic Acid Benzyl Alcohol Biphenyl Carbon Bisulfide Dibenzofuran Dibenzothiophene Diphenyl Ether Diphenylamine Hexanoic Acid Isobutyl Alcohol M-xylene Methyl Methacrylate Acidity Amenable Cyanide Total Alkalinity Chloride Chemical Oxygen Demand (COD) Hexavalent Chromium Fluoride Total Fluoride Ammonia as Nitrogen Total Phosphorus Sulfate Total Petroleum Hydrocarbons (As Sgt-HEM) Total Sulfide Total Dissolved Solids Total Kjeldahl Nitrogen Total Organic Carbon (TOC) Total Recoverable Phenolics Weak-acid Dissociable Cyanide Silver Arsenic Beryllium Cadmium Cyanide Chromium Copper CAS Number 65850 100516 92524 75150 132649 132650 101848 122394 142621 78831 108383 80626 Other Non-Conventior C025 16887006 C004 18540299 16984488 7664417 14265442 14808798 C037 18496258 C010 C021 C012 C020 C042 Priority Pollutan 7440224 7440382 7440417 7440439 57125 7440473 7440508 POTW Removal Efficiency % 80.5 78 96.28 84 77.32 84.68 77.32 77.32 84 28 95.07 99.96 ltd Pollutants 57.41 57.41 81.3 57.41 61.35 57.41 38.94 57.41 84.61 57.41 57.41 8 57.41 70.28 57.41 t Metals 88.28 65.77 71.66 90.05 70.44 80.33 84.2 Toxic Weighting Factor (TWF) 0.00033 0.0056 0.029 2.8 0.2 0.046 0.013 0.00037 0.0014 0.0015 0.0003 0.000024 0.51 0.035 0.0025 0.0000056 2.8 16 3.5 1.1 2.6 1.1 0.076 0.63 16 ------- MP&M Proposed Effluent Guidelines Cost-Effectiveness Analysis Table 10: MP&M Pollutants of Concern Name Mercury Nickel Lead Antimony Selenium Thallium Zinc Acenaphthene 1,1,1 -trichloroethane 1 , 1 -dichloroethane 1 ,1 ,2,2-tetrachloroethane Chloroethane Acrolein 4-chloro-3-methylphenol Chloroform 1 ,2-dichlorobenzene 1 , 1 -dichloroethene 2,4-dimethylphenol 2,6-dinitrotoluene Ethylbenzene Fluoranthene Benzene Methylene Chloride Chloromethane Isophorone Naphthalene 2-nitrophenol 4-nitrophenol 2,4-dinitrophenol N-nitrosodimethylamine N-nitrosodiphenylamine Phenol Bis(2-ethylhexyl) Phthalate Butyl Benzyl Phthalate Di-n-butyl Phthalate Di-n-octyl Phthalate Chlorobenzene Dimethyl Phthalate CAS Number 7439976 7440020 7439921 7440360 7782492 7440280 7440666 Priority Pollutant 83329 71556 75343 79345 75003 107028 59507 67663 95501 75354 105679 606202 100414 206440 71432 75092 74873 78591 91203 88755 100027 51285 62759 86306 108952 117817 85687 84742 117840 108907 131113 POTW Removal Efficiency % 71.66 51.44 77.45 66.78 34.33 71.66 79.14 Organics 98.29 90.45 70 77.51 77.51 77.51 63 73.44 77.51 77.51 77.51 77.51 93.79 42.46 77.51 54.28 69.74 77.51 94.69 26.83 77.51 77.51 77.51 90.11 95.25 59.78 81.65 84.66 68.43 96.37 77.51 Toxic Weighting Factor (TWF) 120 0.11 2.2 0.0048 1.1 1 0.047 0.029 0.0045 0.00039 0.053 0.0014 0.97 0.0043 0.0021 0.011 0.18 0.0053 0.1 0.0014 0.8 0.018 0.00042 0.0021 0.00073 0.015 0.0016 0.0094 0.0075 0.07 0.04 0.028 0.095 0.023 0.012 0.22 0.0029 0.0033 17 ------- MP&M Proposed Effluent Guidelines Cost-Effectiveness Analysis Table 10: MP&M Pollutants of Concern Name Anthracene Fluorene Phenanthrene Pyrene Tetrachloroethene Toluene Trichloroethene CAS Number 120127 86737 85018 129000 127184 108883 79016 POTW Removal Efficiency % 77.51 69.85 94.89 83.9 84.61 96.18 77.51 Toxic Weighting Factor (TWF) 2.5 0.7 0.29 0.11 0.013 0.0056 0.0064 18 ------- MP&M Proposed Effluent Guidelines Cost-Effectiveness Analysis GLOSSARY at-stream: As discharged to surface waters, after POTW treatment in the case of indirect dischargers. Best Available Technology Economically Achievable: Effluent limitations for direct dischargers, addressing priority and non-conventional pollutants. BAT is based on the best existing economically achievable performance of plants in the industrial subcategory