EPA-HQ-RCRA

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1 September 20, 2013 Ron Jordan, Office of Water and Barnes Johnson, Office of Resource Conservation and Recovery U.S. Environmental Protection Agency 1200 Pennsylvania Avenue, NW Washington DC Submitted via website and to: Re: Water Docket ID No. EPA-HQ-OW and RCRA CCR Docket ID No. EPA-HQ-RCRA Dear Mssrs. Jordan and Johnson: The Edison Electric Institute (EEI) is submitting the attached comments in response to the U.S. Environmental Protection Agency s (EPA s) proposed effluent limitation guidelines and standards (ELGs) for the steam electric power generating point source category (proposed rule). EPA published the proposed rule at 78 Fed. Reg on June 7, 2013, and published a notice extending the comment deadline to today at 78 Fed. Reg on July 12, EEI is the association of U.S. investor-owned electric companies. Our members serve nearly all of the ultimate customers in the shareholder-owned segment of the industry, and represent approximately 70 percent of the U.S. electric power industry. They provide electricity for 220 million Americans, operate in all 50 states and the District of Columbia, and directly employ more than 500,000 workers. With more than $85 billion in annual capital expenditures, our industry is also responsible for millions of additional jobs. Reliable, affordable, and sustainable electricity powers the economy and enhances the lives of all Americans. EEI s members operate power plants and other facilities that generate, transmit, and distribute electricity to residential, governmental, commercial, and industrial customers. The ELG rulemaking would directly affect the majority of our nation s generation fleet. It would impose new technology-based requirements on up to seven wastewater streams at steam-electric generating plants, with significant potential cost, energy supply, and reliability impacts.

2 Dockets EPA-HQ-OW and EPA HQ-RCRA EEI comment cover letter September 20, 2013 Page 2 Therefore, EEI and its members have a direct interest in ensuring that any final steamelectric ELG rule EPA may adopt is accurate, representative of actual conditions in our industry, and reasonable in the new requirements it imposes and in its implementation provisions. EEI and our members support such reasonable regulatory provisions and work hard to be positive stewards of a clean environment. In the proposed rule, EPA has listed a number of technology options, some of which appear reasonable and appropriate, but most of which if adopted would impose substantial costs on the generation fleet without providing corresponding benefits. In most cases, those higher cost-to-benefit options are based on outdated, inadequate, or unrepresentative data and analyses, leading EPA to a number of conclusions that we believe are unwarranted and inappropriate. EEI encourages EPA to revisit the rulemaking record, to ensure that the data and analyses on which the agency is basing the rulemaking are sufficiently current, complete, and representative of the electric utility generating fleet to produce a reasonable final rule. We also request that EPA address the concerns raised in our comments and in comments submitted by the Utility Water Act Group (UWAG), Electric Power Research Institute (EPRI), individual utilities, and their consultants. Taking into account the industry s comments, and based on the improved record, we encourage EPA to re-propose the steam-electric ELG rule with a more accurate and reasonable set of proposed requirements. In turn, EPA should take further comment on that revised proposal before adopting a final rule. For the reasons set out in the industry comments, in revising the proposed rule and ultimately adopting a final rule, EEI recommends that EPA not impose new ELG requirements as to bottom ash and fly ash transport water, combustion residual leachate, nonchemical metal cleaning wastewater, gasification wastewater, and flue gas mercury control wastewater. Data that EPA has provided and industry has examined for these wastestreams indicate that current levels of control of the wastestreams under existing ELGs are appropriate and sufficient. We also encourage EPA to reanalyze and reconsider its proposed requirements for flue gas desulfurization (FGD) wastewater. Further, EEI recommends that EPA not impose requirements that prevent reuse of water to manage wastes within generating facilities, as long as the facilities meet technologybased limits in their discharges. Also, EPA should not set best-management practice (BMP) requirements for coal-combustion residual impoundments, which are separately regulated. Finally, EPA should provide adequate time for utilities to implement any new requirements that EPA does impose in a final ELG rule, coordinating implementation of those requirements with compliance with EPA s separate air, solid waste, and water rulemakings that are affecting or soon will affect the electric utility industry.

3 Dockets EPA-HQ-OW and EPA HQ-RCRA EEI comment cover letter September 20, 2013 Page 3 Ultimately, EEI encourages EPA to ensure that any changes the agency does adopt to the steam electric ELGs are reasonable and well founded in an accurate record that is representative of our industry and the types of facilities being affected. EPA should avoid unnecessary new requirements and ensure that any new requirements that are adopted produce benefits comparable to costs and do not negatively affect consumers, jobs, energy supply, fuel diversity, and reliability. If you have any questions about these comments, please contact either C. Richard Bozek at rbozek@eei.org or 202/ or Henri Bartholomot at hbartholomot@eei.org or 202/ on EEI staff. Sincerely, Quinlan J. Shea, III Attachment

4 COMMENTS OF THE EDISON ELECTRIC INSTITUTE ON THE U.S. ENVIRONMENTAL PROTECTION AGENCY S PROPOSED EFFLUENT LIMITATION GUIDELINES AND STANDARDS FOR THE STEAM ELECTRIC POWER GENERATING POINT SOURCE CATEGORY (40 C.F.R. Part 423) Published at: 78 Fed. Reg. 34,431 (June 7, 2013) Submitted on: September 20, 2013 To: U.S. Environmental Protection Agency Water Docket ID No. EPA-HQ-OW and RCRA Docket ID No. EPA-HQ-RCRA Via:

