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The method applied to characterize the overall level of quantitative uncertainty in the cost estimates of this RIA, is based on the 02 February 2005 “Recommended Practice No. 18R-97: Cost Estimate Classification System as Applied in Engineering, Procurement, and Construction for the Process Industries” 104 . This method is specifically applicable to cost estimates developed for mechanical and chemical process equipment used for engineering, procurement and construction across a wide variety of industries including the electric utility industry sector (i.e., NAICS code 22). As summarized in Exhibit 4M below, this cost estimate classification system involves five estimation categories (i.e., Class 1, Class 2, Class 3, Class 4, Class 5) reflecting different relative (a) levels of cost definition, (b) purposes and uses of cost estimates, (c) cost estimation methodologies, (d) expected accuracy ranges, and (e) degrees of cost estimate preparation effort. Estimate Category Class 5 Class 4 Class 3 Exhibit 4M Summary of Cost Estimation Classification System for Characterizing Data Quality Uncertainty in this RIA Level of Detail Level of Effort (Quantity of Input Information & Data) (Time Required to Complete the Cost Estimate) Very limited information (e.g., little more than proposed project Very limited amount of time and with little effort, sometimes type, location, and capacity). requiring less than one hour FTE to prepare the cost estimate. 1% to 5% complete, limited information (e.g., preliminary Sometimes requiring up to two months FTE for preparing the engineered process and equipment lists) for purpose of alternatives cost estimate. analysis, screening analysis, or demonstration of economic feasibility. 10% to 40% complete, semi-detailed information (e.g., process flow diagrams, equipment diagrams, layout drawings, engineered process and equipment lists). Expected Accuracy Range -50% to +100% -30% to +50% Data quality uncertainty range applied in this RIA (i.e., between Class 3 and Class 4) = -25% to +40% May require up to nine months FTE to prepare the cost estimate. -20% to +30% Class 2 30% to 70% complete, detailed information May require up to 1.5 years FTE to prepare the cost estimate. -15% to +20% 50% to 100% complete and full project definition (e.g., virtually all May require up to or over three years FTE to prepare the cost Class 1 -10% to +15% engineering and design documentation/plans) estimate. Because the bulk of the data collection and analysis presented in this RIA was executed in a relatively short time (i.e., five months) using semidetailed information for baseline CCR disposal conditions, disposal unit costs, and engineering control and ancillary costs for the regulatory options, the level of numerical uncertainty for the baseline cost and incremental costs for each of the regulatory options estimated in this RIA may be classified between a Class 3 and Class 4 type of estimate (i.e., -25% to +40%), as displayed below in Exhibit 4N. These uncertainty ranges represent a probability distribution about the cost estimates, and may be interpreted as the expected values (i.e., best estimates) and lowend and high-end ranges about each cost estimate. Such quantitative indicators of uncertainty are identified in OMB’s Circular A-4 (pages 40, 41) as acceptable for characterizing probability distributions for cost estimates involving major rules with possible annual economic effects of $1 billion or more for one or more regulatory options. 104 Recommended Practice No. 18R-97 (10 pages) published by the Association for the Advancement of Cost Engineering at: http://www.aacei.org/technical/rps/18r-97.pdf 108
Exhibit 4N Cost Estimation Uncertainty with Overall Data Quality Uncertainty Factor Applied to the October 2009 Draft RIA Options ($millions in 2009$) Subtitle C Hazardous waste Cost Estimate Uncertainty Indicator Best estimate (w/updated LDR cost): $1,474/year (updated) $20,343 PV -25% uncertainty low-end $1,106/year $15,264 PV +40% uncertainty high-end $2,064/year $28,485 PV Subtitle D (version 1) $1,368/year (updated) $18,880 PV $1,026/year $14,160 PV $1,915/year $26,429 PV Hybrid C&D: Subtitle C for impoundments Subtitle D for landfills $1,376/year (updated) $18,990 PV $1,032/year $14,243 PV $1,926/year $26,581 PV Note: PV = present value of average annualized cost over 50-years @7% discount rate, calculated by multiplying the average annualized cost by the present value factor = 13.801. Note: Chapter 6 of this RIA scales these estimated costs based on the October 2009 draft RIA, to the 2010 regulatory options. 109
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Regulatory Impact Analysis For EPA
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Table of Contents Executive Summary
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Executive Summary This RIA evaluate
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impoundments, the relative number t
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Summary Exhibit 3 Induced Effect of
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Summary Exhibit 6 Comparison of Reg
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Chapter 1 Problem Statement: The Ne
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Bevill Amendments 10 which exempted
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Just three weeks after the TVA’s
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2. Waste & Environmental Management
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This RIA did not discover similar d
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Exhibit 2A Identity of Other Indust
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Require review of surface impoundme
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Chapter 3 Baseline CCR Management i
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Exhibit 3C below, these 495 coal-fi
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Exhibit 3C State-by-State Electric
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3B. Types of CCR Disposal Units Es
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92 plants Offsite landfill fly ash
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electric utility plants in the data
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Exhibit 3E Annual CCR Disposition f
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3D. Size of CCR Disposal Units The
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costs for each type of disposal (no
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annual sampling for surface impound
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o Of the 25 state regulations revie