or category. Factors considered in assessing BAT include the cost of achieving BAT effluent reductions, the age of equipment and facilities involved, the processes employed, engineering aspects of the control technology, potential process changes, non-water quality environmental impacts (including energy requirements), economic achievability, and such factors as the Administrator deems appropriate. The Agency may base BAT limitations upon effluent reductions attainable through changes in a facility's processes and operations. Where existing performance is uniformly inadequate, EPA may base BAT upon technology transferred from a different subcategory within an industry or from another industrial category. Best Practicable Control: Effluent limitations for direct discharging facilities, addressing conventional, toxic, and non-conventional pollutants. In specifying BPT, EPA considers the cost of achieving effluent reductions in relation to the effluent reduction benefits. The Agency also considers the age of the equipment and facilities, the processes employed and any required process changes, engineering aspects of the control technologies, non-water quality environmental impacts (including energy requirements), and such other factors as the Agency deems appropriate. Limitations are traditionally based on the average of the best performances of facilities within the industry of various ages, sizes, processes, or other common characteristics. Where existing performance is uniformly inadequate, EPA may require higher levels of control than currently in place in an industrial category if the Agency determines that the technology can be practically applied. biochemical oxygen demand: The amount of dissolved oxygen consumed by microorganisms as they decompose organic material in an aquatic environment. biosolids: nutrient-rich organic materials resulting from the treatment of sewage sludge chemical oxygen demand: A measure of the oxygen required to oxidize all compounds, both organic and inorganic, in water. (http://www.epa.gov/OCEPAterms/cterms.html) conventional pollutants: Statutorily listed pollutants understood well by scientists. These may be in the form of organic waste, sediment, acid, bacteria, viruses, nutrients, oil and grease, or heat. (http://www.epa.gov/OCEPAterms) end of pipe: As discharged from the source outfall to surface waters (for direct dischargers) or to sewers (for indirect dischargers. interference: The obstruction of a routine treatment process of POTWs that is caused by the presence of high levels of toxics, such as metals and cyanide in wastewater discharges. These toxic pollutants kill bacteria used for microbial degradation during wastewater treatment. oil and grease: These organic substances may include hydrocarbons, fats, oils, waxes and high-molecular fatty acids. Oil and grease may produce sludge solids that are difficult to process, (http://www.epa.gov/owmitnet/reg.htm) pass through: Pollutants "pass through" a POTW if they are not removed by treatment and are present in the POTW's discharges to waters of the U.S. EPA compares the percentage of a pollutant removed by well-operated POTWs achieving secondary treatment with the percentage of the pollutant removed by facilities meeting BAT effluent limitations. For purposes of defining PSES and PSNS, a pollutant is determined to pass through if the median percentage removed by a well-operated POTW is less than the median percentage removed under BAT limitations. Pretreatment Standards for Existing Sources: Categorical pretreatment standards for existing