United States Office of Water (4503F) EPA 841 -D-01 -003
Environmental Protection Washington, DC 20460 August 1, 2001
Agency www.epa.gov/ow
v/EPA The National Costs of the Total
Maximum Daily Load Program
(Draft Report)
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DRAFT FOR REVIEW AND COMMENT
The National Costs of the
Total Maximum Daily Load Program
Office of Water
U.S. Environmental Protection Agency
August 1, 2001
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TABLE OF CONTENTS
Executive Summary i
I. Introduction 1
II. Background - Impaired Waters Under the Clean Water Act 3
The Clean Water Act 3
Current TMDL Program Regulations 5
Citizen Suits for TMDL Implementation 6
The TMDL Federal Advisory Committee 7
July 2000 TMDL Program Regulation Revisions 8
III. Current Efforts to Protect and Restore the Nation's Waters 10
IV. Defining Today's Water PoUution Problems -- The 1998 §303(d) Lists 12
V. Administrative Costs to Develop TMDLs 14
The Cost of Listing Impaired Waters 14
The Cost of Developing TMDLs 15
Federal Share of TMDL Development Costs 22
VI. Costs to Pollutant Sources to Implement TMDLs 24
Methodology - Three Scenarios 28
Estimated Pollution Control Costs for Pollutant Sources Under the Three Scenarios . . 32
APPENDICES: Other Matters of Interest to Congress Appendix A -1
SUPPORTING REPORTS:
Environomics and Tetra Tech, Inc., The National Costs to Develop TMDLs, prepared for
the U.S. EPA, Office of Wetlands, Oceans and Watersheds, draft July, 2001
Environomics and Tetra Tech, Inc., The National Costs to Implement TMDLs, prepared
for the U.S. EPA, Office of Wetlands, Oceans and Watersheds, draft July, 2001
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Executive Summary
Most Americans agree that the quality of the Nation's rivers, lakes and coastal waters has
improved dramatically over the past 30 years. This remarkable improvement in the Nation's
rivers, lakes, and coastal waters was led by governments at the federal, state, tribal and local level
but could not have been accomplished without the hard work of citizens and the sustained
financial commitment of the private sector.
At the same time, there is a recognition that some water pollution problems remain to be
addressed. In 1998, states reported nearly 22,000 individual water bodies including river and
stream segments, lakes, and estuaries that do not attain state adopted water quality standards.
These impaired waters include 300,000 miles of rivers and coastal shoreline and approximately 5
million acres of lakes, representing about one-third of the length/acreage of all waters in the U.S.
whose quality has been assessed, and about 10 % of all the waters Nationwide.
Defining policies and programs that sustain the quality of water resources and restoring
the health of those waters that are impaired is a complex problem. The Clean Water Act provides
a sturdy foundation of core water quality programs, but the implementation of these programs by
the Environmental Protection Agency (EPA), states, tribes, and others is the subject of
controversy. Over the past several years, there has been considerable debate over the best
approach to restoring impaired waters and the costs of various approaches to this task. In
response to this debate, Congress directed the EPA to study the costs of implementing the Total
Maximum Daily Load or "TMDL" program.
Key Findings
This Report responds to Congress' request for information on the costs of implementing
pollution control measures to develop and implement TMDLs. Key findings of the Report are --
1) Costs to Pollutant Sources to Implement the TMDL Program Range from Under $1
Billion/Year to $4.3 Billion/Year Depending on Efficiency of TMDLs
- The cost of measures to implement TMDLs for impaired waters now identified by
states is estimated to be between $900 million and $3.2 billion per year if the
problem is approached through the implementation of TMDLs that seek the lowest
cost alternatives among all sources of the impairments (see Table ES-I).
If the TMDL program was implemented based on an assessment of the reduction
needed for the water body and an allocation that includes all sources of
impairment, without strict attention to the most cost-effective allocations, costs
would be expected to rise to between $1 billion and $3.4 billion per year.
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In the event that the impaired waters were addressed using a least flexible TMDL
scenario costs might rise to as high as $1.9 billion and $4.3 billion per year. Under
this unlikely scenario, regardless of the individual contributions of different
sources, states would simply tighten discharge permits and other national
requirements through a uniform and inflexible approach. This scenario would not
benefit from site-specific tailoring to local conditions that should result from
development of a more careful allocation.
When a moderately cost-effective TMDL program, which looks for readily
available cost effective solutions, is used to allocate pollution reduction
responsibilities, the costs for both point and nonpoint sources are reduced.
The nonpoint pollution control measures expected to be implemented under each
option would generate some partly offsetting cost savings (e.g. by reducing the
frequency of application and the amount of fertilizer used), but these specific
savings could not be calculated.
Table ES - 1
Estimated Costs for Pollutant Sources to Implement TMDLs
Type of Source
Point sources
Nonpoint sources
Total implementation costs
Potential savings for nonpoint sources
Annual Costs
(2000 $ in millions)
Least Flexible
TMDL Program
1,082-2,178
783 - 2,162
1,865 - 4,340
undetermined
Moderately
Cost-effective
TMDL
Program
812- 1,634
234- 1,791
1,046 - 3,425
undetermined
More Cost-
Effective TMDL
Program
625 - 1,321
281 - 1,869
906 - 3,190
undetermined
2) The average annual costs of developing TMDLs, primarily by states, over the next 15
years is estimated to be between $63-69 million per year, nation wide.
It will cost approximately $1 billion over 10 to 15 years for the 36,000 TMDLs in
the over 20,000 water bodies known to be impaired. These costs could be higher
or lower by 10%, depending on the pace that states adopt the most efficient
approaches to develop TMDLs.
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The average cost of developing the TMDLs for each of the roughly 20,000
impaired water bodies is estimated to be about $52,000, with a typical range of
costs between $26,000 and over $500,000.
EPA expects that states will increase the number of TMDLs developed each year,
spending about $30 million in the year 2000, $43-48 million in 2002, and about
$68-75 million starting in 2005 and each year thereafter until 2015.
The cost estimate is based on the unit costs typical for the majority of TMDLs.
EPA estimates that only 2-5% of the TMDLs nationally might have costs in excess
of the range of costs used in this analysis which, to the extent that these prove to
have sufficiently higher costs, might increase the national TMDL development
costs by perhaps 10 to 20%.
The costs of TMDL development cited in the Report are based on compliance with
the current regulations including the TMDL regulations published in July 2000.
The costs of the additional requirements associated with the July 2000 regulations
represent less than 10% of the total development costs estimated in this report.
The July 2000 regulations added requirements that increased the costs to develop
TMDLs but did not add additional requirements, or therefore costs, to implement
TMDLs.
It is expected that technical assistance that is routinely provided by other
governmental agencies, such as the U.S. Department of Agriculture, will
experience increased demand as a result of the TMDL program. But EPA has not
estimated that cost.
3) The cost of water quality monitoring to support the development of TMDLs is expected to
be approximately $17 million per year.
EPA made a preliminary estimate of additional monitoring needed for TMDL
development from a limited survey of state experiences to date. This estimate
needs to be revised as states gain more experience with TMDL development.
4) Clustering TMDLs through a watershed approach to development of TMDLs can
significantly reduce the costs of developing TMDLs and implementing the resulting
pollution control measures.
EPA evaluated the extent to which impaired waters listed by states fall into logical
geographic clusters for the purpose of developing TMDLs and concluded that as
many as 80% of the water bodies nationally could realize cost-efficiencies from
developing TMDLs jointly. The cost analysis assumes that states will increasingly
be able to realize these efficiencies over a 5-10 year transition period, resulting in a
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national average of 60-70% of the waterbodies achieving cost efficiencies from
clustering. The analysis estimates that the 36,000 TMDLs will be developed in
about 6,000 to 8,000 submissions averaging 5-6 TMDLs per submission. These
may consist of as few as one TMDL per submission to more than 30 TMDLs in
each but averaging 5-6 TMDLs per submission.
The development of more cost-effective TMDLs on a watershed basis creates
opportunities to shift pollution control responsibilities from high cost controls over
point source discharges to comparatively low cost controls over nonpoint sources.
Savings attributable to this efficient allocation of pollution control responsibilities
are estimated to be between $140 - $235 million per year.
Increased costs to nonpoint sources that may occur when the more cost effective
solutions are implemented are more than offset by savings to point sources.
5) EPA provides substantial funding to the states for management of the full range of Clean
Water Act programs.
Using the high end of the range of costs for core TMDL development, and TMDL
related monitoring, and assuming a further 10-20% cost increase to account for
particularly high cost TMDLs, total TMDL development costs are expected to be
as much as $65-74 million in 2002, rising to about $92-107 million annually in
2005 through 2015.
In FY 2001, the resources available to states to develop TMDLs include:
Funding Under Section 106 Water Program Grants - Funding for
implementation grants under this core water program increased from $115
million in FY 2000 to $170 million in FY 2001, with an indication from the
Congress that the $55 million increase was associated with the TMDL
program costs.
Funding Under Section 319 Nonpoint Pollution Control Grants - Funding
for implementation of state nonpoint pollution control programs increased
from $200 million in FY 2000 to $237 million in FY 2001. EPA has
provided that states may use up to 20% of this funding (i.e. about $47
million) to develop TMDLs.
Planning Funds from State Revolving Loan Funds Grants — Under section
604(b)(3) of the Clean Water Act, states may use up to one percent of
grant funds (or $100,000, whichever is greater) for planning and related
purposes, including development of TMDLs. In FY 2001, the total
funding available under this authority was $14 million.
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In FY 2001, EPA expects to invest about $21.7 million in management of the
current TMDL program. About $10 million of this funding is available to EPA
Regions as contract funds to support development of TMDLs at the request of a
state or where a state does not develop a TMDL called for in a consent decree.
EPA expects these funding levels to be maintained, or to increase slightly increase
in FY 2002.
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I. Introduction
The 1972 Clean Water Act established a blueprint for a sustained effort by government at
all levels and the private sector to protect and restore the quality of the Nation's waters.
Implementation of the range of programs authorized in the Act over the past 30 years has resulted
in dramatic improvements to the quality of rivers, lakes, wetlands, and coastal waters across the
country. Today, a significant portion of the Nation's waters meet the "swimmable, fishable" goals
set out in the Clean Water Act.
The success of water pollution control programs is causing a gradual change in the
approach to water pollution control. In the past, water pollution problems were common and
easily identified. Broad, national programs were well suited to remedying problems and
preventing further decline in water quality. Today, many of the most obvious problems have been
solved. Despite this progress, serious water pollution problems remain. These problems promise
to be more difficult to solve because they are driven by specific local conditions and are caused by
a wider array of sources. To meet the water pollution challenges of today, government, the
private sector, and citizens are increasingly asking two key questions -
• how do we best maintain past progress and protect the majority of waters with
good water quality? and,
• how do we best identify each of the remaining water bodies that do not meet clean
water goals (i.e. waters that do not attain state water quality standards) and
implement cost-effective remedies for them?
This report addresses the question of how to begin to correct the remaining water
pollution problems throughout the country in the most cost-effective manner. It is in direct
response to a request contained in the Conference Report #106-988 describing the VA/HUD and
Independent Agencies Appropriations Act for FY 2001. That Conference Report called on EPA
to provide a "comprehensive assessment" of both development and implementation costs of the
"Total Maximum Daily Load" (TMDL) program. Although some aspects of these issues were
addressed in the economic analysis prepared for the July 2000 TMDL regulations, many
individuals and organizations are interested in a more comprehensive review of costs and related
considerations than that required for the development of the July 2000 regulations.
The costs of developing and implementing TMDLs should appropriately be considered
within the context of the overall effort to protect and restore water quality under the Clean Water
Act. The TMDL program is not an end in itself — it is a tool to help organize information and
make decisions regarding how best to respond to impaired waters to begin to take the necessary
steps that will eventually lead to attaining the water quality standards adopted by the states or
revising those standards to more accurately reflect local conditions. TMDLs fit within the
continuum envisioned by the Clean Water Act of designating uses for the various waters in a
state, assigning water quality criteria for these uses, monitoring to determine whether water
quality standards are met, and if they are not, taking the proper additional actions called for by the
specific conditions in that watershed.
