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2
Assessment and Commentary
on EPA’s Analysis
A
s indicated in Chapter 1, the intent of the U.S. Environmental Pro-
tection Agency’s (EPA) analysis was to assess the differential costs of
nutrient load reduction under the numeric nutrient criteria (NNC)
rule vs. Florida’s narrative rule. This chapter accepts the EPA definition
of the incremental effect of the NNC rule and focuses on the way EPA
estimated that effect and the costs for different sectors including municipal
wastewater facilities, industrial facilities, agriculture lands, urban stormwa-
ter, and septic systems. The associated costs of governmental administration
are also discussed. This chapter also includes some initial descriptions of
the current regulatory requirements for each sector and how regulatory
uncertainties can lead to different assumptions about the effect of the NNC
rule on the level and timing of costs. Chapter 3 provides an expanded dis-
cussion of the incremental effect of the rule and how uncertainty about the
rule change can affect incremental costs.
EPA COST ANALYSIS METHODS: OVERVIEW
The first part of EPA’s analysis was conducted for point sources, iden-
tifying the number of point sources that would have to improve treatment
in response to the NNC rule, the likely technological upgrades that would
be implemented, and the cost of upgrades based on unit costs multiplied by
the actual flow rate of each point source. The next step in the EPA analysis
was to determine the potential incrementally impaired waterbodies—that is,
an estimate of those waters that may be expected to be in noncompliance
with the numeric nutrient criteria, but that would not be impaired under the
35
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36 EPA’S ECONOMIC ANALYSIS OF NUTRIENT STANDARDS IN FLORIDA
narrative rule. Once this set of waters was defined, the analysis proceeded
to estimate the location and amount of land area that would require load
controls to meet the numeric nutrient criteria in the waterbody. For the
stormwater and agricultural sources, EPA identified the corresponding acre-
age draining to the potential incrementally impaired waterbodies, reduced
the acreage considered based on best management programs that were
already in place, selected a set of BMPs that EPA staff deemed adequate
and cost-effective, and then applied a unit cost to the resulting acreage to
estimate the total cost for the two sectors. For septic systems EPA deter-
mined the number of systems within 500 feet of a waterbody in a potential
incrementally impaired watershed and multiplied this number by unit cost
to upgrade septic systems to reduce their nutrient loads.
Several key regulatory assumptions were made by EPA and are dis-
cussed in the subsequent sector analyses only if the Committee took issue
with them. These assumptions include the following
• Impaired waterbodies where a total maximum daily load (TMDL)
has already been developed based on the narrative criteria were not con-
sidered, assuming that the TMDLs would serve as the basis for site-specific
alternative criteria (SSAC), if needed.
• Waters that are currently listed as impaired based on the narrative
criteria were also not considered, because it was assumed that a TMDL
for nitrogen (N) and/or phosphorus (P) would be developed and that this
TMDL would serve as the basis for an SSAC determination.
• Municipal and industrial plants discharging at 3 mg/L for total
nitrogen (TN) and 0.1 mg/L for total phosphorus (TP) were considered “in
compliance.”
• The cost of actions to reduce pollutant loads associated with im-
plementation of the statewide Stormwater Rule, the Urban Turf Fertilizer
Rule, the Florida Department of Environmental Protection (FDEP) Dairy
Rule, and Concentrated Animal Feeding Operation (CAFO) Requirements
would not necessarily be accruable to the NNC rule, since these programs
are already in place.
Three analytical assumptions of the EPA analysis were accepted for this
chapter (and are returned to in Chapter 3):
• The definition of the incremental effect of the NNC rule was de-
fined and limited to (1) waters that would be newly listed and determined
to be stressed by nutrients and (2) National Pollutant Discharge Elimina-
tion System (NPDES) municipal and industrial sources that would receive
certain concentration limits in their discharge permits.
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37
ASSESSMENT AND COMMENTARY ON EPA’S ANALYSIS
• EPA assessed the incremental effect of the NNC rule at a single
point in time, assuming no further changes would occur under the narrative
process (which was the baseline), instead of comparing the future outcomes
of both processes over time.
• The analysis assumed constant temporal conditions in such fac-
tors as population, land use, crop types, management practices, industrial
activities, and climate, even though the analysis acknowledged that the ef-
fects would occur over time (for example, there was a 20-year horizon for
amortizing capital costs).
