&EPA
United States
Environmental Protection
Agency
Office of Water
4301
EPA-820-B-95-010
March 1995
Assessment of
Compliance Costs
Resulting from
Implementation of
the Final Great
Lakes Water
Quality Guidance
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DISCLAIMER
This document has been reviewed by the Office of Science and
Technology, U.S. Environmental Protection Agency, and approved
for publication as a support document for the Great Lakes
Water Quality Initiative. Mention of trade names and
commercial products does not constitute endorsement of their
use.
V j
AVAILABILITY NOTICE
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Springfield, VA 22161
(800) 553-6847
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NTIS Document Number: PB95187340
or
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., ; v^eciion Agency
» ^.'i--i~T*'1 L * " "
Floor
Chicaco,
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TABLE OF CONTENTS
TABLE OF CONTENTS
EXECUTIVE SUMMARY ES-1
1. INTRODUCTION 1-1
1.1 PURPOSE OF THIS REPORT 1-1
1.2 ORGANIZATION OF THIS REPORT 1-2
2. METHODOLOGY 2-1
2.1 SUMMARY OF METHOD FOR DEVELOPING COST ESTIMATE FOR THE
PROPOSED GUIDANCE 2-1
2.2 APPROACH FOR ESTIMATING COMPLIANCE COSTS FOR THE FINAL
GUIDANCE 2-5
2.2.1 Selection of Direct Discharge Facilities 2-8
2.2.2 Collection of Data/Information 2-9
2.2.3 Calculation of Permit Limits/Conditions 2-12
2.2.3.2 Expanded List of Pollutants Evaluated in
Cost Analyses 2-13
2.2.5.2 Development of Tier I Criteria and Tier II Values
Used in Cost Analyses 2-14
2.2.3.3 Revised Implementation Procedures 2-22
2.2.4 Estimation of Facility Compliance Costs 2-26
2.2.4.1 Compliance Cost Decision Matrix 2-26
2.2.4.2 Pollution Prevention/Waste Minimization Costs 2-32
2.2.5 Estimation of Total Compliance Costs to the Regulated Community . . . 2-32
2.2.6 Estimation of Compliance Costs for Indirect Dischargers 2-33
3. RESULTS 3-1
3.1 OVERVIEW OF APPROACH 3-1
3.2 DISCUSSION OF RESULTS 3-2
3.2.1 Analysis of Low-End Cost Estimate for Direct Dischargers 3-2
3.2.2 Analysis of High-End Cost Estimate for Direct Dischargers 3-6
3.2.3 Comparison of Estimated Costs for the Final Guidance
to Costs of Proposed 3-14
4. EVALUATION OF COST-EFFECTIVENESS 4-1
4.1 METHODOLOGY 4-1
4.1.1 Estimation of Pollutant Reductions 4-1
4.1.2 Revised Toxic Weights 4-3
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TABLE OF CONTENTS
TABLE OF CONTENTS
(continued)
Page
4.1.3 Toxicity Weighting and Extrapolation of Pollutant Baseline Loadings and
Reductions 4-4
4.1.4 Determining Cost-Effectiveness 4-4
4.2 RESULTS 4-4
5. EVALUATION OF REGULATORY OPTIONS 5-1
5.1 SUMMARY OF ISSUES RELATED TO COMPLIANCE COST
ESTIMATES 5-1
5.2 DESCRIPTION OF REGULATORY OPTIONS 5-1
5.3 METHODOLOGY TO EVALUATE REGULATORY OPTIONS 5-1
5.3.1 Method for Evaluating the Impact of the Antidegradation Provisions of
the Final Guidance 5-6
5.3.2 Method for Evaluating the Impact of Future Improvements to Analytical
Detection Levels 5-8
5.4 RESULTS 5-9
5.4.1 Fish Consumption Rates 5-10
5.4.2 Use of Pollutant Minimization Programs When WQBELs Are Below
Analytical Detection Levels 5-10
5.4.3 Intake Credits 5-11
5.4.4 Tier n Criteria 5-12
5.4.5 Wildlife Criteria/Mercury Criteria 5-14
5.4.6 Allowance of Mixing Zones for BCCs 5-15
5.4.7 Additivity 5-16
5.4.8 Antidegradation 5-18
5.4.9 Future Impact of Detection Levels " 5-19
APPENDIX A - REEVALUATION OF TIER U AQUATIC LIFE VALUES A-l
APPENDIX B - WILDLIFE CRITERIA DEVELOPMENT B-l
ll
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LIST OF TABLES
LIST OF TABLES
Page
TABLE ES-1 SUMMARY OF ANNUALIZED COMPLIANCE COSTS
ATTRIBUTABLE TO THE FINAL GREAT LAKES
WATER QUALITY GUIDANCE ES-3
TABLE 2-1 COST STUDY ASSUMPTIONS REGARDING CRITERIA/
STANDARDS THAT ARE MORE STRINGENT THAN REQUIRED
BY FINAL GUIDANCE 2-7
TABLE 2-2 COST STUDY ASSUMPTIONS REGARDING IMPLEMENTATION
PROCEDURES THAT ARE MORE STRINGENT THAN REQUIRED
BY FINAL GUIDANCE 2-7
TABLE 2-3 DISCHARGERS REMOVED FROM THE COST ANALYSIS
AND REPLACEMENT FACILITIES 2-9
TABLE 2-4 MAJOR FACILITIES RANDOMLY SELECTED FOR COMPLIANCE
COST EVALUATION 2-10
TABLE 2-5 PARAMETERS IDENTIFIED FOR FINAL COSTING ANALYSES 2-15
TABLE 2-6 CRITERIA DEVELOPED FOR USE IN FINAL COST ANALYSES 2-16
TABLE 2-7 COMPARISON OF MOST STRINGENT HUMAN HEALTH CRITERIA
IN THE PROPOSED GUIDANCE, FINAL GUIDANCE, AND COST
EVALUATIONS 2-20
TABLE 2-8 COMPARISON OF WILDLIFE CRITERIA IN THE PROPOSED
GUIDANCE, FINAL GUIDANCE, AND COST EVALUATIONS 2-21
TABLE 2-9 PARAMETERS USED TO TRANSLATE DISSOLVED
METALS CRITERIA TO TOTAL RECOVERABLE WQBELs 2-23
TABLE 2-10 COST ESTIMATES FOR PURSUING REGULATORY RELIEF 2-31
TABLE 2-11 SUMMARY OF INDIRECT DISCHARGERS POTENTIALLY AFFECTED
BY THE GUIDANCE AT NINE PRETREATMENT POTWs 2-34
TABLE 3-1 SUMMARY OF ANNUALIZED COMPLIANCE COSTS ATTRIBUTABLE
TO THE FINAL GREAT LAKES WATER QUALITY GUIDANCE 3-3
TABLE 3-2 FINAL GUIDANCE COMPLIANCE COST ESTIMATES FOR
DIRECT DISCHARGERS: LOW-END SCENARIOS 3-4
ill
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LIST OF TABLES
LIST OF TABLES
(continued)
TABLE 3-3 BREAK-OUT OF FINAL GUIDANCE COMPLIANCE COSTS
BY POLLUTANT: LOW-END SCENARIO 3-7
TABLE 3-4 FINAL GUIDANCE COMPLIANCE COST ESTIMATES FOR
DIRECT DISCHARGERS: HIGH-END SCENARIO 3-10
TABLE 3-5 BREAK-OUT OF FINAL GUIDANCE COMPLIANCE COSTS
BY POLLUTANT: HIGH-END SCENARIO 3-12
TABLE 3-6 COMPARISON OF PROPOSED AND FINAL COMPLIANCE
COST ESTIMATES 3-16
TABLE 4-1 TOXIC WEIGHTS FOR POLLUTANTS EVALUATED IN
THE FINAL GUIDANCE 4-5
TABLE 4-2 UNWEIGHTED POLLUTANT LOADING REDUCTIONS 4-6
TABLE 4-3 TOXICITY WEIGHTED POLLUTANT LOADING REDUCTIONS 4-9
TABLE 5-1 SUMMARY OF ISSUES RAISED RELATED TO COMPLIANCE
COST ESTIMATES FOR THE PROPOSED GUIDANCE 5-2
TABLE 5-2 SUMMARY OF REGULATORY ALTERNATIVES EVALUATED FOR
THE MAJOR ISSUES RAISED RELATED TO COMPLIANCE COST
ESTIMATES FOR THE PROPOSED GUIDANCE 5^
TABLE 5-3 VALUE OF SHIPMENTS FOR SIX MAJOR INDUSTRIAL SECTORS
(MILLIONS OF DOLLARS) 5-7
TABLE 5-4 PROPORTION OF DIRECT DISCHARGERS TO TOTAL INDUSTRY
ESTIMATES 5-8
TABLE 5-5 EVALUATION OF FISH CONSUMPTION RATES 5-10
TABLE 5-6 EVALUATION OF POLLUTANT MINIMIZATION PROGRAM
REQUIREMENTS 5-12
TABLE 5-7 EVALUATION OF ALTERNATIVE INTAKE CREDIT PROVISIONS 5-13
TABLE 5-8 EVALUATION OF APPLICATION OF TIER I CRITERIA AND
TIER D VALUES 5-14
IV
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LIST OF TABLES
LIST OF TABLES
(continued)
TABLE 5-9 EVALUATION OF APPLICATION OF WILDLIFE CRITERIA 5-15
TABLE 5-10 EVALUATION OF ALLOWING MIXING ZONES FOR BCCs 5-16
TABLE 5-11 EVALUATION OF ADDITIVITY 5-17
TABLE 5-12 EVALUATION OF IMPACT OF ANTIDEGRADATION
PROVISIONS 5-18
TABLE 5-13 EVALUATION OF FUTURE IMPACT OF LOWER ANALYTICAL
DETECTION LEVELS 5-20
TABLE A-l COMPARISON OF TIER U AQUATIC LIFE VALUES CALCULATED
FOR COST ANALYSES VS. THOSE CALCULATED USING FINAL
GUIDANCE METHODS (/tg/1) A-2
TABLE A-2 COMPARISON OF AQUATIC LIFE VALUES CALCULATED USING
FINAL GUIDANCE METHODS VS. THE MOST STRINGENT HUMAN
HEALTH AND WILDLIFE CRITERIA (/ig/1) A-3
TABLE B-l WILDLIFE VALUES FOR RIA/INFORMATION USED TO
CALCULATE VALUES B-4
TABLE B-2 EXPOSURE PARAMETERS B-5
TABLE B-3 WILDLIFE VALUES VS. CHRONIC AQUATIC LIFE VALUES FOR
SK INORGANIC COMPOUNDS B-5
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LIST OF FIGURES
LIST OF FIGURES
Page
FIGURE 2-1 COMPLIANCE COST DECISION MATRIX 2-27
FIGURE 3-1 FINAL GUIDANCE COMPLIANCE COST ESTIMATES FOR DIRECT
DISCHARGERS: LOW-END SCENARIO 3-5
FIGURE 3-2 FINAL GUIDANCE COMPLIANCE COST ESTIMATES FOR DIRECT
DISCHARGERS: HIGH-END SCENARIOS 3-11
VI
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EXECUTIVE SUMMARY
EXECUTIVE SUMMARY
On April 16, 1993, the Environmental Protection Agency (EPA) proposed the Great
Lakes Water Quality Guidance (58 FR 20802) that included minimum water quality criteria,
antidegradation provisions, and implementation procedures for the Great Lakes System. In
support of the Regulatory Impact Analysis for this proposal, an estimate of the incremental cost
to direct dischargers resulting from the implementation of the proposed Guidance was developed.
The resulting estimate reflected the incremental cost of complying with prospective permit
requirements stemming from compliance with procedures and water quality criteria specified in
the proposed Guidance. In addition, because some of the compliance costs may be passed on
to users of publicly owned treatment works (POTWs), preliminary cost estimates for indirect
dischargers (i.e., dischargers to POTWs) were developed. Preliminary estimates of the
reductions of pollutant loadings resulting from implementation of the proposed Guidance were
also developed to evaluate the resulting cost-effectiveness.
In response to the public comments received on the proposed Guidance, EPA has revised
the proposed Guidance to address many of the issues raised by the public. While revising the
proposed Guidance, EPA requested support in evaluating the costs associated with complying
with the final Guidance. This report provides compliance cost information for use by EPA in
decision-making for the final Guidance. The primary purpose of this study was to develop the
cost of control measures (e.g., pollution prevention, end-of-pipe treatment, or other pollutant
controls) needed by point sources to meet effluent limitations developed using the final Guidance
water quality criteria and implementation procedures. The estimate considers only the
incremental cost of complying with the final Guidance.
I. METHODOLOGY FOR ESTIMATING COMPLIANCE COSTS AND
POLLUTANT LOADING REDUCTIONS
In general, the basic methodology used to estimate compliance costs and pollutant load
reductions attributable to the proposal was employed to estimate costs for the final Guidance.
However, the approach was revised based on comments received by EPA to more accurately
project the costs to the regulated community and to better account for the pollutant load
reductions. Several of the significant revisions are described briefly below.
• Improved Data Collection: For the final Guidance, the current information and
data (including permits, fact sheets, permit applications, and other relevant
discharge information) were updated and verified, and were used as the basis for
comparison to Guidance requirements. In addition, State permitting authorities
were requested to review each sample facility and provide recommendations or
comments so that the facilities were represented accurately. Comments provided
by States in response to the original cost estimates were also considered.
ES-1
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EXECUTIVE SUMMARY
• Consideration of Additional Pollutants: In addition to the 32 pollutants for which
numeric criteria are being published as part of the final Guidance, 37 other
pollutants were included in the cost analysis. These 37 pollutants were identified
at the sample facilities and were determined to have potential impacts on costs
and pollutant loadings. This increased the total number of pollutants evaluated
to 69.
* Use of Tier I Criteria and Tier II Values: Water quality criteria for the 69
pollutants were developed using the Tier I and Tier n methodologies outlined in
Appendices A, B, C, and D of the final Guidance and readily available toxicity
data. In addition, EPA revised many of the criteria originally proposed under the
Guidance, including promulgating criteria for metals in the dissolved form as
opposed to the total form for aquatic life.
• Additivity: The estimate of costs for the sample facilities accounted for additivity
of human carcinogenic effects of pollutants contained in a discharge. To estimate
costs for the final Guidance, it was assumed that the total carcinogenic risk of the
mixture of two or more carcinogens in a discharge would not exceed a lifetime
incremental cancer risk equal to one in 100,000 (10~5).
• Intake Credits: The presence of intake water pollutants in establishing water
quality-based effluent limits was considered in accordance with the final
Guidance.
In general, the assessment of compliance costs was revised to reflect modifications made
to the final Guidance to provide increased flexibility for State and Tribal implementation. For
purposes of estimating compliance costs, it was assumed that permitting authorities would use
the more stringent provisions specified in the final Guidance even when the Guidance provides
for less stringent alternatives.
Finally, in an effort to ensure consistency in estimating the general types of controls that
would be necessary for a sample facility to comply with the final Guidance, as well as to
integrate into the cost analysis the alternatives available through the final Guidance (e.g., phased
total maximum daily loads/water quality assessments, site-specific criteria modifications,
alternative mixing zones, etc.), a costing decision matrix was used for each sample facility. The
underlying assumption of the decision matrix is that facilities would first pursue least-cost
controls prior to incurring the costs to install end-of-pipe treatment. As a final step before
assuming that treatment would be installed by the facility, the relationship between the cost of
adding the treatment and other types of remedies or controls were considered. If it was
concluded that other remedies or controls would be more feasible than installing end-of-pipe
treatment, then it was assumed that a facility would alternatively pursue some type of regulatory
relief from the Guidance water quality-based effluent limit (WQBEL).
Two different cost scenarios were developed for the final Guidance to primarily account
for the flexibility provided in the Guidance (i.e., use of regulatory relief). Under the low-end
compliance cost scenario, if the estimated annualized cost for removal of a pollutant by a facility
exceeded $200 per toxic pounds-equivalent then it was assumed that the facility would explore
ES-2
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EXECUTIVE SUMMARY
the use of other remedies or controls. Acknowledging that the use of regulatory relief may be
limited depending upon the particular circumstances for a "facility," compliance costs were also
estimated under a high-end cost scenario that assumes regulatory relief would be granted only
when the cost for the particular "category of dischargers" exceeds $500 per toxic pounds-
equivalent. Under the high-end scenario, when the trigger for the category was exceeded, then
it was assumed that dischargers within the "category" would be granted regulatory relief.
H. RESULTS
The total annualized cost of the final Guidance will be between $61 million (low-end) and
$376 million (high-end). Table ES-1 presents a breakdown of costs for direct and indirect
dischargers. Under the low-end estimate, direct dischargers account for 67 percent of the total
estimated compliance costs and indirect dischargers account for the remaining 33 percent.
Under the high-end estimate, direct dischargers account for 98 percent of the total estimated
cost, and indirect dischargers account for 2 percent. The increase in capital costs under the
high-end resulted in a greater percentage of the costs associated with direct discharging facilities.
TABLE ES-1 SUMMARY OF ANNUALIZED COMPLIANCE COSTS ATTRIBUTABLE TO THE
FINAL GREAT LAKES WATER QUALITY GUIDANCE
COST CATEGORIES
Major Direct Dischargers-
Industrial
Major Direct Dischargers-
Municipal
Minor Direct Dischargers
Indirect Dischargers
TOTAL
LOW-END COST SCENARIO
ESTIMATED
COSTS*
15.7
23.8
. 1.6
19.9
61.0
GROUP COST
AS PERCENT OF
TOTAL COST
25.8%
39.0%
2.6%
32.6%
100.0%
HIGH-END COST SCENARIO
ESTIMATED
COSTS*
108.2
259.8
1.6
6.6
376.2
GROUP COST
AS PERCENT OF
TOTAL COST
28.7%
69.1%
0.4%
1.8%
100.0%
First Quarter 1994 $, Millions
Low-End Scenario Cost E.^i
Under the low-end cost estimate for the direct dischargers, municipal majors are expected
to incur 58 percent of total costs and industrial majors account for 38 percent of total compliance
costs. Minor direct dischargers are estimated to incur 4 percent of the total costs for direct
dischargers. The two major industrial categories with the largest total annualized cost are the
pulp and paper (20 percent of total) and miscellaneous (11 percent) categories. The food and
food products, metal finishing, mining, and metals manufacturing categories are estimated to
incur less than 1 percent of the total annualized compliance cost.
ES-3
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EXECUTIVE SUMMARY
Although the municipal major category accounts for over 58 percent of the total estimated
cost under the low-end, the average annual cost is just over $75,000 per facility. Average
annualized costs for industrial majors vary widely across categories, with the highest average
cost estimated for the miscellaneous ($168,000 per plant) and pulp and paper ($151,000 per
plant) categories. For minor facilities, average costs are negligible at an estimated $500 per
facility.
Costs to direct dischargers for developing and implementing pollutant minimization
programs (required when WQBELs are below analytical detection levels) account for most of
the low-end costs (58 percent of total annual costs). Annualized capital and operation and
maintenance (O&M) costs make up just over 21 percent of the total annual costs and waste
minimization (i.e., pollution prevention) costs account for just over 11 percent. Under the low-
end cost scenario, regulatory relief was assumed when the control costs for a pollutant at a
facility exceeded $200 per toxic pounds-equivalent. Based on the analysis of sample facilities,
it was estimated that regulatory relief would be required for less than 1 percent of all direct
dischargers. For these facilities, cost for controls to comply with the final Guidance (e.g.,
capital and O&M, pollutant minimization programs, waste minimization, etc.) were shifted to
costs related to pursuing regulatory relief. The resulting costs associated with pursuing
regulatory relief account for just over 6 percent of the total annual costs.
Controls for mercury account for over 20 percent of annual low-end costs (attributable
primarily to pollutant minimization program-related costs). Other pollutants that account for
significant costs include methylene chloride, aluminum, benzene, and copper.
High-End Scenario Cost Estimates
Under the high-end scenario, regulatory relief was assumed necessary when the total cost
for a category exceeded $500 per toxic pounds-equivalent reduced. Only the steam electric
industrial category was estimated to exceed the $500 toxic pounds-equivalent cost trigger. In
general, estimated costs for end-of-pipe treatment of significant volumes of non-contact cooling
water accounted for the high costs within the steam electric category. As a result of these
significant costs, costs for end-of-pipe treatment were shifted to costs to pursue regulatory relief
for certain high volume steam electric facilities.
Under the high-end estimate for the direct dischargers, municipal majors are expected
to incur just over 69 percent of total costs and industrial majors account for 29 percent of total
annual compliance costs. Minor direct dischargers are estimated to incur less than 1 percent of
the total costs.
The two major industrial categories with the largest total annualized cost are the pulp and
paper (23 percent of total) and miscellaneous (3 percent) categories. Even under the high-end,
the food and food products, metal finishing, mining, and metals manufacturing categories are
still estimated to incur less than 1 percent of the total annualized compliance cost. In addition,
due to the shift from end-of-pipe treatment to regulatory relief, the steam electric category also
accounts for less than 1 percent of the total compliance cost.
ES-4
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EXECUTIVE SUMMARY
The municipal major category accounts for just over 69 percent of the total estimated
.cost, the average annual cost is just over $822,000 per facility. Average annualized costs for
industrial majors vary widely across categories, with the highest average cost estimated for pulp
and paper ($1,583,000 per plant) and miscellaneous ($433,700 per plant) categories. For minor
facilities, average costs' are negligible at an estimated $500 per facility.
For the high-end scenario, costs to direct dischargers shifted away from developing and
implementing pollutant minimization plans and waste minimization to capital, operating and
maintenance costs (over 52 percent of total annual costs) associated with construction and
application of end-of-pipe treatment. Annualized costs for developing and implementing
pollutant minimization plans make up just over 6 percent of total annual costs and waste
minimization costs account for less than 1 percent. Since regulatory relief was assumed for only
one category under the high-end, the costs associated with regulatory relief account for less than
1 percent of the total annual compliance cost.
Controls for lead account for over 60 percent of annual costs (attributable primarily to
end-of-pipe treatment related controls). Other pollutants that account for significant costs include
heptachlor, pentachlorophenol, lindane, and mercury.
Comparison of Estimated Costs for the Final Guidance to Costs of Proposed Guidance
The original proposal estimates were revised to reflect changes made in the approach to
estimating costs for the final Guidance. The reevaluated original proposal resulted was about
$240 million (low-end scenario) and $265 million (high-end scenario) higher than estimates for
the final Guidance.
The annual cost estimate for the final Guidance is significantly lower than the revised
estimates for the proposed Guidance. Some of this reduction is attributable to the final Guidance
intake credit provisions, which provide relief to several significant dischargers that discharge to
non-attained waters, and to the use of dissolved metals criteria, which also tends to lower the
costs for the final Guidance.
Common to both the reevaluated proposal and the final Guidance, the lowering of the
permit baseline also accounts for an overall decrease in compliance costs and load reduction.
The lowering of the permit baseline was expected due to State implementation of the
requirements of Section 303(c) of the Clean Water Act, which required all States to promulgate
water quality criteria for certain toxic pollutants. To ensure that the requirements of Section
303(c) are met, EPA promulgated the National Toxics Rule (57 FR 6084; 12/22/92) to provide
water quality criteria for pollutants for which States did not promulgate criteria. More
important, each of the Great Lake States has been actively involved in the Great Lakes Water
Quality Initiative since 1989, acting as co-partners and major participants in developing the
Guidance.
Consequently, most of the Guidance and current State water quality standards have a
wide number of similarities. In fact, some States have already elected to promulgate more
stringent requirements for a variety of Guidance-related provisions in anticipation of the
Guidance. As a result of these and many other efforts by States, the stringency of National
ES-5
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EXECUTIVE SUMMARY
Pollutant Discharge Elimination System (NPDES) permit requirements continues to increase,
which decreases the incremental difference between the current State permit limits and Guidance-
based WQBELs.
m. POLLUTANT LOADINGS REDUCTIONS AND COST-EFFECTIVENESS
Toxic pounds-equivalent represent a unit of measurement that permit uniform comparison
among pollutants based on their relative toxicity. For example, reducing the discharge of
aluminum by 10 pounds will have a different effect on the environment as compared to reducing
the discharge of mercury by 10 pounds. Normalizing the pollutant loading reductions by using
toxic weight factors enables one to compare the relative impacts of these pollutant loading
reductions.
For the final Guidance, the toxicity-weighted baseline pollutant loading was projected to
be just over 35 million toxic pounds-equivalent per year (Ibs-eq/year). This baseline pollutant
loading represents almost a 72 percent reduction in the baseline projected by EPA for its original
analysis of the proposed Guidance (126 million Ibs-eq/year).
This downward shift in the baseline pollutant loadings is particularly significant in light
of the fact that over 35 more pollutants were added for the analysis of the final Guidance. This
shift is attributable to the fact that the existing permit baseline also moved downward (i.e.,
existing permit limits for the sample facilities were found to be more stringent). This downward
shift in the permit baseline is due, in part, to increased efforts by States to protect water quality.
The use of dissolved criteria for metals for the final Guidance, which tended to eliminate metals
for the cost and loading analysis also accounted for a shift in the baseline. Finally, in contrast
to the cost analysis for the proposed Guidance, where baseline loads were estimated even when
all data were reported below analytical detection levels (in the absence of a permit limit), the
cost analysis for the final Guidance excluded pollutants that were never detected from further
evaluation.
Upon implementation of the final Guidance, the estimated pollutant loadings under the
low-end estimate would be reduced by 5.8 million Ibs-eq/year, which represents a 16 percent
reduction of the baseline pollutant loadings. Under the high-end cost estimate, pollutant loading
reductions would increase by 1.8 million Ibs-eq/year to a total of 7.6 million Ibs-eq/year, which
represents a 22 percent reduction of the baseline pollutant loadings.
The percent reductions estimated for the final Guidance are also lower than projected for
the proposed Guidance reevaluated using the revised approach for estimating costs and load
reductions. Pollutant loadings under the proposed Guidance would be 8.4 million Ibs-eq/year
(24 percent reduction) and 10.1 million Ibs-eq/year (29 percent reduction) for the low- and high-
end scenarios, respectively. The drop in estimated pollutant loadings can also be credited to the
changes made by EPA to the criteria for the final Guidance (e.g., adjusting bioaccumulation
factors, use of dissolved criteria for metals) and the toxic weights. The combined result of these
changes was essentially less stringent criteria, which would tend to reduce the difference between
existing permit limits and the Guidance-based WQBELs.
ES-6
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EXECUTIVE SUMMARY
Under the low-end estimate for the final Guidance, the largest pollutant load reductions
occur for dieldrin and lead, which account for over 50 percent toxic weighted load reduction.