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After describing the overall context of clean water programs, this report estimates the
costs to develop TMDLs, including the costs of monitoring related to TMDL development. This
report compares these results to actual experiences of states and EPA to date. The report also
estimates the implementation costs under various TMDL program scenarios for pollution sources
to achieve reduced discharges consistent with TMDLs. In addition, as required by Conference
Report #106-988, economic analysis issues raised by the Comptroller General are addressed (see
Appendix A).
In December of 2000, EPA published a notice in the Federal Register asking for
information on TMDL program costs. EPA received approximately 90 comments. Twelve state
agencies in charge of the TMDL program provided information on their costs, mostly to develop
TMDLs, and 7 state agencies involved in implementation provided some information on their
costs. Most comments submitted by point and nonpoint pollution sources provided one or two
examples of costly TMDLs. One commenter presented comprehensive implementation costs for
NPDES dischargers. These comments, as well as experienced experts engaged in development
and implementation of TMDLs were considered in the development of this report.
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II. Background - Impaired Waters Under the Clean Water Act
A brief review of the statutory basis for the TMDL program and the history of efforts to
review and revise the program over the past several years provides useful background for
understanding what developing and implementing TMDLs entails. The background information
provided below addresses several topics:
• the statutory basis in the Clean Water Act for responding to impaired waters and
the role that the TMDL program, as described in §303(d), plays in this effort;
• the TMDL program regulations established in 1985 and amended in 1992 which
are currently in effect;
• the litigation challenging state and EPA implementation of the regulations and the
Act;
• the Federal Advisory Committee that considered the TMDL program during 1996
and 1997 and made recommendations for further actions;
• the amendments to the TMDL regulations proposed in August of 1999 and
published in July 2000 but not effective until October 30, 2001, at the earliest.
The Clean Water Act
The Clean Water Act includes a number of programs aimed at improving, maintaining, and
restoring water quality, ranging from effluent limits and permits for point source discharges and
funding for sewage treatment facilities, to state grants to reduce nonpoint sources of pollution.
As discussed below, these programs are designed to provide general protection for all waters, to
define environmental goals for the nation's waters, and to offer a process for assuring that waters
failing to meet these goals will be restored.
An early goal for the Nation's clean water program was the implementation of nationally
consistent pollution controls for discharges from sewage treatment plants and industrial facilities.
These controls were determined based on assessment of the best treatment technology available
and affordable. Installation of pollution controls that would meet these national performance
standards was assured through the National Pollutant Discharge Elimination System (NPDES)
permit program under §402 of the Act. Most sewage treatment plants and industrial facilities
have permits requiring basic treatment of discharges consistent with these national requirements.
While much of the early focus of the clean water program was on development of
discharge permits, the Act also called for efforts to implement basic controls of runoff or pollution
from "nonpoint" sources. Under §208 of the Act, federal, state and local governments worked
together to develop area-wide plans that would reduce point and nonpoint source pollution. The
effort to reduce nonpoint source pollution was expanded by the creation of §319 in the 1987
amendments to the Act. The 1987 amendments also provided for expanded efforts to control
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dischargers of storm water by bringing the most significant dischargers within the scope of the
NPDES permit program.
The Clean Water Act includes a second tier of protection for the Nation's waters. Under
§303 of the Act, states adopt water quality standards for their waters and EPA must approve
those standards. States further review their standards at least every three years and modify them,
as appropriate. These water quality standards describe the "designated use" of the water and
include both general, narrative criteria and numerical, pollutant specific criteria that need to be
attained to protect the designated use. Where the basic pollution controls applied to point and
nonpoint sources of water pollution do not result in the attainment of the water quality standards,
the water body is considered impaired.
Congress provided specific mechanisms for attaining the standards called for in §303. In
the case of a water body found to be impaired by a particular pollutant, the first, most direct
recourse is to identify the permits that allow the discharge of that pollutant. Most specifically,
§301(b)(l)(C) of the Act requires that each discharge permit include effluent limitations as
necessary to assure that the water quality standards for the water body are met. Many of the
permits originally issued to dischargers focused on nationally applicable requirements but did not
include limits needed to assure that the site-specific water quality standards would be attained. In
recent years, EPA and states that have been authorized to issue Clean Water Act permits, have
increasingly issued permits that include these "water quality-based" limitations, and these permits
have helped reduce degradation of water quality and violation of water quality standards.
The Clean Water Act permit issuing authority (i.e. the EPA or a state authorized to issue
Clean Water Act permits) can revise the permits to include water quality-based limits resulting in
additional pollution controls pursuant to §301(b)(l)(C) of the Act. For example, a portion of a
river is found to have chromium in excess of the water quality criteria for chromium. The state
identifies chromium in the discharge from a tannery. The tannery is in compliance with the basic
treatment requirement, but the permit is revised to include water quality-based limits requiring
further reductions in the discharge of chromium needed to attain the water quality standard. In
many cases, use of these "Water Quality-Based Effluent Limits" (WQBELs) have enabled
attainment of water quality standards.
Unfortunately, many of the water pollution problems around the country are the result of
multiple pollutants coming to a water body from a range of point and nonpoint sources. In these
cases, the basic requirement that a NPDES discharge permit not result in violation of a water
quality standard (i.e., §301(b)(l)(C)) still applies. The simple application of this requirement,
however, could result in imposing significant pollution control burdens on a single discharger
when a group of dischargers is causing the problem. It could also result in imposing significant
pollution control burdens on a group of point source dischargers when both NPDES discharges
and nonpoint sources contribute to a problem, even if measures to reduce nonpoint pollution
could be significantly cheaper than point source controls. In addition, if nonpoint sources, in the
aggregate, are the major sources of the pollutants, point source controls alone may be inadequate
to attain standards.
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Congress recognized that assuring the attainment of water quality standards, especially in
the case of impaired waters, can involve multiple pollutants, multiple sources, and multiple
segments of a water body. Although Congress never waived the requirement that permits result
in attainment of water quality standards (as mentioned above regarding §301(b)(l(C)), it created
the TMDL program in §303(d) of the Act. Section 303(d) calls for states to identify impaired
waters and, more importantly, offers an approach to attaining standards in a water body other
than the simple tightening of individual discharge permit limits. In effect, it allows for an
assessment of pollution problems on a larger geographic scale and the development of a plan for
restoring the health of the water body that includes allocation of pollution control responsibilities
to a range of point and nonpoint sources in the manner deemed most appropriate in the specific
circumstance. States and interested stakeholders are able to consider factors such as relative cost-
effectiveness of pollution control measures, reliability of measures, and equity in devising these
plans. The TMDL program offers significant flexibility in devising remedies for impaired water
bodies, but it retains the bottom line requirement that the TMDL must be set at a level that will
result in attainment of the water quality standard adopted by the state.
The Clean Water Act gives states the lead responsibility for developing lists of impaired
waters and developing TMDLs. EPA's role in the process is to support states and to review and
approve the lists and the TMDLs. EPA is also to establish a list or a TMDL in certain cases, for
example when it disapproves one or the other submitted by a state.
Finally, although state adopted water quality standards express society's goal for the
health of a water body, the standards are not irrevocable. States may revise water quality
standards to make them more or less protective of aquatic systems, subject to Clean Water Act
program regulations and EPA approval. For example, a state may relax a water quality standard
when designated uses cannot be attained or the costs of attaining them would cause widespread
social and economic disruption. This specific provision may include completing a use attainability
analysis of the impaired water and its designated standard or implementing a site-specific or
source-specific variance in order to avoid significant harm. Therefore, the CWA includes a safety
valve to reassess the goals for an individual water body when attaining those goals would only
come at an unacceptable cost. This caps the costs and other social or economic impact that might
be incurred either under a WQBEL or a TMDL for pollutant sources affecting an impaired water
body.
Current TMDL Program Regulations
EPA issued regulations governing identification of impaired water bodies and
establishment of TMDLs, at 40 CFR §130.7, in 1985 and revised them in 1992. These
regulations, which are currently in effect, provide that:
• Pursuant to §303(d), States must periodically list those waters where existing
pollution controls are not stringent enough to attain and maintain applicable water
quality standards;
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• §303(d) lists must be submitted to EPA every two years, beginning in 1992, on
April 1 of every even-numbered year;
• A priority ranking for listed waters must include an identification of the pollutant
or pollutants causing or expected to cause the impairment and an identification of
the water bodies targeted for TMDL development in the next two years;
• States, in developing lists, must assemble and evaluate all existing and readily
available water quality-related data and information;
• States must submit, with each list, the methodology used to develop the list and
provide EPA with a rationale for any decision not to use any existing and readily
available water quality-related data and information; and
• TMDLs must be established at levels necessary to implement applicable water
quality standards with seasonal variations and a margin of safety that takes into
account any lack of knowledge concerning the relationship between effluent
limitations and water quality.
A TMDL specifies the amount of a particular pollutant that may be introduced into a
water body and allocates the total allowable pollutant loads among sources, thereby providing a
road map for efforts to attain and maintain state water quality standards. TMDLs are established
for water body and pollutant combinations for water bodies impaired by point sources, nonpoint
sources, or a combination of both point and nonpoint sources.
Citizen Suits for TMDL Implementation
While the TMDL provisions have been in §303(d) of the Clean Water Act since 1972,
states and EPA did not emphasize implementation of §303(d) until relatively recently. As noted
above, during the 1970s and 1980s, the focus of state and EPA efforts was to establish
performance standards for industrial dischargers and sewage treatment facilities. As a result,
many state lists of waters needing a TMDL were limited to a few waters and relatively few
TMDLs were developed.
The Clean Water Act specifically provides that EPA has a duty to review and approve the
list of impaired waters and TMDLs submitted by a state and to develop a list and/or TMDL where
a state submission was disapproved. Some states did not develop lists or TMDLs, yet EPA did
not take a disapproval action nor develop lists or TMDLs for those states.
In the early 1990's, citizen organizations began bringing legal actions against EPA seeking
the listing of waters and establishment of TMDLs. One argument made by many of the
organizations bringing these lawsuits was that, under §303(d), the failure to submit any list or any
TMDL constituted a "constructive submission" of no list or TMDL. The failure to act was, at
least in effect, an action that required an EPA response. They argued that EPA has a mandatory
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duty under the Clean Water Act to act for a state that does not implement §303(d). Although
EPA opposed this argument in a number of the early TMDL lawsuits, several courts accepted it in
various forms and ruled that EPA had a duty under the Clean Water Act to establish TMDLs in
the face of state inaction.
To date, environmental groups have filed about 40 legal actions in 38 states. Most of the
lawsuits have been filed since the mid-1990s. They generally argue that EPA must establish
TMDLs where a State fails to do so. Over 20 of these lawsuits have resulted in court orders or
consent decrees under which EPA is required to establish TMDLs if the State fails to do so in a
timely manner.
By the mid-1990's, the Agency initiated a new effort with states and other stakeholders to
put the program on a sounder footing so that courts would be less inclined to direct EPA to
establish lists of impaired waters or TMDLs where states had not done so (see discussion of
TMDL Federal Advisory Committee below). At the same time, EPA developed a clearer
standard for determining the sufficiency of state implementation of a TMDL program involving a
three part test where: 1) the state has established TMDLs; 2) the state has a plan for implementing
TMDLs in the future; and 3) the state is engaged in and supporting the plan.
The TMDL Federal Advisory Committee
In 1996, EPA determined that there was a need for a comprehensive evaluation of EPA's
and the states' implementation of their §303(d) responsibilities. EPA convened a committee
under the Federal Advisory Committee Act (TMDL FACA Committee) to undertake such an
evaluation and make recommendations for improving implementation of the program, including
recommended changes to the TMDL regulations and guidance.
The TMDL FACA committee was comprised of 20 individuals with diverse backgrounds,
including agriculture, forestry, environmental advocacy, industry, and state, local, and tribal
governments.
On July 28, 1998, the committee submitted its final report to EPA containing more than
100 consensus recommendations, a subset of which would require regulatory changes. Key
recommendations of the FACA included:
• restoring impaired water should be a high priority for all agencies and sources;
• all TMDLs should be completed expeditiously but no later than 8-15 years after
listing according to a schedule developed by the state;
• the TMDL process should include key steps such as target identification, allocation
of pollution loads, an implementation plan, and evaluation procedures;
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• states should have discretion in making allocations among sources as long as the
allocation will result in the attainment of water quality standards; and
• stakeholders should play an active role in the TMDL process.