Determination of Incrementally Impaired Waters
EPA defined one incremental effect of the NNC rule as the number of
waterbodies that would be listed as impaired under the numeric nutrient
criteria but not under the narrative criteria. Had monitoring data for N and
P concentrations been available for all waterbodies, this would be a simple
exercise. However, out of a total of 3,765 freshwater stream segments in
Florida, a very large fraction (84 to 89 percent) lacks sufficient monitoring
data on N and P concentrations to make an assessment, based on the ap-
plication of Florida’s Impaired Waters Rule (IWR) (FDEP, 2011). For the
1,444 lake segments in Florida, 59 to 78 percent lack sufficient information
to be assessed (FDEP, 2011), which covers a substantial area of the state,
particularly in the north and northwest (see Figure 2-1). Thus, of the 5,209
freshwater WBIDs in Florida (see Chapter 1 for the definition of a WBID),
approximately 77 to 86 percent cannot currently be assessed.1 Despite a long
record of water quality monitoring in Florida, the vast majority of the water-
bodies have insufficient information to determine whether action is needed.
Streams and Lakes2
Faced with this limitation, EPA opted for the following approach to
estimate the number of incrementally impaired streams and lakes. Using the
1 The range in unassessed segments reflects the difference in the amount of information re-
quired to assess under the current narrative criteria (one year of data) compared to the NNC
(three years), as well as differences in the quality of the data that EPA and FDEP considered
necessary to determine whether a WBID can be assessed. Furthermore, the sentence is not im-
plying that 77 to 86 percent of Florida waters have no monitoring data, just that there is not
enough data to make a determination of impairment based on the requirements of the IWR.
2 In this section, WBID and waterbody are interchangeable. WBID is used when citing data
on the number and status of impaired waterbodies from the EPA and FDEP documents. Also,
TMDLs are developed for individual or groups of WBIDs, so this term is also used when
discussing the TMDL process.
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38 EPA’S ECONOMIC ANALYSIS OF NUTRIENT STANDARDS IN FLORIDA
FIGURE 2-1 WBIDs with insufficient data to assess impairment.
SOURCE: EPA analysis for National Academy of Sciences.
FDEP database of WBIDs and monitoring data for the past five years from
IWR Run 40 (a subset of Florida’s water quality data), EPA first identified
potentially impaired waterbodies by comparing their monitoring data to
the numeric nutrient criteria. WBIDs where a nutrient-related TMDL had
already been established were excluded, based on the assumption that
FDEP would seek SSACs for those WBIDs and/or that “controls to reduce
nutrients already required in the absence of EPA’s rule would be sufficient.”
In addition, EPA identified WBIDs adjacent to lakes to which downstream
protective values could apply.3 Finally, all of the unassessed waters were
excluded by EPA from consideration as potentially impaired due to the new
3 The NNC rule requires the application of a downstream protective value when choosing
the criterion for a stream segment that enters directly into a lake. That is, if a stream directly
enters a lake and the lake criterion is more stringent, then the lake criterion would apply to
the stream.
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39
ASSESSMENT AND COMMENTARY ON EPA’S ANALYSIS
rule by assuming that unassessed waterbodies are likely to be unimpaired,
given Florida’s focus on monitoring the most polluted streams and lakes. In
other words, EPA assumed that if a waterbody were likely to be impaired,
Florida would have already known about it and monitored it under the
existing program of narrative criteria. Using these assumptions, EPA de-
termined that only 325 WBIDs potentially exceed the numeric nutrient
criteria [see Exhibit ES-4 in EPA (2010a)]. Given EPA’s assumptions, the
Committee considers the EPA estimate to be a lower bound on the number
of incrementally impaired waters that would be listed due to the new rule.4
FDEP used a different approach for estimating the number of poten-
tially impaired waters that would be listed due to the new rule and deter-
mined that there are between 424 and 546 incrementally impaired WBIDs
under the NNC rule (FDEP, 2011). The FDEP approach was based on a
statistical analysis, using the failure rate of assessed waterbodies under the
current narrative criteria to predict the number of unassessed waterbodies
that would fail under the numeric nutrient criteria. FDEP developed differ-
ent statistics for the various “nutrient watershed regions” identified by EPA
in the new rule (see Table 1-1). While using regionalized statistics acknowl-
edges biogeographic and climate differences, no other consideration was
given to the characteristics of a watershed that may result in impairment.
It is unknown whether prior information from the currently listed WBIDs
is a good predictor of the status of the unassessed WBIDs. The size and
land use composition of WBIDs varies substantially, which can lead to a
significant over- or underestimate of the impaired acreage. Thus, it is not
possible to determine whether this approach represents an upper bound on
the incremental number of potentially impaired waters due to the new rule.