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Exhibit 3I Baseline Compliance with
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Baseline CCR Disposal Cost Estimati
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Before-tax costs: 50-year period:
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Baseline “Engineering Control”
Page 57 and 58: assume that the same water trucks w
Page 59 and 60: memorandum to George Garland, EPA,
Page 61 and 62: Exhibit 3K Summary of Industry & St
Page 63 and 64: ($80,000 per year average Subtitle
Page 65 and 66: Validity Check of Baseline Cost Est
Page 67 and 68: Chapter 4 Estimated Cost for RCRA R
Page 69 and 70: B. Ancillary costs for CCR disposal
Page 71 and 72: location restriction mitigation inv
Page 73 and 74: o Impoundment berms: The average su
Page 75 and 76: State government average cost per w
Page 77 and 78: corrective action remedies usually
Page 79 and 80: Exhibit 4A Two Case Studies: Possib
Page 81 and 82: Biennial Report”). According to E
Page 83 and 84: 4B.3 Land Disposal Restriction Cost
Page 85 and 86: The TVA cost study did not estimate
Page 87 and 88: Using the EPA ORCR 2009$ updated un
Page 89 and 90: Exhibit 4D Comparison of Annual O&M
Page 91 and 92: Exhibit 4E Summary of Wet Conversio
Page 93 and 94: o Recent Trend in CCR Impoundment P
Page 95 and 96: from coal to other fuels such as na
Page 97 and 98: o Result of Dry Conversion Cost Upd
Page 99 and 100: As summarized below in comparison t
Page 101 and 102: 17% phase-out trend suggest the fut
Page 103 and 104: RIA 50- ye ar period Actual company
Page 105 and 106: 4C. State-by-State Distribution of
Page 107: 4D. Cost Estimation Uncertainty Thi
Page 111 and 112: In contrast to the Exhibit 5A list
Page 113 and 114: Step 2. Determine Potentially Affec
Page 115 and 116: Step 3. Apply EPA-ORCR 2009 Arsenic
Page 117 and 118: RISKn WELLREACH iRISK EDn N Where
Page 119 and 120: The constant slope allowed estimati
Page 121 and 122: Step 6. Monetize Future Avoided Can
Page 123 and 124: controls like surface-impoundment p
Page 125 and 126: Finally, for Subtitle C, there woul
Page 127 and 128: Exhibit 5A-12 Percentile of Cleanup
Page 129 and 130: Exhibit 5A-16 Per-Site Groundwater
Page 131 and 132: Multiple CCR disposal units at a si
Page 133 and 134: 5B. Benefit of Preventing Future CC
Page 135 and 136: As displayed below in Exhibit 5B-2,
Page 137 and 138: Where: = Observed arrival rate (0.
Page 139 and 140: Step 3. Calculate Future Impoundmen
Page 141 and 142: some surface impoundment regulation
Page 143 and 144: Exhibit 5B-8 Poisson Distribution (
Page 145 and 146: With these new distributions, EPA p
Page 147 and 148: Exhibit 5B-12 Scenario #2: Cleanup
Page 149 and 150: 5C. Induced Effect of RCRA Regulati
Page 151 and 152: Exhibit 5C-1 Estimate of Annual Mat
Page 153 and 154: Exhibit 5C-3 below presents a 2004
Page 155 and 156: To avoid double-counting of economi
Page 157 and 158: 5C2. Potential Effect of RCRA Regul
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Others take a different view on how
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Exhibit 5C-7 EPA Extrapolation of E
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Based on the most recent CCR benefi
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Beneficial uses of CCR have been co
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Exhibit 5C-12 Beneficial Use Trend
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Increases due to increased disposal
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“Using [coal] fly ash in building
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Exhibit 5C-14 Historical Annual Per
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Hypothetical expansion of CCR custo
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Step 6: Apply Estimated Induced Eff
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Exhibit 5C-16 Scenario #1: Increase
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Exhibit 5C-17 Scenario #2: Decrease
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Exhibit 5C-18 Beneficial Use Trends
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Exhibit 5C-19 Scenario #1: Benefit
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Exhibit 5C-21 Scenario #2: Cost of
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Step 10: Quantify Potential Capacit
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Chapter 6 Comparison of Regulatory
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Exhibit 6B Comparison of Regulatory
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Exhibit 6D Comparison of Regulatory
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Exhibit 6F Comparison of Regulatory
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Exhibit 6F Scaling Factors (Extrapo
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Exhibit 6G Estimate of Subtitle D (
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detect contamination early and thus
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Step 1: Downloaded the annual milli
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Exhibit 7A State by State Breakout
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Small government: Based on the RFA/
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Step 3 & Step 4: Determine and docu
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Factor #2 of 2: The small business
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how much they use or indeed how muc
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Collection of Minority & Low-Income
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Comparison of Minority & Low-Income
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Exhibit 7G Minority and Low-Income
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Exhibit 7H Comparison of Minority a
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o The state-by-state range of minor
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CCR fraction #3: CCR fraction #4:
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7D. Child Population Statistics (Ex
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Comparison of Child Populations Liv
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Count of plant unique ZCTAds Exhibi
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Exhibit 7K Comparison of Child Popu
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7E. Unfunded Mandates (UMRA) & Fede
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Findings for UMRA Impact and Federa
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Exhibit 7M List of 74 Coal-Fired El
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Analysis - The Institute for Southern Studies

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