indirect dischargers, designed to prevent the discharge of pollutants that pass through, interfere with, or are otherwise incompatible with the operation of POTWs. Standards are technology-based and analogous to BAT effluent limitations guidelines. publicly-owned treatment works: A treatment works, as defined by section 212 of the Clean Water Act, that is owned by a State or municipality. This definition includes any devices or systems used in the storage, treatment, recycling, and reclamation of municipal sewage or industrial wastes of a liquid nature. It also includes sewers, pipes, or other conveyances only if they convey wastewater to a POTW Treatment Plant. (http://www.epa.gov/owm/permits/pretreat/final99.pdf) total suspended solids: A measure of the suspended solids in wastewater, effluent, or water bodies, determined by tests for "total suspended non-filterable solids." (http://www.epa.gov/OCEPAterms/tterms.html). 19 ------- MP&M Proposed Effluent Guidelines Cost-Effectiveness Analysis toxic pound-equivalent: Pound of pollutant weighted by toxic weighting factor: A factor that measures the the pollutants toxic weighting factor, to provide a toxicity of a given pollutant relative to the toxicity of comparable toxicity-adjusted measure of pollutants copper, where toxicity is assessed based on chronic discharged or removed by treatment or pollution prevention. freshwater aquatic criteria (or toxic effects levels) and on human health criteria (or toxic effects levels) for the consumption of fish. 20 ------- MP&M Proposed Effluent Guidelines Cost-Effectiveness Analysis ACRONYMS BAT: Best Available Technology Economically Achievable MP&M: Metal Products and Machinery BOD: biochemical oxygen demand POTW: publically owned treatment works BPT: Best Practicable Control TSS: total suspended solids CCI: Engineering News-Record Construction Cost Index TWF: toxic weighting factor COD: chemical oxygen demand 21 ------- MP&M Proposed Effluent Guidelines Cost-Effectiveness Analysis REFERENCES U.S. EPA (2000). Technical Development Document for Proposed Effluent Limitations Guidelines and Standards for the Metal Products and Machinery Point Source Category. Office of Water. EPA-821-B-00-005. U.S. EPA (2000). Economic, Environmental, and Benefit Analysis of the Proposed Metal Products and Machinery Rule. Office of Water. EPA-821-B-00-008. Engineering News Record. Construction Cost Index, http://www.enr.com/cost/costcci.asp 22 ------- MP&M Proposed Effluent Guidelines Cost-Effectiveness Analysis Appendix A: Alternative CE easures INTRODUCTION This appendix provides two alternative measures of cost- effectiveness: >• Cost-effectiveness including costs to closing facilities; and >• Cost-effectiveness to industry A.I CE INCLU&INS COSTS TO CLOSING FACILITIES. The traditional calculation of cost-effectiveness values includes reductions in loadings that occur when facilities close due to the rule, along with reductions achieved by pollution prevention and treatment, but does not include costs for facilities that close. An alternative measure, presented in this appendix, attributes costs to the facilities that close due to the rule. This cost-effectiveness measure includes costs for facilities that close due to the rule equal to the compliance costs they would have incurred if they instead continued to operate. This calculation overstates costs because these facilities are expected to find it more economic to shut down rather than incur the compliance costs. No costs or loadings reductions from facilities that close in the baseline are included in the analysis, as in the traditional analysis. The following tables present the values for this alternative cost-effectiveness measure for the proposed rule by subcategory, and compares the results with the traditional measures presented in the report, for indirect and direct dischargers respectively. Table A.I and A.2 present this comparison for indirect and direct dischargers, respectively. 