A more defensible approach than either of the previous ones would take
into consideration the characteristics of the various WBIDs to predict the
likelihood that they would fail to meet the narrative criteria or the numeric
nutrient criteria. For example, using the land use data and land use man-
agement statistics of the assessed WBIDs, one could establish a relationship
between the likelihood of impairment and the level of urbanization, num-
ber of septic systems, loading from NPDES-permitted sources, agricultural
production, the level of adoption of agricultural and stormwater BMPs in
a given WBID, etc. The land use information for such an analysis is read-
ily available in geographic information system (GIS) format. FDEP has a
database of septic systems in each WBID. Land management information
could be obtained from FDACS (for agricultural BMPs implemented) or
from MS4 permittees (for stormwater BMP adoption). While this approach
also entails a certain level of uncertainty, the uncertainty should be easier to
estimate and report. In addition, since the potential incrementally impaired
4 Assuming EPA’s definition of incrementally impaired.
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40 EPA’S ECONOMIC ANALYSIS OF NUTRIENT STANDARDS IN FLORIDA
WBIDs can be identified, their specific acreage can be considered for the
analysis, reducing this source of uncertainty.
Springs
EPA identified springs with any monthly geometric mean nitrate-nitrite
concentration greater than the numeric nutrient criterion as impaired. As
with streams and lakes, EPA removed from the resulting list of springs
those that are currently on Florida’s 303(d) list of impaired waters. This
analysis resulted in 24 incrementally impaired springs (see Exhibit ES-4 in
EPA, 2010a). Waters with insufficient data to determine compliance were
assumed to be unimpaired under the numeric nutrient criteria. Thus, the
same issues that were discussed above for lakes and streams regarding unas-
sessed waters also potentially hold for springs (in terms of the EPA number
being a lower bound).
Acreage of Land Draining to Incrementally Impaired Watersheds
After estimating the incrementally impaired WBIDs, the next step was
to determine the acreage of various land uses that contribute to the po-
tential impairment. EPA used a relatively coarse “grid,” by considering
the 10-digit hydrologic units code (HUC10) watersheds, as defined by the
USGS. Because WBIDs may not fall within a single HUC10, to estimate the
incremental acreage EPA considered all the HUC10 watersheds containing
at least 10 percent of an incrementally impaired lake or stream, which may
lead to a significant overestimate of the incremental acreage (EPA, 2010a).
On the other hand, EPA excluded all of those HUC10 watersheds that
contain at least 10 percent of a lake or stream that are currently impaired
or under a TMDL. This could lead to an underestimate of the incremental
acreage. The Committee’s evaluation of maps showing the incrementally
impaired WBIDs and their associated HUC10s did not lead to an obvi-
ous conclusion that the HUC10 units are an over- or underestimate of the
acreage.
The HUC10 watersheds are generally too coarse for TMDL analysis,
which is typically done with a delineation closer to the USGS HUC12 sub-
watershed level. Figure 2-2 provides an example of the resolution of the
WBIDs for the Santa Fe River in Central Florida. As can be seen, there are
dozens of WBIDs within this single basin, of varying sizes. Figure 2-3 pres-
ents the HUC10s for this same region. There are only seven large HUC10s
within this basin. Figure 2-4 presents the HUC12 delineation for the re-
gion. Although there is no direct correspondence between the HUC12s
and Florida’s WBIDs, the size of the WBIDs is generally much closer to
the HUC12s. Thus, a more precise estimate of the potential incrementally
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41
ASSESSMENT AND COMMENTARY ON EPA’S ANALYSIS
FIGURE 2-2 WBIDs in the Santa Fe River.
SOURCE: McKee (2011).
FIGURE 2-3 HUC 10 delineation for the Santa Fe River in Central Florida.
SOURCE: McKee (2011).
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42 EPA’S ECONOMIC ANALYSIS OF NUTRIENT STANDARDS IN FLORIDA
FIGURE 2-4 Comparable HUC 12 delineation for the Santa Fe River in Central
Florida.
SOURCE: McKee (2011).
affected acreage due to the new rule could have been performed using the
same assumptions but with the HUC12 delineation of the areas contribut-
ing to the various WBIDs. Alternatively, EPA could have used the area for
each specific WBID for their analysis.