The committee was unable to reach consensus on several key issues, including:
• whether implementation plans should be required as part of the TMDL under
§303(d) of the CWA or required as part of the state Continuing Planning Process
under §303(e); and,
• whether TMDLs should be required for waters impaired by atmospheric
deposition.
July 2000 TMDL Program Regulation Revisions
Building on the recommendations of the TMDL Federal Advisory Committee, EPA
drafted revisions to the existing TMDL regulations and published proposed TMDL program
changes on August 23, 1999. EPA engaged in an extensive outreach and information-sharing
effort following the publication of the proposed rule. The Agency sponsored and participated in
six public meetings nationwide, to better inform the public on the contents of the proposed rules,
and to get informal feedback from the public. These meetings took place in Denver, Los Angeles,
Atlanta, Kansas City, Seattle, and Manchester, New Hampshire. EPA received about 34,000
comments on the proposal.
The Agency also consulted with state and local officials and their national/regional
organizations throughout the development of this rule. For example, EPA met with organizations
representing state and local elected officials including: the National Governors' Association, the
Western Governors' Association, the National Conference of State Legislatures, the National
Association of Counties, the National League of Cities and EPA's State and Local Advisory
Group.
On July 13, 2000, EPA published final revisions to the TMDL regulations. Key elements
of those regulations include:
• more comprehensive lists of all water bodies that do not attain and maintain state
water quality standards with revision of the lists every 4 years rather than every 2
years;
• a schedule, based on priority factors, for establishing all needed TMDLs over 10
years, with an allowance for another five years where necessary;
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• an enumeration of 11 specific elements of a TMDL, including implementation
plans that identify lists of actions and expeditious schedules to reduce pollutant
loadings and attain water quality standards;
• requirements for documentation of "reasonable assurance" that reliable nonpoint
source controls would be implemented;
• prompt action to implement needed pollution controls and a goal of meeting water
quality standards within 10 years;
• expanded opportunities for public comment on listing methodologies, lists,
prioritized schedules and TMDLs prior to submission to EPA;
• specific time frames under which EPA will assure that list of impaired waters and
TMDLs are completed as scheduled.; and
• new authority for EPA to object to and if necessary, reissue expired and
administratively-continued NPDES permits issued by states.
As the Agency was finalizing these rules, Congress enacted an amendment to the Military
Construction Appropriations Act: Supplemental Appropriations (PL 106-426). This provision
prohibited EPA from using FY 2000 or 2001 funds to "make a final determination on or
implement" the July 2000 regulations. EPA published the final rule before the legislation was
signed into law and established the effective date of the new TMDL regulations as 30 days after
the expiration of this prohibition, or at the earliest, October 30, 2001.
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III. Current Efforts to Protect and Restore the Nation's Waters
Progress in improving water quality over the past several decades has involved substantial
expenditures by government at all levels and by the private sector. Understanding the scale of
these efforts provides a useful perspective on the costs of the TMDL program that are presented
in Section V of this Report.
In the most general terms, expenditures for water quality can be thought of as the total of:
• Governmental spending to administer clean water programs;
• Public and private capital investments to prevent the generation of pollution and to
collect and treat wastewater to remove the pollutants. Such capital investments
range from sewer systems to treatment plants to constructed measures to reduce
runoff from agricultural fields and other land. Investments are occurring to
improve the collection and treatment of wastewater from existing sources, to
replace existing wastewater treatment facilities as they near the end of their useful
life, and to address the potential for new pollution from a growing population and
industrial base; and,
• Municipalities and industry incur substantial operating and maintenance expenses
to minimize discharge from potential polluting activities and to keep the clean
water capital equipment in good working order. Research and development also
represents another important cost.
A substantial majority of current spending is to comply with the provisions of the Act
requiring implementation of performance-based water pollution controls. While many NPDES
dischargers do have Water Quality Based Effluent Limits (WQBELs) in their permits to comply
with the health/environmental goals for the Act, including state water quality standards, this is a
comparatively small investment compared to the overall investments by dischargers as a result of
the national system of performance-based water pollution controls. Federal and state program
administration costs are the smallest part of this spending.
The performance-based requirements of the Clean Water Act and related statutes include:
• Effluent guidelines requiring direct industrial dischargers to meet effluent limits
based on the best conventional pollution control technologies (for conventional
pollutants discharged by existing sources) and the best available treatment
technologies that are economically achievable (for toxic and nonconventional
pollutants discharged by existing sources) or new sources performance standards
(for new sources). Effluent guidelines have been established for more than 50
major categories of industrial dischargers (both existing and new sources) under
Sections 301 and 304 of the Act;
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• Categorical pretreatment standards controlling discharges by industries to publicly
owned sewage treatment plants under §307 of the Act. These standards are also
included in the effluent guidelines;
• Standards requiring all sewage treatment plans to treat their effluent to meet
secondary treatment performance standards under §304 of the Act;
• Storm water management requirements for municipalities, industry and
construction sites;
• Voluntary reduction of polluted runoff from major categories of nonpoint sources
largely supported by grants and state matches under §319 of the Act; and,
• Implementation of management measure to reduce nonpoint pollution in coastal
waters under §6217 of CZARA.
As noted above, in very general terms, a substantial majority of the on-going spending is to
comply with the provisions of the Act requiring implementation of performance-based water
pollution controls, with the biggest share contributed by public entities for sewage collection and
treatment.
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IV. Defining Today's Water Pollution Problems -- The 1998 §303(d) Lists
Section 303(d) of the Clean Water Act requires states periodically to develop a list of their
impaired water bodies (i.e. water bodies that do not meet water quality standards) and requires
that EPA review and approve those lists. The most recently required submission of lists was in
April, 1998. EPA waived the requirement for a 2000 list because it was in the process of revising
the program regulations. The 1998 §303(d) lists thus provide the most recent comprehensive
picture of the states' understanding of impaired waters in the United States.
The states and territories identified nearly 22,000 individual water bodies, including river
and stream segments, lakes, and estuaries, that do not attain state water quality standards despite
28 years of pollution control efforts under the Clean Water Act. Table IV-1 includes important
information concerning the section 303(d) lists of impaired waters.
These impaired water bodies include approximately 300,000 miles of rivers and coastal
shoreline and approximately 5 million acres of lakes. This quantity of impaired waters represents
about 1/3 of the length/acreage of all waters in the U.S. whose quality has been assessed, or about
10 % of all the waters nationwide. Approximately 210 million people live within 10 miles of one
or more of the impaired water bodies currently listed under §303(d).
The list of impaired water bodies may grow in the future as more waters are assessed.
However, the one-third fraction of assessed waters that we are currently finding to be impaired is
much greater than the fraction of the currently unassessed waters that will ultimately be found to
be impaired. The quality of the waters that are assessed now, equal to approximately one-third of
all the waters, is likely generally worse than the quality of the waters that have not yet been
assessed. This is because assessment efforts to date have tended to focus on: 1) waters that are
important and heavily used (i.e., near urban areas and thus more likely to be degraded); and 2)
waters that are likely to be impaired (i.e., monitoring is often employed to determine whether
waters suspected of being impaired are so; while it is rarely used to confirm that waters that are
expected to be pristine really are so).
If these §303(d)-listed waters are to meet state water quality standards and the goals of
the Clean Water Act are to be achieved, pollutant sources affecting these waters must implement
additional controls beyond applicable performance-based requirements for point sources and
existing management practices for nonpoint sources. Through interpretation of the information
from states, we estimate that less that 5 % of these waters are impaired by point sources only and
a further 25% are impaired by a combination of sources that includes point sources. About half of
the §303(d) waters are impaired by nonpoint sources exclusively, and the remainder are impaired
by various combinations of nonpoint, "other", and unknown sources. In addition to the use of
individual water quality-based permits for point sources under §301(b)(l)(C) discussed above, the
Clean Water Act includes the TMDL process as an additional means of attaining these varied
water body-specific standards. For each listed water where the impairment is caused by a specific
pollutant, rather than some other environmental cause such as flow or habitat modification, the
Act requires that a state establish the total maximum daily load that will provide for attainment of
the applicable water quality standards, with seasonal variation and a margin of safety. The Act
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does not specify how the TMDL is to be achieved, which sources are to be addressed, or how
responsibilities for further controls are to be apportioned among the sources contributing to
impairment. EPA's regulations implementing this section of the Act retain this flexibility — EPA
requires only that all sources of the impairing pollutant be considered, and that wasteload
allocations be assigned to all relevant point sources and load allocations be assigned to all relevant
nonpoint sources.
Table IV-1
Overview of the States' 1998 §303(d) Lists
States and territories listed 21,851 impaired waters. They cite 41,331 causes of impairment for these waters, an average of
nearly 2 causes per water. Under the July, 2000 regulation, each cause -- with the exception of those such as habitat
alteration or flow alteration that do not involve a pollutant ("impaired by pollution but not a pollutant") -- requires a TMDL.
EPA estimates that roughly 37,000 of the causes will require TMDLs. The following information describes these impaired
waters.
Leading Causes of Impairment (41,331 cited)
Sediment 14.8%
Pathogens 12.8%
Nutrients 11.5%
Metals 9.6%
Dissolved oxygen 9.6%
Other 5.8%
Habitat alteration 5.1%
Temperature 4.6%
pH 4.4%
Toxic organics 3.7%
Impaired biologic community 3.5%
Flow alteration 2.7%
Mercury 2.6%
Remainder 5.9%
Area of Impaired Lakes (2,946 total lakes)
< 10 acres
10 - 500 acres
> 10,000 acres
9.5%
56.6%
3.5%
Leading Sources of Impairment (21,700 cited)*
Agriculture 24.6%
Other source 12.8%
Flow or habitat alteration 12.0%
Nonpoint source (not classified) 11.4%
Resource extraction (mining, oil&gas) 9.6%
Municipal point sources 8.5%
Urban runoff/storm sewers 6.8%
Unknown source 4.6%
Atmospheric deposition 2.6%
Construction 2.5%
Silviculture 1.9%
Industrial point sources 1.0%
Remainder 1.6%
* (Source information is reported for only about half of all waters)
Length of Impaired River Segments (15,721 total
segments)
<1 mile
1 - 20 miles
20- 100 miles
> 100 miles
7.2%
74.4%
16.84%
1.6%
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V. Administrative Costs to Develop TMDLs
The TMDL program has two specific administrative activities that states (or EPA, if
needed) must perform:
• Listing Impaired Water Bodies. States must identify their specific impaired water
body segments and periodically submit the resulting list, including supporting
material, to EPA.
• Developing TMDLs. For each pollutant cause of impairment for each listed water
body, the state must develop a specific plan (a "TMDL") that will achieve the
applicable water quality standards. The plan will involve establishing the total
maximum daily load the water body can tolerate, identifying the specific sources
contributing the impairment pollutant to the water body, and allocating the total
allowable load among the contributing sources. Under the July 2000 rule, each
TMDL is also to include an implementation plan, specifying the actions to be
taken, the timetable, and the responsible parties.
EPA has estimated the costs for the states and EPA to perform these activities, focusing
on the waters listed on the!998 §303(d) lists. In addition, this section identifies costs to states of
monitoring specifically associated with development of TMDLs.
• Implementing the TMDLs. For this report, we were not able to estimate
separately the potential increased administrative costs to the states and EPA that
might be associated with implementing TMDLs. To implement a TMDL, the state
will need to revise NPDES permits to require the wasteload reductions desired
from point sources, and to implement an appropriate range of programs
(voluntary, incentive-based, and/or regulatory) for targeted nonpoint sources. To
a large extent these activities, such as revising NPDES permits and working with
nonpoint sources, are already part of the states' water program efforts. The extent
to which implementing TMDLs will result in the need to increase these efforts is
unclear. To a large extent, the need to implement TMDLs may only change the
timing or the focus of current efforts rather than increase their cost. For point
sources, states renew permits every five years, so timing and costs are unlikely to
be affected. On the other hand, in some states, especially for efforts related to
nonpoint sources, expansion of current programs may be needed.
A) The Cost of Listing Impaired Waters
EPA estimated the cost of meeting the listing requirements of §303(d) prior to the July
2000 rule in its periodic Information Collection Request (ICR). Subsequent to public comment
on the draft ICR, OMB approved the ICR (#1560.05) for the period covering March 2000
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through April 2003. The national burden to states for each listing, prior the July 2000 rule, was
estimated to be about $1 million and listings were required every 2 years.