23 ------- MP&M Proposed Effluent Guidelines Cost-Effectiveness Analysis Table A.I: Cost-Effectiveness for Indirect Dischargers by Subcategory With and Without Costs for Regulatory Closures Subcategory General Metals Metal Finishing Job Shop Non-Chromium Anodizing Printed Wiring Board Steel Forming & Finishing Oily Wastes Railroad Line Maintenance Shipbuilding Dry Dock Total Removals, Ib-eq 6,216,887 1,766,063 1,195,260 179,900 14,140 9,372,250 Without Costs for Regulatory Closures Costs (millions of 1981$) 844.52 68.82 81.17 12.19 2.52 1,009.22 Cost- Effectiveness Ratio, S/lb-eq 136 39 68 68 178 108 With Costs for Regulatory Closures Costs (millions of 1981$) 848.40 87.02 84.89 13.66 4.94 1,038.92 Cost-Effectiveness Ratio, $/lb-eq 136 49 71 76 350 111 Source: U.S. EPA analysis. Table A. 2: Cost-Effectiveness for Direct Dischargers by Subcategory With and Without Costs of Regulatory Closures Subcategory General Metals Metal Finishing Job Shop Non-Chromium Anodizing Printed Wiring Board Steel Forming & Finishing Oily Wastes Railroad Line Maintenance Shipbuilding Dry Dock Total Removals, Ib-eq 899,372 14,194 64,573 339,147 16,070 174 111 1,333,642 Without Costs for Regulatory Closures Costs (millions of 1981$) 114.54 0.69 1.42 18.39 6.42 0.67 1.24 143.37 Cost- Effectiveness Ratio, $/lb-eq 127 49 22 54 400 3,851 11,171 108 With Costs for Regulatory Closures Costs (millions of 1981$) 118.60 0.69 1.42 18.39 6.42 0.67 1.24 147.42 Cost- Effectiveness Ratio, $/lb-eq 132 49 22 54 400 3,851 11,171 111 Source: U.S. EPA analysis. 24 ------- MP&M Proposed Effluent Guidelines Cost-Effectiveness Analysis A.2 CE TO INDUSTRY This section presents the incremental costs to industry per pound of pollutants removed, and cost-effectiveness values based on those costs to industry. These costs are the after- tax compliance costs as incurred by the regulated facilities. The costs exclude costs for both baseline and regulatory closures, and are annualized at 7 percent. Tables A.3 and A.4 present the results for indirect and direct dischargers, respectively. Table A.3: Industry Cost-Effectiveness for Indirect Dischargers (PSES) Regulatory Option Proposed Option Option 2/6/10 Option 4/8 Annual After-Tax Compliance Costs (excluding regulatory closures) Total Cost (millions) 1999$ 1,161.7 1,645.0 2,644.5 1981$ 677.7 959.6 1,542.6 Incremental Cost (millions) 1999$ 1,161.7 483.3 999.5 1981$ 677.7 281.9 583.0 Weighted Pollutant Removals Total Removals (000 Ibs-eq) 9,372.3 9,755.5 9,936.9 Incremental Removals (000 Ibs-eq) 9,372.3 383.2 181.4 Cost-Effectiveness Ratio ($/lb-eq) 1999$ 124 1,261 5,510 1981$ 72 736 3,214 Source: U.S. EPA analysis. Table A.4: Industry Cost -Effectiveness for Direct Dischargers (BAT) Regulatory Option Proposed Option Option 2/6/10 Option 4/8 Annual After-Tax Compliance Costs (excluding regulatory closures) Total Cost (millions) 1999$ 167.3 167.3 273.7 1981$ 97.6 97.6 159.7 Incremental Cost (millions) 1999$ 167.3 106.4 1981$ 97.6 62.1 Weighted Pollutant Removals Total Removals (000 Ibs-eq) 1,333.6 1,333.6 1,366.7 Incremental Removals (000 Ibs-eq) 1,333.6 33.1 Cost-Effectiveness Ratio ($/lb-eq) 1999$ 125 3,215 1981$ 73 1,876 Source: U.S. EPA analysis. 25 ------- |