Chlordane, heiptachlor, and pentachlorobenzene were also reduced by significant amounts from
the baseline. Under the high-end estimate, the largest pollutant load reductions occur for
heptachlor, dieldrin, and lead which account for about 70 percent of the toxic weighted load
reduction.
Approximately 80 percent of the pollutant load reduction for the final Guidance,
regardless of the scenario, is attributable to reducing BCCs as a result of pollutant minimization
plans and end-of-pipe treatment.
The cost-effectiveness of the final Guidance under the low-end estimate is just under
$7.00/lbs-eq for the direct dischargers only; with the cost for indirect dischargers, the cost-
effectiveness rises to $10.30/lbs-eq. Under the high-end estimate, the cost-effectiveness
increases to just over $49.00/lbs-eq.
The estimates for the final Guidance are considerably more cost-effective than those
estimated for the proposed Guidance using the revised approach ($35.96/lbs-eq and $63.83/lbs-
eq); low-end and high-end scenarios, respectively). For comparative purposes, cost-effectiveness
values for effluent limitations guidelines and standards range from just over $1.00/lbs-eq to over
$500/lbs-eq.
IV. EVALUATION OF REGULATORY OPTIONS
The proposed Guidance generated extensive comments related to the potential costs of
numerous aspects of the Guidance. In response to the issues raised regarding the cost of various
provisions of the Guidance, additional analyses were performed to evaluate the impact of
possible regulatory options to address these issues.
Fish Consumption Rates
Many commenters believed that EPA's proposed fish consumption rate of 15 grams per
day (grams/day) for establishing human health protection criteria would not be protective of
recreational and subsistence anglers such as the Native American anglers and minority anglers,
or women of childbearing age and children within the Great Lakes Basin. Further, some
commenters suggested that a higher fish consumption rate ranging from 30-60 grams/day would
be necessary to protect lower income and minority subpopulations that eat more sport caught fish
on average. The cost estimates for the final Guidance were based on a consumption rate of 45
grams/day. Decreasing the consumption rate to 15 grams/day had an insignificant impact on the
estimated compliance cost and expected pollutant load reductions. The cost results at the high-
end also show relatively insignificant increases in estimated costs and pollutant load reductions.
The primary reason that decreasing fish consumption had little impact on costs or load reductions
was due to the fact that the resulting difference in criteria using 15 and 45 grams/day
assumptions was not significant enough to change the control options selected for a pollutant at
a particular facility. This was particularly the case for most BCCs, for which criteria using 15
or 45 grams/day remained below analytical detection levels.
ES-7
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EXECUTIVE SUMMARY
Use of Pollutant Minimization Programs When WOBELs Are Below Analytical Detection
Levels
Procedure 8 of the final Guidance requires that the permitting authority require that a
pollutant minimization plan be required when a WQBEL is established below analytical detection
levels. The intent of the pollutant minimization plan is to reduce all sources of the pollutant to
maintain the effluent below analytical detection levels. Although it is acknowledged that some
facilities will want to ensure compliance with WQBELs below detection levels through the use
of additional or enhanced end-of-pipe treatment, it is likely that an aggressive pollutant
minimization program can successfully result in compliance with WQBELs below detection
levels. Pollutant minimization programs account for a significant proportion of the total
compliance cost under the low-end scenario. The impact of these requirements were evaluated
by deriving cost estimates assuming that permitting authorities would only require increased
monitoring for any pollutant for which a Guidance-based WQBEL was below analytical detection
levels. An analysis was performed of the impact of only requiring monitoring for pollutants for
which Guidance-based WQBELs are below analytical detection levels.
It is estimated that annual compliance costs for direct dischargers will decrease by over
60 percent. The estimated pollutant load reductions decrease to 1.3 million Ibs-eq/day, which
is almost 80 percent less than the reduction estimated for the final Guidance. Under the high-
end, compliance costs do not drop as dramatically as the low-end costs due to the shift towards
end-of-pipe treatment, however, the pollutant load reductions decrease by over 50 percent.
Intake Credits
In generating cost estimates for the proposed Guidance, intake credits were provided by
assuming there was no reasonable potential for outfalls at facilities that added no additional
pollutants prior to discharge. In an effort to evaluate the impact of intake credits on estimated
compliance costs, compliance costs under a number of different intake credit scenarios were
developed. For discharges to different bodies of water, no significant impact occurred (less than
O.S percent) to either the compliance costs or pollutant load reductions at either the low- or high-
end scenarios, regardless of whether intake credits are relaxed (no net increase) or made more
stringent (no intake credit allowed). This result occurred because discharges occurred only
infrequently to different bodies of water that were non-attained.
Alternatively, the form of intake credits does impact discharges to the same body of
water. When intake credits are allowed, a slight drop in costs is experienced concurrent with
a larger proportional drop in pollutant load reduction. At the low-end, compliance costs drop
by $700,000 (a 1.7 percent decrease), but pollutant load reductions drop by over 17 percent.
At the high-end, costs decrease by less than 1 percent, but pollutant load reductions decrease by
13.5 percent.
When intake credits were not allowed for discharges to the same body of water, the
annual compliance costs for direct dischargers increased by $245 million, representing over a
600 percent increase from the final Guidance low-end estimate. However, pollutant load
reductions increased to 6.4 million Ibs-eq/year, which represents only a 9 percent increase from
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EXECUTIVE SUMMARY
the final Guidance low-end estimate. The same trend results using high-end scenario costs
where the costs increase by over 60 percent, but pollutant reductions increase by only 7 percent.
Tier II Criteria
One of the stated limitations of the cost estimate for the proposed Guidance was that
compliance costs were not estimated for pollutants other than those for which numeric Tier I
criteria were proposed. The cost estimate for the final Guidance is based upon evaluation of
compliance with 69 pollutants of initial focus. To determine the potential impact of the use of
Tier I criterion versus Tier n values, compliance costs under a variety of scenarios were
developed.
If only Tier I criteria are used, the annual compliance costs for direct dischargers would
drop by $5 million, which is just under 12 percent of the final Guidance low-end estimate. The
pollutant load reductions would also decrease by about 8 percent of the estimate for the final
Guidance. Under the high-end, both costs and pollutant load reductions decrease similarly (2
percent drop in costs and 6 percent drop in pollutant load reduction from the high-end estimate
from the final Guidance).
If Tier I and n criteria are used for all pollutants, the annual compliance costs increase
insignificantly at both the low- and high-end. This result was expected since the scenario only
adds Tier n wildlife values. Although many of these additional Tier n wildlife values are more
stringent than other Guidance criteria, the impact is insignificant since both the Tier n wildlife
values and the other Guidance criteria are below analytical detection levels.
Wildlife Criteria/Mercury Criteria
The final Guidance limits the use of the wildlife criteria methodology to the Tier I
procedure for the 22 BCCs for which sufficient data exist. In response to the many concerns
raised regarding the stringency of wildlife criteria and the potential significant costs associated
with complying with the criteria, a number of alternatives were evaluated.
Using additional wildlife criteria (beyond those required for the 22 BCCs) results in an
insignificant increase in annual compliance costs. Alternatively, excluding all wildlife criteria
also results in essentially no difference in compliance cost estimates and pollutant load reductions
at both the low- and high-end. These results indicate that factors other than the wildlife criteria
tend to drive the costs of the final Guidance. In the absence of wildlife criteria, the Guidance
human health criteria would form the basis for Guidance-based WQBELs. The Guidance human
health criteria for most pollutants are below analytical detection levels and, as such, the costs
for treatment and pollutant minimization plans would be incurred by a facility. Although the
wildlife criteria in general are more stringent than the Guidance human health criteria, they
would also result in Guidance-based WQBELs below analytical detection levels. Therefore, the
same treatment and pollutant minimization plan requirements, costs, and pollutant load
reductions would occur.
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EXECUTIVE SUMMARY
Allowance of Mixing Zones for BCCs
As promulgated in Procedure 3 of Appendix F to Part 132, the final Guidance retained
the requirement for elimination of mixing zones for BCCs within 12 years. The final Guidance
also provides some flexibility to allow limited mixing zones for BCCs if the facility can show
that all prudent and feasible treatment technologies are being implemented to reduce the
discharge of BCCs to the maximum extent possible. In estimating costs for the final Guidance,
it was conservatively assumed that no mixing zones would be allowed for BCCs. To determine
the impact of this requirement on facilities (in terms of cost) and the environment (in terms of
pollutant load reductions), the sample facilities were reevaluated allowing the same mixing zones
for BCCs as are allowed for non-BCCs.
The addition of mixing zones for BCCs results in an estimated incremental annual cost
savings to direct dischargers of just over $200,000, which is less than a 0.5 percent decrease
from the final Guidance low-end cost estimate. In terms of pollutant load reductions, the
addition of mixing zones results in an insignificant decrease in pollutant load reductions. Slight
reductions in cost and pollutant load reductions were also found under the high-end scenario.
The relatively small impact associated with allowing mixing zones for BCCs is due to
the fact that the criteria for most BCCs are relatively stringent, and usually well below analytical
detection levels. Even with the dilution afforded by the mixing zones, resulting WQBELs
remain below analytical detection levels and, as a result, do not drastically impact the costs and
load reductions (i.e., the pollutant controls would not change if both WQBELs were below
analytical detection levels).
Additivitv
In an effort to evaluate the impact of the additivity provision on the compliance cost of
the final Guidance, cost estimates for two scenarios were developed. Under one scenario, the
assumption was that additivity would be controlled if the total carcinogenic risk in a discharge
was less than 10*s and accounted for by assuming that individual criteria were based on a 10*5
risk level. Under the second scenario, the assumption was that the additive effects from
carcinogens would be accounted for if individual criteria were based on a 10"6 risk level.
The impact of the first scenario was relatively insignificant (less than 0.5 percent decrease
in costs and just over 1 percent decrease in pollutant load reductions at both low- and high-end
estimates). The relatively insignificant changes in cost and pollutant load reductions are based
on the fact that most facilities did not detect more than a few carcinogens in their discharge.
As a result, the final Guidance estimates (based upon a total carcinogenic risk of 10~5 but
accounted for by distributing the risk across all carcinogens in the effluent) did not represent
more stringent WQBELs for carcinogens, as compared to only accounting for the risk through
the individual criteria.
When the individual criteria risk level is adjusted down to 10"6, a more dramatic increase
in costs occurs. A 10* risk level for individual criteria would increase the annual compliance
costs for direct dischargers to over $51 million under the low-end. The associated load
reductions do not increase as dramatically, accounting for only an additional 6,000 Ib-eq/year.
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EXECUTIVE SUMMARY
The reason a large pollutant reduction did not accompany the large increase in costs under the
low-end scenario is the assumption that a significant number of facilities would pursue some sort
of regulatory relief, for which there is no pollutant reduction credit, to meet the more stringent
criteria based on a 10* risk level.
The same trend occurs at the high-end, where costs increase by over 30 percent, but
pollutant load reductions decrease by less than 1 percent. However, under the high-end scenario
where variances are limited to categories that exceed the high-end cost trigger, the significant
increase in costs is due to the costs associated with installing and maintaining end-of-pipe
treatment for pollutants impacted by the more stringent criteria. The insignificant load
reductions associated with the large increase in costs are due to the fact that some regulatory
relief was still justified under the high-end. Further, for some pollutants with criteria below the
analytical detection level, the shift from criteria based on a 10s risk level to criteria based on
a 10"* risk level resulted in criteria further below analytical detection levels, which had no impact
on pollutant load reductions.
Antidegradation
It is assumed that the antidegradation provision of the final Guidance, as promulgated
under Appendix E to Part 132, may impact the regulated community. However, due to the
variety of site-specific factors that would influence the future impact of the antidegradation
provision, it is uncertain whether the impact will be significant. Therefore, an analysis of the
potential impact of the antidegradation provision was performed in the form of estimating the
cost to lost opportunities for businesses in the Great Lakes Basin.
Under the worst case where it was assumed that all (100 percent) facilities with BCCs
in their discharge (approximately 5 percent of all facilities) requested an antidegradation review
and were denied permission to increase loads, an opportunity cost of $43.2 million would be lost
due to the Guidance. More realistically, if it was assumed that half (SO percent) of the facilities
requesting antidegradation reviews for BCCs were allowed to increase discharges, only $21.6
million of opportunity cost would be lost each year. Finally, assuming that only 10 percent of
the facilities discharging BCCs request an antidegradation review, and only half are denied, then
the opportunity lost for growth would be approximately $2.2 million.
If the low-end estimate is used, then a modest 3 percent increase in the low-end annual
compliance cost results. The potential benefits, although not quantified, could be relatively
significant for some receiving waters because additional discharges of BCCs would be denied.
Future Impact of Detection Levels
In recent years, several States in the Great Lakes System have promulgated water quality
criteria for various toxic pollutants that are more restrictive than the level of analytical detection.
Implementation of these existing water quality criteria by these States do take into account the
ability to detect the pollutant in the wastestream. Likewise, Procedure 8, Appendix F, of Part
132 clearly provides that the water quality-based effluent limit must be derived from the water
quality criterion; compliance with that limit, however, will be based on the minimum level (ML)
where available. When a promulgated ML is not available, compliance with that limit may be
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EXECUTIVE SUMMARY
based on the lowest level of quantification (at the State's discretion) defined in Procedure 8 of
Part 132.
In estimating the compliance cost for the final Guidance, it was conservatively assumed
that the method detection level (MDL) would serve as the compliance level. In actuality, the
State permitting authority is only required to use the ML (as defined under 40 CFR Part 136)
as the basis for reporting compliance with the Guidance-based WQBEL. Although the pollutant
MDL was used for costing purposes, it is acknowledged that estimating treatment costs for
WQBELs below the MDL, and most likely below the ML, would be speculative for many
pollutants, particularly as such estimation relates to expected future performance.
Nevertheless, an evaluation of the potential impact that improvements to analytical
detection levels would have on compliance cost estimates was performed. In particular, costs
and pollutant load reductions were estimated under two scenarios, one that assumes MDLs
improve 10-fold over time and another that assumes MDLs improve 100-fold over time. This
equivalent to a 30 to 60 fold or 300 to 600 fold improvement, respectively, in the minimum
level of quantification, which is used for determining compliance in the final Guidance.
The results of the analysis show conceivable increases in estimated compliance costs.
When MDLs become 10 times more stringent, annual costs increase by over $500 million
dollars. Pollutant load reductions also increase when MDLs decrease 10-fold by over 12 million
toxic pounds-equivalent per year. When MDLs become 100 times more stringent, the annual
compliance costs are estimated to increase by just over $880 million and pollutant load
reductions would increase by approximately 19 million toxic pounds-equivalent per year above
the final Guidance estimates. These results indicate that as analytical detection levels improve,
the costs to implement the final Guidance increase. However, the increase in compliance costs
are offset by comparable pollutant load reductions.
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SECTION 1 INTRODUCTION
1. INTRODUCTION
On April 16, 1993, the Environmental Protection Agency (EPA) proposed the Great
Lakes Water Quality Guidance (58 FR 20802) which included minimum water quality criteria,
antidegradation provisions, and implementation procedures for the Great Lakes System. In
support of this proposal, an estimate of the incremental cost to direct dischargers resulting from
the implementation of the proposed Guidance was developed. The resulting estimate reflected
the incremental cost of complying with prospective permit requirements stemming from
compliance with procedures and water quality criteria specified in the proposed Guidance. In
addition, because some of the compliance costs may be passed on to users of publicly owned
treatment works, preliminary cost estimates for indirect dischargers (i.e., dischargers to POTWs)
were developed. Preliminary estimates of the reductions of pollutant loadings resulting from
implementation of the proposed Guidance also were developed to evaluate the resulting cost-
effectiveness.
In response to the public comments received on the proposed Guidance, EPA has revised
the proposed Guidance to address many of the issues raised by the public. While revising the
proposed Guidance, EPA requested support in evaluating the costs associated with complying
with the final Guidance.
1.1 PURPOSE OF THIS REPORT
This report provides compliance cost information for use by EPA in decision-making for
the final Guidance. The primary purpose of this study was to develop the cost of control
measures (e.g., pollution prevention, end-of-pipe treatment, or other pollutant controls) needed
by point sources to meet effluent limitations developed using the final Guidance water quality
criteria and Implementation Procedures. The estimate considers only the incremental cost of
complying with the final Guidance.
The overall approach to developing a cost estimate for control measures for point sources
due to implementation of the final Guidance was the same as that used for estimating costs for
the proposed Guidance. In general, this approach involved developing detailed cost estimates
for a randomly selected subset of facilities and then extrapolating these costs to the entire
population of facilities. In estimating compliance costs for the selected facilities, SAIC generally
compared existing permit limitations, which are representative of nationally promulgated effluent
limitations and existing State water quality standards, to prospective water quality-based
limitations based on the final Guidance. The control measures needed to provide the incremental
pollutant removal required to comply with the new Guidance-based effluent limitations were then
evaluated. Finally, compliance costs were estimated for these control measures based on
information on treatment technologies and cost analyses available in the literature.
The secondary purposes of this study were to revise estimates of the potential compliance
costs to indirect dischargers and estimates of the cost-effectiveness of the final Guidance. The
costs to indirect dischargers are based on an estimated percentage of indirect dischargers that
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SECTION 1 INTRODUCTION
would incur compliance costs similar to direct dischargers. Cost-effectiveness, defined as the
incremental annualized cost of a pollution control option per incremental pound-equivalent of
pollutant removed by that control option, is based on the methodology used by EPA in
developing national effluent guideline's limitations and standards under the Clean Water Act
(CWA).
This analysis represents a "snapshot" of current conditions. It does not address the
economic impacts on specific firms or the region as a whole. It does not attempt to address the
effects or costs of future changes in policy, science, or the industrial structure or population of
the Great Lakes region. The costs estimated here do not include the ancillary costs of pollutant
treatment technologies that generate transfers to other media (i.e., air and ground water). In
addition, this report addresses costs to existing point source dischargers only. It does not
attempt to identify the least costly means of controlling a particular pollutant or to allocate
available loads equitably between point and non-point sources.
Finally, this report does not identify or estimate benefits of compliance with the final
Guidance. Information on benefits is being developed by EPA using a case study approach in
a separate study.
1.2 ORGANIZATION OF THIS REPORT
The remainder of this report is organized into four sections. Section 2 describes the
revisions made to the methodology for calculating compliance costs for the final Guidance.
Section 3 discusses the results of the revised cost estimates related to the final Guidance.
Section 4 presents the estimates of cost-effectiveness of the final Guidance. Section 5 presents
the results of evaluations performed on regulatory alternatives to the final Guidance that were
identified and considered by EPA.
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SECTION 2 METHODOLOGY
2. METHODOLOGY
This section updates the methodology used to estimate the costs for the regulated
community to implement the final Great Lakes Water Quality Guidance (the final Guidance).
The methodology used to estimate costs for the proposed Guidance was presented hi the
"Assessment of Compliance Costs for Point Source Dischargers Resulting from Implementation
of the Proposed Great Lakes Water Quality Initiative," April 16, 1993. The revisions and
updates to the original methodology presented here were made primarily in response to revisions
to the proposed Guidance, comments received during the public comment period, and comments
from the Office of Management and Budget (OMB). The revised methodology is provided as
a supplement to the April 16,1993 report and, as such, does not repeat all information presented
previously.
2.1 SUMMARY OF METHOD FOR DEVELOPING COST ESTIMATE FOR THE
PROPOSED GUIDANCE
The overall approach to developing a cost estimate for control measures for point sources
due to implementation of the proposed Guidance was to develop detailed cost estimates for a
randomly selected subset of facilities and then extrapolate these costs to the entire population of
facilities. A sample of 50 facilities was selected to represent the estimated 588 major
dischargers and 9 minor facilities to represent the 3,207 minor dischargers in the Great Lakes
Basin. For major dischargers, sample facilities were selected from each of the major categories
of facilities, which included nine primary industrial groups and a category for municipal
wastewater treatment facilities, also known as Publicly Owned Treatment Works (POTWs). The
nine industrial categories were Mining, Food and Food Products, Pulp and Paper, Inorganic
Chemical Manufacturing, Organic Chemical Manufacturing/Petroleum Refining, Metals
Manufacturing, Electroplating/Metal Fabrication, Steam Electric Power Plants, and
Miscellaneous facilities (e.g., remedial clean-up discharges, tire manufacturers). Sample major
facilities also were selected to ensure representation across facility size (as measured by
discharge flow volume), through stratification by flow within each category.
Because minimal compliance costs were anticipated by minor dischargers, a limited
number of randomly selected minor dischargers were analyzed to verify that assumption.
Furthermore, because limited discharge flow data were available for minor dischargers, it was
not possible to adopt a flow-stratified analytical plan similar to that used for major dischargers.
For each sample facility under review, the most current National Pollutant Discharge
Elimination System (NPDES) permit data and background information were collected to calculate
the limits that would be anticipated from current regulatory requirements (if not incorporated
into the current permit) and to develop additional permit requirements based on the proposed
Guidance. Information was gathered from State and Environmental Protection Agency (EPA)
Regional files that included permit applications, permit fact sheets or rationale, inspection
reports, discharge monitoring reports, pretreatment reports, short-term waste characterization
studies, receiving stream low-flow scenarios and total maximum daily loads/waste load allocation
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SECTION 2 METHODOLOGY
reports, and any other readily available information including industry-wide studies of various
industrial categories used in developing effluent guidelines.
For each sample facility, new permit limits and additional permit conditions were
developed based on the implementation procedures in the proposed Guidance. The proposed
criteria would require some permitted facilities to meet new limits and adopt other permit
conditions, such as whole effluent toxicity testing and additional monitoring. The limits
developed for estimating costs were calculated for those 32 pollutants for which numeric Tier
I criteria were proposed. For a given facility, only those pollutants that were detected in the
discharge, or expected to be present in the discharge but reported as not detected because of use
of less sensitive EPA-approved analytical methods, were evaluated. The need for whole effluent
toxicity limits and monitoring was also evaluated in accordance with the proposal. For each
facility, limits were calculated for the outfalls that contain or may contain observed or
anticipated loadings for the pollutants of concern.
If the existing effluent limits for some of the permitted facilities selected did not reflect
current State water quality standards and implementation policies, permit limits were recalculated
to reflect the newly revised State standards and requirements, which are based on the adoption
of toxic water quality standards under Section 303(c)(2)(B) of the Clean Water Act (CWA)
(referred to here as baseline requirements). This approach more accurately reflected differences
between existing effluent limits based on newly revised State requirements and procedures
required in the proposed Guidance.
In determining specific requirements imposed by the proposed Guidance, site-specific
wasteload allocations (WLAs) for discharges to both the open waters of the Great Lakes and
then* tributaries were calculated using equations set forth in the proposed implementation
procedures. Because of the general lack of readily available background concentration data for
receiving waters, two different WLAs were calculated for each sample facility. The first WLA
assumed zero background in the absence of background data (WLA #1). The second WLA
assumed a value for background concentrations where no background data existed (WLA #2).
The assumed background values were approximately 50 percent of the proposed Guidance water
quality criteria.
The resulting WLAs then were used to establish water quality-based effluent limits
(WQBELs) for the sample facilities; the daily maximum WQBEL for a pollutant was set equal
to the Final Acute Value, which represents the WLA to achieve the acute aquatic life criterion;
monthly average WQBELs were set equal to the most stringent WLA calculated to protect
chronic aquatic life, wildlife, or human health criteria. When negative WLAs were calculated
for a pollutant (because discharges from all sources of pollutants would be expected to exceed
criteria for a receiving water), two different sets of WQBFXs were calculated for each facility,
which resulted hi different compliance cost scenarios. In cases where negative WLAs were
calculated using WLA #1, the WQBEL was set equal to the most stringent water quality criteria
(WQBEL #1); when negative WLAs were calculated using WLA #2, then the WQBEL was set
equal to the assumed background concentration (WQBEL #2).
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SECTION 2 METHODOLOGY
If either WQBEL #1 or WQBEL #2 was more stringent than the existing effluent limits-
cither hi current permits or calculated against current regulatory requirements—then costs were
developed based on options that likely would be available to the facility to comply with the more
stringent effluent limits.
To estimate costs to the particular facilities reviewed and to develop potential compliance
options, an engineering analysis for each facility in the sample was conducted. This included
a review of existing treatment systems at the facility and an assessment of the need to add new
or supplement existing treatment capabilities. Having defined the control options, the
compliance costs to facilities implementing each option were estimated. Compliance costs
generally included treatment costs, monitoring, and operations and maintenance costs, and a
variety of one-time costs of limited durations (e.g., waste minimization audits of production
processes). Residual management costs were also estimated for industrial and municipal
facilities that were projected to install end-of-pipe treatment and generate additional sludge (e.g.,
sludge produced from chemical precipitation).
If the analysis showed that additional treatment was the most likely control method to be
used to comply with either WQBEL #1 or #2, then it was generally assumed that this treatment
would be added as an end-of-pipe unit process (i.e., the treatment unit process would be added
at a point just prior to discharge to the receiving water). While additional treatment at end-of-
pipe may be neither technically nor economically efficient in a variety of circumstances, the
necessary facility- or process-specific information, such as contributing wastewater flows, in-
plant treatment capabilities or opportunities, process waste characteristics, or recycling
capabilities that would allow an assessment of other potentially less expensive alternatives were
not available.
In many instances, however, it was determined that additional end-of-pipe treatment was
not necessary to allow a facility to meet Guidance-based WQBELs. This was the case where
existing treatment facilities could accomplish the required treatment, the incremental amounts
of pollutants to be removed were insignificant, or where waste minimization/pollution prevention
control techniques were believed to be adequate to comply with the Guidance. The appropriate
control technique, therefore, was determined by the best professional judgement of the engineer
performing the costing analysis, based on the available facility file information.
In the case of POTWs, consideration was given to the number and types of industrial
users discharging to the collection system, as well as the size of the POTW. If additional
pretreatment controls or modifications seemed unlikely to achieve the pollutant reductions, then
additional treatment at the POTW was considered the next most likely option.
Monitoring costs for permitted facilities were also estimated. In those cases where
additional parameters and limitations were deemed necessary because of the Guidance, the
monitoring regimes (i.e., sampling frequency) were established consistent with the existing
monitoring requirements for other parameters. Monitoring costs were then estimated based on
average costs per analytical method for the more common techniques.
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SECTION 2 METHODOLOGY
Because the discharge of bioaccumulative chemicals of concern (BCCs) is of special
interest under the proposed Guidance, monitoring-only costs were included for Tier I BCCs for
all affected facilities, regardless of whether Tier I BCCs were detected or expected to be present
in a discharge.
