Analysis - The Institute for Southern Studies

Increases due to increased disposal costs were estimated first and constitute the “base case” of this RIA. By increasing disposal costs, electric
utility plants face an “avoided disposal cost incentive” to ship their CCR farther for beneficial uses by other industries; that is, utilities would be
willing to pay more transportation costs to avoid the higher disposal costs. Thus, RCRA regulation of CCR disposal would likely open new
markets at farther transport distances, or increase purchases by existing markets. The effect of this stimulus would be to increase CCR
beneficial use. The concept of “avoided disposal cost incentive” is recognized and defined by the American Coal Ash Association (ACAA) on
its website as follows:
“If a [coal-fired electric utility] plant markets its [CCR] into commercial applications, then disposal of this [CCR] is not
required. Not only is a revenue stream created for the [coal-fired electricity plant] but also the need to dispose of the [CCR] is
avoided. As discussed above, disposal is not just the transportation and placement of [CCR] in a disposal site. The need for
future space is a concern. If [CCR is] marketed, then the need to develop future [CCR disposal] sites (including land
acquisition, permitting, design and construction costs) is avoided …. It is not uncommon for a company to help offset the costs
of transportation or placement at construction sites by providing the contractor or trucking firm a payment of some sort. For
example, if the cost of disposal at a plant is normally four dollars a ton, then the company may arrange a payment of four
dollars or less to the contractors to cover transportation and placement costs. The difference between the amount of this
payment and the cost of disposal is also referred to as “avoided disposal costs.” Source: ACAA Frequently Asked Question nr.
14 webpage at: http://acaa.affiniscape.com/displaycommon.cfm?an=1&subarticlenbr=5#Q14
On the other hand, some stakeholders have claimed that a Subtitle C “hazardous waste” approach would have a “stigma” effect on CCR,
reducing their use. That is, due to the label of “hazardous waste,” some purchasers of CCR might opt to turn down the CCR for more
expensive substitutes in fear that the CCR might either harm their sales or create liability, and generators might be reluctant to provide the
material to users because of liability concerns. The final alternative, that beneficial use quantities remain the same, results in no net costs or
benefits for the Subtitle C approach because it is assumed that the baseline trend plays out the same as it would absent a rule. Thus, no further
analysis of this option was necessary.
The two alternative Scenario analyses (i.e., Scenario #1, Scenario #2) in this section build upon the ACAA’s historical CCR beneficial use
data. 144 ACAA data on the beneficial use was modified to remove the use of CCR in minefilling applications because the proposed rule does
not address minefilling operations. Excluding 100% of the ACAA reported quantity of CCR used in minefilling results in a reduction of 1.13
million tons per year in the amount beneficially used. As a result, the 2005 quantity of beneficial use relied upon for our analyses is 48.5
million tons per year of CCR, rather than the original 49.6 million tons per year reported by ACAA.
144 Source: Historical CCR beneficial use data from the American Coal Ash Association (ACAA) “Coal Combustion Products -- Production & Use Statistics” webpage at:
http://acaa.affiniscape.com/displaycommon.cfm?an=1&subarticlenbr=3
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