5 Table of Contents I. Introduction to and Purpose of These Comments... 1 II. Executive Summary of Comments... 1 A. Overview of the Proposed Rule... 2 B. The ELG Rule Should Meet Certain Fundamental Requirements... 3 C. The Rulemaking Record is Inadequate and Flawed... 5 D. The Proposed Rule is Not Cost-Effective... 6 E. The Proposed Rule Does Not Provide for Flexible Implementation and Reasonable Compliance Deadlines... 7 F. Summary Conclusion... 7 III. Summary of the Proposed Rule and Comment Topics IV. Legal Framework for Effluent Limitations Guidelines A. Administrative Procedure Act B. Clean Water Act Section 304(b) and Section V. BAT for Flue Gas Desulfurization Wastewater A. EPA s Proposed Options for FGD Wastewater B. EPA s Sampling Program Did Not Properly Characterize the Industry s FGD Wastewaters C. EPA s Sampling Protocol for FGD Wastewaters was Flawed Despite Advice to Revise Agency Methodology D. EPA s FGD Wastewater Control Technology Cost-Effectiveness Analysis is Flawed and Must be Redone E. EPA s Proposed Limits for FGD Wastewater are Not Supported by the Data and Result from Flawed Statistical Approaches F. Chemical Precipitation Plus Biological Treatment are Insufficiently Proven G. Thermal ZLD Systems are Not Demonstrated or Technologically i

6 Available for FGD Wastewater; Nor are they Cost-Effective H. BPJ is Not Favored I. Flexibility is Necessary if Chemical Precipitation is Required Contrary to EEI s Recommendations VI. BAT for Bottom Ash Transport Water A. EPA s Proposed Options for Bottom Ash Transport Water and History of Regulation B. Much of EPA s Bottom Ash Transport Water Data is Invalid Despite Contemporaneous Industry Sampling Advice C. EPA s Bottom Ash Transport Water Control Technology Cost- Effectiveness Analysis is Flawed D. EPA Failed to Apply its Traditional Criteria for Selecting Pollutants of Concern for Bottom Ash E. The Definitions of Bottom Ash and Transport Waters Should Be Clarified VII. BAT for Fly Ash Transport Water A. EPA s Proposed Options for Fly Ash Transport Water B. Dry Handling for Fly Ash is Not Cost-Effective VIII. BAT for Combustion Residual Leachate A. EPA s Proposed Options for Combustion Residual Leachate B. EPA Should Not Distinguish Leachate from Low Volume Waste C. If EPA Insists on Separating Leachate from Low Volume Waste Contrary to EEI s Recommendation, EPA s Preferred Option of BPT Limits for Leachate is Correct D. EPA Should Make Clear That the Definition of Leachate Does Not Include Stormwater Runoff from Covered Landfills E. Seepage that is Not Channeled or Discharged to a Surface Water Cannot Be Regulated Leachate F. Leachate Limits Should Not Apply to Landfills Offsite from the Power Plant ii

7 G. Combustion Residual Leachate Should Not Include Water that May Contact CCR that is Beneficially Used H. New Landfills and Landfill Cells Needed to Handle CCR Displaced by the Steam Electric ELGs Should Be Categorized as Existing Sources IX. Nonchemical Metal Cleaning Waste Should, as EPA Proposes, Continue to be Regulated as it is Now X. BAT for Gasification Wastewater A. Proposed BAT for Gasification Wastewater B. Possible IGCC Discharges Do Not Warrant Revision of the Existing Guidelines Because They are Already Sufficiently Regulated and Technology is Evolving C. EPA Does Not Have Adequate Data D. Nonchemical Cleaning of Metal Surfaces in the Gasification Process Should Be Treated as Low Volume Waste E. The Two Different Definitions of Gasification Wastewater are Not Clear XI. BAT for FGMC Wastewater XII. The Rule Needs to Allow for the Continued Treatment of Legacy Wastes XIII. Constructing New Landfills Would Be Costly and Time-Consuming XIV. Pretreatment Standards (PSES and PSNS) A. The POTW Pass-through Analysis is Incomplete B. The POTW Removal Percentages are Obsolete C. The BAT Removal Percentages are Inaccurate D. Dry or Closed-loop Bottom Ash Handling is Not Cost-Effective E. Incremental Biological Treatment of FGD Wastewater is Not Reliable or Cost-Effective F. Regulation of Nonchemical Metal Cleaning Waste is Inappropriate G. Schedules for Compliance Should Be Determined by the Control Authority (State or Local Government) iii

8 XV. New Source Performance Standards XVI. BMPs for Ash Ponds A. Proposed BMP Requirements B. EPA Cannot Legally Promulgate BMP Requirements that Have Not Been Published for Comment C. Proposed BMPs are Inappropriate in Concept and Require Cumulative Impacts Coordination XVII. Clarification of Voluntary Incentives Timing is Needed XVIII. Negative Consequences of Anti-Circumvention Rule A. Proposed Anti-Circumvention Measures B. Mixed Wastestreams C. Internal Limits D. Sufficiently Sensitive Methods Ignores Flaws in EPA Sampling Methods XIX. Applicability of the ELG Rule XX. Compliance Schedules New Requirements Need to be Phased in Over Time XXI. Cooling Tower Blowdown XXII. Trading Should Be Expressly Authorized XXIII. Significant Flaws in the Background Documents for the Proposed Rule A. EPA Gives a Misleading Picture of the Electric Utility Industry Damage Cases Pollutant Loadings Water Quality Modeling Water Quality Impacts to Wildlife Water Quality Impacts to Human Health B. EPA Assumptions Overestimate Benefits iv