A number of other costs were also considered depending on the specific circumstances
surrounding a particular type of facility. These were generally one-time costs related to
pollutant minimization studies, bioconcentration studies, whole effluent toxicity testing,
pretreatment program revisions, waste minimization audits, and implementation of pollution
prevention techniques. Generally, these costs were included with the capital costs for purposes
of calculating annualized costs of compliance.
Four different cost estimates were developed to account for differences between limits
based on WLA #1 (zero background absent actual data) and WLA #2 (assumed 50 percent of
the most stringent Guidance criteria as background absent actual data), as well as the potential
range of costs associated with implementation of waste and pollutant minimization studies and
controls. These scenarios are described below.
Scenario 1: Limits based on WLA #1 and the low end of the estimated range of
waste minimization costs for all facilities.
Scenario 2: Limits based on WLA #2, the middle of the estimated range of waste
minimization costs for industrial facilities, and the high end of the estimated range
costs for the POTWs aggressively implementing the pretreatment program to
promote source control.
Scenario 3t Limits based on WLA #2, the middle of the estimated range of waste
minimization costs for industrial facilities, and end-of-pipe treatment installation
by POTWs.
Scenario 4: Limits based on WLA #2, the high end of an estimated range of
waste minimization costs, and end-of-pipe treatment installation by POTWs.
The major difference between Scenario 2 and Scenario 3 was the emphasis on pollution
prevention versus end-of-pipe treatment. Assumptions underlying Scenario 2 emphasized
pollution prevention through source control. Scenario 3 focused on end-of-pipe treatment,
especially at POTWs.
To develop a single cost estimate for each facility for each scenario described above, the
three cost categories mentioned above (treatment, monitoring, and one-tune costs) were
combined into a single annualized cost, which reflects the annual economic costs associated with
recurring activities (e.g., compliance monitoring, and operation and maintenance), repaying
capital expenses, and special studies. Annualized costs were calculated by assuming that all
capital costs and special study costs would be paid by borrowing money at an interest rate of
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SECTION 2 METHODOLOGY
seven percent and paying it back over a 10-year period. Annual costs of monitoring, operation,
and maintenance were added directly.
Given a single estimate of the annualized cost for each facility, the procedure for
extrapolating costs from the sample to the entire population was pre-determined by the stratified
random sampling procedure used to select the subset of facilities examined in detail. Using the
single annualized cost figure for each plant, an estimate of the cost for each category was
calculated by averaging the values for applicable (sample) plants and then multiplying by the
total (population) number of plants in that stratum. The cost estimate for the category was
calculated by summing the strata in the category. The cost estimate for the entire universe of
facilities was the sum across categories. This procedure was followed to estimate costs for each
scenario.
An estimated 3,500 indirect industrial dischargers that discharge to POTWs in the Great
Lakes Basin were identified, and preliminary estimates of compliance costs were developed for
these dischargers. These preliminary cost estimates were based on the assumption that indirect
dischargers affected by the proposed Guidance would incur costs comparable to those incurred
by direct industrial dischargers in the same category. In addition, it was assumed that costs to
industrial users subject to categorical pretreatment standards would be higher than the costs to
non-categorical significant industrial users. The following four scenarios for indirect dischargers
are consistent with the four cost scenarios developed for direct dischargers.
Scenario 1: Assumes that 10 percent of all indirect dischargers in the Great
Lakes Basin would install additional controls.
Scenario 1: Assumes that 30 percent of all indirect dischargers in the Great
Lakes Basin would install additional controls.
Scenario 3: Assumes that 20 percent of all indirect dischargers in the Great
Lakes Basin would install additional controls.
Scenario 4: Assumes that 20 percent of all indirect dischargers in the Great
Lakes Basin would install additional controls (same as Scenario 3).
The estimated percent of indirect dischargers affected by the proposed Guidance was
based on an assessment of conditions involving industrial users and then* toxic discharges to a
moderately large POTW in the Great Lakes Basin.
2.2 APPROACH FOR ESTIMATING COMPLIANCE COSTS FOR THE FINAL
GUIDANCE
This section discusses the revisions to the approach used to derive compliance cost
estimates for the proposed Guidance. The revisions to the approach are based primarily upon
the changes to the proposal discussed throughout the preamble and rule for the final Guidance,
and the public comments received on the methodology used for the proposal.
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SECTION 2 METHODOLOGY
In general, the basic methodology attributed to the proposed Guidance (as described in
Section 2. 1) was employed to estimate compliance costs and pollutant load reductions for the
final Guidance. However, the approach was revised, based on comments received, to more
accurately project the costs to the regulated community and to better account for the pollutant
load reductions. Revisions to the original analysis for the proposed Guidance are described
below.
It should be noted that many of the provisions included in the final Guidance provide
implementation flexibility for permitting authorities. Rather than requiring States and Tribes to
adopt a specific procedure, the final Guidance provides a recommended approach, and flexibility
was provided for the State or Tribe to use alternative approaches. For purposes of estimating
compliance costs, it was assumed that permitting authorities would use the procedures
recommended by EPA in the preamble to the final Guidance. In general, the use of these
procedures was considered conservative for the costing analysis since it is likely that States will
sometimes adopt procedures that are less stringent than those recommended by EPA, and will
rarely adopt procedures that are more stringent.
While the cost analysis implementation procedures were generally as, or more, stringent
than those that will be used by States, there were a few areas where assumptions could
underestimate potential costs. These include the following areas:
• Cost analyses considered only 69 of the 138 pollutants of initial focus (see Section
2.2.3.1). It is possible that other pollutants may eventually be detected hi facility
discharges and may require some type of control.
• Tier n values could be estimated for only some of the 69 pollutants because actual
procedures call for pollutant-specific evaluations. Data collected by facilities could
result in more stringent Tier n values hi some instances.
• Costs attributed to the antidegradation provisions of the final Guidance could only be
estimated using a sensitivity analysis. While the assumptions were considered
conservative, the actual costs may be higher or lower than predicted.
• Where total maTimnm daily loads (TMDLs) are developed by States, the WLAs and
resulting WQBELs will differ from those calculated in the cost analyses. While this
should generally result hi less stringent WQBELs for point sources, it could also result
hi more stringent WQBELs under certain circumstances.
Acknowledging that the assumptions noted above may result hi an underestimation of
potential costs, the analysis also utilized a number of assumptions that will likely result hi an
overestimation of costs. Specific elements of the costing analyses where more stringent
assumptions were utilized are provided in Table 2-1 and Table 2-2.
2-6
-------
SECTION 2
METHODOLOGY
TABLE 2-1 COST STUDY ASSUMPTIONS REGARDING CRITERIA/STANDARDS THAT ARE
MORE STRINGENT THAN REQUIRED BY FINAL GUIDANCE
GUIDANCE REQUIREMENT
Appendix B - Bioaccmnulation Factors (BAFs)
Human heath and wildlife criteria to be derived
using measured or predicted BAFs.
Appendix C - Human Health
Requires use of drinking water factors where
discharge is to open waters, connecting channels, or
designated drinking water sources.
Uses IS grams/day consumption rate.
MORE STRINGENT COST ESTIMATE ASSUMPTIONS
BAFs used to develop criteria for the costing
analysis were calculated using conservative
assumptions. BAFs were therefore more stringent
than those that would be calculated by States and
should result in more stringent criteria than would
be developed by States. Projected costs, therefore,
will likely overestimate actual costs.
Assumed all receiving waters were drinking water
sources. This resulted in more stringent criteria.
Therefore, projected costs will likely over-estimate
actual costs.
Assumed a fish consumption rate of 45 grams/day.
States will most likely use 15 grams/day; thus, the
cost projections will likely overestimate actual costs.
TABLE 2-2 COST STUDY ASSUMPTIONS REGARDING IMPLEMENTATION PROCEDURES
THAT ARE MORE STRINGENT THAN REQUIRED BY FINAL GUIDANCE
GUIDANCE REQUIREMENT
MORE STRINGENT COST ESTIMATE ASSUMPTION
Procedure 1: Site Specific Modifications
Allows States to use more or less stringent, human
health, wildlife, and aquatic life criteria and BAFs.
Cost analyses are based on final Guidance
recommendations. It is most likely that States will
use the provision to relax criteria and BAFs, thus,
projected costs will likely overestimate actual costs.
Procedures: TMDL/WLA
All mixing zones for BCCs eliminated within 12
years of rule publication. Extensions may be granted
for technical and economic considerations.
Defines critical low flow for wildlife protection as
the 90-year, 10-day flow (90Q10).
Assumed
elimination of all mixing zones
for BCCs. Costs were developed assuming BCC
criteria were applied at end-of-pipe. Since States
will likely allow mixing zones for many existing
sources up to 12 years, this would allow permittees
to defer some costs over the 12-year period.
Projected costs, therefore, will likely overestimate
actual costs.
Used 30-year, 5-day (30Q5) critical low flow for
protection of wildlife.
2-7
-------
SECTION 2
METHODOLOGY
TABLE 2-2 ASSUMPTIONS REGARDING IMPLEMENTATION PROCEDURES THAT ARE MORE
STRINGENT THAN REQUIRED BY FINAL GUIDANCE (continued)
GUIDANCE REQUIREMENT
Procedure 4: Additivity
Requires States to adopt an additivity provision.
Procedure 6: Whole Effluent Toxicity (WET)
WET limits must be determined where reasonable
potential is determined. States must develop and
apply WET limits, but may defer limit application
until sufficient data have been generated.
MORE STRINGENT COST ESTIMATE ASSUMPTION
WQBELs were calculated assuming that all
carcinogens were additive. Assumed an additive risk
of IxlO"5. This assumption is likely to be at the
stringent end of the options selected by States. The
projected costs, therefore, should slightly
overestimate actual costs.
Costed WET testing requirements for all facilities
where WET data were unavailable and where toxic
pollutants were present in discharge. Rigorous WET
testing requirements likely will exceed State
requirements; thus, projected costs likely will
overestimate actual costs.
Procedures: WQBELs Below Detection
Permits will specify the most sensitive analytical
technology and will establish the "Minimum Level of
Quantification" (MLOQ).
Cost analyses used the method detection level
(MDL) as the target concentration. Since the MDL
will be equal to, or more stringent than the MLOQ,
the projected costs will likely overestimate the actual
costs.
Procedure 9: Compliance Schedules
Final Guidance allows States to provide a three year
compliance period upon permit reissuance. This
could allow costs to be deferred for up to eight years
(i.e., five year permit cycle + three year schedule).
Cost analyses did not consider compliance schedules.
Costs were assumed to be incurred immediately.
Since States will likely provide compliance periods
for many existing sources, projected costs will likely
overestimate actual costs.
2.2.1 Selection of Direct Discharge Facilities
The selection process for the 59 direct discharge facilities that were used to develop cost
estimates based on the proposed Guidance was described in detail in the April 16, 1993
compliance cost report. The cost analyses for the final Guidance were performed for the same
group of direct dischargers with several exceptions described below.
During the data collection effort for the revised cost analyses (described in Section 2.2.2
of this report), it was determined that four of the 59 sample facilities had either ceased
operation, altered manufacturing processes, or redirected process discharges. These facilities,
2-8
-------
SECTION 2
METHODOLOGY
therefore, were replaced by alternate facilities drawn at random from the appropriate category
and flow strata. Table 2-3 summarizes the reasons for the removal of the facilities and presents
the facilities used as replacements. In addition, Table 2-4 provides a complete list of the 59
study facilities used for the final cost analyses.
TABLE 2-3 DISCHARGERS REMOVED FROM THE COST ANALYSIS AND
REPLACEMENT FACILITIES
FACILITY NAME
Cyprus Northshore
Mining Corp.
(MI0046981)
RMI Company
(OH0002305)
Bellville Plating
Company
(MI00044S6)
Minnesota Power -
Dulutb (MN0001015)
CATEGORY
Mining
Metals Manufacturing
Metal Finishing
Steam Electric
REASON FOR REMOVAL
Process discharge was
redirected to a POTW.
Process discharge was
redirected to a POTW.
Process discharge was
redirected to a POTW.
Facility is not currently
operating. Effluent data and
other file information were,
therefore, unavailable.
ALTERNATE FACILITY
EVALUATED
Martin Marietta
(MI0004154)
Great Lakes Metals
Corporation
(OH0032727)
Johnson Control, Inc.
(MI0003484)
Holland BPW -
De Young Power Plant
(MI0001473)
2.2.2 Collection of Data/Information
The original analysis for the proposed Guidance was performed based on data collected
from EPA Region 5, State permitting authorities, EPA development documents, and special
studies. Discharge data were based on 1990 Permit Compliance System (PCS) data, and facility-
specific permit file information were generally from 1992. For the final Guidance, the current
information and data (including permits, fact sheets, permit applications, and other relevant
discharge information) were updated and verified, and were used as the basis for comparison to
Guidance requirements. In addition, State permitting authorities were requested to review each
sample facility evaluated in the original cost estimate for the proposed Guidance and to provide
comments and additional information as necessary to ensure accurate reflection of current permit
requirements and discharge conditions.
For the cost estimate for the final Guidance, 1993 PCS discharge data were used, as well
as permit file information and data provided by the State permitting authorities (generally
representing permits issued as late as through mid-1994). As a result of use of more recent data,
a shift was noted hi the baseline of permit requirements for the sample facilities; the baseline
was lowered based on more stringent NPDES permit requirements being applied by permitting
2-9
-------
SECTION 2
METHODOLOGY
TABLE 2-4 MAJOR FACILITIES RANDOMLY SELECTED FOR COMPLIANCE
COST EVALUATION
NPDES PERMIT NUMBER
FACILITY NAME
MINING
MI0004154
MN0055301
MI0038369
MI0003158
MARTIN MARIETTA
RESERVE MINING CORP
TILDEN MINING CO
MEDUSA CEMENT CO-CHARLEVOK
REPORTED SIC CODE
1011
1011
1011
3241
FOOD AND FOOD PRODUCTS
M10002542
MI0002003
MI0002267
MI0002224
MICHIGAN SUGAR CO-CROSWELL
MICHIGAN SUGAR CO-SEBEWAING
MICHIGAN SUGAR CO-CARO
MICHIGAN SUGAR CO-CARROLLTON
PULP AND PAPER
WI0002798
MI0000060
NY0000515
WI0003140
WI0000990
WI0001848
OH0000990
OH0000493
IN000003S
MI0002381
SUPERIOR FIBER PROD-SUPERWOOD
MENOMINEE PAPER CO
SCHOELLER TECHNICAL PAPERS INC
JAMES RIVER PAPER COMPANY
APPLETON PAPERS INC - LOCKSMILL
FORT HOWARD PAPER COMPANY
2063
2063
2063
2063
2493
2611
2621
2621
2611
2611
INORGANIC CHEMICALS
ZACLON INC
SCM CHEMICALS
UNION CARBIDE LAKESIDE PLANT
ATOCHEM NORTH AMERICA INC
2819
2816
2813
2819
ORGANIC CHEMICALS AND PETROLEUM REFINING
NY0000345
NY0000400
MI0000868
NY0003328
FMC CORPORATION
LIFE TECHNOLOGIES INC
DOW CHEM USA-MIDLAND
E.I. DUPONT DE NEMOURS & CO
2879
2834
2821
2869
2-10
-------
SECTION 2
METHODOLOGY
TABLE 2-4 MAJOR FACILITIES RANDOMLY SELECTED FOR COMPLIANCE
COST EVALUATION (continued)
NPDES PERMIT NUMBER
MI0002763
MI0001902
OH0032727
IN0000175
MI0002399
FACILITY NAME
REPORTED SIC CODE
METALS MANUFACTURING
EXTRUDED METALS
QUANEX CORP-MICH SEAMLESS TUB
GREAT LAKES METALS CORP.
BETHLEHEM STEEL CORPORATION
MCLOUTH STEEL-TRENTON
3354
3317
3360
3312
3312
METAL FINISHING
MI0002836
KD0003484
OH0000281
WI0001309
FEDERAL MOGUL CORP-GREENVILLE
JOHNSON CONTROL INC
ARGO TECH CORPORATION
KOHLERCO
3714
3691
3471
3471
STEAM ELECTRIC
OH0003786
MI0001473
W10000922
MI0001
-------
SECTION 2 METHODOLOGY
TABLE 2-4 MAJOR FACILITIES RANDOMLY SELECTED FOR COMPLIANCE
COST EVALUATION (continued)
NPDES PERMIT NUMBER
M10042439
W10024767
PA0026301
M10022276
FACILITY NAME
WEST BAY CO REGIONAL WWTP
MILWAUKEE MSD - JONES ISLAND
ERIE WASTEWATER TREATMENT PLANT
BATTLE CREEK WWTP
REPORTED SIC CODE
4952
4952
4952
4952
authorities. The overall effect of lowering the baseline was that estimated compliance costs and
pollutant load reductions were not as substantial as were originally projected for the proposed
Guidance.
One of the limitations of the original compliance cost study for the proposed Guidance
was a general lack of site-specific receiving water data (i.e., background data) for the sample
facilities. To fully evaluate EPA's provisions in the final Guidance for intake credits (i.e.,
determining whether discharges are to same or different bodies of water and for identifying non-
attainment waters), as well as to ensure that all available data were used for the cost analysis,
additional background concentration data for each of the sample facilities was collected. Data
submitted as a part of the public comments, as well as the water quality files contained hi the
STORE! data base, were reviewed and considered. In addition, State permitting authorities
were contacted frequently to collect all applicable data.
Consistent with Procedure 3 of Appendix F to the final Guidance, fish tissue data (either
caged or resident fish tissue data) were also collected to represent ambient water column
background concentrations. When fish tissue data were available for the pollutants being
evaluated at a sample facility, a simplified approach for converting the tissue data to ambient
water column concentrations was used. This method entailed dividing fish tissue data (hi mg/kg
wet weight) by the pollutant-specific bioaccumulation factor (BAF) used to derive Tier I criteria
(in I/kg) and multiplying the result by 1,000 to give the result as concentration of pollutant
0*g/l). When data for more than one species was available, the geometric mean for all species
was calculated and used.
2.2.3 Calculation of Permit Limits/Conditions
The proposed Guidance Implementation Procedures outlined the specific methodologies
to calculate WQBELs and determine the need to include the calculated limits in a permit. The
final Guidance, however, establishes only the framework for WQBEL calculation in the
regulation. This approach provides State permitting authorities the flexibility to develop their
own specific procedures for WQBEL calculation as long as the assumptions used are consistent
with final Guidance requirements. While the procedures outlined hi the proposed Guidance are
not included hi the regulation for the final Guidance, the preamble does indicate that procedures
_
-------
SECTION 2 METHODOLOGY
in the proposed Guidance are fully consistent with the final Guidance, and may be used by States
to satisfy Guidance requirements. Because several States will likely use the recommended
procedures, the final costing analysis did not revise the formulae used to calculate WQBELs.
While the general approach and the equations used to calculate WQBELs were not
modified in order to perform the final costing analyses, there were several significant changes
to the criteria and implementation procedures hi the final Guidance that impacted WQBEL
calculations. The specific revisions to the final Guidance that affected the costing analyses, and
the approach used to address these revisions are described below.
2.2.3.7 Expanded List of Pollutants Evaluated in Cost Analyses
The proposed Guidance, while generally applying to all pollutants, was structured to
provide an initial focus on 138 pollutants. The 138 pollutants were identified as those being
known or suspected of being of primary concern hi the Great Lakes Basin. The proposed
Guidance included numeric criteria to protect aquatic life, human health, and/or wildlife for 32
of the 138 pollutants. The cost study for the proposed Guidance was based on these 32
pollutants. Because of concern that the 32 pollutants did not represent all the possible pollutants
that may contribute to potential costs, the study evaluated whether additional pollutants should
be included in the cost analysis. The evaluation used three criteria— loadings, frequency of
occurrence, and toxicity, to determine whether additional pollutants should be included in the
final analysis.
To determine which pollutants exhibited significant loadings to the Great Lakes Basin,
the loadings for all 138 pollutants of initial focus listed hi the proposed Guidance at the 59 study
facilities were calculated. The loadings were based on facility permit limits or measured effluent
concentrations. The loadings were then multiplied by EPA toxic weights to normalize the
toxicity of each pollutant to that of copper. (See Section 4 for further discussions related to EPA
toxic weights.) Using the statistical extrapolation factors developed for the costing analysis, the
total toxic weighted loadings for the 138 pollutants were extrapolated to the universe of major
dischargers hi the Great Lakes Basin. Based on the results of this evaluation, it was determined
that pollutants that exhibited "de minimis" loadings would be omitted from the final costing
analysis. The "de minimis" value selected was 10 pounds-copper toxicity equivalents per day.
This value corresponds to a total pollutant load from all major point source dischargers to the
Great Lakes Basin of 10 pounds of copper per day.
In addition to the loadings analysis, it was important to ensure that other pollutants that
were frequently limited or required to be monitored at facilities, but that might have been
undetected or that exhibited low toxicity and thus were not captured hi the loadings analysis,
were also included hi the final costing analyses. Since the loadings analyses should have
captured the most significant pollutants of concern, this evaluation was considered a "safety net."
This analysis captured any pollutant that was limited, detected, or required to be monitored at
three or more of the 59 sample facilities.
2-13
-------
SECTION 2 METHODOLOGY
As a final "safety net" it was important to ensure that any pollutant limited, detected, or
required to be monitored at any facility that exhibited a high toxicity (high toxic weight) was
included in the final costing. This evaluation was performed by multiplying the "frequency of
occurrence" for a given pollutant by its toxic weight. The resulting value was designated the
"Occurrence Toxic Equivalent" (OTE). The OTE analysis captured those pollutants that might
have not been detected and thus escaped the loadings evaluation, but that had monitoring
requirements at one or more facilities. A target value of 0.1 OTE was selected to ensure that
any pollutant with a toxic weight of 50 or greater, and even a single monitoring requirement at
one sample facility, would be included in the final costing analysis.
The additional pollutant evaluation identified 76 pollutants that were limited, detected in
the effluent, or required to be monitored at one or more of the 59 sample facilities. From this
list of 76 pollutants, 37 were determined to be of consequence to the loadings and costing
analyses using the rationale described above. This increased the total number of pollutants
evaluated for compliance costs and load reductions in the final analysis to 69. The list of
pollutants included in the final analysis and those found but not included in the costing analyses
are provided in the Table 2-5.
An example of a pollutant found at study facilities, but excluded from the final analyses,
is vinyl chloride. Vinyl chloride was limited in a permit for one facility and was detected in the
effluent at a second facility. Based on the permit limit and the monitoring data, a total load of
vinyl chloride of 0.04 pounds per day was determined. Using the vinyl chloride toxic weight
of 0.0013 and extrapolating the load to the 588 major discharges in the Great Lakes Basin, a
total toxic weighted load of 0.0018 pounds-equivalent per day was estimated, which is below the
"de minimis" criteria of 10 pounds-equivalent per day. The occurrence frequency for vinyl
chloride (2 of 50 facilities or four percent) did not exceed the trigger of five percent. The OTE
was then calculated by multiplying the occurrence frequency of four percent by the toxic weight
(0.0013). This resulted in an OTE of 0.00005, which is less than the 0.1 OTE trigger. As a
result of this analysis, vinyl chloride was not considered in the final costing analyses.
2.2.3.2 Development of Tier I Criteria and Tier 11 Values Used in Cost Analyses
Having established the list of 69 pollutants for the final costing analyses, criteria for these
pollutants were developed utilizing the Tier I and Tier n procedures outlined in Appendices A,
B, C, and D of the final Guidance and readily available toxicity data. For the 32 pollutants for
which numeric criteria were established in the proposed Guidance, the criteria for protection of
aquatic life were generally used; however, the criteria for protection of wildlife and human
health were revised to reflect modifications to the Guidance procedures for determination of
BAFs. In addition, it was necessary to calculate criteria values for the additional 37 pollutants
added to the costing analysis, using the final Guidance methodologies and the most current
toxicity data. The results of the criteria development efforts are provided in Table 2-6.