The July 2000 TMDL rule requires states to improve their methodologies for setting
priorities, establish schedules for developing TMDLs, increase public participation, provide their
lists in a consistent format, and convey the essential information supporting the listing. As
described in the supporting Economic Analysis,1 the bulk of the cost associated with these
requirements would be a one-time transition cost that would be incurred for the first listing under
the rule, and there would be smaller on-going costs for future listings. The one-time cost for the
transitional first listing was estimated at about $1.3 million, and the additional cost for subsequent
listings was estimated to be about $0.2 million.
However, the July 2000 rule also eliminated half of the future listings by changing the
listing cycle from 2 years to 4 years, thereby saving about $0.8 million every four years.2 By
2011, on an undiscounted basis, the savings associated with the 4 year cycle will exceed the
additional cost of the new listing-related requirements of the July 2000 rule. By 2015, the total
undiscounted cost of listing under the current program will be $6.9 million in comparison with the
July 2000 rule's cost of $6.5 million. On a discounted cost basis, using a 7% discount rate, the
revised rule begins to save money after the 2014 listing. Thus, the 15 year discounted costs of
listing under the current rule and the July 2000 rule are approximately the same at $4.5 million.
B) The Cost of Developing TMDLs
In estimating the national cost of developing TMDLs, EPA combined information on the
number of TMDLs that will need to be developed with information on the unit costs of
developing TMDLs of various types. The analysis also considered varying unit costs as a function
of the complexity of different TMDLs, and the potential efficiencies that can be obtained by
coordinating the development of TMDLs within watersheds.
The Number of TMDLs Needed
For the purpose of this analysis, EPA assumed that states will develop TMDLs for all
water bodies on the section 303(d) lists that are impaired by one or more pollutant.
In the 1998 §303(d) lists, states identified nearly 22,000 water bodies impaired by more
than 41,000 causes of various types. Roughly 37,000 of these causes of impairment on 20,000
water bodies involve pollutants, and thus must be addressed by TMDLs. EPA's most recent
^nvironomics and Tetra Tech, Inc. Analysis of the Incremental Cost of Final Revisions to the Water
Quality Planning and Management Regulation and the National Pollution Discharge Elimination System
Program, prepared for the U.S. EPA, Office of Wetlands, Oceans and Watersheds. July 7, 2000.
2Even though an entire listing would be avoided every 4 years, the Economic Analysis assumed that only
80% of the cost of a listing would be saved since some of the activities associated with listing would likely continue
to occur anyway on an annual basis.
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estimates indicate that about 1,000 of these TMDLs were developed prior to 2000. Therefore, as
of the beginning of 2000, there were approximately 36,000 more TMDLs that will need to be
developed to address the causes of impairment identified in the 1998 §303(d) lists.
Although EPA has developed cost estimates based on the assumption that about 36,000
TMDLs need to be developed, this estimate may understate or overstate the actual costs to be
incurred because some water bodies will be addressed through means other than the development
of a TMDL. For example, a state may issue a revised NPDES permit with more stringent permit
limits for a single discharger to an impaired water body, and this may result in achieving water
quality standards before a TMDL is initiated. Similarly, implementation of other pollution
controls, such as new storm water discharge permits or controls over combined sewer overflows,
may result in attainment of standards prior to development of a TMDL. In addition, some states
have indicated that the 1998 lists include waters for which there is insufficient data to establish
impairment and these waters may be removed from the lists in the next listing cycle.
At the same time, it is important to remember that some waters that are now impaired, or
that will become impaired in the future, are not included on the 1998 lists of impaired waters.
EPA estimates that about 1,000 new waters will be added to 303(d) lists per four year listing
cycle starting with the 2006 listing cycle to a total of 9,000 new listings by 2038. Each such
addition of 1,000 waters will result in an additional workload of about 100 TMDLs per year (i.e.,
the 1,000 TMDLs will be developed at an even pace over the 10 years subsequent to the date of
listing).
The Unit Cost of Developing TMDLs
In estimating the cost of developing TMDLs consistent with the July 2000 regulations,
EPA includes costs for performing eight basic steps:
1. characterizing the watershed,
2. modeling and analyzing the water body and its pollutants to determine the
reduction in the pollutant load that would eliminate the impairment,
3. allocating load reductions to the appropriate sources,
4. preparing an implementation plan,3
5. developing a TMDL support document for public review,
6. performing public outreach,
3This step is not a required element of the TMDL under the 1992 rules, but EPA encouraged such action
in an August, 1997 memorandum from the Assistand Administrator for Water and many states are preparing such
plans. The July 2000 regulations explicitly require that a TMDL include an implementation plan.
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7. conducting formal public participation and responding to it, and
8. management (including tracking, planning, legal support, etc.).
When developing TMDLs, states can obtain substantial cost savings by working on a
watershed basis. By coordinating the development of multiple TMDLs within a watershed,
efficiencies can typically be realized for every step of the TMDL development processes. For this
reason, the July 2000 regulation encouraged states to incorporate this important consideration
when setting priorities and planning for developing TMDLs. Grouping TMDLs for coordinated
development is consistent with current trends in internal state management of water programs,
with half of the states already using a basin management approach to address monitoring,
evaluation, public meetings and permitting efforts. In addition:
• A large sample of 1,096 TMDLs for 668 water bodies recently submitted to EPA4
indicates the extent to which states are already beginning to adopt approaches for
efficiently developing TMDLs. These 1,096 TMDLs were grouped together by
the states into 496 submissions. About half of the submissions, representing only
about 25% of the TMDLs, were for a single TMDL for a single water body. The
remaining submissions either grouped all of the TMDLs for a single water body
together or grouped all of the TMDLs for several water bodies together. Overall,
more than half of the TMDLs benefitted from the cost efficiencies that can be
realized by coordinating the development of TMDLs for water bodies requiring
multiple TMDLs and by coordinating the development of TMDLs for multiple
water bodies within watersheds.
• To assess the potential for realizing such efficiencies in the future, EPA analyzed
nearly all of the water bodies on the 1998 §303(d) lists - the analysis was done for
all of the water bodies on the 1998 §303(d) lists for which adequate data were
available, representing 77% of the water bodies and 70% of the causes nationally.
For these water bodies, we were able to identify the groups of water bodies that
were interconnected (i.e., flowed into one another) within watersheds. Based on
this analysis, over 85% of the TMDLs could potentially realize varying degrees of
cost efficiencies. Based on this detailed analysis it is clear that the potential for
coordinating the development of TMDLs to achieve cost savings is substantially
greater than reflected in the recent sample of 1,096 TMDLs submissions.
Thus, EPA anticipates that in the future states will increasingly be able to adopt efficient practices
when developing TMDLs.
The cost of developing TMDLs can be viewed at different levels of aggregation in
addition to the national total. Accordingly, Table V-l provides the national average cost and the
4The TMDLs were prepared by 35 states in 9 EPA Regions for over 60 different types of causes, and were
submitted over the period April 1998 through September 2000.
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associated typical range of costs in developing TMDLs for: 1) a single cause of impairment; 2) a
water body that requires multiple TMDLs; and 3) a submission that may range from a single
TMDL for a single water body to many TMDLs for all the water bodies in a watershed.
As summarized in Table V-l, the cost per cause is estimated to be about $28,000 on
average nationally, but can typically range from about $6,000 to $154,000. The lower end of the
range reflects the typical cost associated with TMDLs that are the easiest to develop and also
have the benefit of maximum efficiencies (for example, the TMDL for the second nutrient
pollutant for a water body). The higher end of the range represents the typical cost associated
with TMDLs that are most difficult to develop, and for which there isn't the benefit of related
work done on other TMDLs for the water body or the watershed. Note that the range of $6,000
to $154,000 per TMDL broadly represents the typical cost of developing TMDLs, with perhaps
only 2-5% of the TMDLs nationally costing more than this range.
Table V-l
National Average & Typical Range for the Unit Cost of Developing TMDLs
Level of Aggregation
Cost per single cause of impairment (for single TMDL)
Cost per single water body (for single TMDLs to multiple TMDLs)
Cost per submission (for single water bodies to multiple water
bodies)
National
Average Cost*
(thousands 2000 $)
S27 - S29
$49 - $54
$136 -$165
Typical
Range for Cost
(thousands 2000 $)
$6 -$154
$26 - over $500
$26 -over $1,000
*Ranges reflect a 5-10 year transition period over which states are assumed to fully achieve the cost
efficiencies that can be realized by clustering water bodies and causes when developing TMDLs.
The cost per water body can vary widely. Although most water bodies have only one
cause of impairment requiring a TMDL, nearly 40% of the water bodies on the 1998 §303(d) lists
have two or more causes. The number of causes ranges to more than thirty for a single water
body. The national average cost of developing TMDLs per water body is estimated to be about
$52,000, but can typically range from under $26,000 to over $500,000 depending on the number
of TMDLs, their level of difficulty and the extent to which impaired waters are clustered together
for TMDL development.
States will usually combine the development of TMDLs into logical, efficient groups and
submit them together in a single submission. Submissions may range from a single TMDL for a
water body to many TMDLs for all of the water bodies in a watershed. The cost of a submission
(which typically may cover 5-6 TMDLs but could have fewer or far more TMDLs) is estimated to
be about $150,000 on average nationally, but may typically range from including a single TMDL
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for a cost of $26,000 per submission to cases that include a cluster of many water bodies and/or
TMDLs at higher levels of difficulty that exceed $1,000,000 per submission.5
The National Cost of Developing TMDLs (excluding monitoring)
As of the beginning of 2000, the total undiscounted cost of developing the remaining
36,225 TMDLs for the 1998 §303(d) lists is estimated to be about $1 billion (in 2000 dollars).
This cost would be spread over the next ten to fifteen years. This total covers all of the tasks
associated with developing TMDLs (except for additional monitoring required to develop the
TMDL), including the additional requirements mandated by the July 2000 regulation, even though
these rules are not yet effective.
As described in detail in the supporting report, The National Costs to Develop TMDLs,
this estimate is based on: the number of TMDLs to be developed, the national distribution of the
complexity of the TMDLs to be developed, the unit costs for each of the tasks needed to develop
TMDLs for each of three levels of complexity, and the potential efficiencies that can be obtained
by coordinating the development of TMDLs within watersheds.
In addition, this estimate is based on the assumption that over a 5-10 year transition
period, the states would fully achieve the cost savings that can be realized by coordinating the
development of TMDLs within watersheds. The total cost of $1 billion could be lower or higher
by about 15%, depending on the time needed for states to adopt the most efficient methods for
developing TMDLs. Nearly all of the total cost of $1 billion is associated with the requirements
of the existing program, with the additional requirements of the July 2000 regulations that affect
TMDL development accounting for less than 10% of the total cost.6
In this analysis, EPA focused on the national average cost for "typical" TMDLs (as
reflected in Table V-l) in order to develop an accurate estimate of the total national cost. EPA
did not consider the most inexpensive TMDLs or the most expensive TMDLs because these
"outliers" are not representative of the bulk of the national TMDL development workload. We
believe that the range of costs used in this report is appropriate for developing an estimate for
total national costs. However, to the extent that there is a significant number of outliers with
Note that it is not necessary that there to be a single submission in order for the individual TMDLs to
benefit from the efficiencies that can be gained from coordinated development. TMDLs can be developed
simultaneously, but submitted separately. In addition, the TMDLs do not even need to be developed
contemporaneously in order still to benefit from efficiencies, although the resulting efficiencies may be less (for
example, much of the watershed characterization and TMDL document could be reused, but the efficiency of
holding a joint public hearing would be lost).
6 The July 2000 rule added one of the eight TMDL development tasks (albeit an important task,
preparing an implementation plan) and increased the effort required for another task (public participation).
However, it should be noted that even before the July 2000 revision, some states were already performing the
additional public participation and were preparing implementation plans. Since August, 1997, in a memorandum
from the Assistant Administrator for Water, EPA has been encouraging states to include implementation plans in
TMDLs. The remaining tasks were not changed by the July 2000 rule.
