902R77101 ECONOMIC ANALYSIS OF PROPOSED REGULATIONS ON ORGANIC CONTAMINANTS IN DRINKING WATER Submitted to , , U.S. Environmental Protection Agency Office of Water Supply Washington, D.C. by Temple, Barker & Sloane, Inc. 15 Walnut Street Wellesley Hills, Massachusetts 02181 December 13, 1977 TIBISI ------- TABLE OF CONTENTS Preface List of Tables I. Introduction II. Cost of a Regulation on Synthetic Organics Cost At An Individual System Level Costs At the National Level Sensitivity of Costs to System Size Limitations III. Combined Costs of Trihalomethane and Synthetic Organics Regulations IV.- Demand on Supplying Industries V. Assessment of an Interim Requirement for Granular Activated Carbon in Existing Filters |T|B|S| ------- PREFACE This report was prepared in partial fulfillment of contract number EPA-68-01—4163 by Temple, Barker & Sloane, Inc. of Wellesley Hills, MA. The report presents an economic impact analysis of regulations on organic contaminants in drinking water, to be proposed by EPA under the Safe Drinking Water Act as an amendment to the Interim Primary Drinking Water Regulations. A previous report, entitled Economic Impact Analysis of a Trihalomethane Regulation for Drinking Water, was published by EPA in August 1977 and was also prepared by Temple, Barker & Sloane, Inc. under the same contract number. It is this previous report which is referenced in the attached text as the separate economic analysis of a trihalomethane (THM) regulation. i TBS ------- •vis LIST OF TABLES Page II-3 II-4 II-5 II-6 II-7 III-l III-2 IV-1 V-l Capital Expenditures for GAC— Individual Water Systems Annual Operations and Maintenance Expenses for GAC—Individual Water Systems Annual Revenue Requirements for GAC—Individual Water Systems Annual Per Capita and Customer Costs of GAC, 1981—Individual Water Systems Water Systems Potentially Affected by Proposed Treatment Requirement National Costs of GAC Treatment Requirement National Costs of a GAC Treatment Requirement With Alternative System Size Limitations Estimated Number of Systems Affected by Both Proposed Regulations National Combined Costs—THM and Treatment Requirement Regulations Demand on Supplying Industries of the Combined Regulations Incremental Cost of an Interim Requirement to Hse Carbon in Existing Filters II-2 II-3 II-4 II-5 II-6 II-7 II-9 III-l III-2 IV-1 V-2 S ------- I. INTRODUCTION .*- During the last year the Office of Water Supply at the Environmental Protection Agency has focused spe- cial attention developing regulations on organic contam- inants in drinking water. The result of the Agency's investigations is a proposed amendment to the Interim Primary Drinking Water Regulations which will be the . first phase of a program for organics control. The proposed new regulations are of two types: a maximum contaminant level on trihalomethanes in drinking water; and a treatment requirement for granular activated carbon or equivalent treatment on systems susceptible to con- tamination from synthetic organic compounds. Both regulations will apply only to large community water systems, those serving resident populations of over 75,000, at this time. It is expected that they will be extended to smaller systems at some future date. The purpose of this document is to present the economic analysis for the proposed regulations. The economic analysis of the proposed trihaloraethane regulation has already been published under separate cover in August of this year.1 This report contains the economic evaluation of the proposed treatment re- quirement for the control of synthetic organics. This document also summarizes the results of the August report and presents the combined economic impacts of the two regulations. Since some community water systems are expected to be affected by both regulations, the combined economic impacts of both are less than the sum of the individual assessments. The economic impacts of these regulations are discussed at three levels. First, the costs are identified at the level of the individual system which will be affected by the regulations. It is at that level that specific water systems will have to finance capital additions and bear increased operating and main- tenance expenses. It is also at that level that local lesidents will be affected by increased water rates. Economic Impact Analysis of a Trihalomethane Regula- tion for Drinking Water, U.S. Environmental Protection Agency, August 1977. ------- 1-2 The second level of analysis is the national level. There the aggregate costs of the regulations ate identified for all the systems in the country which are expected to