2-14
-------
SECTION 2
METHODOLOGY
TABLE 2-5 PARAMETERS IDENTIFIED FOR FINAL COSTING ANALYSES
PROPOSED GUIDANCE
PARAMETERS
PARAMETERS ADDED FOR FINAL
ANALYSES
PARAMETERS FOUND Bur NOT
ANALYZED
2,3,7,8-TCDD
2,4-Dimethylphenol
2,4-Dinitrophenol
ArsenicOH)
Benzene
Cadmium
Chlordane
Chlorobenzene
Chromium(III)
Chromium(VT)
Copper
Cyanide, Free
Cyanide, Total
DDT
Dieldrin
Endrin
Heptachlor
Hexachlorobenzene
Hexachloroethane
Lindane
Mercury
Methylene Chloride
Nickel
Parathion
PCBs
Pentachlorophenol
Phenol
Toluene
Total Selenium
Toxaphene
Trichloroethylene
Zinc
1,1 -Dicholoroethane
1,1-Dichloroethylene
1,1,1 -Trichloroethane
1,2-Dichloroethane
1,2-Dichloropropane
1,2-trans-Dicnloroethylene
1,2,4,5-Tetrachlorobenzene
2,4,6-Trichlorophenol
3,3-Dichlorobenzidine
4,4-DDD
4,4-DDE
Acrylonitrile
Aldrin
alpha-Endosulfan
alpha-Hexachlorocyclohexane
Aluminum
Antimony
Benzidine
Benzo[a]pyrene
Beryllium
beta-Endosulfan
beta-Hexachlorocyclohexane
Carbon tetrachloride
Chloroform
Chlorpyrifos
Chrysene
Endosulfan
Fluoranthene
Fluoride
Hexachlorocyclohexane
Iron
Lead
Pentachlorobenzene
Phenanthrene
Silver
Tetrachloroethylene
Thallium
2-Nitrophenol
4-Nitrophenol
1,2-Dichlorobenzene
1,3-Dichlorobenzene
1,4-Dichlorobenzene
3,4-Benzofluoranthene
11,12-Benzofluoranthene
1,1,2-Trichloroethane
1,2,4-Trichlorobenzene
1,1,2,2-Tetrachloroethane
1,2,3,4-Tetrachlorobenzene
2-Chlorophenol
2,4-Dichlorophenol
2,4-Dichlorophenoxyaceticacid
Acenaphthene
Acenaphthalene
Acrolein
Anthracene
Bis(2-chloroethyl)ether
Bis(2-chloroisopropyl)ether
Bromoform
Butylbenzylphthalate
Chlorodibromomethane
Chloroethane
Dichlorobromomethane
Diethyl phthalate
Di-n-butylphthalate
Dimethylphthalate
Ethylbenzene
Fluorine
Hexachlorobutadiene
Indeno[ 1,2,3 cdjpyrene
Isophorone
Methyl bromide
Methylchloride
Octachlorostyrene
Pyrene
Vinyl Chloride
2-15
-------
SECTION 2
METHODOLOGY
TABLE 2-6 CRITERIA DEVELOPED FOR USE IN FINAL COST ANALYSES*
PARAMETER (1,2)
Aciylonitrile
Aldrin
Aluminum
Antimony
Arsenic (IE)
Benzene
Benzidine
Benzo[a]pyrene
Beryllium
ddmimn
Carbon tetrachloride
Cbloniftne
Chlorobenzenc
Chloroform
Chlorpyrifos
Chromium (ffl)
Chromium (VI)
Chryscne
Copper
Cyanide, free
Cyanide, total
4,4-DDD
4,4-DDE
DDT
3,3-Dichlorobenzidine
1 , 1 -Dichloroetnane
1 ,2-Dichloroethane
1 , 1 -Dichloroethy lene
AQUATIC IDE (3)
Final
Acute
Value
(Mg/I)
7.55E+03
6.00E+00
1.50E+03
1.76E+02
&80E+02
5.30E+03
2.50E+03
1.30E+02
3.61E+00
3.52E+04
2.40E+00
2.89E+04
1.66E41
*.81E+«2
3.1SE+01
1.40E+01
4ME+01
6.00E-01
1.05E+03
1.10E+00
1.18E+05
Criterion
Continuous
Concentration
(M/Q
4.19E+02
8.70E+01
3.00E+OJ
l-SOE-Htt
2.94E+02
1.39E+02
5.30E+00
6.6BEA1
1.96E+03
4.30E-03
1.24E+03
4.JOE-02
43ee.+m
IME+Ql
434E+W
5JOE+W
3.33E-02
5.83E+01
1.00E43
6.56E+03
WILDLIFE
Wildlife
Domestic
Animnl
Criteria
(fgfl)
6.70E-07
9.24E-05
1.97E+OJ
3.47E-01
2.78E-06
2.78E-O6
2.78E-06
HUMAN HEALTH <4)
Human
Non-
Cancer
Value
(15g)
(««)
SJ8E-05
1^1£+OI
834E+00
1J8E+01
8J4E+01
lJ3K+(tt
1J9E+01
1JUE+01
8^1E-03
4.18E+W
2.72E-KO
ijdE+ai
2.78E+04
1J5E+02
1.90E+03
536E+02
6.11E+02
L2«E4$
2J5E+W
Human
Cancer
Value
(15g)
UgH)
6.43E-01
U2E4M
2.04E-01
ld4B+«t
1J1&03
LOSE-05
7.12E42
2.15E+00
1.44E44
5^7E+01
3.10E4S
4.<5E^4
2^
-------
SECTION 2
METHODOLOGY
TABLE 2-6 CRITERIA DEVELOPED FOR USE IN FINAL COST ANALYSES* (continued)
PARAMETER (1,2)
1 ,2-Jrans-Dichloroethylene
1 ,2-Dichloropropane
VMdritt
2,4-DuuGtuylphcaol
2.4-Djnhropheiiol
•tpha-Endosulfui
beta-Endosulfan
Endosulian
Endrin
Fluorantbene
Fluoride
Heptachtor
Hexachlorobenzene
alpha-Hexachlorocyclohexane
beta-Hexachlorocyclohexane
Heuchlorocyclohexane
Hexachloroethane
Iron
Lead
Undue
Mttwuy
Memytene Chloride
Nkkei
Panftion
PCBs
Pentachlorobenzene
P«ntacUotophenoJ
AQUATIC LIFE 0)
Final
Acute
Value
(M/I)
4JO&41
2.12E+03
2.20E-01
2.20E-01
2.20E-01
1.80E-01
3.98E+03
5.20E-41
J.20E+01
2.00E+00
9.80E+02
5.91E+01
L90E+00
M1E+W
SJOE+02
1J30E4I
2.00E+00
LWE+01
Criterion
Continuous
Concentration
a
1.79E+03
554E+02
«.8fiE45
9.5JB-02
7.^7E+02
Human
Cancer
Value
(15g)
0^)
S.04E+00
2J3&46
J.7REW
2.62E44
2.87R«3
l.MIXC
l.OOE-02
3J8E+00
«.17EXO
4.73E+01
U9E45
5.12E-01
HUMAN HEALTH (5)
Human
Non-
Cancer
Value
(45g)
(MA)
4.93E+02
«J4E-05
1.06E+02
5J9E+01
;.«£-O7
7.«£-07
(J.02E-0;
1.72E4Q
1.15E+02
3J9IH-03
J.22E-02
8.97E-03
8.88E-01
l^OE+01
«JME-02
S45B*4
1.75E+03
5.48E+02
2J9E45
J.79E-02
5.57E+07
Human
Cancer
Value
(45g)
0>gA)
4.70E-HW
*.75E-07
5.97E-«5
8.7SEXB
9^0E-04
3.46E43
3^E^»3
1.12E+00
2,78E4a
4^0E+01
4.64E-06
1.93E-01
2-17
-------
SECTION 2
METHODOLOGY
TABLE 2-6 CRITERIA DEVELOPED FOR USE IN FINAL COST ANALYSES* (continued)
PARAMETER (1,2)
Phenanthrene
Phenol
Selenium (Total)
Silver
1 ,2,4,5-Tetnchlorobenzene
2,3,7,8-TCDD
Tetnchloroetfaylene
Thallium
Toluene
Tonpbene
1,1,1 -Trichloroethane
Trichtoroethylene
2,4,6-Trichlorophenol
Whole Effluent Touchy
(WET)
Zinc
Number of Her I Criteria
Number of Tier O Values
AQUATIC las, (3)
Rnai
Acute
Value
0*/1)
6.00E+01
7.29E+03
3.69E+OI
1.05E+00
l.OOE-02
5.28E+03
1.40E+03
1.75E+04
1.46E+00
4.50E+04
L31E+02
16
34
Criterion
Continuous
Concentration
(M/l)
6.30E+00
1,1«E-M»
441B+0Q
l.OOE-05
2.93E+02
4.00E+01
9.72E+02
2.00E-04
2.50E+03
9.70E+02
S.9SE+01
15
34
WILDLIFE
Wildlife
Domestic
Amrnnl
Criteria
On/i)
1.63E42
2.98E-03
2.00E49
1.20E+00
6.75E+00
7.70E-05
9.00E+01
7
21
HUMAN HEALTH (4)
Human
Non-
Cancer
Value
OSg)
<«/»
L21E+03
135E-f02
U9E+02
233&4H
4JNE48
l.«E+02
1JOB+00
4.ME+OZ
5.94E43
8.81E+01
4.4SE+02
8.13E+03
46
6
Human
Cancer
Value
(15g)
«.1SE4»
1.93EXW
2JIB+«1
2J2E+«1
31
2
HUMAN HEALTH (5)
Human
Non-
Cancer
Value
(45g)
Gig/I)
4.23E+02
1J6E402
1^7E+02
7J7E42
1.68E-OS
9J5E+01
7.82E-01
1.72E+02
1.98E-03
t35to¥9t
3.61E+02
7.ME+03
46
6
Human
Cancer
Value
(45g)
(W»)
2.4SE49
6.43E-06
2O8E+01
1.78E+01
31
2
* Criteria were developed Maiming-
Hardness = 50.0 mg/1 as CaCO,
pH = 6.50 S.U.
Criteria used in calculating WQBELs were adjusted for actual hardness and pH as appropriate.
(1) Shaded parameters indicate that criteria were presented in the proposed Guidance
(2) Values that are shaded and bolded are considered Tier I' criteria - all others are considered "Tier 0 values"
(3) Criteria for metals are for the "dissolved" fraction
(4) Human health criteria calculated assuming a fish consumption rate of IS grams per day
(5) Human health criteria calculated Mmming a fish consumption rate of 45 grams per day
2-18
-------
SECTION 2 METHODOLOGY
Aquatic Life
Criteria for the protection of aquatic life were determined for 50 of the 69 costed
pollutants using Tier I and Tier n methodologies. Generally, the most current toxicity data were
used as input to calculate aquatic life criteria used for the costing analyses; however, where
toxicity data were insufficient to calculate tier I criteria, estimates of appropriate Tier n values
were developed. The following methods were used to calculate aquatic life criteria:
• Tier I criteria were calculated using the same procedures and data utilized for the
proposed Guidance. The values, therefore are identical to those published in Tables
1 and 2 of the proposed Guidance.
• Tier n values were determined based on the availability of toxicity data for the
specific pollutant. Where the EPA Office of Science and Technology (OST) had
published or proposed aquatic life criteria for a pollutant (e.g., National Toxics Rule),
it was assumed that reliable toxicity data existed; thus, the published criteria were used
as the Tier n values. For pollutants where criteria had not been published or
proposed, the "lowest observed effect level" (LOEL) was used to derive the Final
Acute Value (FAY) and to obtain the Criteria Continuous Concentration (CCC).1
Human Health
Criteria for the protection of human health were determined for 64 of the 69 costed
pollutants. The criteria for 58 of the 64 pollutants were determined using Tier I methodologies,
and Tier n values were determined for the remaining 6. The only difference between the Tier
I and Tier n methodologies used to develop criteria for the cost analyses, pertained to the data
available to calculate BAFs. Where sufficient data were available to accurately calculate BAFs,
criteria were considered Tier I. Where minimum data were not available to develop reliable
BAFs, existing data were used to estimate BAFs. Criteria calculated using the estimated BAFs
were considered Tier n values.
Human health criteria were also calculated for copper and lead using alternate methods.
Since neither slope factors nor reference dose data were available for these pollutants, the
costing analyses used the drinking water "maximum contaminant levels" (MCL) as the criteria.
Tier I methods were used for all pollutants for which BAFs could be accurately calculated
and for which carcinogen slope factors or toxic reference dose data were available. For the
purposes of the costing analyses, EPA provided revised BAFs for many of the study pollutants.
In addition, EPA provided the most recent carcinogen slope factors and toxic reference dose data
'Following the development of the cost estimates, it was determined that the procedures used to calculate Tier
U aquatic life values were inconsistent with final Guidance methodologies. A subsequent analysis of the affect of
these inconsistencies on projected costs and load reductions determined that impacts were negligible. A summary
of the impact analysis is provided in Appendix A.
2-19
-------
SECTION 2
METHODOLOGY
for each of the study pollutants. In nearly all instances, the parameters and assumptions used
to calculate human health criteria for the cost analyses resulted in criteria that were more
stringent than those published in the proposed Guidance. Following the completion of the cost
analyses, EPA again updated its calculation of BAFs, slope factors, and reference doses, in
order to calculate numeric criteria for the final Guidance. Based on the revised parameters and
assumptions, many of the human health criteria published in the final Guidance were less
stringent than those used for the costing analyses. A comparison of the criteria published in the
proposed Guidance, those published in the final Guidance, and those used for the costing
analyses, are provided in Table 2-7.
TABLE 2-7 COMPARISON OF MOST STRINGENT HUMAN HEALTH CRITERIA IN THE
PROPOSED GUIDANCE, FINAL GUIDANCE, AND COST EVALUATIONS
CHEMICAL
Benzene
Chlordane
Chlorobenzene
Cyanide
DDT
Dieldrin
2,4-DimethylphenoI
2,4-Dinitrophenol
Hexachlorobenzene
Hexachloroethane
Lindane
- Noncancer
- Cancer Tier n
Mercury'
Methylene chloride
PCBs (class)
2,3,7,8-TCDD
Toluene
Toxaphene
Trichloroethylene
PROPOSED GUIDANCE
G«g/l)
l.OOE+01
2.00E-04
5.00E+02
8.00E+02
7.00E-05
l.OOE-04
3.00E+02
7.00E+01
l.OOE-04
2.00E+00
7.00E-01
2.00E-03
5.00E+01
3.00E-06
l.OOE-08
6.00E+03
2.00E-05
3.00E+01
FINAL GUIDANCE
0«g/l)
1.16E+01
2.46E-04
4.69E+02
6.00E+02
1.46E-04
6.45E-06
4.45E+02
5.52E+01
4.49E-04
4.21E+00
4.72E-01
1.99E-03
4.74E+01
3.91E-06
8.53E-09
5.59E+03
6.74E-05
2.95E+01
COST EVALUATIONS
(Mg/D
1.02E+01
4.79E-05
2.92E+02
6.02E+02
2.95E-05
9.75E-07
1.06E+02
5.29E+01
8.76E-05
8.88E-01
9.54E-02
2.78E-03
5.35E-04
4.60E+01
4.64E-06
2.05E-09
1.72E+02
6.43E-06
2.81E+01
Includes Methylmercury
2-20
-------
SECTION 2
METHODOLOGY
Wildlife
Criteria for the protection of wildlife were calculated for 7 of the 69 costed pollutants
using Tier I methodologies and for an additional 21 pollutants using Tier II methodologies. The
Tier I methods used were identical to those published in the proposed Guidance; however, BAFs
were updated by EPA based on revised data. Use of these revised BAFs generally resulted in
the calculation of wildlife criteria that were less stringent than those published in the proposed
Guidance. However, following completion of the cost analyses, EPA again updated the
parameters used to calculate the wildlife criteria in order to calculate numerical values for the
final Guidance. These updates resulted in final wildlife criteria that were less stringent than
those used for the cost analyses. Table 2-8 provides a comparison of the wildlife criteria
published in the proposed Guidance, those published in final Guidance and those used in the cost
analyses.
Tier n wildlife values were calculated using the same procedures used to calculate Tier
I criteria; however, the wildlife toxicity data were limited for these pollutants; thus Tier I
criteria could not be determined. A summary of the Tier n methodology is provided in
Appendix B.
TABLE 2-8 COMPARISON OF WILDLIFE CRITERIA IN THE PROPOSED GUIDANCE, FINAL
GUIDANCE, AND COST EVALUATIONS
CHEMICAL
DDT (and metabolites)
Mercury1
PCBs (class)
2,3,7,8-TCDD
PROPOSED GUIDANCE
(Mg/D
8.70E-07
1.80E-04
1.70E-05
9.60E-09
FINAL GUIDANCE
G«g/I)
1.10E-05
1.30E-03
7.40E-05
2.00E-09
COST EVALUATIONS
(us/I)
2.78E-06
9.12E-04
9.20E-05
2.00E-09
1 Includes Methylmercury
Dissolved Metals Water Quality Criteria
As described above, EPA revised many of the criteria originally proposed under the
Guidance. Among the various updates made by EPA, was the change in promulgation of criteria
for metals in the dissolved form, as opposed to the total form for aquatic life. The procedures
used to derive metals criteria in the dissolved form for use in deriving compliance cost estimates
is described briefly below.
In order to apply metals criteria in the dissolved form, conversion factors, based on
toxicity testing results, were used to revise criteria from the total form to the dissolved form.
The conversion factors were based on the ratio of dissolved metals to total metals present in the
laboratory toxicity tests performed to establish the criteria for toxic metals. Conversion factors
2-21
-------
SECTION 2 METHODOLOGY
were obtained from the EPA report "Results of Simulation Tests Concerning the Percent
Dissolved Metal in Freshwater Toxicity Tests" (EPA Duluth 1994) and from the EPA Policy
memo from Martha G. Prothro to EPA's Water Management and Environmental Services
Division Directors in Regions I-X dated October 1, 1993.
Conversion factors ranged from 0.333 for trivalent chromium, to 1.0 for trivalent arsenic.
Where conversion factors were not available, a conversion factor of 1.0 was assumed. The
conversion factor of 1.0 was determined to be appropriate because the majority of the actual
values were in the range of 0.90 to 1.0. The criteria for the dissolved form of the metals were
then adjusted back to the total form using the theoretical partitioning relationship between the
total/dissolved phases described in the October 1, 1993 EPA policy memo.
The October 1, 1993 memo reiterates EPA's position that permit limits for metals must
be established for total metals and describes three methodologies for translating dissolved metals
criteria to the total form. Two of the three methods rely on site-specific studies performed to
determine actual in-stream partitioning relationships. However, since actual metals partitioning
data were not available for any of the 59 study facilities, the third alternative, based on the
theoretical partitioning relationship, was used to calculate Guidance-based WQBELs. The
theoretical partitioning relationship is based on a partitioning coefficient, determined empirically
for each metal, and the concentration of total suspended solids (TSS) hi the receiving water.
In performing the cost analysis for each study facility, an attempt was made to determine
the TSS concentration of the receiving water. These data were generally available in the facility
file, or were obtained through the EPA STORET database. In a few instances, however, TSS
data were not available. In these cases a default TSS value ranging from 10 to 20 mg/1 was
selected based on the best professional judgement of the reviewer. This range was reflective of
actual TSS data available for other study facilities.
Using the theoretical partitioning relationship, partitioning factors (T) were determined
in the range of 2.0 for nickel, to 20.55 for trivalent chromium. Where empirically determined
partitioning coefficients were not available, a partitioning factor of 2.0 was assumed. Therefore,
partitioning factors assumed to be 2.0 would produce an appropriately stringent permit limit.
Table 2-9 provides a summary of the parameters used to translate the metals criteria from
dissolved metals to total metals fractions at a TSS concentration of 20 mg/1.
2.2.3.3 Revised Implementation Procedures
Intake Credits
In estimating the compliance costs for the sample facilities, the intake credit provisions
of the final guidance were applied to applicable facilities. Consistent with the proposal, intake
credits were provided hi one of two general ways.
2-22
-------
SECTION 2
METHODOLOGY
TABLE 2-9 PARAMETERS USED TO TRANSLATE DISSOLVED METALS CRITERIA
TO TOTAL RECOVERABLE WQBELs
COMPOUND
Aluminum
Antimony
Anenfc (HOC)
BeryDhon
f^mluiUau
Chromium (HOC**)
Chromium (VI)
^tiyiimiigii
Copper
Iran
Lead
Mercury
Nickel
Selenium (Total)
Selenium (IV)
Selenium (VI)
Silver
Thallium
Zinc
KP.
STREAM
N/A
N/A
480,000
N/A
4;00o,ooo
3,360,000
N/A
3,360.000
1,040.000
N/A
310,000
2,910,000
490,000
N/A
N/A
N/A
N/A
N/A
1,250,000
or
STREAM
N/A
N/A
-0.7286
N/A
-1.1307
-0.9304
N/A
-0.9304
-0.7436
N/A
-0.1856
-1.1356
-0.5719
N/A
N/A
N/A
N/A
N/A
-0.7038
**
LAKE
N/A
N/A
N/A
N/A
3.520.000
2.170,000
N/A
2,170,000
2.850,000
N/A
2,040,000
1,970,000
2,210.000
N/A
N/A
N/A
N/A
N/A
3.340,000
or
LAKE
N/A
N/A
N/A
N/A
-0.9246
-0.2662
N/A
4.2662
-0.9000
N/A
-0.5337
-1.1718
-0.7578
N/A
N/A
N/A
N/A
N/A
-0.6788
K*
STREAM
N/A
N/A
54,114
N/A
135.203
206.948
N/A
206,948
112.095
N/A
177,783
96,927
88.336
N/A
N/A
N/A
N/A
N/A
151.791
K«
LAKE
N/A
N/A
N/A
N/A
220.602
977.520
N/A
977,520
192.273
N/A
412,354
58,873
228.282
N/A
N/A
N/A
N/A
N/A
437,127
T
STREAM
2.00
2.00
2.08
2.00
3.70
5.14
2.00
5.14
3.24
2.00
4.56
2.94
2.00
2.00
2.00
2.00
2.00
2.00
4.04
T
LAKE
2.00
2.00
2.00
2.00
5.41
20.55
2.00
20.55
4.85
2.00
9.25
2.18
5.57
2.00
2.00
2.00
2.00
2.00
9.74
Where:
*
T
1 +[K«*(TSS)»(lE-6)]
Kp, - Empirically determined partitioning coefficient
a «= Constant
K< "= She-specific partitioning coefficient
Notes: N/A - Data Not Available
* «= Assumed As(m) partitions similarly to total Arsenic
** = Assumed CitflD partitions similarly to total Chromium
(1) Variables correspond to those described in EPA October 1993 memo.
(2) "T" indicates the multiplier for translating "dissolved" to "total* metals fractions.
(3) Table values assume TSS = 20 mg/1. Cost analyses were developed using site-specific TSS concentrations.
2-23
-------
SECTION 2 METHODOLOGY
First, the evaluation determined whether there would be a reasonable potential for the
discharge to cause or contribute to an excursion above a narrative or numeric water quality
criterion. For purposes of estimating compliance costs, no reasonable potential was determined,
and WQBELs were not established, for outfalls that met the following criteria:
• The facility withdrew 100 percent of the intake water containing the pollutant from the
same body of water into which the discharge was made.
• The facility did not contribute any additional mass of the identified intake water
pollutant to its wastewater.
• The facility did not chemically or physically alter the identified intake water pollutant
in a manner that would cause adverse water quality impacts that would not occur if
the pollutants were left in-stream.
• The facility did not increase the identified intake water pollutant concentration
compared to the pollutant concentration in the intake water.
• The timing and location of the discharge would not cause adverse water quality
impacts to occur that would not occur if the identified intake pollutants were left in-
stream.
It should be noted that when intake pollutant data for a sample facility was not available,
it was assumed that there would be a reasonable potential to exceed WQBELs, and appropriate
compliance costs were estimated for the sample facility. This assumption tends to overstate the
costs, since some of the facilities for which no data was available could qualify for an intake
credit. There were also instances when some intake pollutant data was available, but not all the
data needed to determine whether all five of the criteria described above would be met. In
general, for purposes of estimating compliance costs, it was assumed there would be no
reasonable potential to exceed water quality standards if at least the first two criteria described
above (i.e., withdrawing 100 percent from the same body of water, and no additional pollutant
was added to the discharge) were met. This assumption could potentially underestimate the cost
impact of the intake credit provisions contained in the final Guidance.
Second, intake credits were granted for sample facilities when the level of the pollutant
upstream of the discharge exceeded the most stringent applicable water quality criterion for that
pollutant. When this situation occurred, relief was provided by making the WQBEL for the
pollutant(s) equal to the most stringent Guidance criterion, instead of prohibiting the discharge
or making another more stringent assumption. This was done for both discharges to different
and same bodies of water. The final Guidance allows "no net increase" (i.e., discharge at
background concentrations) for up to 12 years, or until a total maximum daily load (TMDL) is
established, for discharges to the same body of water. Cost estimates conservatively assumed
that TMDLs justifying loads greater than criteria would not be developed after 12 years and
dischargers to the same body of water would eventually need to comply with the most stringent
criteria at end-of-pipe.
2-24
-------
SECTION 2 METHODOLOGY
Additivitv/TEFs
The estimate of costs for the sample facilities accounted for additivity of human
carcinogenic effects of pollutants contained in a discharge. To estimate costs for the final
Guidance, it was assumed that the total carcinogenic risk of the mixture of two or more
carcinogens in a discharge would not exceed a lifetime incremental cancer risk equal to one in
100,000 (10*5). The final Guidance allows States to use a less stringent incremental cancer risk
for additivity; however, a risk level of 10"5 was assumed for the mixture for estimating costs
because some States may choose to use a 10~5 risk level. In addition, the final Guidance allows
a State or Tribe to account for additivity by establishing individual human carcinogen doses at
levels corresponding to an incremental cancer risk of one in 1,000,000 (10*), or applying a
scientifically defensible method to account for the additive effects of carcinogens.
The first step in estimating the cost attributable to additivity was to determine the number
of potential carcinogens discharged by a study facility, the concentration of those pollutants in
the discharge, and the background concentrations in the ambient water for those pollutants. The
second step was to determine the human cancer value (HCV) associated with a lifetime
incremental cancer risk equal to one in 100,000 for those individual pollutants identified in the
discharge. The third step was to divide each of the HCVs for those carcinogens identified in
the discharge by the total number of carcinogens in the discharge to determine the allowable
concentration for each carcinogen that could be discharged. This concentration was then
compared to the actual concentration in the discharge for that pollutant to determine whether the
facility needed to reduce that pollutant. This approach results in an equivalent (proportional)
reduction for each HCV at a sample facility. This approach was selected to provide a consistent
method for addressing additivity to all sample facilities.
Toxicity equivalent factors (TEFs) were also considered when establishing wasteload
allocations for both human health non-cancer and cancer criteria for compounds similar to
2,,3,7,8-tetrachlorodibenzo-p-dioxin (2,3,7,8-TCDD) in accordance with Procedure 4 of
Appendix F of the final Guidance. It should be noted, however, that for those sample facilities
for which 2,3,7,8-TCDD WQBELs were established, no concentration data existed for the
chlorinated dibenzo-p-dioxins (CDDs) and chlorinated dibenzofurans (CDFs) in an effluent.
Thus equivalent concentrations for 2,3,7,8-TCDD-type chemicals were not developed.
Acute Mixing Zones for Whole Effluent Toxicity AVET)
The implementation procedures presented in the proposed Guidance required that facilities
comply with an acute WET criterion of 1.0 acute toxic unit (TUJ at the end-of-pipe (i.e., no
mixing zone allowed). The final Guidance requires that no discharges exceed 0.3 TU. at the
edge of an approved acute mixing zone. As a result, for purposes of estimating costs, mixing
zones were allowed to comply with acute WET criteria. WLA equations provided in Procedure
3 of Appendix F of the proposed Guidance and the 1-year, 10-day (1Q10) critical receiving
water flow as recommended in Procedure 3 of Appendix F of the final Guidance were used to
calculate acute WET limits.
2-25
-------
SECTION 2 METHODOLOGY
2.2.4 Estimation of Facility Compliance Costs
Subsequent to the analyses for determining which Guidance pollutants should be regulated
and for developing WQBELs based on the final Guidance water quality criteria, the costs of
compliance to be borne by each sample facility were determined or estimated. Prior to
estimating compliance costs, an engineering analysis of how the facility could comply with the
Guidance-based effluent limitations was performed. The costs were then estimated based on the
decisions and assumptions made in the analysis. Compliance costs evaluated at each facility
included capital costs for treatment, annual costs (compliance monitoring, operation and
maintenance, or O&M, and residuals management costs), and special costs defined as one-time
costs that would be incurred during the first year of the permit. The procedures used for
calculating facility costs, and for annualizing capital (and other one-time) costs, were not revised
to develop the final cost estimates. The procedures for determining the appropriate control
measure for a specific facility, however, were revised as described below.
In deriving the cost estimate for the proposed Guidance, it was assumed that when
treatment costs became excessive in light of the amount of pollutant to be removed, or if
information regarding the existing treatment system was lacking, that waste
minimization/pollution prevention techniques would be the preferred control approach selected
by the regulated community. In addition, for the proposed Guidance, the evaluation also did not
consider the alternatives available to facilities through regulatory relief mechanisms such as
variances, mixing zone studies, phased-TMDLs, site-specific criteria, and others.