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sufficiently higher costs, total national costs may ultimately exceed what we estimate in this
report. For perspective, if the potential outliers exceed the maximum cost of $154,000 per
TMDL by an average of $100,000 per outlier TMDL, then the national total cost estimated in this
report would be understated by perhaps 10-20%.7
A state that wishes to apply the national average estimates and methodology to estimate
the cost of developing TMDLs for itself should make the appropriate state-specific adjustments as
detailed in the supporting cost analysis to this Report, The National Costs to Develop TMDLs.
For example, for some states it may be important to explicitly consider outliers.
Annualized Costs of Developing TMDLs
EPA estimates that the average annual national cost for developing TMDLs will be about
$63-$69 million. While the July 2000 rule sets a 10 year schedule for developing TMDLs, the rule
includes a provision for extending that an additional 5 years when requested by states. The 15
year schedule was used in this analysis. The rate of TMDL development is gradually increasing.
About 1,000 TMDLs were developed prior to 2000 and another 1,400 TMDLs were developed in
2000. Therefore, it appears that states are in the process of building up their capacity to develop
TMDLs. This estimate of annual costs in based on the assumption that states will develop the
needed TMDLs at a roughly uniform pace between 2000 and 2015 or about 2,350 TMDLs per
year.
A more likely scenario is a "transition" pace in which TMDL development might steadily
increase from 1,000 TMDLs per year in the year 2000 to about 2,550 TMDLs by the year 2005
and remain at that rate through the year 2015. This would result in a yearly cost that would start
at about $27-$29 million in the year 2000 and steadily increase to about $68-$75 million in 2005
and remain at that level through 2015.8
The Cost of Additional Monitoring Needed to Develop TMDLs
Ideally, the additional cost of monitoring needed to develop TMDLs would have been
incorporated in the analysis described above. However, in the time frame for this report, it was
not feasible to apply this approach. A general estimate of monitoring costs is provided below.
Federal, state, and local governments, dischargers, citizens groups and others currently
perform extensive water quality monitoring for a wide variety of purposes, ranging from basic
research to compliance assessment. Some of the major water programs that prompt substantial
monitoring efforts include:
7 Note that the average additional cost of $100,000 per outlier represents a range for outliers extending to
as much as $1,000,000 per outlier TMDL over and above $154,000. See The National Costs to Develop TMDLs,
Chapter III. Section B.2.c. for a detailed discussion.
8Note that both the uniform rate and the transition rate would be generally consistent with the pace of
developing TMDLs needed to comply with the requirements of the consent decrees discussed in Section II.
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• Evaluating whether waters support designated uses, as required by §305(b) of the
Act;
• Avoiding potentially harmful exposures by those using surface waters (e.g.,
monitoring of swimming beaches, drinking water intakes, fish and shellfish);
• Evaluating whether NPDES dischargers are in compliance with their permit limits;
• Obtaining data necessary to establish or revise water quality standards; and
• Scientific research (e.g, characterizing pristine waters in order to understand
healthy ecosystems, studying the impacts of acid deposition).
Each of these purposes requires differing sorts of monitoring, in terms of scale (national,
regional, watershed, stream, site), media (water column, biota, sediments), parameters (flow,
temperature, pollutants, biological activities), time frame (continuing, one-time, short term/long
term) and other dimensions. In addition, the overall monitoring strategies differ across states.
In some cases, for some water bodies in some states, available monitoring data will be
adequate for the development of a TMDL. In other cases, additional monitoring data will be
needed. The extent to which existing monitoring will suffice or additional monitoring is needed
for any given TMDL will depend on such factors as the nature of the state's monitoring program
(e.g., primarily at fixed stations throughout the state, or more in-depth monitoring on a rotating
basin basis), the extensiveness of the existing state program, the complexity of the TMDL,
particularly the types of sources that need to be addressed, and the availability of monitoring data
from other sources, such as data collected by USGS or collected for the drinking water program.
Thus, there is a wide variation across states in the degree to which additional monitoring is
likely to be needed in developing any particular TMDL. In addition, monitoring is often done to
achieve multiple objectives, and it is not clear how to apportion the costs of these efforts.
Therefore, EPA has not attempted to estimate incremental monitoring needs on a per-TMDL
basis.
Instead, EPA conducted an informal survey of state monitoring program staff to obtain
their judgments on the total monitoring resources needed in their state to support development of
all of the state's TMDLs. The Agency surveyed nine diverse states (CO, CT, KS, MD, OH, OK,
OR, SC, WV) representing a range of geographic locations, TMDL workloads (a factor of 20
difference between the smallest and the largest), and existing monitoring programs. Each state
offered an opinion about the number of monitoring staff that might be required to provide all
monitoring information needed for TMDL development in the state. State staff stressed both the
unique and judgmental nature of their responses — the estimates depended on such specific factors
as the aggressiveness of the state's TMDL development schedule, whether or not the state has
routinely in the past collected stream geometry and flow information, the extent to which the state
has received supplemental monitoring assistance from USGS and others, the methods and burden
of proof that the state had applied in listing waters, etc.
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Each state's monitoring staff were asked specifically to estimate how many full time staff
equivalents (FTEs) would be necessary to adequately meet the intensive data needs for TMDL
development that are not typically addressed by the state's broader water quality characterization
efforts for §303(d) listing, water quality inventories, and other purposes. The responses ranged
from 1.5 to 15 FTEs per year per state, with some estimates considering field monitoring staff
only and others including support staff as well. While the responses implicitly consider the TMDL
development schedules to which states are currently committed, states were quick to point out
that these staffing needs would not likely diminish once their 1998 lists were dealt with; the
resulting slack would be taken up by follow-up monitoring and efforts associated with future
assessments and 303(d) listings.
To begin extrapolating the nine state responses to the remainder of the nation, we related
each state's estimate of its TMDL monitoring needs to the miles of pollutant-impaired §303(d)-
listed waters in the state. The resulting estimates ranged from one monitoring FTE needed per
2,402 miles of impaired waters to one FTE per 509 miles of impaired waters. The average across
the surveyed states was one FTE per 1,168 miles. Dividing the number of pollutant-impaired
miles in the nation by 1,168 miles monitored per FTE, we estimate that roughly 247 FTEs are
needed nationwide for TMDL-related monitoring.9
However, we consider this may be a low estimate, since some states' judgments appeared
to include only monitoring field staff, and not the additional planning, laboratory and support
services they will need. At $70,000 per FTE (year 2000 dollars),10 the incremental cost of
monitoring for TMDL development is therefore estimated at $17.3 million annually.
C) Federal Share of TMDL Development Costs
We assumed in this analysis that information that is routinely provided by other
government agencies, such as the U.S. Department of Agriculture, will continue to be provided,
and have not estimated this cost. We recognize that there likely will be increased demand for
technical assistance as a result of the TMDL program, but have not estimated the cost attributable
to additional technical assistance that other agencies may provide for TMDL development.
Although states have the primary responsibility for administering the TMDL program,
EPA is responsible for providing technical assistance and funding to the states for this work. In
addition, EPA provides for the overall management of the program, including review and
9The national total number of miles impaired by pollutants or pollutant-related pollution is 288,274
(267,231 stream miles and 20,643 lake acres converted to stream miles). Given that much of the monitoring effort
is expended in getting to and from the monitored sites, we believe mileage is a reasonable rough proxy for
monitoring workload in a state - better than either number of waters or number of TMDLs (causes).
10The default value for the typical cost of an FTE in the State Water Quality Management Resource Needs
Model is $70,000, including salary, all overhead and administrative expenses.
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approval of lists of impaired waters and TMDLs. EPA is also responsible for developing TMDLs
in some circumstances.
EPA is presently budgeting almost $22 million annually for the TMDL program. Of this
funding, about $9 million is for support of program staff in Headquarters and the ten EPA
regional offices. An additional $2.6 million is available for contracts to support TMDL related
work. The remaining $10 million is contract funding that is available to the Regions to support
the development of TMDLs where EPA is required to develop the TMDLs under a consent
agreement or court order or has otherwise agreed to develop a TMDL for a state.
In addition, EPA provides grants to states to implement Clean Water Act programs,
including the TMDL program. These grant programs and the amounts that can be available
specifically for the TMDL program include:
Section 106 Water Program Grants -- Funding for implementation grants under
this core water program increased from $115 million in 2000 to $170 million in FY
2001, with an indication from the Congress that the $55 million increase was
associated with the TMDL program.
Section 319 Nonpoint Pollution Control Grants - Funding for implementation
of state nonpoint source pollution control programs increased from $200 million
in 2000 to $237 million in FY 2001. EPA has provided that states may use up to
20% of this funding (i.e. about $47 million) to develop TMDLs.
Planning Funds from State Revolving Loan Funds Grants -- Under section
604(b)(3) of the Clean Water Act, states may use up to one percent of grant funds
(or $100,000, whichever is greater) for planning and related purposes, including
development of TMDLs. In FY 2001, the total funding available under this
authority was $14 million.
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VI. Costs to Pollutant Sources to Implement TMDLs
In a TMDL, some point and/or nonpoint sources will be assigned allowable loads that are
less than the loads they currently discharge. These sources will incur some costs to reduce their
loads from current levels to the lower levels assigned by the TMDL. It is these costs to reduce
loads that we consider to be associated with the TMDL program and that we estimate in this
chapter.11
Key Assumptions of the Analysis
Several key assumptions serve as a foundation for this analysis.
1) The cost estimates are for measures to control point and nonpoint sources to
implement TMDLs for the impaired waters included in the states' 1998 §303(d)
lists.
2) For these impaired waters, we count as costs to pollutant sources the additional
controls associated with the TMDLs beyond a baseline that includes:
Whatever controls were in place at point and nonpoint sources when the
1998 §303(d) lists were developed; and
Assumed compliance with all applicable current technology-based
requirements.
Viewed in another way, the analysis estimates the incremental costs to pollutant sources of
implementing TMDLs relative to the sources' baseline in 1998, but excluding the costs of
whatever amount of this further progress will be achieved through meeting technology-based
requirements that were unmet as of 1998.
Several aspects of how we define the baseline and TMDL costs for pollutant sources
deserve more explanation:
• When the 1998 lists were developed, many pollutant sources had already
implemented control measures or BMPs beyond those required by technology-
based standards. Many point sources had implemented advanced treatment
measures as required by water quality-based effluent limits (WQBELs) in their
NPDES permits. Many nonpoint sources had implemented BMPs voluntarily or
because of incentive programs or state requirements. Therefore, a substantial
11 Note that some of these same costs could be incurred in the absence of a TMDL, including the period
between listing and the development of the TMDL, since §301(b)(l)(C) of the Clean Water Act requires water
quality-based effluent limits (WQBELs) for NPDES permittees as stringent as necessary to meet water quality
standards.
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amount of the controls beyond technology-based standards needed in order to
attain water quality standards may have already been put in place by the time the
1998 lists were developed, but had not yet resulted in attainment of water quality
standards.
• By the same token, additional progress needed to meet water quality standards for
the 1998 §303(d)-listed waters has probably occurred since they were listed. Since
1998 or so, many more point sources have installed advanced treatment measures
as required by WQBELs and many more nonpoint sources have implemented
desirable BMPs. Thus some of the costs we estimate in this report as needed to
meet water quality standards have already been spent. We estimate costs to meet
water quality standards relative to a circa 1998 baseline; these costs that we
estimate are greater than will be necessary if we were to measure them relative to a
current 2001 baseline or at the time when the TMDL is developed according to the
10-25 year time frame in the July 2000 rule.
• We do not count as costs associated with TMDLs those costs to pollutant sources
that have yet to be incurred to meet existing technology-based standards. Some of
the progress needed to meet water quality standards will come as sources meet as-
yet-unmet technology-based requirements, most notably the requirements
pertaining to storm water, CSOs and SSOs (some of these, because of statutory
requirements, are considered existing requirements, even though specific
regulations are under development). The costs of meeting these technology-based
standards will be substantial, and for many waters these additional control efforts
will be critical to attaining water quality standards. However, technology-based
requirements and their associated costs are pursuant to sections of the Clean Water
Act other than §303 (TMDLs). Dischargers are and will be required to meet these
technology-based standards regardless of whether a TMDL is established or not.
Consequently, we do not include these baseline costs in our analysis of costs to
dischargers associated with the TMDL program.