be affected. Finally, the impact of these regulations upon supplying industries is examined. Two groups are especially significant: the manufacturers of granular activated carbon and the manufacturers of furnaces for the regeneration of granular activated carbon. This report is structured into five chapters. Chapter I is the current introduction. Chapter II presents the economic impacts of the proposed treatment requirement taken alone, without consideration of the trihalomethane regulation. Chapter III then discusses the combined costs of both regulations taken together. Chapter IV contains an assessment of the effect of the two regulations upon product demand,in the major sup- plying industries. Chapter V presents an evaluation of an interim measure which would encourage the use of granular activated carbon in existing filters to provide protection while systems design and construct their ultimate treatment systems. The analytical methodology and basic cost assumptions utilized in this analysis are the same as those used in the August report referred to above. Two appendices to that report, which are not reproduced here, provide detailed documentation appropriate to both analyses. Those are "Apppendix A: Methodology and Modelling," and "Appendix C: Treatment Costs and Sen- sitivity Analysis." All costs in this document have been reported in 1976 dollars in order to maintain consistency with the August report. However, if the costs were stated in 1978 dollars, all expenditures will be approximately 11 percent higher than those shown. The analysis assumes that affected systems will achieve compliance by 1981. TBS 7 ------- II. COST OF A REGULATION ON SYNTHETIC ORGANICS The proposed regulation for the control of synthetic organics. in drinking water is a treatment requirement. It specifies the use of granular activ-- ated carbon or an equivalent treatment for community water supplies which are susceptible to contamintion by synthetic organic compounds. In its proposed form it will only apply to systems serving resident populations of over 75,000. COST AT AN INDIVIDUAL SYSTEM LEVEL It is expected that community water systems af- fected by this regulation will incorporate granular activ- ated carbon into their treatment trains by construction of post-filtration contactors for the carbon. Such contactors are assumed in this analysis to be circular, each approxi- mately fifteen to thirty feet in diameter and ten feet in height. The number of contactors needed at each plant will depend upon plant capacity and the length of time which water must be in contact with the carbon in order to achieve adequate organic removal efficiency ("contact time"). The required contact time will vary from site to site and is expected to range from nine minutes to perhaps as high as eighteen minutes. A typical plant serving 280,000 people in 1981 (producing 50 MOD) would have 10 to 20 contactors depending upon its required contact time. Carbon movement to and from the contactors for regeneration is assumed to be via automated slurry systems. On-site regeneration of the spent carbon is anticipated through the use of multiple-hearth furnaces constructed especially for this purpose. Regen-eration frequencies will vary from site to site depending upon raw water quality and other factors, but should generally be between two and six months for this regulation. The furnaces will vary in size depending upon the volume of ------- 1 II-2 granular activated carbon utilized and the frequency of regeneration. A typical installation for a system serving 280,000 people in 1981 (producing 50 MGD) might have six hearths with an outside dimension of approximately 12 feet in diameter and 20 feet in height. These will generally be fueled by distillate oil or natural gas. The capital expenditure requirements for the contactors, furnaces, initial carbon fill, and other related capital items are shown in Table II-l below for an individual water system. As the figures show, the capital expenditures vary significantly with different contact times and less significantly with different regeneration frequencies. Contact time affects virtually all the capital expenditure items almost linearly—a doubling requires twice as many con- tactors, twice the initial carbon fill, and twice the furnace capacity for regeneration. Different regenera- tion frequencies, on the other hand, 'affect only the furnace capacity and not the other capital improvements. Table li-l CAPITAL EXPENDITURES FOR GAC* INDIVIDUAL WATER SYSTEMS (millions of 1976 dollars) Contact Time Population Served 75,000 - 100,000 100,000 - 1 million Over 1 million Regeneration Frequency 6 Months 2 Months 9 min. 18 m1n. 9 rain. 