9 C. EPA Assumptions Underestimate Costs Major Cost Flaws Industry-wide Overestimate of Costs D. Regulatory Impacts Analysis is Also Faulty XXIV. EPA Regulations Should Not Limit Future Fuel Diversity, Which Ensures Reliability and Low-Cost Electricity XXV. Conclusion and Proposed Steps Forward v

10 I. Introduction to and Purpose of These Comments The Edison Electric Institute (EEI) appreciates the opportunity to comment on the U.S. Environmental Protection Agency s (EPA s) proposed revision of the effluent limitation guidelines and standards (ELGs) for steam electric power generating point sources promulgated under the Clean Water Act (CWA) and published at 78 Fed. Reg. 34,431 (June 7, 2013) (proposed rule). EEI is the association of U.S. investor-owned electric companies. Our members provide electricity for 220 million Americans, operate in all 50 states and the District of Columbia, and directly employ more than 500,000 workers. With more than $85 billion in annual capital expenditures, the electric power industry also is responsible for millions of additional jobs. Reliable, affordable, and sustainable electricity powers the economy and enhances the lives of all Americans. EPA s rulemaking will affect the vast majority of the U.S. generating fleet, requiring potentially costly and disruptive facility modifications that may not produce corresponding benefits, depending on which proposed changes to the existing steam electric ELGs EPA finalizes. Therefore, EEI and its members have a direct interest in the rulemaking. We are filing these comments in the hope of assisting EPA to produce a final rule that is well-founded, reasonable, and streamlined and that imposes only requirements whose costs are commensurate with their benefits. We also incorporate by reference the comments on the proposed ELG rule filed by the Utility Water Act Group (UWAG Comments). II. Executive Summary of Comments Power plant discharges to surface waters, including discharges by steam electric plants that are the focus of the ELG rulemaking, have been regulated through CWA section 402 for 1

11 more than 40 years, since passage of the CWA in The section 402 permitting process has ensured that each plant reduces pollutants as needed to meet industry-specific technology standards and receiving-water-specific water quality standards, as applicable. EPA is now taking a fresh look at discharges from steam electric plants because, in the past few years, EPA and states have required plants to add air emission control technology that may produce new wastestreams warranting such evaluation under the CWA. EEI recognizes the importance of this new look at the steam electric ELGs. EEI s membership has been cooperating with EPA by providing large volumes of information about plant operations, wastestreams, and wastestream management measures already in place. A. Overview of the Proposed Rule EPA is obligated through a settlement agreement to finalize the ELG rulemaking by May This schedule creates an unusually tight time frame for such a complex rulemaking. The tight time frame has made it difficult for EPA to compile an accurate record based on data representative of the utility industry and to analyze the data carefully, leading to a number of problems that we will discuss in our comments. The proposed rule would set strict effluent limitations, forcing technological and operational changes at existing coal-fired facilities and likely at many nuclear and gas-fired combined-cycle generation facilities. In the rulemaking, EPA is focusing on seven major types of wastewater: (1) fly ash transport water, (2) bottom ash transport water, (3) combustion residual leachate, (4) flue gas desulfurization (FGD) wastewater, (5) flue gas mercury control wastewater, (6) gasification wastewater, and (7) nonchemical metal cleaning wastewater. EPA has considered different technology options for each wastewater and outlines eight regulatory options, of which four are preferred. The four preferred options differ primarily in stringency for discharges associated 2

12 with bottom ash and FGD wastewater. EPA is considering imposing dry fly ash handling in each of its preferred options. One of the four preferred options would impose dry bottom ash handling. The proposed rule also addresses legacy wastewaters (i.e., certain wastewaters generated prior to the rule s compliance deadlines) and considers imposing stringent best management practices for coal combustion residual surface impoundments. B. The ELG Rule Should Meet Certain Fundamental Requirements In this and any other rulemaking related to the U.S. electric power industry, EPA should recognize that the electric utility industry is undergoing a transition to a more modern, lower emissions fleet, driven in part by a host of new EPA environmental regulations recently put in place and currently being put in place. Regulations such as the proposed ELG rule need to be crafted carefully so they do not upset this transition, force utilities to make changes whose costs exceed benefits, impose changes with high energy penalties that will undermine utility efforts to improve plant efficiency, create unworkable implementation time frames, or cause negative economic and environmental effects. Also, EPA should recognize that the utility industry needs sufficient lead time to avoid or minimize adverse consequences to electricity customers stemming from energy supply and reliability effects of the rules. The industry is investing billions of dollars to effect the current transition. But there is a tipping point at which additional investment becomes unaffordable. It would be bad environmental and economic policy to squander resources on unnecessary or excessive regulation in one area, limiting the ability of the industry to complete investments to meet other more beneficial environmental, economic, and energy regulations and goals. 3