In addition to considering a relatively coarse grid for the analysis, EPA
considered that every acre of agricultural and urban land in an HUC10
contributes equally to in-stream loading. While it is likely that the char-
acteristics of Florida’s WBIDs in some regions, such as artificial drainage
and highly transmissive soils, may lead to contributions from fields further
away from the WBID than in other regions around the United States, the
coarseness of the grid makes this assumption much less valid. While a ro-
bust analysis would require a full fate-and-transport calculation, an inter-
mediate approach would have considered a distance/travel time weighting
factor between the contributing croplands and the WBIDs. Using the more
refined HUC12 delineation of subwatersheds would also reduce the error in
these estimates of land areas that contribute to water quality degradation.
To estimate the urban areas, agricultural land, and septic systems that
may need controls to attain the numeric nutrient criteria for springs, EPA
obtained GIS data on land areas where groundwater aquifers supply wa-
ter to springs (spring recharge areas or springsheds) from FDEP’s Florida
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43
ASSESSMENT AND COMMENTARY ON EPA’S ANALYSIS
Geological Survey. EPA identified incrementally impaired spring recharge
areas as those vulnerable to surface sources of contamination by the Florida
Geological Survey Florida Aquifer Vulnerability Assessment (Arthur et al.,
2007). The Committee has no concerns with this approach.
Determination of Incrementally Affected
NPDES-Permitted Municipal and Industrial Sources
EPA made the conservative assumption that municipal and industrial
wastewater point sources would be potentially affected by the NNC rule
regardless of the impairment status of the WBID in which they are located.
To determine the incremental effect of the NNC rule on these sources, EPA
assumed that wastewater treatment plants (WWTPs) would be considered
to be in compliance with the NNC rule if they could treat their discharges
with advanced biological nutrient removal (BNR) to reach 3 mg/L for TN
and 0.1 mg/L for TP as annual averages. This level of performance was
selected based on a judgment regarding demonstrated technology that has
been used at sufficient scale and can be reasonably applied in Florida (see
discussion below under the subsection entitled “Effectiveness of Control
Methods”). These targets for water quality-based effluent limits (WQBELs)
for all WWTP permittees assume some dilution and assimilation within the
receiving waters to meet the numeric nutrient criteria at the point of compli-
ance. Whether more stringent effluent limits will be required, approaching
or in fact equaling the appropriate numeric nutrient criterion, is a matter of
dispute and is discussed further in this chapter and in Chapter 3.
From the Committee’s reading of EPA (2010a), it appears that only
municipal and industrial point sources that discharge to freshwater lakes
and streams were considered in the analysis. Municipal and industrial point
sources that discharge to groundwater via effluent spray fields or rapid
infiltration basins were not considered, although they have the potential to
lead to nitrate impairment in springs. For example, both Ichetucknee and
Wakulla springs are suspected to be impacted by municipal wastewater
effluent spray fields. Lake City’s spray field disposes 3 million gallons per
day (MGD) of wastewater effluent in the Ichetucknee springshed. The City
of Tallahassee’s municipal effluent sprayfield disposes of about 20 MGD in
the Wakulla springshed. A more conservative analysis would have identi-
fied all municipal and industrial facilities with effluent sprayfields and rapid
infiltration basins in incrementally impaired springsheds and assumed that
some level of additional treatment might be required before disposal of
their wastewater. Discussions with EPA indicated that they were aware of
this possibility, but that available data did not allow them to unambigu-
ously identify all relevant municipal dischargers that would affect springs
(although the data suggested that the number of such dischargers and their
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44 EPA’S ECONOMIC ANALYSIS OF NUTRIENT STANDARDS IN FLORIDA
capacity was relatively small). Thus, EPA judged that exclusion of these
dischargers from the cost analysis would not materially affect the total
cost estimate. The quantitative assessment on which this assumption was
based was not presented by EPA, making it difficult to determine whether
the assumption was reasonable, especially from a water quality (as opposed
to a cost) standpoint.
A potential additional industrial cost could exist due to the large num-
ber of general permits utilized by Florida. A footnote on Page 2-15 of the
EPA analysis states there are 34,508 dischargers covered under general
permits in Florida and that EPA did not include those dischargers in the
analysis. General permits are used to cover a common class of dischargers
in a streamlined fashion with minimal cost to the permitting authority and
the permittee. There is no further information regarding the classes of dis-
chargers covered by the general permits. However, if any of those general
permits relate to industrial facilities discharging nutrients, those facilities
could potentially lose general permit coverage and be required to obtain
individual permits. Compliance costs for holders of individual permits are
generally higher than for general permits. A related uncertainty of this
type arises with stormwater sources. At present, most of these sources are
deemed to be outside the NPDES-regulated process where WQBELs apply.