'IB min. $ 2.1 S 3.6 4.9 9.0 12.4 22.6 $ 2.9 5 5.1 6.1 11.3 15.1 27.6 Granular activated carbon. Including contactors, carbon Initial fill, plant modifications, and regeneration furnaces. The capital requirements for indi idual systems under the most favorable assumptions shown would be $2.1 million for an average system serving 75,000 to 100,000 people, $4.9 million for an average system serving 100,000 ------- M II-3 to 1 million people, and $12.4 million for an average system serving over 1 million people. The capital requirements would increase to almost two-and-a-half "times those levels under the least favorable conditions shown. Operations and maintenance (O&M) expenses, in contrast,'change more over the range of regeneration frequencies shown than over the range of contact times. These expenses consist primarily of labor and furnace operating costs and the cost of make-up carbon to com- pensate for losses of approximately seven percent ex- perienced in each regeneration cycle. These expenses, therefore, vary with both the volume of carbon used (a function of contact time) and the number of times it is regenerated each year. The estimated O&M costs for the various alternatives considered are presented in the table below. l } i i Table I1-2 ANNUAL OPERATIONS AMD MAINTENANCE EXPENSES FOR GAC* INDIVIDUAL WATER SYSTEMS (millions of 1976 dollars) Regeneration Frequency 6 Months 2 Months Contact Time 9 win. 18 min, 9 tain. 18 min. Population Served 75,000 - 100,000 100,000 - 1 million Over 1 million $ 0.2 $ 0.3 J 0.3 $ 0.6 •0-.4 0.7 0.7 1.3 1.6 3.0 3.1 S.6 Including labor, fuel and makeup carbon during regeneration. The annual O&M expenses for granular activated carbon treatment for the control of synthetic organics would range from $0.2 million to $0.6 million for an average system serving 75,00^ to 100,000 people depending TlBlSl ------- 4- -* II-4 ..upon contact time and regeneration frequency. O&M costs for the larger system sizes would vary similarly, from minimum cost levels of approximately $0.4 million and $1.6 million respectively under the most favorable conditions. II Annual revenue requirements for this applica- tion of granular activated carbon have been computed from the capital expenditure and O&M figures above by assuming amortization of the capital expenses over a 40 year period at an average interest rate of approximately 8 percent for new debt financing. The resulting figures are shown in Table II-3 below. Contact Time Table I1-3 ANNUAL REVENUE REQUIREMENTS FOR GAC INDIVIDUAL WATER SYSTEMS (Billions of 1976 dollars) Regeneration Frequency 6 Months 2 Months 9 min. 18 nin. 9 min. 18 min. Population Served 75,000 - 100,000 100,000 - 1 nillion flyer 1 million J 0.4 J 0.6 0.6 1.5 2.7 4.9 S 0.6 J 1.0 1.3 2.3 4.3 7.9 1981 Baseline Revenues $ 2.2 6.1 23.6 The effect of GAC utilization on these water systems will be approximately a 10 to 45 percent in- crease in annual revenue requirements by 1981 depending upon design specification. The significance of that effect is probably best examined in terms of cost per capita and cost per residential customer as shown in Table I1-4 below. ------- II-5 Table II-4 ANNUAL PER CAPITA AND CUSTOMER COSTS OF 6AC, 1981 INDIVIDUAL WATER SYSTEMS (1976 dollars) Regeneration Frequency 6 Months 2 Months Contact Time 9 mln. 18 m1n. 9 nrin. 18 nrin. Population Served Annual Cost Per Capita .._..-«.— 75,000 - 100,000 $ 3.80 J 6.70 $ 6.30 $11.00 100,000 - 1 million 3.10 5.60 Over 1 million 2.20 4.00 ————Annual Residential Customer Bill Impact*- 75,000 - 100,000 5 5.70 $10.00 $ 9.50 100,000 - 1 million 4.70 8.40 7.20 Over 1 million 2.90 5.30 4.80 4.80 3.60 8.70 6.50 $16.50 13.10 8.60 For a family of three. Note: See text for explanation of those calculations. The cost per capita shown in Table I1-4 above is simply the total annual revenue requirement divided by the population served by the water system. It provides a measure of the cost of this form of health protection and is an upper bound on the possible cost to individual consumers if no costs were allocated to non-residential customers. By this measure the utilization of GAC treat- ment will result in costs of approximately $2 to $4 per capita under the most favorable conditions and $7 to $11 per capita under the least favorable conditions. Actually the increase in water rates will usu- ally be less than this per capita cost because some of the costs will be borne by non-residential customers of the water system. The other set of figures in the table is an estimate of the likely