13 The proposed steam electric ELG rule is a case in point. As discussed below, EPA has adopted very conservative assumptions and extrapolated from limited data to propose a rule that will have limited environmental benefits and significant costs. This action is not compelled by the CWA, which requires that controls on existing sources be available and economically achievable. If EPA nonetheless issues a final rule that consumes limited capital to install controls that are not cost-effective to pursue negligible environmental benefits, the funds expended will not be available to meet future EPA regulations or for other more beneficial uses. 1 The cumulative impact of the multiple regulations facing the electric utility industry, if not the individual regulations themselves, already is forcing some plant closures and threatening to strand newly upgraded assets. To avoid and minimize such adverse consequences, any final steam electric ELG rule needs to meet three objectives: (1) it should be based on accurate, representative data and sound analyses; (2) it should include only cost-effective requirements; and (3) it should provide for flexible implementation and reasonable compliance deadlines. Such objectives will help to ensure net benefits, minimize unnecessary costs, and allow plant owners to make rational decisions taking into account all the new air, water, and solid waste regulations. Meeting these objectives will help to ensure that electricity rates remain reasonable and electricity supply and delivery remains reliable as the electric power industry transitions to a more modern, lower emissions fleet. Unfortunately, the proposed rule does not meet these objectives. 1 Utilities are still assessing how they will comply with various final and proposed EPA rules, such as the Mercury and Air Toxics Standards Rule, Cross State Air Pollution Rule, Cooling Water Intake Structures Proposal, and Coal Combustion Residuals (CCR) Proposal. In addition, EPA has just today proposed a rule to control greenhouse gas emissions from electric utilities. 4

14 C. The Rulemaking Record is Inadequate and Flawed First, the proposed rule is not based on accurate, representative data and sound analyses. This flaw affects EPA s assessment of baseline pollutant loadings, technology choices, cost estimates, and benefits. For example, with respect to baseline pollutant loadings for bottom and fly ash, over half of the pollutants (measured as toxic-weighted pounds equivalent or TWPE ) that EPA asserts are being discharged to ash ponds are, at best, theoretical, and likely nonexistent. EPA s analysis of fly ash and bottom ash transport water includes estimated TWPEs for sulfides based on reported values that were almost all below the detection limit. EPA interpreted those results using the limit of detection as the actual value, thus creating pollutant loadings that are not supported by the reported values. This plus other data manipulations discussed below resulted in an EPA-developed TWPE for ash ponds that is six times too large. Hence, any reliance on such an analysis is arbitrary and capricious. EPA also used inaccurate and unrepresentative data to characterize many wastestreams. For example, during its 68 power plant site visits between December 2006 and February 2013, EPA collected only one sample of bottom ash transport water. Instead of obtaining additional current information, EPA used 40 year old summary data to characterize this wastestream data so old that EPA has destroyed the underlying records and has only summary information. By relying on 40-year old data that do not reflect current regulatory controls or current test methods and quality assurance, EPA has greatly overstated the TWPE of bottom ash transport water. Similarly, EPA collected only five samples of fly ash transport water, while relying on the same missing 40-year old summary data it used for bottom ash transport water, and used data from only 13 unrepresentative facilities for flue gas desulfurization wastewater. 5

15 EPA further exaggerated the pollutants in wastestreams by failing to account for the pollutant contributions from source water in its analyses. By thus ignoring background levels of the metals, EPA has overstated the benefits of removing the pollutants from utility bottom ash wastestreams, and used those benefits to justify a zero discharge standard, when in fact the pollutants will still be in the source water. EPA used a similarly flawed analysis for fly ash transport water. This analysis is arbitrary and capricious. Finally EPA relied on a very few plants to identify the best achievable technology, including only two similar plants for flue gas desulfurization wastewater. This analysis does not meet the requirements of CWA section 304(b). D. The Proposed Rule is Not Cost-Effective As a result of using unrepresentative data and conducting flawed analyses, EPA has proposed a rule that is not cost-effective. EPA itself estimates that the cost of its proposal is between $185 million and $954 million per year and the benefit is between $139 million and $483 million per year, and in our view these numbers significantly underestimate the costs and overestimate the benefits of the rule. Further, in all other ELGs, EPA has established a benchmark that the cost of removing one pound of toxic-weighted pounds-equivalent should not exceed $404 in 1981 dollars. Yet as demonstrated below, the cost of many portions of the proposed rule would far exceed that benchmark. Our analysis of the proposed rule also belies EPA s claim that its proposal will have little impact on the cost of compliance, plant closures, or electricity rates. It would be ill-advised from an environmental and policy perspective for EPA to require the utility industry to invest billions of dollars for little environmental benefit, especially in this case when the electric utility fleet is already undergoing a transformation and 6

16 other investments must be made to meet other environmental and energy regulatory obligations and goals. E. The Proposed Rule Does Not Provide for Flexible Implementation and Reasonable Compliance Deadlines Finally, EPA has failed to provide for flexible implementation and reasonable compliance deadlines. Instead, EPA has proposed to set in the ELG regulation how the effluent limitations are to be met, for example by requiring wastestreams to meet discharge limits inside the plant, before discharge. These so called anti-circumvention measures are bad policy because they limit a plant s ability to conserve water through reuse and exceed EPA s authority under the CWA because EPA can regulate only discharges to navigable waters, not plant operations. Iowa League of Cities v. EPA, No (8 th Cir. Mar. 25, 2013), reh g den. July 10, 2013, citing Am. Iron & Steel Ins. v. EPA, 115 F.3d 979, 996 (D.C. Cir. 1997). EPA s proposed rule is likewise inflexible with respect to the management of coal combustion residuals (CCRs). EPA s CCR management proposals, including BMPs, exceed EPA s authority under the CWA. EPA has also failed to propose compliance deadlines that would allow the industry to coordinate this rule with other changing environmental regulations and the changing composition of the electric utility fleet. If not corrected, this will increase the rule s overall adverse impacts and inhibit an efficient transition to a more modern, lower emissions fleet. F. Summary Conclusion Based on our review of the proposed rule and the flaws we and other industry representatives have identified, EEI encourages EPA to withdraw its proposal, to compile a more accurate record based on current, representative data and more reasonable analyses, to develop a new proposed rule based on this better record, and to invite comment on that new 7