Costs and Savings That Are Not Estimated
This study attempts comprehensively to estimate the costs that pollutant sources will incur
to achieve the load reductions that will likely be required by the eventual TMDLs for waters listed
on the States' 1998 303(d) lists. Given this objective, we want to be clear that the study explicitly
does not estimate several sorts of costs:
• Costs for activities other than abating loads from pollutant sources. We do not
estimate the costs that USDA and other agencies might incur in providing
information and technical assistance to farmers who need to reduce their loads.
However, to the extent that Federal, State or other agencies themselves are the
owners of facilities or lands that are pollutant sources (e.g., military bases, Federal
forest and range lands), we do estimate these costs .
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• Broader social consequences that might occur as pollutant sources meet TMDL
requirements. We estimate the costs for sources to reduce their loads to meet
TMDL requirements, but these actions may have further consequences for society.
We have not attempted to describe the social consequences of these actions or to
assign monetary values to these changes. For example, higher water and sewer
rates as a result of increased costs for POTW treatment may increase the number
of households facing high rates and place greater economic stress on these
households. In addition, increased production costs for farmers implementing
agricultural BMPs will likely result in reduced agricultural output and/or higher
agricultural commodity prices. We also do not estimate the distributional impacts
of the costs to pollutant sources. If pollutant sources are particularly concentrated
geographically, there may be local or regional consequences. On the other hand,
farming economies in other areas not affected by TMDLs may see increased
activity triggered by reduced production in the areas affected by TMDLs and
resulting higher commodity prices. These sorts of secondary and ultimate impacts
cannot be assessed without broad economic modeling of the sectors within which
the TMDL-affected pollutant sources operate. This sort of modeling is beyond the
scope of this analysis. However, we expect that these broader consequences of
TMDL costs will be a small fractional increase in the current costs of the activities
the pollutant sources conduct.
• Costs for pollutant sources affecting waters found in the future to need TMDLs.
This analysis addresses costs relating to currently impaired waters on States' 1998
303(d) lists. More waters may be listed in the future as needing TMDLs. On the
other side of the coin, some of the currently listed 303(d) waters will eventually
achieve standards or otherwise removed from the list of impaired waters without
needing a TMDL. While we did, above, estimate the potential costs to develop
future TMDLs, because we have no basis for projecting where these as-yet-
unlisted waters will be found and which pollutant sources might need to be
addressed because of them, we were unable to estimate implementation costs
beyond those for waters listed in 1998.
Other sorts of costs are omitted from this analysis not because we define them as outside
of our analytical scope, but because we have been unsuccessful in finding a way to estimate them
within the time and data constraints for this study. The major sorts of costs that we have omitted
because of analytical resource limitations include:
• Costs for achieving load reductions from several difficult-to-analyze nonpoint
source types. We estimate the costs for TMDL-prompted load reductions from
agriculture, confined livestock, silviculture and on-site wastewater treatment
systems (septic tanks, etc.). Likely important but omitted nonpoint source types
include resource extraction (mines and oil and gas development), atmospheric
deposition, contaminated in-stream sediments, natural sources (e.g., salt springs,
natural mineral deposits) and land disposal (both formal and informal sites). We
estimate that these omitted source types account for about 14 % of all 303(d) river
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miles and 22% of all 303(d) lake acres. Some of these omitted source types can
entail high costs for mitigation (e.g., some instances involving dredging and
disposing of contaminated in-stream sediments). On the other hand, if impairment
from one of these source types cannot be remedied or will involve "widespread
social and economic impacts", then the water quality standard giving rise to the
TMDL may be revised through a use attainability analysis.
• Costs for achieving any needed load reductions from point sources covered by
general permits. Our analysis of TMDL-related costs for point source dischargers
covers all point sources for which individual NPDES permits have been issued.
However, there are potentially 385,000 sources to be covered by stormwater
general permits and approximately 52,000 point sources that are covered by non-
stormwater NPDES general permits. We believe that TMDLs will rarely require
further load reductions from point sources that are currently covered by general
permits, and that our omission of these sources from the cost analysis results in
only modestly underestimating costs.
In the same light, implementation of TMDLs will result, in some cases, in savings to
pollutant sources, for example:
• Savings due to implementation of some nonpoint source BMPs. In some cases,
BMPs anticipated to be adopted by nonpoint sources in order to meet load
reduction targets may yield savings that partly or perhaps even largely offset the
costs of the BMPs. For example, we expect that nutrient management planning --
minimizing nutrient losses by more carefully matching the timing and amount of
nutrient applications to exactly what is needed by crops -- will be widely adopted
by farmers in response to TMDLs seeking reductions in nutrient loads. Nutrient
management planning will cost farmers money (in developing the plans, in testing
soils, etc.), but it will also yield savings in terms of reduced costs for purchased
commercial fertilizers. It is exceedingly difficult to project what these sorts of
savings might amount to if these BMPs were applied on a widespread basis, as we
simulate in this analysis.
In view of the very large uncertainties in estimating the national savings that might result
from widespread implementation of TMDL-prompted BMPs, we decided to treat the potential
savings from the BMPs in a different manner from the costs. We explicitly estimate the costs of
the BMPs and display them as our estimate of TMDL implementation costs. We also develop
some very rough quantified estimates of the potential cost savings from the BMPs, but, -- in an
effort both to be conservative and to recognize the much greater uncertainty of the savings
estimates -- we choose not to display these savings estimates or to net them out in the tables
summarizing TMDL implementation costs.
This decision not to display the savings estimates does not mean that we believe them to
be unimportant or nonexistent. To the contrary, we believe that in many circumstances these
BMPs will engender substantial savings that offset some portion of the BMP costs. We are
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unable, however, to estimate these savings with much confidence. For the final version of this
analysis, we intend to gather additional data that will allow us to narrow the range of uncertainty
in our national savings estimates.
Methodology - Three Scenarios
Subject to these definitions about what costs are included in the baseline and what costs
we attribute to TMDLs, EPA estimated the costs to pollutant sources for the impaired waters on
the states' 1998 §303(d) lists under each of three broad scenarios:
a "Least Flexible TMDL Program" scenario;
a "Moderately Cost-effective TMDL Program" scenario; and
a "More Cost-Effective TMDL Program" scenario.
The results of the analysis are summarized in this report. Full details on the analysis are
provided in a supporting companion report: The National Costs to Implement TMDLs.
The "Least Flexible TMDL Program" Scenario
This scenario explores what costs would result if states chose to respond to the 1998 list
of impaired waters by uniformly increasing controls on all sources, point and nonpoint, that
contribute the impairment pollutant to the listed water. Rather than allocating loads to the most
significant sources or those sources that can most efficiently reduce loads, under this scenario all
sources must adopt additional controls. This scenario, while unlikely because of the high
probability that it will over-control sources and impose unreasonable costs, in effect represents
continuing to implement the water quality-based approaches that have been used when a TMDL
has not been developed. For example, under Clean Water Act §301(b)(l)(C), all NPDES permits
for point source dischargers must include limits necessary to meet water quality standards.
Similarly, under §319 of the Act, states must address the nonpoint sources that contribute to
impairment of water bodies (though not necessarily through regulatory mechanisms, as are
mandated for point sources through the NPDES program).12 Under this scenario, these controls
12 Some observers have postulated a different scenario in the absence of TMDLs. These observers
emphasize that point sources are subject to regulatory controls under the NPDES program, while nonpoint sources
are generally not subject to federal regulatory controls. If achieving water quality standards were to depend solely
on federal regulatory authorities available under the Clean Water Act, states or EPA would be able to require
further control efforts only from point sources. NPDES permit limits for point sources would be progressively
tightened as necessary to make up for uncontrolled nonpoint sources. Under this "point source only worst-case
scenario," many point sources would ultimately need to meet exceedingly costly "zero discharge" limits in an
attempt to compensate for growing nonpoint source loads.
We regard this scenario as extremely unrealistic and will not analyze it. For many impaired water bodies,
the contribution from point sources is minimal or non-existent. Any realistic program to achieve water quality
standards in all impaired waters must seriously address nonpoint sources as well as point sources.
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would be implemented uniformly and without flexibility to all sources that contribute to
impairments.
Our Methodology for Estimating Costs to Pollutant Sources - the "Least Flexible TMDL Program" Scenario
We follow three steps:
1. Identify all the point and nonpoint sources in the nation that appear to contribute an impairment pollutant to one of the
impaired waters on the 1998 §303(d) lists.
2. Assume that every such relevant source will be required under the NPDES program or somehow induced under the 319
program to implement additional measures (beyond those assumed to be in place already to meet existing technology-
based standards) to abate this pollution.
3. Estimate the costs for each source to implement an appropriate "next treatment step" that will presumably sufficiently
reduce the source's discharge.
The "Moderately Cost-effective TMDL Program" Scenario
The "Moderately Cost-effective TMDL Program" scenario differs from the first scenario
in that it assumes the use of a more careful TMDL process, including non-uniform and flexible
allocation among sources to achieve cost effective reductions. This begins with an assessment of
the impaired water body and all the sources that affect it. Then the "moderately cost-effective
TMDL" determines how much load from all the sources together can be tolerated, and allocates
this allowable load in some manner among the responsible sources.
In the least flexible scenario, every source that discharges the impairment pollutant will
presumably need to implement measures to abate its discharge. With a "moderately cost-effective
TMDL," a much finer calculation is made. The TMDL determines exactly which sources will
need to reduce their loads, and by how much. Depending on the severity of the impairment, with
a moderately cost-effective TMDL, somewhere between a few and many of the sources
discharging the impairment pollutant may not have to reduce their discharge at all. By addressing
each source in isolation and requiring further controls from all of them individually, the previous
"Least Flexible TMDL Program" scenario is likely to greatly overshoot the load reduction needed
to attain water quality standards. Under this scenario, which describes EPA's assumption of how
TMDLs will normally be developed and implemented, the number of sources that have to reduce
their loads should, in most cases, be reduced.
Our Methodology for Estimating Costs to Pollutant Sources - the "Moderately Cost-effective TMDL Program"
Scenario
We start with the steps for the "Least Flexible TMDL Program" scenario: a) Identify all sources responsible for impairments;
2) Estimate costs for all of them to implement an appropriate "next treatment step". We then:
Scale these costs down to reflect the average percentage load reduction identified in typical TMDLs relative to the
load reduction that would be obtained if all sources were to implement the "next treatment step".
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The "More Cost-Effective TMDL Program" Scenario
Neither the Clean Water Act nor EPA's implementing regulations prescribe how a total
maximum daily load is to be allocated among the sources that discharge the impairment pollutant.
The state may assign responsibilities among sources for load reductions as the state wishes.
Different allocations will result in different total costs of achieving the desired total load
reduction, as a function of the differing costs per pound for the various sources to reduce their
loads.
In general, the total costs of achieving the target load reduction will be lower if the
sources with lower per unit control costs are assigned responsibility for achieving the bulk of the
desired total load reduction. We use the term "more cost-effective wasteload allocation" to
denote a situation in which the state attempts to reduce aggregate costs by assigning responsibility
for achieving most of the total desired load reduction to sources that have relatively low costs of
achieving load reductions. Alternatively, the same economically efficient result (achieving a
desired total load reduction in the least-cost manner) can be achieved, in theory, given any initial
allocation of control responsibilities, if "trading" is allowed after the allocation and permit limits
are set by the TMDL. With trading, any source that is assigned responsibility for a load reduction
is free to achieve that load reduction itself, or to buy the equivalent load reduction from another
source that might be able to provide it at lesser cost. Whatever the initial allocation, trading could
elicit load reductions from the lowest cost sources.
The "More Cost-Effective TMDL Program" scenario recognizes the possibility of
reducing TMDL costs to point source dischargers through either additional "cost-effective
wasteload allocations" or through trading, or both. Either of these approaches would reduce the
eventual costs to dischargers well below what they would be if TMDLs assigned load reductions
on a cost-neutral basis (e.g., if load reductions were determined on a simple proportional rollback
basis). We expect that pressure to adopt cost-minimizing approaches will build, and more
TMDLs will tend toward this "more cost-effective" model. Note, though, that there may be some
instances where other concerns (e.g., equity or concern about implementation and enforcement
complexities attendant to trading) prevent use of these cost-minimizing approaches.