increase in annual water rates for an average family of three assuming that non- residential customers pick up the same proportion of GAC costs that they do of other system costs. On this basis the GAC treatments will result in annual increased water bills of approximately $3 to $6 per family under the best conditions shown and $9 to $17 per family under the worst conditions shown. ITIBIS ------- II-6 COSTS AT THE NATIONAL LEVEL " - - A major factor in assessing the national eco- nomic effects of the proposed treatment requirement is the number of systems which may ultimately be required to install and operate the treatment. EPA has reviewed its monitoring data and its inventory of community water systems and estimated that approximately 50 systems would be impacted by this proposed regulation. The exact num- ber, of course, will depend upon site-specific water quality and other factors. Higher or lower numbers of systems affected would result in proportionately higher or lower national costs in the following tables. As Table II-5 below shows, there are almost 400 water systems in the country which serve populations of over 75,000 people and which therefore would be sub- ject to this regulation. It is generally thought that systems which rely primarily upon surface water sources for their water will be the most likely to be affected. Those account for just over 200 systems in this size range. Table II-5 WATER SYSTEMS POTENTIALLY AFFECTED BY PROPOSED TREATMENT REQUIREMEKT Population Served Category 75,000- 100,000- Over 100,000 1 minion 1 million Total Total Systems Systems With Primary Surface Water* Expected to be Affected** 147 59 15 232 137 32 11 10 3 390 206 50 TBS estimate, Survey of Operating and Financial Characteristics of Community Water Systems. April 1977. *EPA estimate. T B S ------- II-7 The 50 systems which are expected to be affected •include some in regions or river basins which have been identified as likely to need treatment and others which are statistically estimated and cannot be specifically identified at this time. The 50 systems represent ap- proximately one out of every eight systems in this size range and one of every four which relies primarily upon surface water. The national costs of applying granular activated carbon to these 50 systems are shown in Table 11-6 below, based upon the individual system costs presented earlier. Table II-6 NATIONAL COSTS OF GAC TREATMENT REQUIREMENT (millions of 1976 dollars) Regeneiation 6 Months Contact Time: 9 min. 18 min. Frequency 2 Months 9 min. 18 nrin. Population Served 75.000 - 100,000 100,000 - 1 million Over 1 million Total Population Served 75,000 - 100,000 100,000 - 1 million Over 1 million Total Population Served 75,000 - 100,000 100,000 - 1 million Over 1 million Total $ 31 $ 54 157 288 37 68 $225 $410 nual OSM Expenses — $ 3 $ 5 12 23 5 9 $20 $ 37 Revenue Requirement $ 5 $ 9 26 47 8 15 $ 39 $ 71 $ 44 197 45 $286 $ 5 24 9 $ 38 5 *«w • $ 9 40 13 $ 62 $ 76 360 83 $519 $ 9 43 17 $ 69 $ 15 74 24 $113 IT B S ------- II-8 The aggregate national costs for the proposed .treatment requirement range as follows: • Capital expenditures will be in the range of $225 to $286 million if an average nine minute contact time will be adequate to achieve the desired organics removal levels. If contact times have to increase to the point where they average 18 minutes nation- ally, then the capital expenditures : total would be $410 to $519 million. * • Operations and maintenance expenses are more dependent upon regeneration frequency than contact time. The national range of O&M expenses will be $20 to $37 million if an average regeneration frequency of six months will be adequate to achieve the desired performance. However, if the average has to be as low as two months then the O&M expenses would be $38 to $69 million per year. • Annual revenue requirements reflect both sets of uncertainties and fall in three general positions under the range of assumptions shown. Under the best 1 conditions they could total $39 million • per year for the 50 systems. Under the least favorable assumptions they could be a high as $113 million. However, if either one of the key operating charac- teristics, contact time or regeneration frequency, turned out favorably and the other did not, then revenues would total $62 to $71 million per year. TBS IS. ------- II-9 SENSITIVITY OF COSTS TO SYSTEM SIZE LIMITATIONS The proposed regulation on the control of synthetic organic contaminants will apply only to large community water systems, those serving resident popula- tions of over 75,000, at this time. In the course of