17 proposal, with adequate time for such input. EEI and our members stand prepared to continue to assist the agency in this effort. EPA should rely on more current and reliable data for target wastestreams, and should revise its analyses to reflect such data, in order to avoid biases in assumptions that make its best available technology (BAT) determinations inappropriately conservative. Analyses by UWAG and the Electric Power Research Institute (EPRI) of more current data demonstrate that almost all of EPA s preferred options and certain non-preferred options for FGD wastewater, bottom ash transport water, and fly ash transport water, and EPA s non-preferred options that differ from its preferred options for combustion residual leachate, are not cost effective. Rather, the current record supports limits consistent with current Best Practicable Control Technology Currently Available (BPT) (i.e., existing effluent limits for TSS and oil and grease) for bottom ash transport water and fly ash transport water. Combustion residual leachate should continue to be classified as low-volume waste. For FGD wastewater, UWAG s analysis shows that chemical precipitation treatment is not cost-effective for plants with a maximum design flow rate of 200 gallons per minute (gpm) or less. Because of shortcomings in the data and cost calculations, documented below, EPA has not justified chemical precipitation as a national standard for FGD wastewater for smaller flow rates. And biological treatment is not cost-effective for units of any size. It is possible that, with additional data and analysis, EPA might be able to justify installing chemical precipitation for FGD wastewater at some plants. If so, we anticipate that an exception would have to be made for: plants with maximum design flow rates less than or equal to 200 gpm; plants that can demonstrate that, for their treatment of FGD wastewater, chemical precipitation would not be cost-effective; and 8

18 plants that can demonstrate that, because of site- or plant-specific treatment features or conditions, chemical precipitation would be either technically or economically unavailable. As to nonchemical metal cleaning wastes, EPA should acknowledge that any facility which affirms that it (1) currently generates nonchemical metal cleaning wastes, and (2) has no technology-based iron and copper limits for nonchemical metal cleaning wastes in its current permit, may continue to operate without iron and copper limits for nonchemical metal cleaning wastes. Gasification wastewater and FGMC wastewater should be eliminated as wastestreams addressed by the rule. There are too few gasification plants to provide data that can be generalized for that wastestream, and the plant discharges have been documented as not producing problems. FGMC wastewater should simply be covered by generally applicable fly ash and FGD requirements rather than as a separate category. For all wastestreams except metal cleaning wastes, EPA has proposed no change to current BPT limits for oil-fired and generating units with a capacity of 50 MW or less. EEI supports this proposal but asserts a threshold of 100 MW instead of 50 would be more appropriate due to the disproportionate burden of new treatment technology for small units. In addition, EPA should leave regulation of surface impoundments to the CCR rule. At a minimum, EPA must sufficiently describe and provide an opportunity for meaningful comment on any BMPs for surface impoundment requirements, as well as sufficiently consider landfill construction implications of the proposed limits. Proposed anti-circumvention provisions should be eliminated or at a minimum revised to address negative consequences for reuse strategies and sampling methodology. Trading 9

19 should be explicitly authorized in the rule. And the final rule s requirements should be phased in and other areas for clarification addressed. In the remainder of these comments, we will address in more detail EPA s proposals for each of the seven wastestreams as well as issues relating to landfills, pretreatment standards, ash ponds, voluntary incentives, the anti-circumvention measures, applicability of the rule, the time for compliance, and the level of benefits claimed by EPA. III. Summary of the Proposed Rule and Comment Topics In addition to summarizing major provisions of the rule, this section also serves as an outline of the general topics, and corresponding order of discussion, addressed in the following comments. First, EPA describes and we critique the legal framework for the rulemaking. Second, the proposed rule would set limits for seven key wastestreams : 1. Flue gas desulfurization (scrubber) wastewater; 2. Bottom ash transport water; 3. Fly ash transport water; 4. Combustion residual leachate; 5. Nonchemical metal cleaning waste; 6. Gasification wastewater; and 7. Flue gas mercury control (FGMC) wastewater. EPA is considering eight options, four of them preferred. EPA has proposed rule language reflecting option 4a for best available technology (BAT) for existing facilities. EPA is proposing option 4 for the new source performance standards (NSPS) and pretreatment standards for new sources (PSNS) requirements (EPA Technical Development Document for the proposed rule (TDD), p. 2-1, and EPA Benefits and Cost Analysis for the proposed rule (BCA) p. 1-1). The eight technology options are shown in the following table: 10