Our Methodology for Estimating Costs to Pollutant Sources - the "More Cost-Effective TMDL Program" Scenario
We start by estimating the costs for the "Reasonable TMDL Program". We then:
Scale these costs down to reflect the typical percentage cost savings that might be realized through additional
"cost-effective wasteload allocations" or trading.
In projecting what future TMDLs are likely to require for the impaired water bodies, we
based several key assumptions on our findings from reviewing the content of a sample of fifteen
recently completed TMDLs. This review is summarized in National Costs to Implement TMDLs,
Appendix A — "Ground-Truthing the Implementation Cost Analysis Assumptions." This sample
of fifteen is smaller than we would like, and it will be increased for the final version of this report.
The major findings from this review are:
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• TMDLs commonly, but not always, address upstream point sources in addition to
those point sources discharging the impairment pollutant directly into the impaired
water;
• The aggregate load reduction needed from point sources is often obtained without
requiring further controls from all of the point sources discharging the impairment
pollutant;
• The geographic extent of nonpoint sources from which further controls are
required is typically much less than the entire county(s) surrounding the impaired
water;
• For both point and nonpoint sources, the degree of load reduction that is required
is very often less than that which would be achieved if all point and nonpoint
sources were to implement "the next treatment step".
More specifically, in estimating the costs of the "Moderately Cost-effective TMDL
Program" and "More Cost- Effective TMDL Program" scenarios, we drew the following
quantitative relationships from the sample of the fifteen TMDLs:
• For point sources. In about half the TMDLs, the aggregate load reduction actually
required of point sources was roughly equivalent to what would be achieved if all
point sources contributing to impairment of the water body were to implement the
"next treatment step". In the other half of the TMDLs, "the next treatment step"
for all point sources would result in about twice as much aggregate load reduction
as was actually needed.
• For nonpoint sources. The size of the watershed from which most TMDLs
required nonpoint source load reductions was far smaller than the size of a typical
county. The acreage of most nonpoint source TMDL watersheds ranged from
about 5 % to about 40 % as large as the acreage of the county(s) within which the
impaired water body was located.
These quantitative relationships should be regarded as tentative pending the evaluation of
more completed TMDLs.13
13Note that we are not presuming to use this small sample of 15 cases as a basis for projecting the national
costs of TMDLs. We have not estimated implementation costs for sources in each of the 15 cases and then
extrapolated or scaled up from these cases to the nation as a whole. Instead, we adopted the approach described
here of estimating the implementation costs for all of the impaired water bodies in the nation by employing a series
of simplifying assumptions about what all TMDLs will require of relevant sources. Under this approach, we use
the 15 case studies not as the fundamental basis from which to extrapolate, but instead in a more limited way to
shed light on the reasonableness of our assumptions. The case studies suggest that actual TMDLs only very rarely
require load reductions as large as those presumed under our Scenario 1 (all relevant point sources implement the
next treatment step, and all relevant nonpoint sources in the entire county implement the next treatment step). The
case studies thus suggest that Scenario 1 really is something like a worst case. The case studies also suggest what
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Estimated Pollution Control Costs for Pollutant Sources Under the Three Scenarios
For each of the three scenarios, we estimate the costs for controlling the point and
nonpoint sources that affect each of the currently listed §303(d) waters. These cost estimates are
for the incremental controls — relative to those that existed in 1998 or so when the impaired
waters were listed -- that will be needed. To the extent that some of these costs have already
been incurred since the waters were listed, the cost estimates we present here overstate the costs
that remain for dischargers.
The task of projecting the costs for pollutant sources stemming from efforts to implement
TMDLs for nearly 20,000 impaired waters is particularly difficult because the actual TMDLs or
water quality-based requirements have been established for only a very few of these waters. We
do not know, at this point, how far out of attainment most of the impaired waters will be found to
be, what sources will be found to be responsible for each impairment, and what degree of load
reduction will be required of each responsible source. In this analysis we must estimate each of
these elements now, before the actual TMDLs or water quality studies have been developed. Our
analysis necessarily involves many assumptions that we apply to the relatively limited data that
now exists on these impaired waters and the sources that may contribute to their impairment.
Thus, our cost estimates are subject to substantial uncertainty. Our data, methodology and
assumptions are described in detail in the supporting cost analysis.
We estimate the costs to pollutant sources in first quarter 2000 dollars. All costs include
capital and operating and maintenance costs, combined into a single annualized cost figure. The
cost estimates that we present represent annualized amounts beginning in the year 2000 that will
continue each year, forever. TMDLs are assumed to be developed at an even pace over the 15
years from now through 2015, consistent with the deadline for TMDL development established by
the new regulations. The average source is assumed to begin incurring its costs to implement
TMDL allocations five years after the TMDL affecting that source is developed. The timing of
compliance investments by sources is assumed to be identical under each of the three TMDL
scenarios. A real discount rate of 7 % is used.
some assumptions more typical of most TMDLs might be. We use some rough averages drawn from the case
studies in defining our more cost-effective Scenarios 2 and 3.
EPA recognizes that the 15 case studies are not representative of all conditions that may be found in potential
TMDLs. For instance, none of the 15 represents a water body impaired by agricultural chemicals or sediment in a
major crop producing area. We believe this is acceptable because we do not use the case studies in a manner such
that this sort of representativeness is critical. We use the case studies primarily to elucidate several much broader
questions: Is Scenario 1 really something like a worst case? For a moderately cost-effective Scenario 2, how much
less should we assume than "the next treatment step will be implemented by all relevant point sources within a
relevant distance and all relevant nonpoint sources in the entire county? For questions of this greater level of
generality, we believe that our sample of 15 is reasonably representative. Nevertheless, we agree that the sample to
be used for "groundtruthing" our assumptions should be expanded, and we will do so for the final version of this
report.
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Under a uniform, inflexible TMDL approach, (the "Least Flexible TMDL Program"
scenario) pollutant sources will incur costs estimated at $1.9 - $4.3 billion per year to implement
controls for the nearly 20,000 impaired waters for which TMDLs will be developed. In the
absence of a more detailed assessment of the required load reductions, a state might chose to
require further controls from all sources that discharge the impairment pollutant. This is
equivalent to approximately $95,000 - $215,000 annually in implementation costs per listed water
body.
In contrast, to meet the same objective of reducing loads below the maximum amount in
the same time frame, under the "Moderately Cost-effective TMDL Program" scenario, pollutant
sources will need to spend only $1.0 - $3.4 billion per year. This is a cost reduction of 21 - 44
%.14 The savings reflected in the "Moderately Cost-effective TMDL Program" scenario are due
to more careful calculations to determine the load reduction that are deemed sufficient to achieve
water quality standards rather than uniformly requiring controls and thereby exceeding necessary
reductions.
Under the "More Cost-Effective TMDL Program" scenario, costs to dischargers may
decline by roughly 7 to 13 % ($140 - $235 million annually) from those that would occur under
the "Moderately Cost-effective TMDL Program" scenario. Rather than requiring equivalent
control efforts from all pollutant sources from which further controls will be sought, the state
would strive to achieve efficient allocations based on the relative costs for the different sources to
reduce pollution. These savings that we estimate from more cost-effective waste load allocations
represent only the savings available from shifting some point source control responsibilities to
nonpoint sources (i.e., "point/nonpoint trading"). We have not been able to estimate but assume
there could be additional savings that might occur from other sorts of cost-effective allocations
(e.g., "point/point" trading, "nonpoint/nonpoint" trading, pretreatment trading).
14The scaling is based on a review of 15 completed TMDLs selected to cover a substantial range of
impairment pollutants, source types (both point and nonpoint sources) and geographic locations. Given the wide
variation in the sorts of waters and impairments that actual TMDLs will address, a sample of 15 completed
TMDLs is obviously far short of an ideal data base from which to draw conclusions and some regions are under
represented. Nevertheless, this initial groundtruthing effort provides some preliminary indications of patterns
across actual TMDLs. See The National Costs to Implement TMDLs, Appendix A for more details.
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Table VI -1
Estimated Costs for Pollutant Sources to Implement TMDLs
Type of Source
Point sources
Nonpoint sources
Total implementation costs
Potential savings for nonpoint sources
Annual Costs
(2000 $ in millions)
Least Flexible
TMDL Program
1,082-2,178
783 - 2,162
1,865 - 4,340
undetermined
Moderately
Cost-effective
TMDL
Program
812- 1,634
234- 1,791
1,046 - 3,425
undetermined
More Cost-
Effective TMDL
Program
625 - 1,321
281 - 1,869
906 - 3,190
undetermined
Point Source Implementation Costs
Under the first two scenarios, half or more of the costs will be incurred by point sources.
This is despite the fact that point sources affect only about 1/4 of the impaired waters while
nonpoint sources affect more than 90 %. Under the third scenario, some point source control
responsibilities are presumed to be shifted to nonpoint sources because of the expected ability of
nonpoint sources to abate loads at lower costs per pound. Even so, point sources may still incur
the majority of the implementation costs.
Table VI - 2
Estimated Costs for Point Sources -- Least Flexible TMDL Program
Type of Source
Industrial dischargers
Indirect dischargers (metals)
POTWs
Total
Annual Costs
(2000 $ in millions)
Low Est.
676
10
396
1,082
High Est.
1,465
16
697
2,178
Number of Affected
Facilities
Low Est.
3052
at 148
POTWs
1094
4,146
High Est.
8557
at 3 12
POTWs
3335
11,893
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Table VI - 3
Estimated Costs for Point Sources for
'Moderately Cost-effective TMDL Program" and "More Cost-Effective TMDL Program
Scenarios"
Type of Source
Industrial dischargers
Indirect dischargers (metals)
POTWs
Total
Potential savings from "More
Cost-effective TMDL
Program," Scenario 3
(savings in parentheses)
Annual Costs
(2000 $ in millions)
Low Est.
507
8
297
812
(187)
High Est.
1,099
12
523
1,634
(313)
Number of Affected
Facilities
Low Est.
2289
at 111
POTWs
821
3,110
1,251
High Est.
6418
at 234
POTWs
2502
8,919
2,066
The low and the high estimates shown above reflect differing judgments about how far
upstream of an impaired water typically can there be point sources that contribute to the water
body's impairment. The lower estimate assumes that only point sources discharging the
impairment pollutant directly into the listed water contribute to impairment. The upper estimate
assumes that point sources can contribute to impairment from as far away as 25 miles upstream (if
the impairment pollutant is BOD, ammonia or toxic organic chemicals) or 50 miles upstream (if
the impairment pollutant is nutrients or metals). We believe these two estimates provide
reasonable lower and upper estimates for the geographic extent of point sources that will be
judged as relevant in TMDLs.
There are roughly 70,000 individually permitted point source dischargers in the nation.
Thus, somewhere between 6 and 17 percent of them seem likely to be affected if there were no
flexibility under the TMDL program, as described in the "Least Flexible TMDL Program"
scenario. Based on the experience from a sample of recently developed TMDLs, only about 3/4
of these sources (about 3,000 - 9,000 dischargers) will likely incur costs under the "Moderately
Cost-effective TMDL Program" scenario. Of these point sources likely to be affected by the
"Moderately Cost-effective TMDL Program" scenario, perhaps 20 to 40 percent of them will
incur no or reduced costs if the TMDL program proceeds to allocate control responsibilities in a
more cost-effective manner ("More Cost-effective Scenario").
35
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Nonpoint Source Implementation Costs
Costs were estimated for four types of nonpoint sources: agricultural land (including crop,
pasture and range land), animal feeding operations (AFOs), silviculture, and on-site wastewater
treatment systems (septic tanks, etc.). Table VI-4 shows the costs from the management
measures that may be implemented by the four types of nonpoint sources that we analyze.
Table VI - 4
Total Implementation Costs for Nonpoint Sources
Type
Agricultural land
crop land
pasture land
range land
Potential savings
AFOs
Potential savings
Silviculture
On-site wastewater treatment systems
Total
Potential Savings
ADDITIONAL COSTS TO NONPOINT
SOURCES UNDER SCENARIO 3 ("MORE
COST-EFFECTIVE TMDL PROGRAM")
Scenario 1
Worst-Case TMDL
Program
645-1,956
5-11
2-16
(not estimated)
76-110
(not estimated)
30-42
24-28
782-2,162
(not estimated)
Scenario 2
Moderately Cost-
effective TMDL
Program
183-1,632
5-11
2-16
(not estimated)
13-73
(not estimated)
7-31
24-28
234-1,733
(not estimated)
47-78
Many sources of unit cost information are used in estimating the cost of implementing
these nonpoint source BMPs as a function of the volume and characteristics of the nonpoint
sources. The costing relationships and the underlying sources are described fully in the
supporting report, The National Costs to Implement TMDLs, Appendix I.