determining the appropriate population level for this limitation, the national costs of a regulation at al- ternative system size limitations have also been cal- culated. The table below presents the national costs for the alternatives of 50,000 persons, 75,000 persons and 100,000. The table is based on costs for GAC treat- ment with two-month regneration cycles and nine-minute contact time. Table II-7 NATIONAL COSTS OF A GAC TREATMENT REQUIREMENT WITH ALTERNATIVE SYSTEM SIZE LIMITATIONS • (millions of 1976 dollars) Expected Number of Affected Systems Capital Expenditures Annual 0«M Expenses Annual Revenue Requirements Annual Cost Per Capita Lower Size Limitation Systems Serving Over 50,000 Persons 83 $374 $ 48 $ 80 For Systems Serving 50,000-75,000 Persons As Proposed Systems Serving Over 75,000 Persons 50 $286 $ 38 $ 62 For Systems Serving 75,000-100,000 Persons Higher Size Limitation Systems Serving Over 100,000 Persons 35 $242 $ 33 $ 53 For Systems Serving 100,000-1 Mi Hi or, Persons $8.45 $6.30 54.80 Note: Based on 2-month regeneration cycle and 9-nrinute contact time. ------- 11-10 The application of this regulation to all systems serving 75,000 or more people is expected to affect 50 systems and result in $286 million in capital expenditures as described earlier. If it were extended to apply to all systems over 50,000 people, then 83 systems are likely to be affected, and if it were re- stricted to only systems over 100,000 people, then 35 systems would be affected. The capital expenditures would increase to $374 million or decrease to $242 million in the two cases, respectively. The costs per capita vary according to the size of the affected systems. For systems serving between 50,000 and 75,000 persons, the installation and operation of GAC treatment with two-month regeneration cycles and nine-minute contact time would cost $8.45 per capita. The costs for larger systems drop to $6.30 in the 75,000 to 100,000 range, $4.80 in the 100,000 to 1 million range, and $3.60 for systems serving over 1 million persons. As noted earlier in this chapter, the likely increases actually passed'on through residential customer bills would generally be lower than these cost per capita figures because non-residential customers would share some of the costs of the regulation. ------- III. COMBINED COSTS OF TRIHALOMETHANE AND SYNTHETIC ORGANICS REGULATIONS The two proposed regulations have each been evaluated separately in terms of economic impacts on the country, individual systems and customers. The effects of the proposed trihalomethane regulation were assessed in the August 1977 report referred to earlier. The ef- fects of the proposed treatment requirement are described in the preceding chapter of this document. The majority of the systems impacted by these regulations are expected to be affected by only one of them. For those systems and their customers, the costs of compliance will simply be the costs which are described in the appropriate individual analysis. A smaller number of systems, approximately 15, are .expected to be affected by both of the regulations as shown in Table III-l below. Since the costs for these •systems have been included in both of the separate cost analyses, the combined costs of the two regulations are less than the sum of the individual costs. For those systems affected by both regulations, the choice of compliance method will be constrained to the use of granular activated carbon, and the operating parameters of contact time and regeneration frequency will have to be designed to achieve both sets of re- quirements. Accordingly, some individual systems may be forced to operate with longer contact times or shorter re- generation frequencies than would be possible if affected by only one regulation, though all are expected to fall within the ranges described in the previous chapter. Table III-l ESTIMATED NUMBER OF SYSTEMS AFFECTED BY BOTH PROPOSED REGULATIONS Regulation Total Number of Systems Affected Number of Systems Using GAC Treatment Total THM Requirement Systems Only Only Both Affected 71 11-28 35 35 15 121 15 61-78 ------- III-2 ; In combination the two regulations are ex- pected to require between 61 and 78 large water systems to utilize granular activated carbon or an equivalent treatment. Of that number 11 to 28 systems will install carbon treatment solely to comply with the trihalo- methane regulation, 35 will install it solely to meet the treatment requirement and 15, as noted above, will use it to meet both requirements.