The Guidance, consistent with the CWA and NPDES program, does not direct facilities
on how to comply with permit requirements. Therefore, each regulated facility can consider a
variety of options to comply with permit requirements. In estimating compliance costs, control
options were selected considering both the technological achievability and the reasonableness of
the selected control measure(s). The determination of the appropriate pollutant control strategy,
therefore, was performed on a case-by case basis using engineering best professional judgement.
To ensure consistency in estimating the general types of controls that would be necessary
for a sample facility to comply with the final Guidance (assuming that the final Guidance
resulted in more stringent requirements), as well as to integrate the other alternatives available
through the final Guidance into the cost analysis, a costing decision matrix was developed that
was used for each sample facility. The underlying assumption of the decision matrix is that a
facility will examine lower-cost alternatives prior to incurring the expense and potential liabilities
associated with constructing end-of-pipe treatment facilities.
2.2.4.1 Compliance Cost Decision Matrix
To model the decision process used by actual facilities, a cost decision matrix was
developed to determine appropriate, cost-effective control measures that could be used by a
facility to meet final Guidance-based WQBELs. Specific rules were established in the matrix
to provide reviewers with guidance in selecting options in a consistent manner. The matrix is
presented in Figure 2-1.
2-26
-------
SECTION 2
METHODOLOGY
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2-27
-------
SECTION 2
METHODOLOGY
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2-28
-------
SECTION 2
METHODOLOGY
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2-29
-------
SECTION 2 METHODOLOGY
Under the decision matrix, costs for minor treatment plant operation and facility changes
were considered first. Modification or adjustment of existing treatment was determined to be
feasible where literature indicated that the existing treatment process could achieve the revised
WQBEL and where the additional pollutant reduction was relatively small (e.g., 10 - 25 percent
of current discharge levels).
Where it was not technically feasible to simply adjust existing operations, the next most
attractive control strategy was determined to be waste minimization/pollution prevention
controls. These controls, however, were costed only where they were considered feasible based
on the reviewing engineer's understanding of the process(es) at a facility. The practicality of
techniques was determined based on several "rules of thumb" established in the decision matrix.
Decision considerations included the level of pollutant reduction achievable through waste
minimization/pollution prevention techniques, appropriateness of waste minimization/pollution
prevention for the specific pollutant, and knowledge of the manufacturing processes generating
the pollutant of concern. In general, detailed treatment and manufacturing process information
was not available in NPDES permit files; therefore, the assessment of feasibility was primarily
based on best professional judgement using general knowledge of industrial and municipal
operations.
If waste minimization/pollution prevention alone was deemed not feasible to reduce
pollutant levels to those needed to comply with the final Guidance criteria, a combination of
waste minimization/pollution prevention and simple treatment was considered. If these relatively
low-cost controls could not achieve the Guidance-based WQBELs, then end-of-pipe treatment
was considered.
Development of end-of-pipe treatment cost estimates began with a review of the existing
treatment systems at each facility. Decisions to add new treatment systems or to supplement
existing treatment systems were based on this initial evaluation. For determining the need for
additional or supplemental treatment, sources of performance information included EPA
Development Documents for effluent guidelines and standards for the facility's industrial
classification and the EPA Office of Research and Development, Risk Reduction Engineering
Laboratory's "RREL Treatability Database" (Version 4.0). The pollutant removal capabilities
of the existing treatment systems and/or any proposed additional or supplemental systems were
evaluated based on the following criteria: (1) the effluent levels that were being achieved
currently at the facility; (2) the levels that were achieved at similar facilities with similar
treatment systems documented in the effluent guideline Development Documents; and (3) the
levels that are documented in the EPA "RREL Treatability Database." If this analysis showed
that additional treatment was needed, unit processes that would achieve compliance with the
GLWQG-based effluent limitations were then chosen using the same documentation.
Following the calculation of end-of-pipe treatment costs, the relationship between the cost
of adding the treatment and other types of remedies or controls was considered. Specifically,
if the estimated annualized cost for removal of a pollutant exceeded $200 per toxic pounds-
equivalent then the decision matrix indicated that dischargers would explore the use of other
remedies or controls. This cost trigger was based on the upper end of the range of the costs to
2-30
-------
SECTION 2
METHODOLOGY
comply with promulgated effluent guideline limitations and standards for direct discharger
industrial categories. When it was assumed that facilities would pursue alternative relief, no
treatment cost was estimated for a facility; however, a nominal cost for some efforts to reduce
the pollutant until the relief is granted was included. In addition, pollutant load reductions were
not calculated or credited for any pollutant for which alternative relief was assumed.
Finally, based on discussions with EPA Regional and State permitting agencies and
outside experts, the typical cost to facilities pursuing relief from Guidance-based WQBELs was
estimated. These costs will be in the form of additional monitoring, performing special studies,
etc., to support facilities' requests for relief from the Guidance-based WQBEL. The costs
estimated by the Regions and States for the relief mechanisms ranged from $1,000,000 per
pollutant for phased-TMDLs to $20,000 for criteria modifications. Table 2-10 provides a
summary of the cost estimates provided by States and EPA Regions. For purposes of estimating
compliance costs, a mid-range cost value of $200,000 per pollutant was used each time a relief
mechanism was assumed necessary.
TABLE 2-10 COST ESTIMATES FOR PURSUING REGULATORY RELIEF
SOURCE
Michigan
DNR
Minnesota
DNR
New York
DEC
Indiana DEM
Ohio EPA
Pennsylvania
DER
Wisconsin
DNR
REGULATORY RELIEF MECHANISM*
Phased-TMDL
NA
NA
$400/NA
NA
NA
NA
NA/$1,000,000
Variance
NA
$2,000/NA
NA/$100,000
NA
NA/$150,000
NA
$10,000/$75,000
Site-Specific
Criteria
NA
NA/$50,000
NA/$200,000
NA
NA
NA
$70,000/$50,000
Change
Designated
Use
NA
$2.000/NA
NA/$75,000
NA
NA/$40,000
NA
NA/$ 1,000,000
Alternative
Mixing Zone
NA
$5,000/NA
NA/$150,000
NA
NA/$150,000
NA
NA/$ 100,000
NA - Not Available
* - State Costs/Facility Costs
In developing and using the cost decision matrix, it is acknowledged that granting relief
from WQBELs is dependent upon the specific circumstances at a facility, as well as the
judgement and implementing procedures of the permitting authority. It is also acknowledged
that opportunities for waste minimization are dependent upon the specific circumstances at a
2-31
-------
SECTION 2 METHODOLOGY
facility. The use of a $200 per toxic pounds-equivalent trigger for a "facility" assumes that the
regulatory flexibility in the final Guidance would be available and granted to all facilities that
exceed the cost trigger.
Acknowledging that the use of regulatory relief may be limited depending on the
particular circumstances for a "facility," costs were also estimated under a higher cost scenario
that assumes regulatory relief would be granted only when the cost for the particular "category
of dischargers" exceeds a cost trigger. Particularly, if the estimated annualized cost for a
"category of dischargers" exceeded $500 per toxic pounds-equivalent then it was assumed that
dischargers within the "category" would be granted regulatory relief. This cost trigger was
based on the highest costs to comply with promulgated effluent guideline limitations and
standards for direct discharger industrial categories, which ranged from $1 to $500 per toxic
pounds-equivalent per industrial category.
2.2.4.2 Pollution Prevention/Waste Minimization Costs
As discussed briefly in the section above, waste minimization/pollution prevention
techniques were used as controls for a number of sample facilities. The costs associated with
the implementation of these techniques, developed for the proposed Guidance, were based on
a limited evaluation of information available through the EPA Pollution Prevention Information
Clearinghouse (PPIC). In the absence of information for a particular category of dischargers,
best professional judgement was used to estimate the cost to implement pollution prevention.
Since the time of proposal, an attempt was made to collect additional information to
verify or replace the original estimates of pollution prevention/waste minimization costs. In
particular, input was solicited from the EPA Pollution Prevention Office and the American
Institute of Pollution Prevention. Both of these organizations acknowledged the difficulty in
developing generic costs because of the site-specific nature of manufacturing processes and
pollutants being removed. In fact, the implementation of waste minimization/pollution
prevention techniques may actually result hi a cost saving for a facility. Because of the general
lack of information related to the cost of pollution prevention techniques, the original estimates
for waste minimization/ pollution prevention were retained. Specifically, the mid-range pollution
prevention/waste minimization estimates were used to develop compliance costs for the final
Guidance.
2.2.5 Estimation of Total Compliance Costs to the Regulated Community
As in the cost analyses for the proposed Guidance, compliance cost estimates were
calculated for each facility chosen to represent a category or group of similar facilities. This
resulted in estimates of three major types of costs for each facility— capital costs, annual costs,
and special studies costs. Capital costs include the total investment cost needed to comply with
new permit limits. Annual costs include costs of yearly monitoring events, operation and
maintenance (O&M), but none of the recurring costs of capital. The costs of special studies
include one-time-only monitoring events, such as bioaccumulation studies, and major
investigative efforts, such as waste or pollutant minimization audits.
— -
-------
SECTION 2 METHODOLOGY
To develop a single cost estimate for each facility, the cost categories were combined into
a single "annualized cost," that reflects the annual expense associated with recurring activities,
repaying capital expenses, and special studies. Annualized costs were calculated by assuming
that all capital costs, special monitoring costs and special minimization study costs would be paid
by borrowing money at an interest rate of seven percent and paying it back over a 10-year
period. Annual costs of monitoring, operation, and maintenance were added directly.
Given a single estimate of the annualized cost for each facility, the procedure for
extrapolating costs from the sample to the entire population is predetermined by the stratified
random sampling procedure (described in Section 2.1 of the cost report for the proposed
Guidance) used to select the subset of facilities examined in detail.
Using the single annualized cost figure for each plant, an estimate of the cost for each
flow stratum can be calculated by averaging the two (or in some cases three) values for
individual (sample) plants, and then multiplying by the total (population) number of plants in that
category/stratum. The cost estimate for the category is calculated simply by summing over the
two (or in some cases three) flow strata in the category. The cost estimate for the entire
universe of facilities is simply the sum across categories. The results of these calculations are
reported in Section 3.
2.2.6 Estimation of Compliance Costs for Indirect Dischargers
The approach to estimating indirect discharger costs, for the proposed Guidance, was
based on an analysis of one major, highly industrialized, sample POTW (City of Battle Creek,
Michigan). Based on this evaluation, it was assumed that the number of indirect dischargers that
could be affected ranged from 10 to 30 percent. To further verify this range for use in
estimating costs for the final Guidance, information for an additional eight POTWs was
analyzed, based on data collected from the Michigan Department of Natural Resources (DNR)
and Wisconsin DNR. In addition, the original sample POTW was re-evaluated based on changes
to the final Guidance (as reflected in estimated WQBELs for the POTW).
Since not all of the eight POTWs were selected as one of the 59 study facilities, it was
assumed for the purpose of this analysis, that the pollutants limited by each POTW's existing
NPDES permit would be the same as those that would require regulation under the final
Guidance (i.e., the Guidance would not result in additional pollutants being regulated, but would
result hi more stringent permit limits). Based on the results provided in the EPA An Analytical
Survey of Nine POTWs from the Great Lakes Basin (Draft Report, December 15, 1994), this
assumption was considered reasonable in light of the limited detection of pollutants, particularly
BCCs. It should be noted that information for three of the additional POTWs was not sufficient
to determine the number of industries potentially affected.
For each POTW, the potential indirect dischargers of each regulated pollutant were
identified from among the POTW's list of indirect dischargers, as well as the number of
industrial users found to be violating the POTW's permit limits for any of the pollutants of
concern over a 1-year period. Based on these data, the range of potentially affected indirect
_
-------
SECTION 2
METHODOLOGY
users is estimated to be 8 to 44 percent of the total number of the indirect dischargers to a
POTW. The results show that the assumed range of indirect dischargers affected (10 to 30
percent) had a reasonable basis: Table 2-11 summarizes the results of the evaluation of Battle
Creek, Michigan and the additional eight POTWs.
For purposes of developing costs for the final Guidance, it was assumed that 30 percent
of all indirect dischargers in the Great Lakes Basin would be impacted by source control efforts
by POTWs as a result of more restrictive Guidance-based WQBELs. The average compliance
cost per direct discharger facility was also updated, based on the revisions made to the sample
facilities as a result of the final Guidance.
TABLE 2-11 SUMMARY OF INDIRECT DISCHARGERS POTENTIALLY AFFECTED
BY THE GUIDANCE AT NINE PRETREATMENT POTWs
POTW
Battle Creek, MI
Greenbay, WI
DePere, WI
Heart of the Valley, WI
Appleton, WI
Saginaw, MI
Mt. Pleasant, MI
Bay City, MI
Nenah, WI
NUMBER
OFSIUS
36
35
36
9
13
20
4
10
19
POLLUTANTS
PRESENT
CN
Cd, Cr, Cu, Pb, Ni,
Zn, CN
Cr, Cu, Zn, Ag,
CN, Hg
Cd, Cu, Ag, CN, Cr
Cd, Cr, Cu, Pb, Ni,
Zn, Hg, CN
*
*
*
Cd, Cr, Cu, Pb, Ni,
Zn, Hg, CN
FORMER
PRETREATMENT
VIOLATORS
WITH GUIDANCE
POLLUTANTS
(% OF TOTAL)
3 (8.3%)
*
*
1 (11%)
2 (15%)
*
*
*
3 (16%)
POTENTIAL
DISCHARGERS
OF GUIDANCE
POLLUTANTS
(% OF TOTAL)
8 (22%)
11 (31%)
10 (27%)
4(44%)
5 (38%)
*
*
*
6(31%)
Information not available
2-34
-------
SECTION 3 RESULTS
3. RESULTS
Compliance costs estimates related to the implementation of the final Guidance were
developed, based on the adjustments made to the cost study approach, described in Section 2.
This section presents the results of the adjustments and discusses.
3.1 OVERVIEW OF APPROACH
The approach for this final cost analysis was to update the detailed technical review of
the sample of 59 facilities evaluated for the proposed Guidance to reflect changes in the final
Guidance criteria and implementation procedures. These facility-specific compliance cost
evaluations were then used to extrapolate to an overall estimate of costs for all facilities in the
Great Lakes System.1
As discussed throughout Section 2, several methodological changes were made to
the assumptions needed to derive compliance costs for the sample facilities. One of
the more significant changes involved the use of a decision matrix for selecting the appropriate
facility-specific control option(s) to comply with final Guidance water quality-based effluent
limits (WQBELs). The underlying assumption of the decision matrix is that facilities would first
pursue least-cost controls prior to incurring the costs to install end-of-pipe treatment. As a final
step before assuming that treatment would be installed by the facility, the relationship between
the cost of adding the treatment and other types of remedies or controls were considered. If it
was concluded that other remedies or controls would be more feasible than installing end-of-pipe
treatment, then it was assumed that a facility would alternatively pursue some type of regulatory
relief from the WQBEL.
As described in Section 2.2.4.1, two different cost scenarios were developed to primarily
account for the flexibility provided in the final Guidance (i.e., use of regulatory relief). Under
the low-end compliance cost scenario, if the estimated annualized cost for removal of a pollutant
by a facility exceeded $200 per toxic pounds-equivalent then it was assumed that the facility
would explore the use of other remedies or controls. Acknowledging that the use of regulatory
relief may be limited depending on the particular circumstances for a "facility, " compliance costs
were also estimated under a high-end cost scenario that assumes regulatory relief would be
granted only when the cost for the particular "category of dischargers" exceeds $500 per toxic
pounds-equivalent. If the high-end trigger for the category was exceeded, then it was assumed
that dischargers within the "category" would be granted regulatory relief.
1 The results of these individual analyses are provided in a separate report prepared for EPA entitled "Technical
Background Document for the Great Lakes Water Quality Guidance Implementation Procedures Final Compliance
Cost Study" (March 13, 1995).
3-1
-------
SECTION 3 RESULTS
3.2 DISCUSSION OF RESULTS
Table 3-1 presents a summary of the total annualized costs of implementing the final
Guidance to direct and indirect dischargers. As shown in Table 3-1, the compliance cost for the
final Guidance is estimated to range from $61 million dollars to $376 million dollars.
Under the low-end estimate, direct dischargers account for 67 percent of the total
estimated compliance cost, and indirect dischargers are estimated to incur 33 percent of the total
cost. Under the high-end estimate, direct dischargers account for 98 percent of the total
estimated cost, and indirect dischargers account for 2 percent. This shift in proportion of costs
between direct and indirect dischargers between the high and the low cost estimates is due to the
increased use of end-of-pipe treatment for direct dischargers under the high-end estimates. In
addition, it was assumed that a smaller proportion of indirect dischargers (10 percent) would be
impacted under the high-end estimate, since municipal wastewater treatment plants are adding
end-of-pipe treatment, which should reduce the need for control of indirect dischargers (i.e.,
reduce the need for increased pretreatment program efforts).
3.2.1 Analysis of Low-End Cost Estimate for Direct Dischargers
Table 3-2 presents the projected annualized cost for each direct discharger and major cost
category under the low-end cost scenario. As shown in Table 3-2, under the low-end cost
estimate for the direct dischargers, municipal majors are expected to incur about 58 percent of
total costs and industrial majors account for 38 percent of total compliance costs. Minor direct
dischargers are estimated to incur 4 percent of the total costs for direct dischargers. The two
major industrial categories with the largest total annualized cost are the pulp and paper (20
percent of total) and miscellaneous (11 percent) categories. The food and food products, metal
finishing, mining, and metals manufacturing categories are estimated to incur less than 1 percent
of the total annualized compliance cost.
Although the municipal major category accounts for over 58 percent of the total estimated
cost, the average annual cost is just over $75,000 per facility. Average annualized costs for
industrial majors vary widely across categories, with the highest average cost estimated for the
miscellaneous ($168,000 per plant) and pulp and paper ($151,000 per plant) categories. For
minor facilities, average costs are negligible at an estimated $500 per facility.
Figure 3-1 presents a summary of the distribution of low-end compliance costs across
cost categories. Costs to direct dischargers for developing and implementing pollutant
minimization programs (required when WQBELs are below analytical detection levels) account
for most of the costs (58 percent of total annual costs). Annualized capital and operation and
maintenance (O&M) costs make up just over 21 percent of the total annual costs, and waste
minimization (i.e., pollution prevention) costs account for just over 11 percent. Under the low-
end cost scenario, regulatory relief was assumed when the control costs for a pollutant at a
facility exceeded $200 per toxic pounds-equivalent. Based on the analysis of sample facilities,
it was estimated that regulatory relief would be required for less than 1 percent of all direct
3-2
-------
SECTION 3
RESULTS
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SECTION 3
RESULTS
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3-4
-------
SECTION 3
RESULTS
FIGURE 3-1: FINAL GUIDANCE COMPLIANCE COST ESTIMATES
FOR DIRECT DISCHARGERS: LOW-END SCENARIO
SPECIAL MON. (2.6%)
WASTE MIN. (11.5%)
VARIANCE (6.1%)
O&M (15.8%)
COMPLIANCE MON. (0.7%)
CAPITAL (5 5%)
POLLUTANT MIN. (57.8%)
3-5
-------
SECTION 3 RESULTS
dischargers. For these facilities, cost for controls to comply with the final Guidance (e.g.,
capital and O&M, pollutant minimization programs, waste minimisation, etc.) were shifted to
costs related to pursuing regulatory relief. The resulting costs associated with pursuing
regulatory relief account for just over 6 percent of the total annual costs.
Table 3-3 presents a summary of compliance costs under the low-end scenario by
pollutant. As shown in Table 3-3, controls for mercury account for more than 20 percent of
annual costs (attributable primarily to pollutant minimization program-related costs). Other
pollutants accounting for significant costs include methylene chloride, aluminum, benzene, and
copper.
3.2.2 Analysis of High-End Cost Estimate for Direct Dischargers
Under the high-end scenario, regulatory relief was assumed necessary when the total cost
for a category exceeded $500 per toxic pounds-equivalent reduced. Only the steam electric
industrial category was estimated to exceed the $500 toxic pounds-equivalent cost trigger. In
general, estimated costs for end-of-pipe treatment of significant volumes of non-contact cooling
water accounted for the high costs within the steam electric category. As a result of the.se
significant costs, costs for end-of-pipe treatment were shifted to costs to pursue regulatory relief.
Table 3-4 presents the projected annualized cost for each discharger and major cost
category under the low-end scenario. As shown hi Table 3-4, under the high-end estimate for
the direct dischargers, municipal majors are expected to incur just over 70 percent of total costs
and industrial majors account for 29 percent of total annual compliance costs. Minor direct
dischargers are estimated to incur less than 1 percent of the total costs.
The two major industrial categories with the largest total annualized cost are the pulp and
paper (23 percent of total) and miscellaneous (3 percent) categories. Even under the high-end,
the food and food products, metal finishing, mining, and metals manufacturing categories are
still estimated to incur less than 1 percent of the total annualized compliance cost. In addition,
due to the shift from end-of-pipe treatment to regulatory relief, the steam electric category also
accounts for less than 1 percent of the total compliance cost.
The municipal major category accounts for almost 70 percent of the total estimated cost,
the average annual cost is just over $822,000 per facility. Average annualized costs for
industrial majors vary widely across categories, with the highest average cost estimated for pulp
and paper ($1,583,000 per plant) and miscellaneous ($433,700 per plant) categories. For minor
facilities, average costs are negligible at an estimated $500 per facility.
Figure 3-2 presents a summary of the distribution of low-end compliance costs across
cost categories. For the high-end scenario, costs to direct dischargers shifted away from
developing and implementing pollutant minimization plans and waste minimization to capital and
O&M costs (more than 52 percent of total annual costs) associated with construction and
application of end-of-pipe treatment. Annualized costs for developing and implementing
pollutant minimization plans account for just over 6 percent and waste minimization costs
3-6
-------
SECTION 3
RESULTS
TABLE 3-3 BREAK-OUT OF FINAL GUIDANCE COMPLIANCE COSTS
BY POLLUTANT: LOW-END SCENARIO
PARAMETER
Acrylonitrile
Aldrin
Aluminum
Antimony
Arsenic(m)
Benzene
Benzidine
Benzo[a]pyrene
Beryllium
Cadmium
Carbon Tetrachloride
Chlordane
Chlorobenzene
Chloroform
Chlorpyrifos
Chromium(in)
Chromium(VI)
Chrysene
Copper
Cyanide, Free
Cyanide, total
4,4-DDD
4,4-DDE
DDT
3 ,3-Dichlorobenzidine
1 , 1 -Dichloroethane
TOTAL ANNUAL COSTS ($)*
0
0
2,793,250
0
139,280
2,101,420
0
0
0
11,400
92,300
687,167
0
339,336
0
0
0
0
2,100,048
1,088,809
0
8,250
8,250
695,417
5,820
972,000
PERCENT OF TOTAL COST
0.0%
0.0%
6.9%
0.0%
0.3%
5.2%
0.0%
0.0%
0.0%
0.0%
0.2%
1.7%
0.0%
0.8%
0.0%
0.0%
0.0%
0.0%
5.2%
2.7%
0.0%
0.0%
0.0%
1.7%
0.0%
2.4%
3-7
-------
SECTION 3
RESULTS
TABLE 3-3 BREAK-OUT OF FINAL GUIDANCE COMPLIANCE COSTS
BY POLLUTANT: LOW-END SCENARIO (continued)
PARAMETER
1 ,2-Dichloroethane
1 , 1 -Dichloroethylene
1 ,2-trans-Dichloroethylene
1 ,2-Dichloropropane
Dieldrin
2,4-Dimethylphenol
2,4-Dinitrophenol
alpha-Endosulfan
beta-Endosulfan
Endosulfan
Endrin
Fluoranthene
Fluoride
Heptachlor
Hexachlorobenzene
alpha-Hexachlorocyclohexane
beta-Hexachlorocyclohexane
Hexachlorocyclohexane
Hexachloroethane
Iron
Lead
Lindane
Mercury
Methylene Chloride
Nickel
Parathion
TOTAL ANNUAL COSTS ($)*
92,300
256,280
0
0
695,417
0
0
0
0
0
687,167
0
10,920
1,786,935
698,342
1,751,908
687,167
687,167
0
10,920
41,920
1,088,593
12,646,210
3,063,667
0
0
PERCENT OF TOTAL COST
0.2%
0.6%
0.0%
0.0%
1.7%
0.0%
0.0%
0.0%
0.0%
0.0%
1.7%
0.0%
0.0%
4.4%
1.7%
4.3%
1.7%
1.7%
0.0%
0.0%
0.1%
2.7%
31.2%
7.6%
0.0%
0.0%
3-8
-------
SECTION 3
RESULTS
TABLE 3-3 BREAK-OUT OF FINAL GUIDANCE COMPLIANCE COSTS
BY POLLUTANT: LOW-END SCENARIO (continued)
PARAMETER
PCBs
Pentachlorobenzene
Pentachlorophenol
Phenanthrene
Phenol
Selenium, Total
Silver
1 ,2,4,5-Tetrachlorobenzene
2,3,7,8-TCDD
Tetrachloroethylene
Thallium
Toluene
Toxaphene
1,1,1 -Trichloroethane
Ttichloroethylene
2,4,6-Trichlorophenol
Whole Effluent Toxicity
Zinc
TOTAL
TOTAL ANNUAL COSTS ($)*
689,303
687,167
1,863,493
0
0
0
0
0
687,167
0
0
0
698,342
0
0
0
654,121
2,520
40,529,768
PERCENT OF TOTAL COST
1.7%
1.7%
4.6%
0.0%
0.0%
0.0%
0.0%
0.0%
1.7%
0.0%
0.0%
0.0%
1.7%
0.0%
0.0%
0.0%
1.6%
0.0%
100.0%
All costs ate in 1st Quarter 1994 dollars; total cost may not match Table 3-2 due to rounding during
extrapolation.
account for less than 1 percent of total annual costs. Since regulatory relief was assumed for
only one category under the high-end, the costs associated with regulatory relief account for less
than 1 percent of the total annual compliance cost.
Table 3-5 presents a summary of compliance costs under the high-end scenario by
pollutant. As shown in Table 3-5, controls for lead account for more than 60 percent of annual
costs (attributable primarily to end-of-pipe treatment related controls). Other pollutants that
account for significant costs include heptachlor, pentachlorophenol, lindane, and mercury.