However, if this changes due to regulation or third party lawsuits and if the
discharge limits that would result are more stringent under the NNC rule
than under the narrative rule, then these sources could realize greater costs.
What is assumed about all these regulatory uncertainties has a direct
influence on the cost estimates reported by EPA and others. Chapter 3
provides a discussion of the regulatory setting, and how to best incorpo-
rate regulatory and other uncertainties in a cost analysis. The sections that
follow here focus on uncertainty related to unit costs and effectiveness of
controls by sector.
SECTOR COST ASSESSMENTS
This review of the EPA economic analysis considered the following
issues for each sector. First, the overall methods to determine costs were
analyzed, focusing on the number of affected units and the per unit cost
of treatment. For example, for the agricultural sector the review considers
whether EPA estimated the affected agricultural acreage correctly and the
costs of BMPs that would be needed for that acreage. Each section discusses
the effectiveness of the proposed control methods, where appropriate. In
doing so, the Committee used the numeric nutrient criteria as a threshold
for evaluating the efficacy of BMPs, in the absence of any other logical
benchmark. Each section describes the relevant sources of uncertainty in
the cost estimate, including variability in per unit costs, uncertainty in BMP
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ASSESSMENT AND COMMENTARY ON EPA’S ANALYSIS
performance, and regulatory behaviors. It should be noted that some of the
uncertainties discussed are not unique to using numeric nutrient criteria (as
opposed to narrative criteria); nonetheless, they are discussed here because
of their potential effect on the cost estimate for a given sector. Finally, the
results of other competing cost analyses are given and compared to those
of EPA.
Municipal Wastewater Discharges
EPA estimated that $22.3 to $38.1 million/year would be the cost to
municipal wastewater sources to comply with the proposed NNC rule in
Florida. The EPA analysis assumed that municipal wastewater dischargers
would be in compliance with the NNC rule if they could meet the definition
of advanced BNR as presented above (discharge limits of 3 mg/L for TN
and 0.1 mg/L for TP as annual averages). It is important to note the use of
an annual averaging period for TN and TP in EPA’s cost estimate. Annual
averaging means that seasonal variability in wastewater discharge pollutant
concentrations is averaged out over the course of a year. There has been
some effort at EPA to enforce average monthly and weekly permit limits
based on interpretation of 40 CFR 122.45(d) requiring average monthly
and weekly permit limits if “practicable.” Monthly and weekly limits are
not as applicable for pollutants such as TN and TP, which do not exhibit
toxic effects, as they are for other pollutants typically regulated by NPDES
permits and which exert their impacts over shorter timeframes than do TN
and TP. However, if monthly and/or weekly permits were required for TN
and TP, the cost of compliance would increase due to the need to build
increased reliability into treatment plant design.
Methods to Determine Costs
EPA considered that every municipal WWTP had “reasonable poten-
tial” under the NNC rule, meaning that they might discharge pollutants at
levels that would prevent associated receiving waters from achieving the nu-
meric nutrient criteria. Thus, their analysis focused on determining whether
existing plants had already installed removal technologies that could meet
the targets of 3 mg/L for TN and 0.1 mg/L for TP as annual averages. When
both TN and TP removal technologies were already installed at a particular
WWTP, it was assumed that additional modifications were unnecessary and
that no cost was associated with these facilities to comply with NNC rule.
Likewise, when either TN or TP removal technology was installed, only
the cost to install and operate technology to remove the alternate nutrient
was attributed to these facilities. This approach is reasonable, as costs for
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ASSESSMENT AND COMMENTARY ON EPA’S ANALYSIS
of the SSAC, and on evaluating variance requests, but these costs were not
considered in the EPA analysis. The history of using SSACs and variances
for nutrient issues is virtually unwritten on a national level. Thus, their use
in Florida would be breaking new ground.
Second round and later costs for TMDLs. EPA assumes all TMDL
costs occur over a nine-year period and then end. In reality, many adap-
tively managed TMDLs will have to be evaluated after the nine-year period
and adjustments made to the TMDL to further reduce nutrients. While not
as costly as the original TMDL development, there are costs involved in the
reevaluation of those TMDLs.
Potentially Lower Stream Criteria Based on Downstream Protective
Values. Once EPA promulgates numeric nutrient criteria for estuaries,
those criteria could force lower nutrient concentrations in streams in order
to meet the estuary criteria. Lower mandatory stream concentrations could
result in additional waters being assessed as impaired, thus increasing the
number and complexity of the TMDLs which must be developed.