^- The national costs of the combined regulations are shown in Table III-2 below. Table III-2 NATIONAL THM AND TREATMENT COMBINED COSTS REQUIREMENT REGULATIONS (millions of 1976 dollars) Low Cost Assumptions* Capital Expenditures 0/M Expenses Annual Revenues Mid-Cost Assumptions* Capital Expenditures 0/M Expenses Annual Revenues High-Cost Assumptions* Capital Expenditures 0/M Expenses Annual Revenues See text for explanation of Regulation Treatment THM Requirement Only . Only $ 66 $ 155 14 14 18 27 $66-166 $ 198 14-23 26 18-32 43 S 166 $ 359 23 48 32 78 assumptions. Both $ 70 6 12 0 $ 88 12 19 $ 160 21 35 Total Costs $ 291 34 57 $352-452 52-61 80-94 $ 685 92 145 The range associated with the trihalomethane regulation shown in this and later tables reflects uncertainty on the proportion of affected systems which will utilize carbon, ranging from a low of 30 percent to a. high of 50 percent. T B S ------- III-3 The national costs may vary significantly .depending upon the local conditions which prevail at t~he systems affected by the regulations. The table presents costs for three different sets of assumptions: Low-cost assumptions, which project that only 11 systems would add GAG treatment under the trihalomethane regulation alone and that the treat- ment requirement could be satisfied with 9 minute contact time and 6 month carbon regeneration. Mid-cost assumptions, which show a range of 11 to 28 systems which will add carbon under the trihalomethane regulation alone and which assume that the regeneration frequency would be shortened to 2 months. High-cost assumptions, which project that .28 systems would add carbon under the trihalomethane regulation alone and that the regeneration frequency would be reduced to 2 months and the contact time would be increased to 18 minutes. The total national capital expenditures re- quired for these combined regulations is estimated to be $291 million under the low-cost assumptions, $352 to $452 million under the mid-cost assumptions, and $685 million under the high-cost assumptions. The aggregate operations and maintenance expenses are esti- mated to range from $34 million to $92 million under these various assumptions. The annual revenues required to cover the capital and operating expenses for those 121 affected systems are projected to be $57 million under the low-cost assumptions, $80 to $94 million for the mid-cost case, and $145 million for the high cost case. The per capita and per customer costs of a specific treatment at the individual systems level, of course, will be no different than the costs shown under the individual regulation analyses. ITIBIS ' ' ' ------- IV. DEMAND ON .SUPPLYING INDUSTRIES The treatments required by both the THM and the synthetic organics regulations will result in large increases in the demand for GAG and for regeneration furnaces. The demand for GAG as initial fill will be determined by the number of.systems adding GAG treatment and the contact time required. The annual replacement of GAG lost in the regeneration process will be set by the frequency of regeneration. Each water system adding GAG treatment is likely to purchase a regeneration furnace, the size of which will vary according to the quantity of carbon the system plans to regenerate. For the largest systems, generally those serving more than 1 million people, the purchase of more than one furnace would be required. Sys- tems with multiple treatment plants would also generally be expected to purchase two or more furnaces. Table IV-1 below estimates the quantity of carbon, both as initial fill and annual replacement, which will likely result from the combined THM and treatment regulations. The three rows of this table represent the low-cost, mid-cost and high-cost assumptions discus- sed in the previous chapter. Table IV-1 DEMAND ON SUPPLYING INDUSTRIES OF THE COMBINED REGULATIONS Demand for GAC (millions of Ibs.) Systems Initial Annual Selecting GAC Fill* Replacement*1 Low Cost Assumptions 61 112 26 Mid-Cost Assumptions 61-78 112-134 47-56 High-Cost Assumptions 78 211 89 Assumes 22600 Ibs. of GAC per MGD for 9 minute contact time and 45200 Ibs. of GAC for 18 minute contact time. Based on 7* losses per regeneration cycle. Demand for ' Furnaces 64-80 64-97 81-100 T|B Si ------- IV-2 The demand for both GAG and regeneration fur- naces generated by the proposed regulations is within the capacity of the respective industries. The acti- vated ^carbon industry was reported to have an unutilized annual "production capacity of some 100 million pounds of GAC in mid-1976. Since that time, one firm has announced plans to add new capacity for GAC production. The in- dustry's expanded capacity appears likely to exceed anticipated