3-9
-------
SECTION 3
RESULTS
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3-10
-------
SECTION 3
RESULTS
FIGURE 3-2: FINAL GUIDANCE COMPLIANCE COST ESTIMATES
FOR DIRECT DISCHARGERS: HIGH-END SCENARIO
O&M (79.2%)
VARIANCE (0.1%)
MPLIANCE MON. (0.1%)
CAPITAL (13.5%)
WASTE MIN. (0.5%)
POLLUTANT MIN. (6.4%)
SPECIAL MON. (03%)
3-11
-------
SECTION 3
RESULTS
TABLE 3-5 BREAK-OUT OF FINAL GUIDANCE COMPLIANCE COSTS
BY POLLUTANT: HIGH-END SCENARIO
PARAMETER
Acrylonitrile
Aldrin
Aluminum
Antimony
Arsenic(m)
Benzene
Benzidine
Benzo[a]pyrcne
Beryllium
Cadmium
Carbon tetrachloride
Chlordane
Chlorobenzene
Chloroform
Chlorpyrifos
Chromium(ni)
Chromium(VI)
Chrysene
Copper
Cyanide, Free
Cyanide, Total
4,4-DDD
4,4-DDE
DDT
3,3-Dichlorobenzidine
1 , 1 -Dichloroethane
TOTAL ANNUAL COSTS ($)*
0
0
4,211,188
0
225,080
2,101,420
0
0
0
11,400
0
642,833
0
2,379,520
0
0
0
0
2,100,048
824,107
0
8,250
8,250
651,083
5,820
11,970,000
PERCENT OF TOTAL COST
0.0%
0.0%
1.1%
0.0%
0.1%
0.6%
0.0%
0.0%
0.0%
0.0%
0.0%
0.2%
0.0%
0.6%
0.0%
0.0%
0.0%
0.0%
0.6%
0.2%
0.0%
0.0%
0.0%
0.2%
0.0%
3.3%
3-12
-------
SECTION 3
RESULTS
TABLE 3-5 BREAK-OUT OF FINAL GUIDANCE COMPLIANCE COSTS
BY POLLUTANT: HIGH-END SCENARIO (continued)
PARAMETER
1,2-Dichloroethane
1 , 1 -Dichloroethylene
1 ,2-trans-Dichloroethylene
1 ,2-DichIoropropane
Dieldrin
2,4-Dimethylphenol
2,4-Dinitrophenol
alpha-Endosulfan
beta-Endosulfan
Endosulfan
Endrin
Fluoranthene
Fluoride
Heptachlor
Hexachlorobenzene
alpha-Hexachlorocyclohexane
beta-Hexachlorocyclohexane
Hexachlorocyclohexane
Hexachloroethane
Iron
Lead
Lindane
Mercury
Methylene Chloride
Nickel
Parathion
TOTAL ANNUAL COSTS ($)*
6,331,000
0
0
0
651,083
0
0
0
0
0
642,833
0
10,920
24,747,833
654,008
6,890,333
642,833
642,833
0
10,920
236,008,507
21,525,000
15,235,978
3,063,667
0
0
PERCENT OF TOTAL COST
1.7%
0.0%
0.0%
0.0%
0.2%
0.0%
0.0%
0.0%
0.0%
0.0%
0.2%
0.0%
0.0%
6.7%
0.2%
1.9%
0.2%
0.2%
0.0%
0.0%
64.2%
5.9%
4.1%
0.8%
0.0%
0.0%
3-13
-------
SECTION 3
RESULTS
TABLE 3-5 BREAK-OUT OF FINAL GUIDANCE COMPLIANCE COSTS
BY POLLUTANT: HIGH-END SCENARIO (continued)
PARAMETER
PCBs
Pentachlorobenzene
Pentachlorophenol
Phenanthrene
Phenol
Selenium, total
Silver
1 ,2,4,5-Tetrachlorobenzene
2,3,7,8-TCDD
Tetrachloroethylene
Thallium
Toluene
Toxaphene
1,1,1 -Trichloroethane
Trichloroethylene
2,4,6-Trichlorophenol
WET
Zinc
TOTAL
TOTAL ANNUAL COSTS ($)*
644,969
642,833
22,260,000
0
0
0
0
0
642,833
0
0
0
654,008
0
0
0
634,456
2,520
367,678,369
PERCENT OF TOTAL COST
0.2%
0.2%
6.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.2%
0.0%
0.0%
0.0%
0.2%
0.0%
0.0%
0.0%
0.2%
0.0%
100.0%
* Costs are in 1st Quarter 1994 dollars; total cost may not match Table 3-4 due to rounding during
extrapolation.
3.2.3 Comparison of Estimated Costs for the Final Guidance to Costs of Proposed
Guidance
Table 3-6 provides a comparison of compliance cost estimates for the final Guidance to
costs of the proposed Guidance. The proposed Guidance estimates were revised to reflect
changes made in the approach to estimating costs for the final Guidance (as described in Section
2). As shown in Table 3-6, revaluation of the proposed Guidance resulted in an increase in the
estimate of costs of about $240 million under the low-end scenario and $265 million for the
high-end scenario when compared to the final Guidance.
3-14
-------
SECTION 3 RESULTS
The annual cost estimate for the final Guidance is significantly lower than the revised
estimates for the proposed Guidance. Some of this reduction is attributable to the final Guidance
intake credit provisions, which provide relief to several significant dischargers that discharge to
non-attained waters, and to the use of dissolved metals criteria, which also tends to lower the
costs for the final Guidance.
Common to both the reevaluated proposed Guidance and the final Guidance, the lowering
of the permit baseline also accounts for an overall decrease in compliance costs and load
reduction. The lowering of the permit baseline was expected due to State implementation of the
requirements of Section 303(c) of the Clean Water Act (CWA), which required all States to
promulgate water quality criteria for certain toxic pollutants. To ensure that the requirements
of Section 303(c) are met, the Environmental Protection Agency (EPA) promulgated the National
Toxics Rule (57 FR 6084; 12/22/92) to provide water quality criteria for pollutants for which
States did not promulgate criteria. More important, each of the Great Lake States has been
actively involved in the Great Lakes Water Quality Initiative since 1989, acting as co-partners
and major participants in developing the final Guidance.
Consequently, most of the final Guidance and current State water quality standards have
a wide number of similarities. In fact, some States have already elected to promulgate more
stringent requirements for a variety of Guidance-related provisions in anticipation of the final
Guidance. For example, New York, Minnesota, Illinois, and Wisconsin all use a higher fish
consumption rate than required by the final Guidance for deriving human health criteria. Many
of the Great Lakes States also currently have provisions in their water quality programs to
account for additivity of risk from carcinogens. As a result of these and many other efforts by
States, the stringency of the National Pollutant Discharge Elimination System (NPDES) permit
requirements continues to increase, which decreases the incremental difference between the
current State permit limits and Guidance-based WQBELs.
3-15
-------
SECTION 3
RESULTS
i
1
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i
lit
!*I
fe
111
e
s
V3
S
I
s
I
Municipal
5
VO
VO
S
1
i*
I
I j
u
1
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II 3*
e e s s
s s S i
s ««
11
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uiu3
3-16
-------
SECTION 4 EVALUATION OF COST-EFFECTIVENESS
4. EVALUATION OF COST-EFFECTIVENESS
This section presents a revised cost-effectiveness analysis which was performed to
compare the estimated costs related to implementing the final Guidance to those of other
Environmental Protection Agency (EPA) regulatory programs. In addition, the results from this
cost-effectiveness analysis reflect revisions to the reported cost-effectiveness values in the
proposed Guidance.
For a pollution control option, cost-effectiveness is defined as the incremental annualized
cost per incremental pound of pollutant removal. Cost-effectiveness is measured in dollars per
toxic pounds-equivalent removed per year. Toxic pounds-equivalent units are standardized to
allow comparison among different pollutants.
This cost-effectiveness analysis has limitations because of the available data and
simplifying assumptions used to calculate pollutant reductions for the 59 sample facilities for
which compliance cost estimates were derived. These limitations and assumptions, discussed
throughout this section, affect the estimation of pollutant reductions and directly influence the
cost-effectiveness measure. These limitations and assumptions notwithstanding, the results
presented in this section should indicate whether the costs to implement the final Guidance are
comparable to other EPA regulatory programs.
4.1 METHODOLOGY
The methodology for evaluating cost-effectiveness used in this study is generally
consistent with the methodology used in the proposed Guidance and is based on the methodology
used by EPA in analyzing pollutant control options for national effluent guidelines and standards.
This methodology entails estimating pollutant loading reductions attributable to the final
Guidance implementation procedures for each major sample facility, converting the pollutant
reduction estimates into toxic pounds-equivalents, and escalating the weighted pollutant loading
reductions to represent the universe of direct discharging facilities hi the Great Lakes Basin.
The pollutant loading reductions were computed under two different sets of assumptions to arrive
at a low-end and a high-end loadings reduction estimate. The total annual costs for both the
low-end and the high-end scenarios were then divided by the low-end and the high-end annual
loadings reductions, respectively, resulting in low-end and high-end cost effectiveness estimates.
4.1.1 Estimation of Pollutant Reductions
As for the proposed Guidance, pollutant loading reductions were calculated using major
municipal and industrial sample facility data to indicate the decrease hi pollutant discharge due
to more stringent water quality-based effluent limitations (WQBELs) resulting from
implementation of the final Guidance. Pollutant loading reductions were calculated by finding
4-1
-------
SECTION 4 EVALUATION OF COST-EFFECTIVENESS
the difference between the existing permit limitation (considered the baseline value) and the final
Guidance-based effluent limitation.1
First, baseline pollutant loadings were determined to establish a fixed reference from
which to estimate pollutant loading reductions. In this case, the existing permit limit was used
as the baseline discharge concentration for each pollutant. If a permit limit was not available
for a pollutant, then the highest reported effluent concentration was used. In cases where the
facility did not have a permit limit and reported all values for a pollutant below reasonable
detection levels, the pollutant was not evaluated further. Baseline loadings were converted to
pounds per day by multiplying the existing permit limitation or effluent concentration (in /zg/1)
by the facility's average daily flow rate (in million gallons per day, or MGD) and a conversion
factor (0.00834) to calculate the loadings in pounds per day.
Next, the low-end and the high-end pollutant loadings were calculated. The low-end
estimate represents loadings when regulatory relief is allowed to facilities if the cost exceeds a
threshold value. For example, if the expected pollutant reduction was insignificant in
comparison to the capital and operational costs incurred for reducing the pollutant, then it was
assumed that the facility would be granted a relief by complying with final Guidance limits
instead of having to implement treatment systems. In cases when a facility was determined to
require relief, any loading reduction was "zeroed" such that no credit was given to the final
Guidance for any projected load reduction.
The nigh-end estimate is based on the cost and pollutant loading reductions resulting from
the use of a higher cost threshold for a category of dischargers. Under the assumptions for this
estimate, only one industrial category's (the Steam Electric Category) cost exceeded the
threshold.
Low-end and high-end pollutant loading reductions were calculated by taking the
difference between the baseline and low-end load estimates, and the baseline and high-end load
estimates. Several assumptions were made in determining the reduction for a pollutant:
• If the difference between the baseline value and the final Guidance limitation was
negative, a zero loading reduction was assumed. Although it seems counter
intuitive, this situation can occur because of the method of determining the need
for a WQBEL. In the absence of a permit limit for a pollutant, if the projected
effluent quality (based on the reported concentration) exceeded the Guidance-
based WQBEL, a final Guidance-based effluent limitation was established.
However, there were instances when the projected effluent quality was greater
than the final Guidance limit (indicating the need for a WQBEL) but the
'It should be noted that using a facility's permit limitations as the baseline for calculating pollutant reductions
portrays the difference between existing and final Guidance-based permit limitations rather than a true estimate of
the pollutant reductions (or baseline loads) that would be attributable to the final Guidance. Some (or most) facilities
may be discharging at concentrations below permitted amounts, so that actual removals (or baseline loads) may be
less than estimated here.
4-2
-------
SECTION 4 EVALUATION OF COST-EFFECTIVENESS
maximum reported concentration was less than the final Guidance permit limit.
The difference between the maximum reported concentration and the final
Guidance permit limit would therefore be negative. In such cases, no loading
reduction (as opposed to a negative reduction) was assumed,
• If the final Guidance-based effluent limit was below analytical detection levels,
one-half of the analytical detection level was used to compute the final Guidance
loading. The final Guidance loading was then subtracted from the baseline load
calculated using the facility's existing permit limit. If both the baseline value and
the Guidance-based effluent limit were below analytical detection levels, then no
pollutant load reduction credit was attributed to the Guidance (but the costs
related to implementation of pollutant minimization programs were still included).
• For purposes of calculating a baseline value, it was assumed that the facilities
were discharging at the level of the existing permit limitation.2
4.1.2 Revised Toxic Weights
Toxic weights were used in the proposed Guidance (and revised hi the final Guidance)
to derive cost-effectiveness estimates as well as to compare the relative loadings of the 138
pollutants of initial focus analyzed for the cost study. Toxic weights are used as normalizing
factors that relate the toxicity of any pollutant to the toxicity of copper. The factor considers
the aquatic toxicity and the human health effects of a pollutant and is calculated using the
following formula:
Toxic Weight = 5.6/[fresh water chronic criteria Gtg/1)] + 5.6/[human health criteria (jtg/1)]
The value of 5.6 /ig/1 was the original National chronic water quality criterion for
copper; thus, the toxic weight for copper was equal to 1.0. A pollutant with a toxic weight of
10, therefore, would be considered 10 tunes as toxic as copper.
The national chronic water quality criterion for copper has since been revised to 12 /xg/1;
however, the 5.6 value is retained for consistency. This results in copper currently having a
toxic weight of 5.6/12, or 0.47.
Toxic weights from 1988 were used in calculating baseline pollutant loads and load
reductions for the proposed Guidance. These loads and load reductions are expressed in toxic
pounds-equivalent. In analyzing the impact of the final Guidance, toxic weights were developed
or recalculated for all 69 pollutants included in the cost study, using the most recent criteria and
toxicity information available. These updates resulted hi both raising and lowering of the 1988
2It should be noted that this assumption was primarily the reason that pollutant reductions and compliances were
estimated for pollutants for which production has been banned (e.g., PCB, 4,4-DDT, etc.)
4-3
-------
SECTION 4 EVALUATION OF COST-EFFECTIVENESS
toxic weights, depending on the toxicity data available for a specific pollutant. Table 4-1
.presents the revised toxic weights for each pollutant evaluated in the cost study.
4.1.3 Toxicity Weighting and Extrapolation of Pollutant Baseline Loadings and Reductions
Each pollutant's baseline load, low-end load, and high-end load were multiplied by their
respective toxic weights to express them hi units of toxic pounds-equivalent. The toxic weighted
loading reductions were then calculated by taking the difference between the baseline values and
the low-end values, and the baseline and the high-end values. The total toxic weighted baseline
load and reduction for all pollutants for a facility was determined by summing toxic weighted
baseline loads and reductions. Each facility's total baseline pollutant load and load reduction
were then summed with other facility toxic weighted loads and reductions within each strata and
then extrapolated to arrive at the total baseline pollutant loading and reduction for the universe
of direct dischargers into the Great Lakes Basin.
4.1.4 Determining Cost-Effectiveness
Cost-effectiveness was determined by multiplying the total pounds-equivalent for all
pollutants (in pounds-equivalent per day) by 365 days to derive the total annual low-end and
high-end toxic weighted pollutant reductions. The total annualized low-end costs were divided
by the total annual low-end toxic pounds reduced to determine the cost-effectiveness, expressed
hi dollars per toxic pounds-equivalent removed. The procedure was repeated to determine the
high-end cost-effectiveness.
4.2 RESULTS
Tables 4-2 and 4-3 present the annual unweighted and toxic weighted extrapolated
baseline pollutant load and loading reductions attributed to implementation of the final Guidance.
As shown hi Table 4-3, the toxicity-weighted baseline pollutant loading was projected to be just
over 35 million toxic pounds-equivalent per year (Ibs-eq/year). This baseline pollutant loading
represents almost a 72 percent reduction hi the baseline projected by EPA for its original
analysis of the proposed Guidance (126 million Ibs-eq/year).
This downward shift in the baseline pollutant loadings is particularly significant hi light
of the fact that more than 35 pollutants were added for the analysis of the final Guidance. This
shift is attributable to the fact that the existing permit baseline also moved downward (i.e..,
existing permit limits for the sample facilities were found to be more stringent). This downward
shift hi the permit baseline is due, in part, to increased efforts by States to protect water quality.
The use of dissolved criteria for metals for the final Guidance, which tended to eliminate metals
for the cost and loading analysis, also accounted for a shift hi the baseline. Finally, hi contrast
to the cost analysis for the proposed Guidance, where baseline loads were estimated even when
4-4
-------
SECTION 4
EVALUATION OF COST-EFFECTIVENESS
TABLE 4-1 TOXIC WEIGHTS FOR POLLUTANTS EVALUATED IN THE FINAL GUIDANCE
PARAMETER
Acrylonitrile
Aldrin
AlumiiHirn
Antimony
Arsenic(III)
Benzene
Benzidine
Benzofalpyrene
Beryllium
Cadmium
Carbon tetrachloride
Chlordane
Chlorobenzene
Chloroform
ChlorDvrifos
Chromium(IIT)
ChromiumCVT)
Chrvsene
Copper
Cyanide, Free
Cyanide. Total
4.4-DDD
4,4-DDE
DDT
3 ,3-Dichlorobenzidine
1 , 1 -Dichloroethane
1.2-Dichloroethane
1 . 1 -Dichloroethylene
1 ,2-trans-Dichloroethylene
1 .2-Dichloropropane
Dieldrin
2,4-Dimethylphenol
2,4-Dinitrophenol
alpha-Endosulfan
beta-Endosulfan
Toxic WEIGHT
8.50E-01
5.00E+01
6.40E-02
1.90E-01
4.00E+00
1.80E-02
l.OOE+03
4.30E+03
5.30E+00
5.20E+00
1.30E-01
2.30E+03
2.90E-03
2.10E-03
1.40E+02
2.67E-02
3.55E+01
1.80E+01
4.70E-01
1.08E+00
1.08E+00
7.60E+02
. 9.50E+02
6.50E+03
7.30E+00
3.90E-04
6.20E-03
1.80E-01
9.30E-05
1.50E-02
5.70E+04
5.30E-03
8.40E-03
l.OOE+02
l.OOE+02
PARAMETER
Endosulfan
Endrin
Fluoranthene
Fluoride
Heptachlor
Hexachlorobenzene
alpha-Hexachlorocyclohexane
beta-Hexachlorocyclohexane
Hexachlorocvclohexane
Hexachloroethane
Iron
Lead
Lindane
Mercury
Methylene Chloride
Nickel
Parathion
PCBs
Pentachlorobenzene
Pentachlorophenol
Phenanthrene
Phenol
Selenium. Total
Silver
1 ,2,4,5-Tetrachlorobenzene
2.3,7.8-TCDD
Tetrachloroethylene
Thallium
Toluene
Toxaphene
1.1.1 -Trichloroethane
Trichloroethylene
2.4.6-Trichlorophenol
Zinc
Toxic WEIGHT
l.OOE+02
9.80E+01
9.20E-01
3.50E-02
4.10E+03
7.20E+02
4.30E+01
1.20E+01
1.80E+01
7.40E-02
5.60E-03
1.80E+00
7.00E+01
5.00E+02
4.20E-04
3.60E-02
4.30E+02
7.49E+03
2.30E+00
5.00E-01
1.90E+01
2.80E-02
1.10E+00
4.70E+01
2.00E+00
4.20E+08
7.40E-02
1.40E-01
5.60E-03
2.90E+04
4.30E-03
6.30E-02
3.50E-01
5.10E-02
4-5
-------
SECTION 4
EVALUATION OF COST-EFFECTIVENESS
TABLE 4-2 UNWEIGHTED POLLUTANT LOADING REDUCTIONS
POLLUTANT
Aciylonitrile
Aldrin
Aluminum
Antimony
Arsenic (m)
Benzene
Benzidine
Benzo[a]pyrene
Beryllium
PaHmiiim
Carbontetrachloride
Chlordane
Chlorobenzene
Chloroform
Chlorpyrifos
Chromium (ID)
Chromium (VI)
Chrysene
Copper
Cyanide, Free
Cyanide, Total
4,4-DDD
4,4-DDE
DDT
3 ,3-Dichlorobenzidine
POLLUTANT LOADING (LBS/YEAR)
BASELINE
*
—
37,185,781
—
5,494
9,111
—
—
—
66,313
4,985
424
—
61,429
—
—
—
—
5,111
87,218
—
0
0
10
15,132
REDUCTION
(Low ESTIMATE)
—
—
397,172
—
5,389
56
—
—
—
0
4,054
289
—
3,333
—
—
—
—
1,583
9,657
—
0
0
0
9,400
REDUCTION
(HIGH ESTIMATE)
—
—
397,172
—
5,389
56
—
—
—
0
4,323
289
—
3,333
—
—
—
—
1,583
9,657
—
0
0
0
12,392
4-6
-------
SECTION 4
EVALUATION OF COST-EFFECTIVENESS
TABLE 4-2 UNWEIGHTED POLLUTANT LOADINGS (continued)
POLLUTANT
1 , 1 -Dichloroethane
1,2-Dichloroethane
1 , 1 -Dichloroethylene
1 ,2-trans-Dichloroethylene
1 ,2-Dichloropropane
Dieldrin
2,4-Dimethylphenol
2,4-Dinitrophenol
alpha-Endosulfan
beta-Endosulfan
Endosulfan
Endrin
Fluoranthene
Fluoride
Heptachlor
Hexachlorobenzene
alpha-Hexachlorocyclohexane
beta-Hexachlorocyclohexane
Hexachlorocyclohexane
Hexachloroethane
Iron
Lead
Lindane
Mercury
Methylene Chloride
POLLDTANT LOADING (LBS/YEAR)
BASELINE
—
4,677
344
—
333
56
—
—
—
—
—
1,934
—
73,584
567
754
1,926
1,929
1,926
—
3,166,429
997,118
77
1,039
11,905
REDUCTION
(Low ESTIMATE)
—
3,065
0
—
333
37
—
—
—
—
—
1,875
—
0
106
272
1,900
1,869
1,843
—
0
600,078
0
133
4,762
REDUCTION
(HIGH ESTIMATE)
—
3,065
0
—
333
37
—
—
—
—
—
1,875
—
0
537
272
1,902
1,869
1,843
—
0
666,078
76
136
4,762
4-7
-------
SECTION 4
EVALUATION OF COST-EFFECTIVENESS
TABLE 4-2 UNWEIGHTED POLLUTANT LOADINGS (continued)
POLLUTANT
Nickel
Parathion
PCBs
Pentachlorobenzene
Pentachlorophenol
Phenanthrene
Phenol
Selenium, total
Silver
1 ,2,4,5-Tetrachloiobenzene
2,3,7,8-TCDD
Tetrachloroethylene
Thallium
Toluene
Toxaphene
1,1,1 -Trichloroethane
Trichloroethylene
2,4,6-Trichlorophenol
Zinc
TOTALS
POLLUTANT LOADING (LBS/YEAR)
BASELINE
2,444
—
61
192,974
13,484
—
—
—
9,078
194,448
0
—
—
2,143
580
—
96
—
34,020
44,183,751
REDUCTION
(Low ESTIMATE)
2,111
—
0
191,967
0
—
—
—
0
188,401
0
—
—
0
1
—
72
—
1,490
1,431,248
REDUCTION
(HIGH ESTIMATE)
2,111
—
0
191,969
11,782
—
—
—
—
193,268
0
—
—
357
1
—
72
—
1,490
1,452,029
* Indicates that there was no reasonable potential for the pollutant to exceed Guidance-based WQBELs for
any of the sample facilities.
4-8
-------
SECTION 4
EVALUATION OF COST-EFFECTIVENESS
TABLE 4-3 TOXICITY WEIGHTED POLLUTANT LOADING REDUCTIONS
POLLUTANT
Aciylonitrile
Aldrin
Aluminum
Antimony
Arsenic (HI)
Benzene
Benzidine
Benzo[a]pyrcne
Beryllium
Osmium
Carbontetrachloride
Chlordane
Chlorobenzene
Chloroform
Chlorpyrifos
Chromium (HI)
Chromium (VI)
Chrysene
Copper
Cyanide, Free
Cyanide, Total
4,4-DDD
4,4-DDE
DDT
3,3-Dichlorobenzidine
POLLUTANT LOADING (LBS-EQ/YEAR)
BASELINE
*
—
2,379,890
—
21,975
164
—
—
—
344,827
648
975,523
—
129
—
—
—
—
2,402
95,940
—
45
21
88,152
110,466
REDUCTION
(Low ESTIMATE)
—
—
25,419
—
21,556
1
—
—
—
0
527
664,604
—
7
—
—
—
—
744
10,623
—
23
10
212
68,619
REDUCTION
(HIGH ESTIMATE)
—
—
25,419
—
21,556
1
—
—
—
0
562
664,604
—
7
—
—
—
—
744
10,623
—
23
10
212
90,465
4-9
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SECTION 4
EVALUATION OF COST-EFTECTTVENESS
TABLE 4-3 POUNDS-EQUIVALENT POLLUTANT LOADING
REDUCTIONS (continued)
POLLUTANT
1 , 1 -Dichloroethane
1 ,2-Dichloroethane
1 , 1 -Dichloroethylene
1 ,2-trans-Dichlorocthylene
1 ,2-Dichloropropane
Dieldrin
2,4-Dimethylphenol
2,4-Dinitrophenol
alpha-Endosulfan
beta-Endosulfan
Endosulfan
Endrin
Fluoranthene
Fluoride
Heptachlor
Hexachlorobenzene
alpha-Hexachlorocyclohexane
beta-Hexachlorocyclohexane
Hexachlorocyclohexane
HexachloFoethane
Iron
Lead
Lindane
Mercury
POLLUTANT LOADING (LBS-EQ/YEAR)
BASELINE
—
29
62
—
5
3,190,719
—
—
—
—
—
189,557
—
73,584
2,324,390
542,816
82,945
23,117
34,675
—
17,732
1,794,813
5,366
519,286
REDUCTION
(Low ESTIMATE)
—
19
0
—
5
2,092,368
—
—
—
—
—
183,778
—
0
434,659
195,908
81,721
22,423
33,172
—
0
1,080,141
0
66,304
REDUCTION
(HIGH ESTIMATE)
—
19
0
—
5
2,092,368
—
—
—
—
—
183,778
—
0
2,201,441
195,908
81,788
22,423
33,172
—
0
1,080,141
5,289
67,878
4-10
-------
SECTION 4
EVALUATION OF COST-EFFECTIVENESS
TABLE 4-3 POUNDS-EQUIVALENT POLLUTANT LOADING
REDUCTIONS (continued)
POLLUTANT
Methylene Chloride
Nickel
Parathion
PCBs
Pentachlorobenzene
Pentachloropbenol
Phenanthrene
Phenol
Selenium, Total
Silver
1 ,2,4,5-Tetrachlorobenzene
2,3,7,8-TCDD
Tetrachloroethylene
Thallium
Toluene
Toxaphene
1,1,1 -Trichloroethane
Trichloroethylene
2,4,6-Trichlorophenol
Zinc
TOTALS
POLLUTANT LOADING (LBS-EQ/YEAR)
BASELINE
5
88
—
454,908
443,840
6,742
—
—
—
426,685
388,895
3,989,245
—
—
12
16,833,496
—
8
—
1,735
35,364,934
REDUCTION
(Low ESTIMATE)
2
76
—
0
441,528
0
—
—
—
0
376,802
0
—
—
0
36,956
—
6
—
76
5,838,289
REDUCTION
(HIGH ESTIMATE)
2
76
—
0
441,528
5,891
—
—
—
—
386,536
0
—
—
2
36,956
—
6
—
76
7,649,510
Indicates that there was no reasonable potential for the pollutant to exceed Guidance-based WQBELs for
any of the sample facilities.