20 Table 1. Steam Electric Main Regulatory Options Technology Basis for the Main BAT/NSPS/PSES/PSNS Regulatory Options Wastestreams FGD WW Chemical Precipitation and Flow Minimization 1 3a 2 3b 3 4a 4 5 BPJ Determination Chem Precip + Bio Treatment for Se and Flow Minimization Chem Precip + Bio Treatment >2000 MW; BPJ <2000 MW Chem Precip + Bio Treatment for Se and Flow Minimization measures Chem Precip + Bio Treatment for Se and Flow Minimization measures Chem Precip + Bio Treatment for Se and Flow Minimization Chem Precip/Coprecip with ZLD (evaporation) Fly Ash Transport Water Impoundment (equal to BPT) Dry handling Impoundment (equal to BPT) Dry handling Dry handling Dry handling Dry handling Dry handling Bottom Ash Transport Water Impoundment (equal to BPT) Impoundment (equal to BPT) Impoundment (equal to BPT) Impoundment (equal to BPT) Impoundment (equal to BPT) Dry handling/ Closed loop (for units >400 MW); Impoundment (Equal to BPT) for units 400 MW Dry handling/ Closed loop Dry handling/ Closed loop Leachate Impoundment (equal to BPT) Impoundment (equal to BPT) Impoundment (equal to BPT) Impoundment (equal to BPT) Impoundment (equal to BPT) Impoundment (equal to BPT) Chem Precip/coprecip Chem Precip/coprecip FGMC Impoundment (equal to BPT) Dry handling Impoundment (equal to BPT) Dry handling Dry handling Dry handling Dry handling Dry handling Gasification WW Evaporation Evaporation Evaporation Evaporation Evaporation Evaporation Evaporation Evaporation Nonchemical Metal Cleaning Chemical Precipitation Chemical Precipitation Chemical Precipitation Chemical Precipitation Chemical Precipitation Chemical Precipitation Chemical Precipitation Chemical Precipitation The four preferred options 3a, 3b, 3, and 4a are shaded. See 78 Fed. Reg. at 34,

21 In our comments, EEI will focus on EPA s wastestream proposals in some detail and will discuss the pretreatment and new source standards briefly. We also encourage EPA to allow continued management of legacy wastes and to recognize that constructing new landfills will be costly and time consuming. including: Third, EPA is considering a number of additional provisions, which we will discuss, 1. BMPs for Surface Impoundments (like 30 C.F.R. Part 77) EPA proposes to require, for example: Plans for design, construction, and maintenance; Plans for closure; Inspection every 7 days; and Annual certification that construction, operation, and maintenance are in accordance with approved plan. 2. Voluntary Incentives EPA proposes to allow: Tier 1 Two extra years to achieve compliance for facilities committing to dewater, close, and cap all CCR surface impoundments (except those containing only CCR leachate). Tier 2 Five extra years to achieve compliance for facilities committing to eliminate discharges of all process water except cooling water. 3. Anti-Circumvention Measures EPA proposes to require facilities to: Demonstrate compliance before using wastestreams in another plant process or mixing wastestreams with another wastestream; Not move wastestreams subject to zero discharge to another process operation with less stringent limits; and Use sufficiently sensitive analytical methods. 4. Applicability EPA proposes to revise the applicability provision to: Read an establishment whose generation of electricity is the predominant source of revenue or principal reason for operation, instead of an establishment primarily engaged in the generation of electricity for distribution and sale. 12

22 Read fuel derived from fossil fuel (e.g., petroleum coke, synthesis gas), instead of which results primarily from a process utilizing fossil-type fuels. Clarify for combined-cycle systems, both the combustion turbine and steam turbine parts are subject to ELGs. 5. Compliance Deadline EPA has proposed a deadline of as soon as possible within next permit cycle beginning July 1, 2017, except nonchemical metal cleaning waste and combustion residual leachate limits, which are effectively immediately, and where extended pursuant to the proposed voluntary incentives provisions. 6. Minor Clarification to PSNS for Cooling Tower Blowdown (423.17(d)(1)) EPA proposes to correct a prior typographical error by adding a footnote reading that no detectable amount is applicable to 124 of the 126 priority pollutants. Finally, in addition to commenting on these topics, in the remainder of these comments, EEI will discuss the importance of water quality trading as a tool for complying with the technology-based effluent limits, will note our concerns about the background documents that EPA has used to support the proposed rule, and will discuss the importance of fuel diversity, before turning to concluding remarks. IV. Legal Framework for Effluent Limitations Guidelines A. Administrative Procedure Act All agency rulemaking, including ELGs, must comply with the Administrative Procedure Act (APA). When promulgating any rule, an agency is required to disclose the purposes and legal authority for the action and to provide the public the opportunity to meaningfully participate in the rulemaking process. Specifically, under the APA, the agency must provide the public with a general notice of proposed rulemaking in the Federal Register. That notice must include: A statement of the nature of public rulemaking proceedings; A reference to the legal authority under which the rule is proposed; and 13

23 The terms or substance of the proposed rule or a description of the subjects and issues involved. 2 After providing notice of the proposed rulemaking, the agency must give interested persons an opportunity to participate in the rulemaking by submitting comments, data, views, or arguments. Only after receiving and fully considering these public comments and other information can the agency proceed to finalize a rule. Also, when finalizing a rule, the agency must provide the public with a notice of the rule being adopted and a concise general statement of its basis and purpose. 3 In short, the APA forbids EPA from creating any new rule or regulation without revealing its factual basis, adequately notifying the public of the proposed rule, and affording the public a meaningful opportunity to participate in the process. The APA prohibits an agency from taking an action that is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. 4 EPA must thus engage in reasoned decision-making with an affirmative showing that all factors relevant to the decision have been considered, based on an administrative record supporting its decision-making. It is not consonant with the purpose of a rulemaking proceeding to promulgate rules on the basis of inadequate data or data that are known only to the agency. 5 As discussed below, the proposed rule does not meet these requirements. There are inadequate data in the record to support EPA s proposal and, in many cases, the limited data 2 5 U.S.C Id. 4 5 U.S.C Portland Cement Assn.v. Ruckelshaus, 486 F.2nd 375, 393 (D.C. Cir.1973), cert. denied, 417 U.S. 921 (1974). 14