Sources of Uncertainty
Government costs as analyzed by EPA are tied exclusively to TMDL
development. Thus, a significant uncertainty for the government sector is
the number of waterbodies that may be impaired and require a TMDL.
Different estimates put that number between 325 and 1,018. While there is
also a large percentage difference in the unit cost of each TMDL estimated
by EPA as compared to others, the gross cost per TMDL is small in com-
parison to implementation costs in other sectors.
Another significant unknown is that FDEP maintains they will be un-
able to develop TMDLs and BMAPs for waters deemed impaired according
to the EPA numeric nutrient criteria due to Florida state law prohibitions
on the use of criteria not contained in state rule (FDEP, 2010). If that is the
case, EPA will be forced to take the lead in both identifying nutrient im-
paired waters and developing TMDLs and BMAPs. Since EPA has no track
record of developing nutrient TMDLs, it is unclear what an EPA TMDL
would look like, how it would be implemented, and what it would cost.
All of EPA cost estimates assume the State of Florida will implement the
numeric nutrient criteria. It is anticipated that costs could be significantly
higher if EPA were responsible for a nutrient TMDL program because EPA
would have initial start-up costs in establishing an infrastructure capable of
assessing Florida’s waters, developing TMDLs, and following up on BMAP
implementation.
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78 EPA’S ECONOMIC ANALYSIS OF NUTRIENT STANDARDS IN FLORIDA
TABLE 2-7 Cardno ENTRIX Total Government Cost Analysis in Millions
Estimated Present Value Cost:
Estimated Annualized Cost 2011-2040
Monte
5th 95th 5th 95th Carlo
Assumption Percentile Percentile Mean Percentile Percentile Mean Output
BMP/LOT $1 $4 $2 $11 $65 $32 $29
End-of-Pipe
Criteria $3 $11 $6 $43 $175 $93 $85
Other Analyses
Cardno ENTRIX (2011) performed an analysis of government cost as a
part of their overall review of EPA’s cost analysis. Their Monte Carlo analy-
sis of the data led to a prediction of 902 additional waters would be listed
as impaired under the numeric nutrient criteria. The analysis also estimated
a higher unit cost for each TMDL using EPA’s minimum and maximum unit
costs as model inputs. Based on the analysis, Cardno ENTRIX estimated
a TMDL unit cost of $64,000 as opposed to the EPA estimate of $47,000.
To determine the total government costs, Cardno ENTRIX considered
two scenarios—(1) Best Management Practices for diffuse sources and the
Limit of Technology for point sources (BMP/LOT) and (2) End-of-Pipe
(EOP) assumption that both point and diffuse sources would be required
to meet the numeric nutrient criteria at the end-of-pipe or edge-of-field.
The results of the Monte Carlo simulation, which provide a range of cost
from low to high, are given in Table 2-7 and range from $1 million to $11
million with a mean of $6 million. The EPA cost estimate of $0.9 million
is near the low-end Cardno ENTRIX estimate.
While the difference between $0.9 million and $6 million is very sig-
nificant in terms of state government budgeting, the government costs are
a small fraction of the overall cost of implementation—less than 1 percent.
Therefore, the government costs play an insignificant role in terms of the
total costs for implementing numeric nutrient criteria.
FINDINGS AND RECOMMENDATIONS
The first set of findings and recommendations pertain to the determi-
nation of the number of incrementally impaired waters, and as such have
repercussions for several of the sector analyses. A second set of findings
and recommendations are provided that are specific to each sector, pre-
ceded by a summary table. All of these findings and recommendations are
based on the assumption that EPA would use the same basic method for
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ASSESSMENT AND COMMENTARY ON EPA’S ANALYSIS
any future economic analyses, with the intent of making suggestions for
improvements.
Incrementally Impaired Waters and Watersheds
FINDING: The HUC10 delineation used to assess the acreage of vari-
ous land uses that contribute to the potential impairment is too coarse.
RECOMMENDATION: EPA should use the more refined HUC12
delineation to generate a more precise estimate of the acres to consider
for the BMPs in the various land uses.
FINDING: It is not valid to assume that the percent of unassessed
waters that would be incrementally affected is zero. A more defensible
approach would take into consideration the characteristics of the vari-
ous WBIDs to predict the likelihood that they would fail to meet the
narrative criteria or the numeric nutrient criteria.