4-11
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SECTION 4 EVALUATION OF COST-EFFECTIVENESS
all data were reported below analytical detection levels (in the absence of a permit limit), the
cost analysis for the final Guidance excluded pollutants that were never detected from further
evaluation.
Upon implementation of the final Guidance, the estimated pollutant loadings under the
low-end estimate would be reduced by 5.8 million Ibs-eq/year, which represents a 16 percent
reduction of the baseline pollutant loadings. Under the high-end cost estimate, pollutant loading
reductions would increase by 1.8 million Ibs-eq/year to a total of 7.6 million Ibs-eq/year, which
represents a 22 percent reduction of the baseline pollutant loadings.
The percent reductions estimated for the final Guidance are also lower than those
projected for the proposed Guidance which was reevaluated using the revised approach for
estimating costs and load reductions. Pollutant loadings under the proposed Guidance would be
8.4 million Ibs-eq/year (24 percent reduction) and 10.1 million Ibs-eq/year (29 percent reduction)
for the low- and high-end scenarios, respectively. The drop in estimated pollutant loadings can
also be credited to the changes made by EPA to the criteria for the final Guidance (e.g.,
adjusting bioaccumulation factors, use of dissolved criteria for metals) and the toxic weights.
The combined result of these changes was essentially less stringent criteria, which would tend
to reduce the difference between existing permit limits and the Guidance-based WQBELs.
Under the low-end estimate for the final Guidance, the largest pollutant load reductions
occur for dieldrin and lead, which account for over 50 percent toxic weighted load reduction.
Chlordane, heptachlor, and pentachlorobenzene were also reduced by significant amounts from
the baseline. Under the high-end estimate, the largest pollutant load reductions occur for
heptachlor, dieldrin, and lead, which account for about 70 percent of the toxic weighted load
reduction.
Approximately 80 percent of the pollutant load reduction for the final Guidance,
regardless of the scenario, is attributable to reducing bioaccumulative pollutants of concern
(BCCs) as a result of pollutant minimization plans and end-of-pipe treatment. However, it
should be noted that for several BCCs (e.g., PCBs, 2,3,7,8-TCDD, mercury, toxaphene), little
or no reduction from the baseline is estimated. This phenomenon occurs because of the method
used to derive load reductions. As described in Section 4.1.1, when an existing permit limit or
a Guidance-based WQBEL is below the analytical detection level, one-half of the method
detection level is used for each limit or WQBEL. The result of this approach is that no pollutant
reduction would be estimated, regardless of whether the Guidance-based WQBEL was further
below detection levels than the existing permit limit. Therefore, hi effect, for several of the
toxic pollutants of concern, the lack of estimated reduction is due to the downward shift hi the
permit baseline (i.e., more stringent existing permit limits).
The cost-effectiveness of the final Guidance under the low-end estimate is just under
$7.00/lbs-eq for the direct dischargers only; with the cost for indirect dischargers, the cost-
effectiveness rises to $10.30/lbs-eq. Under the high-end estimate, the cost-effectiveness
increases to just over $49.00/lbs-eq.
4-12
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SECTION 4 EVALUATION OF COST-EFFECTIVENESS
The estimates for the final Guidance are considerably more cost-effective than those
estimated for the proposed Guidance using the revised approach ($35.96/lbs-eq for the low-end
scenario and $63.83/lbs-eq for the high-end scenario). For comparative purposes, cost-
effectiveness values for effluent limitations guidelines and standards range from just over
$1.00/lbs-eq/year to more than $500/lbs-eq/year.
4-13
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SECTION 5 EVALUATION OF REGULATORY OPTIONS
5. EVALUATION OF REGULATORY OPTIONS
The proposed Guidance generated extensive comments related to the potential costs of
the Guidance. Many comments related to the cost associated with specific provisions of the
Guidance. Most of the regulated community, driven by the uncertainty, of future impacts of the
Guidance, also claimed that the costs could be orders of magnitude higher than those estimated
for the proposed Guidance. There also were concerns from several States that the estimated
impact of the proposed Guidance, in relation to their current program of regulating point source
dischargers, was too great.
In response to the issues raised regarding the cost of various provisions of the proposed
Guidance, additional analyses were performed to evaluate the impact of possible regulatory
options and address these issues. This section discusses the major issues raised by commenters,
the approach used to evaluate these issues, and the results of these analyses.
5.1 SUMMARY OF ISSUES RELATED TO COMPLIANCE COST ESTIMATES
There were many comments received on the compliance cost and pollutant loading
reduction estimates that were provided for the proposed Guidance. Based on the comments
submitted, there were several issues identified that could significantly impact the estimated
compliance cost for the final Guidance. These issues were considered "cost drivers."
Table 5-1 summarizes the cost driver issues related to the Guidance compliance cost
estimates.
5.2 DESCRIPTION OF REGULATORY OPTIONS
In response to the cost driver issues identified in the public comments, a number of
regulatory alternatives for these issues were developed and analyzed to determine the impact of
the cost drivers on the compliance cost and pollutant load reduction estimates for the Guidance.
Table 5-2 presents a summary of the regulatory alternatives that were identified to
address the issues described in Section 5.1 above. In general, for each cost driver, costs and
pollutant load reduction estimates were derived for one alternative believed to be less stringent
than the regulation contained hi the proposed Guidance, as well as an alternative considered
more stringent. However, due to the nature of some of the issues, both types of alternatives
(i.e., less and more stringent) could not be developed.
5.3 METHODOLOGY TO EVALUATE REGULATORY OPTIONS
For each of the cost driver issues, (except the evaluation of the antidegradation provisions
and the impact of future improvement of analytical detection levels), the same methodology, as
described in Section 2 of this report, was used to estimate the compliance cost and pollutant
5-1
-------
SECTION 5
EVALUATION OF REGULATORY OPTIONS
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SECTION 5
EVALUATION OF REGULATORY OPTIONS
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SECTION 5
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SECTION 5
EVALUATION OF REGULATORY OPTIONS
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SECTION 5 EVALUATION OF REGULATORY OPTIONS
reduction impact of each regulatory alternative. Since evaluation of the impact of
antidegradation provisions and improved analytical detection levels involves predicting impacts
in the future, alternative methods were developed. These alternative methods are described
further hi the following sections.
5.3.1 Method for Evaluating the Impact of the Antidegradation Provisions of the Final
Guidance
An alternative methodology was also used to analyze the impact of the antidegradation
provisions considered for the final Guidance because the impacts would be highly site-specific
and unpredictable in terms of when a facility will need to request an antidegradation review.
Further, of particular concern to commenters was the possible lost economic opportunities should
they be denied the ability to increase discharges hi the future.
Therefore, the method used to estimate the impact of the final Guidance antidegradation
provisions involved estimating what lost opportunity costs may result. This analysis was
particularly based on the antidegradation requirements for BCCs contained hi the final Guidance,
that requires an antidegradation review if there is a deliberate action on the part of a facility that
results hi a significant lowering of water quality (i.e., the activity results hi an increase hi BCC
loadings).1 The general premise behind the antidegradation analysis was that the economic
growth hi the Great Lakes region would continue at a pace equal to the average growth over the
last 8 years (1987-1994).
Table 5-3 shows one measure of economic growth (the total value of shipments) for six
major industrial categories hi the Great Lakes Basin for which data were readily available.
Based on these data, the total value of shipments hi the Great Lakes Basin hi 1994 is projected
to be $172 billion; the average annual growth (total value of shipments) over the 8-year period
across all categories is just over 1 percent (1.29).
Acknowledging that not all industrial facilities are direct dischargers, and therefore not
all economic growth is attributable to direct dischargers, data was collected to determine what
proportion of the total industry was made up of direct dischargers. Table 5-4 shows data
collected from EPA development documents supporting effluent limitations guidelines and
standards for the six industrial categories for which economic data was collected. As shown in
Table 5-4, and assuming that national proportions are reflective of the Great Lakes Basin, direct
dischargers account for 38.9 percent of the total industry on average across all six industrial
categories. Multiplying the 1994 total value of shipments ($172 billion) by 38.9 percent results
hi a total value of shipments attributable to direct dischargers of $67 billion.
1 The final Guidance does not require State and Tribal permitting authorities to adopt antidegradation
procedures for non-BCCs. Therefore, the cost impact analysis focused only on BCCs.
5-6
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SECTION 5
EVALUATION OF REGULATORY OPTIONS
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5-7
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SECTION 5
EVALUATION OF REGULATORY OPTIONS
Based on an average annual growth rate of 1.29 percent, the resulting estimated
incremental annual growth above 1994 estimates, which is attributable to direct dischargers in
the Great Lakes Basin, is estimated to be $864 million. This estimate served as the baseline
from which Guidance antidegradation requirement impacts were estimated.
TABLE 5-4 PROPORTION OF DIRECT DISCHARGERS TO TOTAL INDUSTRY ESTIMATES
INDUSTRIAL CATEGORY
Iron and Steel
Pulp and Paper
Nonferrous Metals
Inorganic Chemicals
Organic Chemicals, Plastics, and Synthetic Resins
Pharmaceuticals
TOTAL
NUMBER OF
DISCHARGERS
1,020
674
448
1,142
941
439
NUMBER OF
DIRECT
DISCHARGERS
733
338
112
481
300
55
Average
DIRECT
DISCHARGERS
AS PERCENT
OF TOTAL (%)
71.9
50.2
25.0
42.1
31.9
12.5
38.9
Source: EPA Development Documents
The impact on the total estimated annual growth in the Great Lakes Basin ($864 million)
was then estimated under three different scenarios:
• High-End Scenario - assuming that all facilities that contained BCCs in then-
discharge (approximately 5 percent of all direct dischargers) would request an
antidegradation review and all 5 percent were denied their request to increase the
discharge of pollutants.
• Mid-Range Scenario - assuming that half of the facilities discharging BCCs and
requesting antidegradation reviews were allowed to increase discharges.
• Low-End Scenario - assuming that only 10 percent of the facilities discharging
BCCs would request an antidegradation review each year, and half of the facilities
requesting antidegradation reviews were allowed to increase discharges.
5.3.2 Method for Evaluating the Impact of Future Improvements to Analytical Detection
Levels
The methodology used to derive estimates of possible Guidance-driven compliance costs
and pollutant load reductions when analytical detection levels become more stringent hi the
5-8
-------
SECTION 5 EVALUATION OF REGULATORY OPTIONS
future is based on the premise that pollutant control cost-effectiveness will remain constant over
time. If it is assumed that treatment technology will keep pace with improvements in analytical
detection levels, then the cost-effectiveness based on the Guidance high-end cost estimates
provides a reasonable upper-bound estimate of costs.
Compliance costs and pollutant load reductions were estimated under two scenarios:
(1) assuming that analytical method detection levels (MDLs) improve 10-fold over time, and
(2) assuming that MDLs improve 100-fold over time. The first step in estimating compliance
costs under these future scenarios was to develop expected pollutant load reductions for each
category of direct dischargers evaluated for the final Guidance. The same procedure used to
derive pollutant load reduction estimates for the sample facilities (as described in Sections 2 and
4) was used to estimate pollutant load reductions. The resulting incremental pollutant load
reductions attributable to MDLs decreasing 10- and 100-fold (in toxic pounds-equivalent) were
then multiplied by the high-end cost-effectiveness values for each category (in annual cost per
toxic pounds-equivalent) to develop the incremental cost of each scenario.
It should be noted that many of the same conservative assumptions that were used in the
cost analysis were continued for purposes of estimating the impact of improvement in analytical
detection levels. These assumptions include:
• Assuming no mixing zone is allowed for BCCs; and
• Assuming that the future MDL will be used as the compliance level. This
equivalent to a 30 to 60 fold or 300 to 600 fold improvement, respectively, in the
minimum level of quantification, which is used for determining compliance in the
final Guidance.
In addition, because the analysis is based on the high-end compliance cost estimates, the use of
regulatory flexibility provided in the final Guidance (e.g., phased total maximum daily
loads/water quality assessments, economic/technical feasibility determination for elimination of
mixing zones for BCCs, site-specific criteria modification, etc.) was limited to the steam electric
category (see related discussion in Section 3.2.2). As a result, except for the steam electric
category, the analysis uses the average high-end compliance costs for a category which are
heavily weighted with end-of-pipe treatment costs.
Finally, the analysis does not off-set costs for treatment that may be required to achieve current
NPDES permit limits that are below analytical detection levels.
5.4 RESULTS
The following subsections present the results of the analyses performed for each of the
final Guidance regulatory alternatives. For each cost driver a summary table is provided to
compare the results to the estimates for the final Guidance.
5-9
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SECTION 5
EVALUATION OF REGULATORY OPTIONS
5.4.1 Fish Consumption Rates
Many commenters believed that EPA's proposed fish consumption rate of 15 grams per
day (grams/day) for establishing human health protection criteria would not be protective of
recreational and subsistence anglers such as the Native American anglers and minority anglers,
or women of childbearing age and children within the Great Lakes Basin. Further, some
commenters suggested that a higher fish consumption rate ranging from 30-60 grams/day would
be necessary to protect lower income and minority subpopulations that eat more sport caught fish
on average. In an effort to evaluate the impact of increasing fish consumption rate assumptions;,
an analysis of the compliance costs associated with increasing the consumption rate to 45
grams/day was performed.
Table 5-5 summarizes the results of the analysis of the impact of alternative fish
consumption rates on the estimated costs and pollutant loading reductions of the final Guidance.
The estimates for the final Guidance were based on a consumption rate of 45 grams/day. As
shown in Table 5-5, decreasing the consumption rate to 15 grams/day had negligible impact on
the estimated compliance cost and expected pollutant load reductions. The cost results at the
high-end also show relatively insignificant increases hi estimated costs and pollutant load
reductions. The primary reason that decreasing fish consumption had little impact on costs or
load reductions was because the resulting difference hi criteria using 15 and 45 grams/day
assumptions was not significant enough to change the control options selected for a pollutant at
a particular facility. This was particularly the case for most BCCs, for which criteria using 15
or 45 grams/day remained below analytical detection levels.
TABLE 5-5 EVALUATION OF FISH CONSUMPTION RATES
DESCRIPTION
Final Guidance
Final Guidance (IS
grams/day)
LOW-END ESTIMATE
ANNUAL
COST
(MILLIONS)
41.1
41.1
POLLUTANT
LOAD REDUCTION
(10* LBS-EQ/YR)
5,883
5,854
HIGH-END ESTIMATE
ANNUAL
COST
(MILLIONS)
369.6
369.6
POLLUTANT
LOAD REDUCTION
(103 LBS-EQ/YR)
7,659
7,631
All costs 1st Quarter 1994 dollars. Costs are for direct dischargers only.
5.4.2 Use of Pollutant Minimization Programs When WQBELs Are Below Analytical
Detection Levels
As discussed in Section 2.2.2, there was an attempt made to collect some data related to
the cost and effectiveness of pollution prevention techniques for the pollutants being regulated
under the final Guidance. The result of these efforts, which generally constituted an extensive
review of the EPA Pollution Prevention Information Clearinghouse (PPIC), was that very little
5-10
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SECTION 5 EVALUATION OF REGULATORY OPTIONS
is documented regarding the effectiveness of pollution prevention to remove many of the
pollutants subject to the final Guidance. The limited data did, however, suggest that there are
facilities that have reduced toxic pollutants to below analytical detection levels using pollution
prevention techniques.
Although it is acknowledged that some facilities will want to ensure compliance with
WQBELs below detection levels through the use of additional or enhanced end-of-pipe treatment,
it is likely that an aggressive pollutant minimization program can successfully result in
compliance with WQBELs below detection levels. In fact, several of the sample facilities
examined as part of the cost study have successfully performed studies, required as part of their
current National Pollutant Discharge Elimination System (NPDES) permit, to effectively reduce
all detectable amounts of particular pollutants of concern from their discharge. For example,
the State of Wisconsin required the Fort Howard Paper Company, as part of an NPDES permit
special condition, to perform a PCB reduction study "to reduce PCBs to the maximum extent
possible with a goal of zero discharge." Resulting effluent concentrations of PCBs allowed the
State of Wisconsin to recommend reduced permit requirements for PCBs in the subsequent draft
reissued permit.
As discussed in Section 3.2.1, pollutant minimisation programs account for a significant
proportion of the total compliance cost under the low-end scenario. The impacts of these
requirements were evaluated by deriving cost estimates assuming that permitting authorities
would only require increased monitoring for any pollutant for which a Guidance-based WQBEL
was below analytical detection levels. Table 5-6 summarizes the results of the analysis of the
impact of only requiring monitoring for pollutants for which Guidance-based WQBELs are below
analytical detection levels.
As shown in Table 5-6, it is estimated that annual compliance costs for direct dischargers
will decrease by more than 60 percent to $16.6 million. It should be noted that pollutant
reduction credit was not taken because monitoring alone is not expected to systematically identify
pollutant sources within a facility, as well as result in pollutant removal. As a result the
estimated pollutant load reductions decrease to 1.3 million pounds-equivalent/day, which is
almost 80 percent less than the reduction estimated for the final Guidance. Under the high-end,
compliance costs do not drop as dramatically as the low-end costs, due to the shift towards end-
of-pipe treatment; however, the pollutant load reductions decrease by more than 50 percent.
5.4.3 Intake Credits
In generating cost estimates for the proposed Guidance, intake credits were provided by
assuming there was no reasonable potential for outfalls at facilities that added no additional
pollutants prior to discharge. Furthermore, two different cost scenarios were developed to
account for the lack of ambient background concentration data and for when negative wasteload
allocations were calculated. As discussed in Section 2.2.3.3 a revised approach was used for
estimating costs for the final Guidance to reflect the intake credit provisions of the final
Guidance.
5-11
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SECTION 5
EVALUATION OF REGULATORY OPTIONS
TABLE 5-6 EVALUATION OF POLLUTANT MINIMIZATION PROGRAM REQUIREMENTS
DESCRIPTION
Final Guidance
Final Guidance (Require
monitoring only when
WQBELs are below analytical
detection levels)
LOW-END ESTIMATE
ANNUAL
COST
(MILLIONS)
41.1
16.6
POLLUTANT
LOAD REDUCTION
(103 LBS-EQ/YR)
5,883
1,308
HIGH-END ESTIMATE
ANNUAL
COST
(MILLIONS)
369.6
337.9
POLLUTANT
LOAD REDUCTION
(10* LBS-EQ/YR)
7,659
3,084
All costs 1st Quarter 1994 dollars. Costs are for direct dischargers only.
In an effort to evaluate the impact of intake credits on estimated compliance costs,
compliance costs under a number of different intake credit scenarios were developed. The
results of these analyses are presented in Table 5-7. As shown in Table 5-7, for discharges to
different bodies of water, no significant impact occurred (less than 0.5 percent) to either the
compliance costs or pollutant load reductions at either the low- or high-end scenarios, regardless
of whether intake credits are relaxed (no net increase) or made more stringent (no intake credit
allowed). This result occurred because discharges occurred only infrequently to different bodies
of water that were non-attained.
Alternatively, the form of intake credits does impact discharges to the same body of
water. When intake credits are allowed, a slight drop in costs is experienced concurrent with
a larger proportional drop in pollutant load reduction. At the low-end, compliance costs drop
by $700,000 (a 1.7 percent decrease), but pollutant load reductions drop by more than 17
percent. At the high-end, costs decrease by less than 1 percent, but pollutant load reductions
decrease by 13.5 percent.
When intake credits were not allowed for discharges to the same body of water, the
annual compliance costs for direct dischargers increased by $245 million, representing more than
a 600 percent increase from the final Guidance low-end estimate. However, pollutant load
reductions increased to 6.4 million pounds-equivalent/year, which represents only a 9 percent
increase from the final Guidance low-end estimate. The same trend results using high-end
scenario costs where the costs increase by more than 60 percent, but pollutant reductions
increase by only 7 percent.
5.4.4 Tier H Criteria
One of the stated limitations of the cost estimate for the proposed Guidance was that
compliance costs were not estimated for pollutants other than those for which numeric Tier I
criteria were proposed. As discussed in Section 2.2.3.1, the cost estimate for the final Guidance
5-12
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SECTION 5
EVALUATION OF REGULATORY OPTIONS
TABLE 5-7 EVALUATION OF ALTERNATIVE INTAKE CREDIT PROVISIONS
DESCRIPTION
Final Guidance
Final Guidance (Intake credits
allowed for different body of
water; the WQBEL is set
equal to the background
concentration)
Final Guidance (Intake credits
allowed for different body of
water; the WQBEL is set
equal to zero)
Final Guidance (Intake credits
allowed for same body of
water; the WQBEL is set
equal to the background
concentration)
Final Guidance (Intake credits
allowed for same body of
water; the WQBEL is set
equal to zero)
LOW-END ESTIMATE
ANNUAL
COST
(MILLIONS)
41.1
41.1
41.2
40.4
286.6
POLLUTANT LOAD
REDUCTION
(103 LBS-EQ/YR)
5,883
5,883
5,883
4,841
6,386
HIGH-END ESTIMATE
ANNUAL
COST
(MILLIONS)
369.6
369.6
369.6
368.3
614.8
POLLUTANT
LOAD REDUCTION
(103 LBS-EQ/YR)
7,659
7,659
7,659
6,617
8,162
All costs 1st Quarter 1994 dollars. Costs are for direct dischargers only.
is based on evaluation of compliance with 69 pollutants of initial focus. To determine the
potential impact of the use of Tier I criteria versus Tier n values, compliance costs under a
variety of scenarios were developed.
Table 5-8 presents the results for the different regulatory scenarios evaluated. As shown
in Table 5-8, if only Tier I criteria are used, the annual compliance costs for direct dischargers
would drop by $5 million, which is just under 12 percent of the final Guidance low-end
estimate. The pollutant load reductions would also decrease by approximately 8 percent of the
estimate for the final Guidance. Under the high-end, both costs and pollutant load reductions
decrease similarly (2 percent drop in costs and 6 percent drop in pollutant load reduction from
the high-end estimate from the final Guidance).
If Tier I criteria and Tier n values are used for all pollutants, the annual compliance costs
increase insignificantly at both the low- and high-end. This result was expected since the
scenario only adds Tier n wildlife values. Although many of these additional Tier n wildlife
5-13
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SECTION 5
EVALUATION OF REGULATORY OPTIONS
values are more stringent than other final Guidance criteria, the impact is insignificant since both
the Tier n wildlife values and the other Guidance criteria are below analytical detection levels.
TABLE 5-8 EVALUATION OF APPLICATION OF TIER I CRITERIA AND TIER n VALUES
DESCRIPTION
Final Guidance
Final Guidance (Use Tier I
criteria only for aquatic life,
human health and wildlife
protection)
Final Guidance (Use Tier I
criteria and Tier n values for
aquatic life, human health, and
wildlife protection)
LOW-END ESTIMATE
ANNUAL
COST
(MILLIONS)
41.1
36.1
41.1
POLLUTANT
LOAD REDUCTION
(103 LBS-EQ/YR)
5,883
5,416
5,955
HIGH-END ESTIMATE
ANNUAL
COST
(MILLIONS)
369.6
363.2
369.6
POLLUTANT
LOAD REDUCTION
(103 LBS-EQ/YR)
7,659
7,192
7,731
All costs 1st Quarter 1994 dollars. Costs are for direct dischargers only.
5.4.5 Wildlife Criteria/Mercury Criteria
The final Guidance limits the use of the wildlife criteria methodology to the Tier I
procedure for the 22 BCCs for which sufficient data exist. In response to the many concerns
raised regarding the stringency of wildlife criteria and the potential significant costs associated
with complying with the criteria, a number of alternatives were evaluated.
As discussed in Section 2.2.3.2, the final Guidance cost estimate includes numeric Tier
I wildlife criteria for mercury, 2,3,7,8-TCDD, PCBs, and DDTs. In addition, Tier I criteria
were developed for three additional BCCs and Tier n values were developed for 21 other
pollutants that were used to assist hi estimating costs for the final Guidance. Six of the 21
pollutants are not BCCs, which tends to further overstate the impact of the wildlife criteria, as
the final Guidance requires development of Tier I wildlife criteria for only BCCs. Furthermore,
these values were estimated using many simplifying and conservative assumptions that are
expected generally to be more stringent than those values that would be derived by permitting
authorities using the wildlife methodology contained in the final Guidance.
Table 5-9 presents the results of the analysis of the impact of wildlife criteria on the cost
estimate for the final Guidance. Using the additional wildlife criteria results hi an insignificant
increase hi annual compliance costs. Alternatively, excluding all wildlife criteria also results
in essentially no difference hi compliance cost estimates and pollutant load reductions at both
the low- and high-ends. These results indicate that factors other than the wildlife criteria tend
5-14
-------
SECTION 5
EVALUATION OF REGULATORY OPTIONS
to drive the costs of the final Guidance. In the absence of wildlife criteria, the final Guidance
human health criteria would form the basis for Guidance-based WQBELs. The final Guidance
human health criteria for most pollutants are below analytical detection levels and, as such, the
costs for treatment and pollutant minimization plans would be incurred by a facility. Although
the wildlife criteria in general are more stringent than the final Guidance human health criteria,
they also would result in Guidance-based WQBELs below analytical detection levels. Therefore,
the same treatment and pollutant minimization plan requirements, costs, and pollutant load
reductions would occur.