demand (excluding new uses for drinking water treatment) by the same 100 million pound level until 1980. Hence the industry is capable of supplying the 112 to 211 million pounds of GAC needed by the af- fected water utilities over the next three years. It should be noted, however, that the highest estimate of 211 million pounds corresponding to the high-cost as- sumptions would require full use of the industry's capacity for more than two years and could only be sup- plied within that time frame with advance planning and contracting and in the absence of large competing demands. In the longer perspective, beyond the ini- tial requirement of this regulation in its first two or three years, the carbon industry has indicated an intent to expand its capacity to whatever level is required to supply the recurring annual volumes of carbon needed by the water supply industry. The regeneration furnaces needed by the util- ities adding GAC treatment could be supplied by the furnace manufacturers over a three-year time period. Multi-hearth furnace producers have estimated that their collective capacities could be increased by as many as 100 furnaces annually. Rotary kilns, infra-red electric furnaces and fluidized bed furnaces also could be made available to water utility customers. The design and installation of reactivation furnaces, particularly multi-hearth furnaces, requires some 18 months of lead- time, though this time frame might be reduced by the availability of pre-engineered designs in the future. TIBIS ------- r V. ASSESSMENT OF AN INTERIM REQUIREMENT FOR GRANULAR ACTIVATED CARBON IN EXISTING FILTERS Since the design and installation of contactors for granular activated carbon is expected to require a significant lead-time, perhaps two to four years, EPA has included an interim measure in the proposed regula- tion. The measure requires systems which are susceptible to synthetic organic contamination to replace the sand or other filter media in their existing filter beds with granular activated carbon while the full treatment is being designed and constructed. Such systems would not be expected to make major capital modifications to their filters in response to this interim requirement. Nor would they necessarily be required to adopt the same operating practices which they will eventually employ when contactors are used—that is, .they might have shorter contact times and longer regeneration cycles in the interim period. Two approaches to interim treatment are pos- sible: one involves no on-site regeneration of carbon, and depends upon the carbon manufacturers to take back spent carbon and perform the regeneration service; the other assumes the water system would purchase its own furnace and perform the carbon regeneration on-site. For the eventual level of treatment required under the proposed regulations it is expected that all of the large systems affected would take the latter approach. However to meet an interim requirement some might wish to postpone capital commitments and select the former approach. The costs during the interim period would be less than those anticipated with the final design. The initial capital investment would consist of the purchase of GAC to fill the beds and, for those systems taking the second approach, a regeneration Jurnace. Operating costs relate primarily to the replacement or Degeneration of the spent carbon. ------- V-2 The incremental costs of the potential interim ..treatment are comprised of three factors: (1) the capital investment in carbon, furnace and plant modifi- cations which are not recoverable for use in the final treatment technique; (2) those operating expenses for fuel, labor, and carbon replacement during the interim period which have no carry-over to the final treatment; and (3) the financing costs for the capital equipment for the additional years prior to ultimate compliance. Table V-l below summarizes those costs for an average system serving 100,000 to 1 million people. As the figures show, at a six-month regeneration cycle, the per capita costs for the interim treatment would be $3.30 per year without on-site regeneration and $1.50 per year with it. If the regeneration frequency were extended to twelve months that per capita cost would decline to $1.70 and $1.10 per year respectively. Table v-i INCREMENTAL COST OF AN INTERIM REQUIREMENT TO USE CARSON IN EXISTING FILTERS (1976 dollars) FOR A SYSTEM SERVING 280,000 PEOPLE (SO MGO) Without On-Site With On-Site Regeneration Regeneration Annual Cost Per Capita 6 Month Regeneration 12 Month Regeneration S 3.30 $ 1.70 1 $ 1.50 J 1.10 ------- |