Sector Analyses
Table 2-8 summarizes the Committee’s assessment of EPA’s economic
analysis by sector. The color coding of Table 2-8 entries reflects the Com-
mittee consensus of the accuracy of the EPA evaluation. Green indicates
a satisfactory job in addressing the issue, yellow indicates only moderate
agreement, and pink indicates unsatisfactory assessment.
The table is based on the cost method used in the EPA analysis, in which
the total sector cost was calculated as the product of the number of affected
units (or area) and the unit cost. The second column refers to how well EPA
determined the number of affected units, including judgments on assumptions
used for the number of point discharges that will require treatment upgrades
and land areas that will need to have new BMP technologies implemented.
The third column deals with the accuracy of unit costs assessments.
The fourth column considers whether the numeric nutrient criteria
could be met by existing technologies at the “end-of-pipe” or “edge-of-
field” for each sector. The EPA analysis assumes that in every case assimi-
lative capacity exists somewhere in the watershed or waterbody, or that
administrative relief is available, such that the each sector does not have to
meet the numeric nutrient criteria at the end-of-pipe or edge-of-field. Yet
the EPA has not employed watershed modeling to determine if implement-
ing all assumed technologies would allow the numeric nutrient criteria to,
in fact, be met. From the regulatory standpoint, if a waterbody violates the
numeric nutrient criteria, its assimilative capacity is considered to already
be exceeded. Thus, the numeric nutrient criteria were used in this column
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TABLE 2-8 Summary of Key Findings by Sector
EPA estimate of the area EPA estimate of the unit Can chosen technologies/
80
affected or number of units cost of BMPs BMPs meet the NNC? Strategies to improve the analysis
Municipal All WWTPs included due CAPDET Works cost Assumed that WWTPs 1. Ground truth unit costs based
Plants to “reasonable potential” estimates not verified using would only be required to on significant existing Florida
provisions of regulations Florida-specific experience treat to 3 mg/L TN and 0.1 experience
mg/L TP and none will treat 2. More realistically reflection
to NNC at end of pipe of the proportion of WWTPs
receiving administrative relief to
avoid treating beyond 3 mg/L TN
and 0.1 mg/L TP
Industrial Established by averaging flows CAPDET Works program Same as for municipal Should not have investigated only
Plants from only a limited number of (used for municipal WWTPs 1 or 2 plants per SIC but rather
facilities and extrapolating to facilities) was misapplied to analyzed each plant
others industries
Agriculture EPA likely underestimated the Costs from SWET report No. Alternative BMPs will Use existing TMDLs and
area of incrementally impaired not representative; need likely be required along restoration plans to identify the
watersheds as well as the more site-specific cost with land retirement BMPs and regional treatment
number of springs affected estimates needed to meet the criteria
Urban Assumed Urban Turf Rule EPA used low end of a very Assumed traditional BMPs Consider advanced BMP
Stormwater would insure compliance on wide range of unit costs would meet NNC and implementation throughout most
all low-density residential land assumed 100% compliance developed land area
and that all land after 1982 is and functionality for urban
already in compliance BMP implementation;
NNC may necessitate more
advanced BMPs
Septic Excluded systems beyond 500 ft Reasonable for technologies Not necessarily, but other Consider wider range of systems
Systems and springs areas evaluated technologies may and updated per unit costs
Government Did not consider other Used old TMDL cost data NA 1. Use contemporary, Florida
Costs government costs like SSAC not specific to FL and nutrient-specific TMDL
approval, variances, etc. development costs
2. Consider costs of SSACs,
TMDL revision, etc.
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ASSESSMENT AND COMMENTARY ON EPA’S ANALYSIS
because no other logical benchmark is available with which to compare the
performance of technologies and BMPs.
An important consideration not well captured in this summary table (but
returned to in Chapter 3) is the degree of uncertainty and variability expected
in each of the sector categories. In many cases, uncertainty is expected to be
exceedingly high. While some uncertainty is captured in the EPA analysis,
it is not considered to be adequate to describe the vast complexity inherent
in many of the parameters critical to the economic analysis. In some of the
sectors, especially with agriculture and with urban stormwater, technology
and implementation unit costs can vary by factors approaching two orders of
magnitude. Placing the assessment accuracy results summarized in Table 2-8
in the context of the high uncertainty and variability of many of the catego-
ries leads to even greater concern with the EPA economic analysis.