TABLE 5-9 EVALUATION OF APPLICATION OF WILDLIFE CRITERIA
DESCRIPTION
Final Guidance
Final Guidance (Use no
wildlife criteria)
Final Guidance (Use Tier I
criteria and Tier D values for
aquatic life, human health, and
wildlife protection)
LOW-END ESTIMATE
ANNUAL
COST
(MILLIONS)
41.1
41.1
41.1
POLLUTANT
LOAD REDUCTION
(103 LBS-EQ/YR)
5,883
5,856
5,955
HIGH-END ESTIMATE
ANNUAL
COST
(MILLIONS)
369.6
369.6
369.6
POLLUTANT
LOAD REDUCTION
(103 LBS-EQ/YR)
7,659
7,632
7,731
All costs 1st Quarter 1994 dollars. Costs are for direct dischargers only.
5.4.6 Allowance of Mixing Zones for BCCs
As promulgated in Procedure 3 of Appendix F to Part 132, the final Guidance retained
the requirement for elimination of mixing zones for BCCs within 12 years. The final Guidance
also provides some flexibility to allow limited mixing zones for BCCs if the facility can show
that all prudent and feasible treatment technologies are being implemented to reduce the
discharge of BCCs to the maximum extent possible.
A sensitivity analysis was performed to address this issue prior to the proposed Guidance.
In general, assuming analytical detection limits remain the same, it was concluded that a cost
would be incurred infrequently for a BCC after mixing zones have been taken away. This
conclusion was based on the fact that many of the WQBELs and associated criteria for BCCs
were already below analytical detection levels.
In estimating costs for the final Guidance, it was conservatively assumed was that no
mixing zones would be allowed for BCCs. To determine the impact of this requirement on
facilities (in terms of cost) and the environment (in terms of pollutant load reductions), the
5-15
-------
SECTION 5
EVALUATION OF REGULATORY OPTIONS
sample facilities were reevaluated allowing the same mixing zones for BCCs as are allowed for
non-BCCs.
As shown in Table 5-10, the addition of mixing zones for BCCs results hi an estimated
incremental annual cost savings to direct dischargers of just over $200,000, which is less than
a 0.5 percent decrease from the final Guidance low-end cost estimate. In terms of pollutant load
reductions, the addition of mixing zones results hi an insignificant decrease hi pollutant load
reductions. Slight reductions hi cost and pollutant load reductions were also found under the
high-end scenario.
The relatively small impact associated with allowing mixing zones for BCCs is due to
the fact that the criteria for most BCCs are relatively stringent and usually well below analytical
detection levels. Even with the dilution afforded by the mixing zones, resulting WQBELs
remain below analytical detection levels and, as a result, do not drastically impact the costs and
load reductions (i.e., the pollutant controls would not change if both WQBELs were below
analytical detection levels).
5.4.7 Additivity
In an effort to evaluate the impact of the additivity provision on the compliance cost of
the final Guidance, cost estimates for two scenarios were developed. Under one scenario, the
assumption was that additivity would be controlled if the total carcinogenic risk hi a discharge
was less than 10~s and accounted for by assuming that individual criteria were based on a 105
risk level. Under the second scenario, the assumption was that the additive effects from
carcinogens would be accounted for if individual criteria were based on a 10* risk level.
TABLE 5-10 EVALUATION OF ALLOWING MIXING ZONES FOR BCCs
DESCRIPTION
Final Guidance
Final Guidance (Mixing zones
allowed for BCCs)
LOW-END ESTIMATE
ANNUAL
COST
(MILLIONS)
41.1
40.9
POLLUTANT
LOAD REDUCTION
(103 LBS-EQ/YR)
5,883
5,839
HIGH-END ESTIMATE
ANNUAL
COST
(MILLIONS)
369.6
369.5
POLLUTANT
LOAD REDUCTION
(103 LBS-EQ/YR)
7,659
7,615
All costs 1st Quarter 1994 dollars. Costs are for direct dischargers only.
As shown hi Table 5-11, the impact of the first scenario was relatively insignificant (less
than 0.5 percent decrease hi costs and just over 1 percent decrease hi pollutant load reductions
at both low- and high-end estimates). The relatively insignificant changes hi cost and pollutant
load reductions are based on the fact that most facilities did not detect more than a few
carcinogens hi their discharge. As a result, the final Guidance estimates (based on a total
5-16
-------
SECTION 5
EVALUATION OF REGULATORY OPTIONS
carcinogenic risk of 10"5, but accounted for by distributing the risk across all carcinogens in the
effluent) did not represent more stringent WQBELs for carcinogens, as compared to .only
accounting for the risk through the individual criteria.
When the individual criteria risk level is adjusted down to 10"*, a more dramatic increase
hi costs occurs. A 10"6 risk level for individual criteria would increase the annual compliance
costs for direct dischargers to more than $51 million under the low-end. The associated load
reductions do not increase as dramatically, accounting for only an additional 6,000 pounds-
equivalent/year. The reason a large pollutant reduction did not accompany the large increase
in costs under the low-end scenario is the assumption that a significant number of facilities
would pursue some sort of regulatory relief, for which there is no pollutant reduction credit, to
meet the more stringent criteria based on a 10*6 risk level.
The same trend occurs at the high-end, where costs increase by more than 30 percent,
but pollutant load reductions decrease by less than 1 percent. However, under the high-end
scenario where variances are limited to categories that exceed the high-end cost trigger, the
significant increase hi costs is due to the costs associated with installing and maintaining end-of-
pipe treatment for pollutants impacted by the more stringent criteria. The insignificant load
reductions associated with the large increase in costs is because some regulatory relief was still
justified under the high-end. Furthermore, for some pollutants with criteria below the analytical
detection level, the shift from criteria based on a 10*5 risk level to criteria based on a 10* risk
level resulted hi criteria further below analytical detection levels, which had no impact on
pollutant load reductions.
TABLE 5-11 EVALUATION OF ADDnTVITY
DESCRIPTION
Final Guidance
Final Guidance (Additivity at
10'5 risk for individual
criteria)
Final Guidance (Additivity at
10* risk for individual
criteria)
LOW-END ESTIMATE
ANNUAL
COST
(MILLIONS)
41.1
40.9
51.4
POLLUTANT
LOAD REDUCTION
(10* LBS-EQ/YR)
5,883
5,791
5,877
HIGH-END ESTIMATE
ANNUAL
COST
(MILLIONS)
369.6
369.4
481.5
POLLUTANT
LOAD REDUCTION
(103 LBS-EQ/YR)
7,659
7,567
7,653
All costs 1st Quarter 1994 dollars. Costs are for direct dischargers only.
5-17
-------
SECTION 5 EVALUATION OF REGULATORY OPTIONS
5.4.8 Antidegradation
It is assumed that the antidegradation provision of the final Guidance, as promulgated
under Appendix E to Part 132, may impact the regulated community. However, due to the
variety of site-specific factors that would influence the future impact of the antidegradation
provision, it is uncertain whether the impact will be significant. Therefore, an analysis of the
potential impact of the antidegradation provision was performed hi the form of estimating the
cost to lost opportunities for businesses hi the Great Lakes Basin.
As shown in Table 5-12, under the worst case where it was assumed that all (100
percent) facilities with BCCs in then* discharge (approximately 5 percent of all facilities)
requested an antidegradation review and were denied permission to increase loads, an
opportunity cost of 5 percent ($43.2 million) of the incremental annual growth would be lost due
to the final Guidance. More realistically, if it was assumed that half (50 percent) of the facilities
requesting antidegradation reviews for BCCs were allowed to increase discharges, only $21.6
million of opportunity costs would be lost each year. Finally, assuming that only 10 percent of
the facilities discharging BCCs requested an antidegradation review, and only half (50 percent)
were denied, then the opportunity lost for growth would be approximately $2.2 million.
An antidegradation review resulting in an increase in baseline loadings should not be
expected for BCCs because for many, their use is already banned or severely restricted by the
EPA. A study performed for EPA shows that 14 of the 28 BCCs are banned or severely
restricted, and another four of the 28 are by-products of banned or severely restricted BCCs.2
The remaining 10 BCCs have some limited restrictions for use, are not restricted at all, or no
data were found for them. Based on this study, the mid- and high-end estimates of lost
opportunity are probably unlikely because the increase of banned or restricted BCCs should not
occur due to releases from the manufacture or use of the BCC. In fact, it is assumed that the
TABLE 5-12 EVALUATION OF IMPACT OF ANTIDEGRADATION PROVISIONS
DESCRIPTION •
Final Guidance (Low-End Estimate)
Final Guidance (High-End Estimate)
Potential Lost Opportunity Cost (High-end)
Potential Lost Opportunity Cost (Mid-range)
Potential Lost Opportunity Cost (Low-end)
ANNUAL COST (MILLIONS)
41.1
369.6
43.2
21.6
2.2
All costs 1st Quarter 1994 dollars. Costs are for direct dischargers only.
2 Memo to Mark Morris (EPA Office of Science and Technology) from Abt Associates regarding "Use and
Production of the Great lakes Initiative Bioaccumulative Chemicals of Concern" (July 21, 1994).
-------
SECTION 5 EVALUATION OF REGULATORY OPTIONS
levels of these BCCs will decrease over time in point source discharges and in the environment.
Several other BCCs are present as contaminants or by-products of banned or restricted BCCs
(e.g., heptachlor epoxide is a metabolic breakdown product of heptachlor), and for the same
reason, the levels of these BCCs should also decrease over time. Therefore, antidegradation
reviews as a result of an increase in loading levels for BCCs that results in a significant lowering
of water quality are not expected.
If the low-end estimate is used, then a modest 3 percent increase hi the low-end annual
compliance cost results. The potential benefits, although not quantified, could be relatively
significant for some receiving waters because additional discharges of BCCs would be denied.
5.4.9 Future Impact of Detection Levels
In recent years, several States hi the Great Lakes System have promulgated water quality
criteria for various toxic pollutants that are more restrictive than the level of analytical detection.
Implementation of these existing water quality criteria by these States do take into account the
ability to detect the pollutant hi the wastestream. Likewise, Procedure 8, Appendix F, of Part
132 clearly provides that the water quality-based effluent limit must be derived from the water
quality criterion; compliance with that limit, however, will be based on the ML where available.
When a promulgated ML is not available, compliance with that limit may be based on the lowest
level of quantification (at the State's discretion) defined hi Procedure 8 of Part 132.
In estimating the compliance cost for the final Guidance, it was conservatively assumed
that the MDL would serve as the compliance level. In actuality, the State permitting authority
is only required to use the ML (as defined under 40 CFR Part 136) as the basis for reporting
compliance with the Guidance-based WQBEL. Although the pollutant MDL was used for
costing purposes, it is acknowledged that estimating treatment costs for WQBELs below the
MDL, and most likely below the ML, would be speculative for many pollutants, particularly as
such estimation relates to expected future performance.
Nevertheless, an evaluation of the potential impact that improvements to analytical
detection levels would have on compliance cost estimates was performed. In particular, costs.
and pollutant load reductions were estimated under two scenarios, one that assumes MDLs
improve 10-fold over time and another that assumes MDLs improve 100-fold over time.
The results of the analysis presented hi Table 5-13 show conceivable increases hi
estimated compliance costs. When MDLs become 10 times more stringent, annual costs increase
by over $500 million dollars. Pollutant load reductions also increase when MDLs decrease 10-
fold by over 12 million toxic pounds-equivalent per year. When MDLs become 100 times more
stringent, the annual compliance costs are estimated to increase by just over $880 million and
pollutant load reductions would increase by approximately 19 million toxic pounds-equivalent
per year above the final Guidance estimates. These results indicate that as analytical detection
levels improve, the costs to implement the final Guidance increase. However, the increase hi
compliance costs are offset by comparable pollutant load reductions.
5-19
-------
SECTION 5
EVALUATION OF REGULATORY OPTIONS
TABLE 5-13 EVALUATION OF FUTURE IMPACT OF LOWER ANALYTICAL DETECTION
LEVELS
DESCRIPTION
Final Guidance (Low-End Estimate)
Final Guidance (High-End Estimate)
Increment Assuming Future MDLs Improve 10-fold
Increment Assuming Future MDLs Improve 100-fold
ANNUAL COST
(MILLIONS)
41.1
369.6
569.8
882.S
POLLUTANT LOAD
REDUCTION
(10* LBS-EQ/YR)
5,838
7,650
12,202
18,900
All costs 1st Quarter 1994 dollars. Costs are for direct dischargers only.
5-20
-------
APPENDIX A
APPENDIX A - REEVALUATION OF TIER H AQUATIC LIFE VALUES
Following the completion of the initial assessment of compliance costs resulting from
implementation of the final Guidance, it was determined that the procedures used to estimate
"Tier IT values for protection of aquatic life differed from those that will be published hi the
final Guidance for 18 of the 69 costed pollutants. In several cases, the Tier n aquatic life values
that were developed for the cost evaluation were less stringent than those determined using the
procedures outlined in the final Guidance. Because of this discrepancy, an evaluation was
performed to determine whether the less stringent aquatic life values could have impacted the
initial cost analyses.
Table A-l presents a comparison of the Tier n aquatic life values used for the cost
evaluation versus Tier n values calculated using the final Guidance methodologies. Table A-l
indicates that the Final Acute Values (FAV) and the Criteria Continuous Concentrations (CCC)
calculated using the final Guidance procedures are significantly more stringent than those
calculated for the cost analyses for several pollutants. In order to determine how these changes
might affect the cost analyses, the most stringent aquatic life criteria were then compared to
applicable human health and wildlife criteria.
Table A-2 provides a comparison of the most stringent aquatic life value (calculated using
final Guidance methods) and the most stringent human health and wildlife criteria used for the
cost analyses. Where either the human health or wildlife criterion was more stringent than the
aquatic life value for a pollutant, the water quality-based effluent limit (WQBEL) was driven by
the human health or wildlife criterion; thus, there would be no effect on costs or loadings due
to the revised aquatic Me value. In general, Table A-2 indicates that human health or wildlife
values are more stringent for most of these pollutants; however, seven pollutants were identified
where the aquatic life values may drive WQBELs under some situations (e.g., human health and
wildlife criteria use slightly higher mixing zone flows).
Having identified seven pollutants where the revised Tier n aquatic life value may, under
certain circumstances, drive the WQBELs, the potential impact of the revisions was evaluated.
The possible impacts of the more stringent aquatic life were determined by first determining
which of the 59 study facilities were evaluated for these pollutants, and second, determining
whether the lower aquatic life values would change cost or loading calculations.
The results of this analysis indicated that there were no cost or loading impacts due to
the revised aquatic life values for chlorpyrifos, hexachloroethane, tetrachloroethane or
trichloroethylene. The revised lead value resulted in the elimination of the "reasonable
potential" determination at one study facility; however, the only costs projected for the facility
were $360 for lead monitoring. This cost would not be incurred if the revised lead value was
implemented. The revised toluene value resulted hi a minimal underestimation (less than 1 toxic
pounds-equivalent) of load reduction at one study facility; however, costs were not impacted.
The fluoranthene value resulted in the underestimation of 1.12 toxic pounds-equivalent at one
study facility; however, costs were also unaffected for this facility.
A-l
-------
APPENDIX A
Based on the findings of this evaluation, the initial cost and pollutant load reduction results
developed for the final Guidance will not be significantly affected by the modifications to the
Tier n aquatic life values.
TABLE A-l COMPARISON OF TIER H AQUATIC LIFE VALUES CALCULATED FOR COST
ANALYSES VS. THOSE CALCULATED USING FINAL GUIDANCE METHODS 0*g/l)
CHEMICAL
Aciylonitrile
Benzene
Benzidine
Beryllium
Carbon tetrachloride
Chloroform
Chlorpyrifos
4,4-DDD
4,4-DDE
1,2-Dichloroethane
2,4-Dimethylphenol
Fluoranthene
Hexachloroethane
Lead **
Tetrachloroethylene
Toluene
Trichloroethylene
Thallium
AQUATIC Lira VALUES USED FOR
COST ANALYSES
FAV
7,550
5,300
2,500
130
35,200
28,900
0.166
0.600
1,050
118,000
2,120
3,980
980
59.1
5,280
17,500
45,000
1,400
ccc
419
294
139
5.3
1,960
1,240
0.0410
0.0333
58.3
6,560
118
221
54.4
1.04
293
972
2,500
40.0
AQUATIC LIFE VALUES
CALCULATED ACCORDING TO
FINAL GUIDANCE METHODS
FAV
580.8
757.1
312.5
16.25
4,400
3,612
0.043
0.086
47.9
9,076.9
1,300
8.37
44.8
149.4
865.6
2,187.5
660
20
CCC
32.3
42.1
17.36
0.903
244.4
200.7
0.002
0.0048
2.66
504.3
530
0.47
2.49
8.3
48.09
121.53
36.67
1.9
Where: FAV = CMC/adjustment factor CCC = FAV/18 (acute/chronic ratio)
* The CMCs come from the document "water quality criteria summary concentrations" except
chlorpyrifos which was calculated using the most recent water quality criteria document and
applying an adjustment factor of 4.3 (7 species available).
**
Revisions to lead calculations resulted in less stringent aquatic life values. Values displayed
were calculated at a hardness of 50 mg/1.
A-2
-------
APPENDIX A
TABLE A-2 COMPARISON OF AQUATIC LIFE VALUES CALCULATED USING FINAL GUIDANCE
METHODS VS. THE MOST STRINGENT HUMAN HEALTH AND WILDLIFE CRITERIA 0»g/l)
CHEMICAL
Acrylonitrile
Benzene
Benzidine
Beryllium
Carbon tetrachloride
Chloroform
Chlorpyrifos *
4,4-DDD
4,4-DDE
1 ,2-Dichloroethane
2,4-Dimethylphenol
Fluoranthene *
Hexachloroethane *
Lead**
Tetrachloroethylene *
Toluene *
Trichloroethylene *
Thallium
AQUATIC LIFE CRITERIA
CALCULATED USING
FINAL GUIDANCE METHODS
FAV
580.8
757.1
312.5
16.25
4,400
3,612
0.043
0.086
47.9
9,076.9
1,300
8.37
44.8
149.4
865.6
2,187.5
660
20
ccc
32.3
42.1
17.36
0.903
244.4
200.7
0.002
0.0048
2.66
504.3
530
0.47
2.49
8.3
48.09
121.53
36.67
1.9
WILDLIFE
CRITERION
-
-
-
-
-
-
0.347
-
-
-
-
-
-
-
-
-
-
-
MOST STRINGENT
HUMAN HEALTH
CRITERION
0.634
10.2
0.00149
0.0570
1.53
52.6
4.42
0.000155
0.00000820
3.76
106
115
0.888
15.0
90.5
172
22.8
0.782
* Indicates that the revised aquatic life value may be more stringent than other applicable criteria
under some circumstances.
** Revised aquatic life value for lead may be less stringent than other applicable criteria under some
circumstances.
A-3
-------
-------
APPENDIX B
APPENDIX B - WILDLIFE CRITERIA DEVELOPMENT
Introduction
The chemicals identified for evaluation were divided into 5 categories and reviewed to
determine whether wildlife values could or needed to be calculated. The five categories were:
1. Inorganic metals
2. Bioaccumulative Chemicals of Concern (BCCs)
3. Carcinogens
4. Non-carcinogens
5. No human health data
Wildlife values were calculated for 28 of the 69 chemicals. Table B-l summarizes the
wildlife values for the 28 chemicals along with the BAFs and toxicity data used. Table B-2
summarizes the exposure assumptions used for deriving each wildlife value and Table B-3
compares the wildlife values for six inorganic metals and the chronic aquatic life criteria. The
rationale for why certain chemicals were selected for review along with the data used are
included in the following sections.
1. Inorganic Metals
Wildlife values for metals were assumed to be similar to existing aquatic life criteria, and
therefore were not estimated for use hi the cost analyses. This was verified by estimating
wildlife values for the six pollutants listed hi Table B-3. Of the six pollutants evaluated, all of
the wildlife values were greater than the chronic aquatic life values.
The toxicity data for these six pollutants were taken from the report "Interim Wildlife
Criteria: Assessment of Screening Level Values". The exposure parameters were the same as
those in Table B-2, and the BAFs were assumed to be 1.
2. Bioaccumulative Chemicals of Concern (BCCs)
Wildlife values were estimated for 16 BCCs. Values could not be calculated for
hexachlorohexane, alpha-BHC, or beta-BHC because the only toxicity data available is for
cancer, which is not an endpoint used for deriving wildlife values.
Mammalian Toxicity Data - The toxicity data for both mammals and avian species for
DDT and its metabolites (4,4-DDE and 4,4-DDD), mercury, 2,3,7,8-TCDD, and
mercury were the same as used in the proposed Guidance with some modifications of the
uncertainty factors.
B-l
-------
APPENDIX B
The mammalian toxicity data for hexachlorobenzene came from the report "Interim
Wildlife Criteria: Assessment of Screening Level Values". There were no other
mammalian wildlife data available. Because of this it was decided to use rodent studies
as the surrogate for mammalian wildlife data.
For the other 10 BCCs, the toxicity data for mammalian species was estimated by
assuming that the effective dose - effects level divided by uncertainty factors - was id-
fold greater than the associated human health RfD for that chemical. For example, if the
human health RfD was 10 mg/kg/day, then the effective dose for mammalian wildlife
was assumed to be 100 mg/kg/day for purposes of estimating wildlife values. A factor
of 10 was selected because the intraspecies uncertainty factor normally used in deriving
human health criteria is not normally used for estimating wildlife values. This also
assumes that the endpoints used for estimating the human health RfD and the associated
uncertainty factors were the same as for wildlife, which in many cases may not be valid.
However, to provide some estimate of the potential wildlife values this seemed a
reasonable assumption.
Avian Toxicity Data - The avian data for toxaphene, dieldrin, and endrin came from the
report "Interim Wildlife Criteria: Assessment of Screening Level Values". There was
no other avian data available.
Exposure Parameters - The exposure parameters used are summarized in Tables 1 and
2. The BAFs for DDTs, mercury, PCBs, and 2,3,7,8-TCDD are described in the "July
1994 Technical Support Document for Derivation of BAFs" (TSD). The trophic level
4 BAFs for the other BCCs were estimated by multiplying the baseline BAFs reported
in the TSD for the pollutant by 0.079 (lipid content for wildlife species) and then
multiplying this sum by the fraction of the freely dissolved portion for that pollutant.
The BAFs for trophic level 3 were estimated two ways. The preferred method was to
calculate a baseline 1 BAF for trophic level 3 for each chemical using the arithmetic
mean of the calculated measured log BAFs for sculpin, alewives, and small smelt. These
data are included in the July 1994 TSD. Once the baseline trophic level 3 values were
estimated, the same procedure as described above could be used to derive a trophic level
3 BAF to be used for estimating wildlife values. This method was used for chlordane,
hexachlorobenzene, lindane, pentachlorobenzene, and 1,2,4,5-tetrachlorobenzene.
When the calculated measured log BAFs for sculpin, alewife, and small smelt were not
available for a chemical, it was assumed that the baseline BAFs for trophic level 3 were
80% of the baseline trophic level 4 BAFs for that chemical. The 80% value was used
as an conservative assumption. Once the baseline trophic level 3 values were estimated,
the same procedure as described above could be used to derive a trophic level 3 BAF.
This method was used for aldrin, dieldrin, endrin, heptachlor, and toxaphene.
B-2
-------
APPENDIX B
3. Carcinogens
Wildlife values were not estimated for A, B, or C human carcinogens, with the exception
of carcinogenic BCCs. The assumption was made, for several reasons, that the human health
criteria for carcinogens would be equal to or more stringent than the associated wildlife values
for that pollutant.
First, for some pollutants (e.g., 2,4,6-trichlorophenol), the only available human health
values are for cancer. Since cancer is not an endpoint used for assessing effects on wildlife it
did not seem appropriate to attempt to derive wildlife values for these pollutants. Second, the
human health values for cancer are often very low because of the conservative assumptions used
in then* derivation. It is unlikely that the wildlife values would be substantially more stringent
than the human health cancer criteria with the possible exception of those pollutants with large
BAFs, which are already covered by the BCC category.
4. Non-carcinogens
Wildlife values were estimated for 14 human health non-carcinogens (see Table 1).
These pollutants were selected because they were not classified as carcinogens and thus it
seemed reasonable that the wildlife values could be less than the associated human health values.
The procedure for estimating mammalian wildlife toxicity data was the same as described
above for the BCCs. There was no avian data for these 14 chemicals. The toxicity data is
summarized in Table 1 and the exposure parameters are summarized hi Table B-2. The
procedure for estimating trophic 4 wildlife BAFs is the same as described above for BCCs.
Because of uncertainty in the precise baseline BAF for trophic level 3 it was decided to assume
that the trophic level 3 BAFs were the same as trophic level 4 BAFs. The one exception was
for phenol where 80% of the trophic level 4 BAFs was used.
5. No data available
Wildlife values for parathion, 1,1-Dichloroethane, anthracene, and phenanthrene were
not estimated because of lack of toxicity data.
B-3
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APPENDIX B
TABLE B-l WILDLIFE VALUES FOR RIA/INFORMATION USED TO CALCULATE VALUES
CHEMICAL
Aldrin
Chlordaoe
Chlorobemene
Chlorpyrifos
DDT and metabolites
1,2-trans-DichloroethyleDe
Diddrin
2,4-Dimetbylpbenol
2,4-DinitrophenoI
Endosulfan
alpbjMndosulfan
beta-endosulfan
Endrin
Heptachlor
HexacUorobemene
Undone
Mercury
PCBs
Pentaddorobenzeiie
Phenol
TCDD
Tetrachlorobenzene
Tetnchloroethylene
Toluene
Toxapbene
1,1,1-Triddoroethane
WILDLIFE VALUES
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APPENDIX B
TABLE B-2 EXPOSURE PARAMETERS
SPECIES
Mink
Otter
Kingfisher
Osprey
Eagle
BODY
WEIGHT (kg)
0.8
7.4
0.15
1.6
4.65
INGESTION
RATE (g/day)
0.155
1.3
0.075
0.3
0.517
DRINKING
WATER (I/day)
0.081
0.60
0.017
0.081
0.16
AVERAGE TROPHIC LEVEL OF
FOOD SOURCE: PERCENT OF DIET
Terrestrial: 20%
Aquatic TL3: 80%
TL3: 80%
TL4:20%
TL3: 100%
TL3: 100%
Fish: 92%
TL3:80%
TL4:20%
Birds: 8%
herring gull:70%)
non-aquatic:30%)
TABLE B-3 WILDLIFE VALUES VS. CHRONIC AQUATIC LIFE VALUES FOR SIX
INORGANIC COMPOUNDS
CHEMICAL
Aluminum
Arsenic
Cadmium
Copper
Nickel
Zinc
WILDLIFE VALUES
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