In estimating implementation costs for nonpoint sources, unit costs and cost savings for
projected BMPs were applied to the volume of nonpoint source activity assumed to need further
controls as estimated for each of the TMDL program scenarios. To the extent that some portion
of the nonpoint sources have already implemented some of the BMPs, the implementation cost
and savings estimates were reduced to reflect the practices that are already in place.
36
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APPENDICES: Other Issues Raised In House Report #106-988
Responses to Issues Raised by General Accounting Office
Estimate of Costs to Small Businesses
Summary of comments on Draft Report
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APPENDICES: Other Matters of Interest to Congress
1. Responses to Issues Raised by the General Accounting Office
The U.S. General Accounting Office issued a report15 raising a number of issues regarding
the proposed revisions to the TMDL regulation. The following addresses the major issues
regarding the July 2000 regulation that were not already covered in the body of this Report.
Assumption of Full Compliance
The GAO report that EPA analyzed the incremental impact of the regulation, but not the
full cost of compliance with the long-established TMDL program requirements. This report and
its supporting cost analyses16 estimate the full cost of the TMDL program to states and to
pollutant sources.
Limitations of Water Quality Data
GAO noted that much of the Nation's waters have not been assessed, and that while
EPA's economic analysis of the TMDL proposal acknowledged that additional waters needing
TMDLs will undoubtedly be identified in the future, "EPA did not estimate costs for developing
TMDLs for these waters." The supporting report, The National Costs to Develop TMDLs, does
address this issue which we also address below.
This following provides perspective on the total number of new causes that might be
identified in the future, the rate at which these new causes might be listed, and the resulting
distribution of this workload over time. While this discussion is necessarily speculative, it does
provide an indication of the additional workload, its timing and potential cost.
Perspective on the total number of new causes that might be added in the future
To date, states have monitored or assessed only a portion of their water bodies. In the
future, there will likely be new listings each cycle (e.g., 2002, 2006, 2010, 2014, 2018). These
new listings might identify the need to develop additional TMDLs beyond those identified in the
15U.S. General Accounting Office, Proposed Revisions to EPA Regulations to Clean Up
Polluted Waters, GAO/T-RCED-00-233, June 28, 2000
16Environomics and Tetra Tech, Inc., The National Costs to Develop TMDLs, prepared
for the U.S. EPA, Office of Wetlands, Oceans and Watersheds, draft May 2001 and
Environomics and Tetra Tech, Inc., The National Costs to Implement TMDLs, prepared
for the U.S. EPA, Office of Wetlands, Oceans and Watersheds, draft May 2001
Appendix A -1
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1998 §303(d) listing. Based on the National Water Quality Inventory (NWQI) Report for
Congress for 1998,
• 23% of the Nation's river and stream miles have been assessed; 35% of these do
not fully support water quality standards or uses and an additional 10% are
threatened.
• 32% of the estuary acres have been assessed; 44% of these do not fully support
water quality standards or uses and an additional 9% are threatened.
• 42% of lake, pond and reservoir acres (not including the Great Lakes) have been
assessed; 45% of these do not fully support water quality standards or uses and an
additional 9% are threatened.
• 90% of the Great Lakes shoreline miles have been assessed, and 96% of the
shoreline miles are not fully supporting water quality standards and uses, and an
additional 2% are threatened.
Thus, about 1/3 of the Nation's waters have been assessed in 1998, leaving 2/3 to be assessed.
Earlier NWQI reports include assessments of some different as well as many of the same waters.
States have the flexibility to assess whatever waters they wish although EPA has been
encouraging them to rotate among all waters on a five year basis. In addition, other data sources,
such as USGS, can provide data on some of the unassessed waters.
As assessment and monitoring efforts expand to cover more of the Nation's water bodies,
more impaired water bodies needing TMDLs will likely be found. A portion of the causes for the
impaired water bodies that will be identified in the future will have TMDLs developed for them.
In addition, a portion of the water bodies that have already been assessed and are not currently
impaired may be found to be impaired in the future (perhaps a portion of the currently
"threatened" water bodies).
However, the magnitude of the water quality problems yet to be discovered is likely to be
far less than might be suggested by only cursory consideration of the above statistics, for three
reasons:
• Many of the unassessed water bodies are extremely unlikely to be impaired. For
example, a significant fraction of the unassessed water bodies are located in areas
that for the most part are considered to be pristine (for example, Alaska alone
represents over 10% of the unassessed river miles and about half of the unassessed
lake acres.) In addition, the reported total river miles doubled from the 1992 to
the 1996 305(b) lists to include nonperennial water bodies (intermittent streams,
canals and ditches), which are generally unlikely to be considered impaired and
these comprise over 75% of the unassessed river miles.
Appendix A -2
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• State monitoring efforts have been focused on water bodies most likely to be
impaired. Therefore, it is likely that most major water quality problems have
already been identified. This is consistent with the results of a recent report by the
General Accounting Office, in which "the state officials we interviewed said they
feel confident that they have identified most of their serious water quality
problems.17 This suggests that the rate of impairment for unassessed waters will be
far lower than for assessed waters.
• Future impairment of currently assessed waters is not likely to be significant. If
all threatened waters became impaired, then this might increase the current number
of TMDLs by perhaps 20%-30%. However, only a portion of these might actually
become impaired because current programs, such as technology-based
requirements, and steps taken be states to address threatened water bodies can
potentially prevent a significant portion of threatened water bodies from becoming
impaired.
Overall, it is anticipated that although additional impaired water bodies will be identified in future
listings, it does not appear likely that this will result in a significant increase relative to the current
workload for the 1998 §303(d) lists.
Perspective on the rate at which new causes might be identified in the future
There is little basis for forecasting the rate at which additional impairments will be
identified in future listings. From 1972 to 1992, very few states submitted §303(d) lists. By 1996,
in response to law suits and increased effort by EPA, all of the 56 states had submitted lists,
although these varied in their comprehensiveness. In 1998, in response to the growing number of
law suits, most of the 56 states did a thorough job of listing their impaired water bodies. The
increase in the number of pollutant causes in the 1998 §303(d) list as compared to the 1996
§303(d) list was 4,536 causes. The 1998 lists grew significantly in some states because authorities
wanted to minimize the potential for litigation and listed causes for which TMDLs would
ultimately not be required (some states are planning on submitting additional information in future
listings that will allow them to de-list causes that were previously identified in the 1996 or 1998
listings). The increase of 4,536 causes from the 1996 to the 1998 §303(d) lists (about 2,000
causes per year) thus likely overstates the extent to which new pollutant causes will be identified
in future listings. In fact, if states do delist TMDLs in the future, some future listings may actually
reduce the TMDL workload rather than increase it.
Further, current state monitoring resources are largely committed for water bodies that
have already been assessed and identified as impaired, as well as other monitoring requirements
associated with ongoing water program activities. Until the TMDLs for the 1998 §303(d) lists
are developed, implemented and successful in achieving water quality standards, it seems likely
17U.S. General Accounting Office, Identification and Remediation of Polluted Waters Impeded by Data
Gaps, GAO/T-RCED-00-131, page 4, March 2000.
Appendix A -3
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that there will be limited discretionary monitoring resources available for states to assess
additional water bodies. Even then, newly identified impaired water bodies could also require
additional monitoring. Thus, the workload associated with newly identified impaired water bodies
is likely to be spread out over a long period.
Finally, EPA anticipates that new causes will be identified gradually over an extended
period of time, in part because states have already focused on those areas most likely to be
impaired and so it will take longer to find new impairments, and in part because some water
bodies may not become impaired until some time in the future (for example, water bodies that are
currently "threatened" but not impaired).
Hypothetical scenario for perspective on the potential workload for new causes
In this report, we provide some perspective on the potential workload associated with new
causes that will be identified in the future. To do so, we estimate the cost for a plausible, but
hypothetical, scenario based on the following assumptions regarding 1) the rate at which new
pollutant causes will be identified, 2) the period over which new causes will be identified, 3) the
rate at which TMDLs will be developed for these causes, 4) the characteristics of the TMDLs that
will need to be developed, and 5) the unit costs for developing TMDLs:
• On average, we assume that 1,000 new pollutant causes might be identified in each
future listing. However, since a number of states appear to be preparing to de-list
causes, we assume that there will not be a net increase in the number of causes in
the 2002 listing, and that net new causes will be added starting in the 2006 listing.
• We assume that 1,000 new pollutant causes will be identified for perhaps nine
listings, with few remaining causes to be identified after 2038, for a total of 9,000
new causes, which is equivalent to about 25% of the current TMDL development
workload for the 1998 §303(d) lists.
• We assume that the TMDLs for newly identified causes will be developed
uniformly over a 10-year period from being listed. - for 1,000 newly listed causes
this would result in 100 TMDLs per year. With the last set of new causes listed in
2038 and this pace of development, the TMDLs for all of the future causes would
be developed by 2050.
• We assume that the characteristics of the TMDLs for future causes will be similar
to causes already identified, and that by the time these TMDLs are developed it
will be possible to do employ the most efficient approaches.
• We assume that the unit costs to develop TMDLs for newly identified causes will
be the same as for the 1998 §303(d) lists - this assumption tends to overstate costs
because we anticipate that with the experience of developing TMDLs for the 1998
§303(d) lists, state staff will be increasingly more effective and efficient, and that
new methods and technology will become available to further lower TMDL
Appendix A -4
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development costs. However, we did not attempt in this report to estimate the
extent to which such cost savings would occur, and so relied upon the
conservative assumption that the unit costs for TMDL development would remain
constant in real terms.
This scenario represents a total of 9,000 TMDLs or about 25% of the current workload for the
1998 §303(d) lists.
Potential Cost
The above plausible, hypothetical scenario provides perspective on the potential workload
that might be associated with new pollutant causes that are identified in future listings. For this
scenario, a total of 9,000 TMDLs would be developed at a total undiscounted cost of $216
million at a typical undiscounted yearly cost of about $5-7 million18 over most of the period
through 2050. Additional detail is provided in The National Costs to Develop TMDLs.
If the total number of new causes, the pace of identifying them, the difficulty of developing
TMDLs for them, the pace of TMDL development, and the characteristics of the new TMDLs
differs from this hypothetical workload, then these costs will increase or decrease accordingly.
Other Limitations
The GAO report noted several additional issues, some of which were addressed in the
body of this report and some of which we address below.
• Unverified Data. The GAO report emphasized the need to verify estimates. The
National Costs to Develop TMDLs provides extensive analyses to verify the
estimates in the report.
• Costs to the Private Sector The costs to the private sector were estimated in the
supporting report The National Costs to Implement TMDLs, and was summarized
in this Report as well.
• Accounting for Uncertainty The GAO report emphasized the need for sensitivity
analysis given the uncertainty of some estimates. The National Costs to Develop
TMDLs provides ranges for key assumptions, and indicates the extent to which the
results may vary depending on the accuracy of the assumptions.
• Analysis of Benefits. The GAO report emphasized the need to address the benefits
of the program, which we addressed in the body of this Report.
1 8
Since the workload for different listing periods would overlap (due to a four-year listing cycle and a ten-
year period to develop the TMDLs), the overall pace of development would start at 100 TMDLs per year, working
up to about 200-300 TMDLs per year and stay at that rate for most of the period, and then wind down.
Appendix A -5
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• Costs to Other Federal Agencies. GAO noted that EPA did not include the costs
to other federal agencies that might result due to the regulation. However, the
July 2000 regulation was substantially revised from the initial proposal and there is
no additional burden to other Agencies. However, EPA has not estimated the
burden on other federal Agencies for the overall TMDL program.
2. Estimate of Costs to Small Businesses
While the proposed regulation for the National Pollutant Discharge Elimination System
(NPDES) Program would have resulted in additional costs to small businesses, the July 2000
regulation revising the TMDL and the NPDES programs do not result in additional costs to
businesses.
3. Summary Comments on Draft Report
To be added after close of comment period
Appendix A -6
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