24 used by EPA are not available for public review. A final rule based on this record would be arbitrary and capricious and contrary to law. B. CWA Section 304(b) and Section 306 Under the CWA, EPA promulgates technology-based effluent limitations guidelines for existing sources under section 304 and new source performance standards for new sources under section Together these requirements are known as ELGs. When EPA promulgates ELGs, it identifies the pollutants to be regulated in a particular industry category or subcategory, as well as a technology that represents the statutorily prescribed level of control for those pollutants. The CWA articulates several levels of control for pollutants (e.g., best practicable control technology currently available, best available technology economically achievable, and best conventional pollutant control technology ). 7 When identifying possible control technologies for existing sources, EPA must consider the factors Congress specified in the CWA for the type of discharger and pollutant at issue. 8 In these various provisions, Congress used different technological standards to control effluent depending on whether the industrial source is new or existing, the type of pollutant at issue, and the effective date by which EPA was to promulgate new regulations. Effluent limitations set forth pursuant to the BAT standard shall require the elimination of discharges of all pollutants if the Administrator finds, on the basis of information available to him... that such elimination is technologically and economically achievable for a category or class of point sources as determined in accordance with 6 33 U.S.C. 1314(b), See 33 U.S.C. 1314(b)(1)(A), (b)(2)(a), (b)(4)(a). 8 Id. 1314(b)(1)(B), 1314(b)(2)(B), 1314(b)(4)(B). 15

25 regulations issued by the Administrator. 9 Section 304(b)(2)(B) of the CWA outlines the factors that EPA should consider in developing BAT: Factors relating to the assessment of best available technology shall take into account the age of equipment and facilities involved, the process employed, the engineering aspects of the application of various types of control techniques, process changes, the cost of achieving such effluent reduction, non-water quality environmental impact (including energy requirements), and such other factors as the Administrator deems appropriate. 10 Cost is listed as a relevant factor. The relationship between costs and benefits also is relevant because at some point extremely costly more refined treatment will have a de minimis effect on the receiving waters. Ass n of Pac. Fisheries v. EPA, 615 F.2d 794, 818 (9 th Cir. 1980). In American Petroleum Institute v. EPA, the court held that EPA would disserve its mandate were it to tilt at windmills by imposing BAT limitations which removed de minimis amounts of polluting agents from our Nation s waters, while imposing possibly disabling costs upon the regulated industry. 787 F.2d 965, 972 (5 th Cir. 1986) citing Alabama Power Co. v. Costle, 636 F.2d 323 (D.C. Cir. 1979) ( Alabama Power ) and Appalachian Power Co. v. Train, 545 F.2d 1351 (4 th Cir. 1976). Thus, an ELG would be unreasonable if it is too costly relative to benefits, particularly where, as here, review of the record reflects significant underestimation of costs and overestimation of benefits. An unreasonable ELG is not a valid exercise of EPA s discretion under the CWA Id. 1311(b)(2)(A) (emphasis added). 10 Id. 1314(b)(2)(B). 11 The legislative history of the CWA states that, in assessing the cost of BAT the Administrator will be bound by a test of reasonableness. See Congressional Research Service, A Legislative History of the Water Pollution Control Act Amendments of 1972 at 170 (1973). 16

26 EPA has traditionally evaluated and considered the cost-effectiveness of its ELG regulations. Cost-effectiveness is defined generally as the cost of compliance with the regulation relative to the effluent reduction that is achieved by the regulation: the cost per pound of pollutants abated. EPA has used the cost-effectiveness of ELGs as an important measuring tool since at least the late 1970s. In general, the cost-effectiveness tests applied by EPA involve estimating the cost at which the proposed ELG abates a pound of various types of pollutants and then comparing this standardized cost for the ELG being evaluated against past benchmarks that denote an upper bound to the standardized cost that previously were deemed acceptable. For toxic pollutants EPA evaluates the cost per toxicity-weighted pound for the quantity of toxic pollutants (priority pollutants plus nonconventional pollutants) abated by the BAT ELG option under consideration as compared to the cost per toxic-weighted pound at which toxic pollutants have been abated in previous ELGs. In other rulemakings, EPA has typically imposed costs of less than $200/TWPE and never more than $404 (in 1981 dollars). Indeed, as the NERA report attached to the UWAG Comments observes, the mean is $47/TWPE, and the median is $15/TWPE. At a minimum, any ELG for which the proposed BAT option would abate toxic pollutants at a cost exceeding the current maximum $404 per TWPE figure should be judged not cost-effective. As demonstrated below, under this benchmark, the proposed steam electric ELG is not cost-effective and is therefore an unreasonable exercise of EPA s authority under section 304(b) of the CWA. 17

27 V. BAT for Flue Gas Desulfurization Wastewater A. EPA s Proposed Options for FGD Wastewater Flue gas desulfurization (FGD) wastewater is one of the seven key wastestreams for which EPA proposes a limit in the proposed rule. Three out of four of EPA s preferred options for FGD wastewater treatment, options 3, 3b, and 4a, would combine chemical precipitation with biological treatment. Option 3b would phase in this technology for facilities with a total wet scrubbed capacity of 2000 MW or greater, and would allow best professional judgment (BPJ) decisions for facilities with lower wet scrubbed capacity. The fourth preferred option 3a would apply BPJ to all FGD wastewater treatment decisions. The record underlying EPA s proposed FGD limits exemplifies many of the concerns EEI and its members have with the proposed rule as a whole. In particular, as discussed below, the record suffers from insufficient representative data to support the proposed limits, as well as significant flawed assumptions, a lack of transparency, and resulting compounded flaws. These problems with the record have resulted in a proposal that is not cost-effective, except possibly for chemical precipitation treatment at plants with a maximum design flow rate over 200 gpm. EPA s proposals for FGD wastewater do not meet the rulemaking objectives identified in section II.B above or the requirements of CWA section 304(b) as discussed in section IV.B above. As a result, EEI and its members do not support any of the proposed technologies or limitations based on the record as it stands. Instead, EEI recommends that EPA reopen the record. It is possible that, with additional data, EPA may be able to justify installing chemical precipitation for FGD wastewater at some plants. If so, an exception should be made for plants (a) with maximum design flow rates less than or equal to 200 gpm; (b) plants that can demonstrate that, for their treatment by FGD wastewater, chemical precipitation would not be 18

28 cost-effective; and (c) plants that can demonstrate that, because of site- or plant-specific treatment features or conditions, chemical precipitation would be either technically or economically unavailable. B. EPA s Sampling Program Did Not Properly Characterize the Industry s FGD Wastewaters EPA should not derive limits for any FGD technology including chemical precipitation without a more robust set of data. EPA s limited data in the record for this rulemaking do not represent the variability of FGD wastewater across the industry. During its development of the proposed rule, EPA obtained data from only 13 facilities with FGD wastewater treatment systems. EPA s resulting data do not adequately characterize the industry. For example, EPA needed to obtain data associated with facilities burning diverse types of coal. However, only one of the sampled plants (Pleasant Prairie) burns Powder River Basin (PRB) coal; another (Hatfield s Ferry) burns a blend of PRB and Eastern bituminous, and the rest burn only Eastern bituminous. According to EPA, out of 117 plants discharging FGD wastewater, burn subbituminous (i.e., PRB) coal and burn a blend of coals TDD at 6-5, Table 6-2. Using only one plant to represent each of those fuel types is inadequate, and cannot possibly capture the variability of FGD wastewater discharges for PRB and blended coal plants. Additionally, the plants selected for sampling are not geographically diverse, a factor that could affect several variables including treatment efficiency. There are no New England or Southwest plants, and just one Midwest plant (Miami Fort). Three of the sampled plants are in Pennsylvania. To characterize FGD wastewater and FGD wastewater treatment through chemical precipitation, chemical precipitation plus biological treatment, and vapor-compression evaporation, EPA used only select facility data from the already limited data set. For example, 19

29 although it had data from seven plants with chemical precipitation systems, EPA chose only three to characterize chemical precipitation treatment levels. See 2013 TDD at 10-9 to 10-10, Table 10-4 at The three plants selected by EPA have the highest pollutant loadings of the plants sampled by EPA. Therefore, they have the highest annual TWPE removals. EPA should have sampled more plants to calculate more representative pollutant reductions. In another example, EPA s assessment of biological treatment is based on only two plants, Allen and Belews Creek. There are several similarities between the Belews Creek and Allen plants, however. For instance, they burn a similar mix of coals, and both plants influent to the FGD treatment system is low in total dissolved solids (TDS) and chlorides and therefore relatively easy to treat. Other plants with influents higher in TDS and chlorides will present more challenges for the treatment system. C. EPA s Sampling Protocol for FGD Wastewaters was Flawed Despite Advice to Revise Agency Methodology Data underlying the FGD wastewater analysis, which already would be insufficient due to the characterization faults discussed previously, is further limited due to significant flaws identified in the sampling protocol. For example, EPA failed to collect paired samples of influent and effluent, and was not consistent in its choice of sampling points, timing, and methods. See UWAG Comments for additional examples of specific data flaws and details regarding the examples provided here. These sampling flaws are particularly egregious given industry s recommendations to EPA during the pre-rulemaking stage that, e.g., EPA needed to collect adequate numbers of representative samples, to collect paired samples of influent and effluent, and to sample all selected FGD wastewater treatment systems over multiple seasons. 20

30 If EPA persists with any option that relies on chemical precipitation or biological treatment, then it must gather more data to prove that the selected treatment system is feasible for other types of scrubbers and coals and to generate data that will result in achievable limits across the industry, as required by CWA section 304(b). D. EPA s FGD Wastewater Control Technology Cost-Effectiveness Analysis is Flawed and Must be Redone Building upon limited and problematic data, as described above, EPA s assessment of the cost-effectiveness of potential control technologies is inherently flawed, and must be redone. Any reliance on the existing analysis would be arbitrary and capricious. As is its standard practice, EPA has calculated the cost-effectiveness of the proposed BAT requirements, including those for FGD wastewaters. 78 Fed. Reg. at 34,503 col. 2. EPA has correctly judged that $404/TWPE in 1981 dollars is about the most a BAT requirement should cost. See 78 Fed. Reg. at 34,504 col. 1-2; see also 68 Fed. Reg. 25,686, 25,701 col. 3, see also 25,702 col. 2 (May 13, 2003) (EPA finding a technology was not BAT when it had a cost of $1000/PE because this was substantially greater than what EPA had typically imposed for BAT technology in other industries, generally less than $200/TWPE). But EPA s conclusion that the FGD proposal is within past precedent and range is mistaken. In fact, EPA has underestimated costs and overestimated benefits. The real $/TWPE of EPA s proposed FGD wastewater treatment options is significantly higher. For example, EPA s cost-effectiveness calculations for FGD wastewater control technologies, chemical precipitation and biological treatment, incorporate significant flaws. The flaws include the agency s use of certain pollutants (e.g., boron) for purposes of assessing technology effectiveness, when those pollutants are not actually removed by the proposed technologies. EPA also relied on cyanide data that were affected by various interferences and 21