Municipal Wastewater Treatment Plants
FINDING: There is significant uncertainty in the cost estimate for
municipal wastewater treatment plants because (1) the unit treatment
costs were not thoroughly verified by comparison to the existing and
extensive Florida advanced wastewater treatment experience and (2)
the assumption that no plant will be required to treat to levels more
stringent than 3 mg/L TN and 0.1 mg/L TP is unrealistic. While the
proportion that will be able to avoid treating to levels more stringent
than 3 mg/L TN and 0.1 mg/L TP is uncertain, there is a real pos-
sibility that at least some WWTPs will have to treat to more stringent
levels.
RECOMMENDATION: Efforts should be made to compare the unit
costs of CAPDETWorks with cost data from Florida. Efforts should
also be made to better estimate the percentage of plants that will be
required to reach discharge limits more stringent than 3 mg/L TN and
0.1 mg/L TP by performing mass balance and dilution calculations for
at least a representative proportion of plants, if not for all of the plants
included in this analysis.
Industrial Plants
FINDING: There is significant uncertainty about the incremental cost
of the NNC rule for industrial plants for several reasons. EPA based its
estimates on one or two selected facilities from each sector and ignored
the diversity of industrial facilities within a sector. This extrapolation
led to some low-flow facilities exerting a disproportionate influence
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82 EPA’S ECONOMIC ANALYSIS OF NUTRIENT STANDARDS IN FLORIDA
on the overall industrial costs. Furthermore, the same cost model and
treatment processes were used for industrial facilities as was employed
for municipal WWTPs. For facilities with highly variable flows, flow
equalization may be a more cost-effective solution than mechanical/
chemical treatment, such that EPA may have overestimated costs for
these facilities. On the other hand, some industrial facilities have higher
unit costs than municipal WWTPs. Finally, industries covered under
general permits were not investigated, raising the question of whether
there may be costs to remove nutrients from those facilities that were
not captured in EPA’s estimates.
RECOMMENDATION: Given the small number of industries in-
volved, the cost analysis should be improved by analyzing each plant
rather than extrapolating the results of one or two plants to the entire
sector. As with the municipal wastewater treatment plants, efforts
should be made to compare the unit costs of CAPDETWorks with cost
data from Florida and to better estimate the percentage of plants that
will be required to reach discharge limits more stringent than 3 mg/L
TN and 0.1 mg/L TP.
Urban Stormwater
FINDING: For the urban stormwater sector, the costs of complying
with the NNC rule in those watersheds determined by EPA to be in-
crementally impaired are expected to be higher than EPA estimates.
However, high uncertainty and variability is prevalent throughout all
aspects of this sector analysis, which would lead to a wide cost range
and costs that are highly dependent on several critical assumptions.
Most traditional Florida urban SCMs will not likely be able to comply
with stringent numeric nutrient criteria, but newer, novel (and more
expensive) technologies may. Per acre costs for traditional Florida
SCMs are highly variable; broadening the SCM options increases the
cost range even more. Many simplifying assumptions are employed
to estimate urban land area incrementally affected by the NNC rule.
Actual affected land area estimates are highly dependent on unverified
existing SCM performance and compliance with urban stormwater
rules and regulations.
RECOMMENDATION: To improve the cost analysis, higher-efficiency
SCMs should be considered, which have costs higher than traditional
SCMs. Costs of retrofitting SCMs into already-developed land should
be considered.
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ASSESSMENT AND COMMENTARY ON EPA’S ANALYSIS
Agriculture
FINDING: For the agricultural sector, the costs of complying with the
NNC rule in those watersheds determined by EPA to be incrementally
impaired are likely to be higher than EPA estimates. The incremental
land area needing treatment was likely underestimated, individual costs
for the BMPs assumed to be sufficient were underestimated, and the
more effective and costly BMPs and regional treatment systems likely
required to meet numeric nutrient criteria were not included in the
analysis. The need for more stringent BMPs and treatment systems
has been demonstrated in many of the BMAPs developed for impaired
waters in Florida. Furthermore, there were some critical omissions
that could well lead to increased costs, including the degree of actual
participation by agricultural producers and the costs of maintaining
BMPs over time.
RECOMMENDATION: To improve the cost analysis, actual experi-
ence from existing TMDLs should be used to identify the BMPs and
regional treatment systems that were sufficient or insufficient to meet
certain numeric targets.
Septic Systems
FINDING: For septic systems, the costs of complying with the NNC
rule in those waterbodies determined by EPA to be incrementally im-
paired are likely to be substantially higher than EPA estimates. The
Committee was comfortable with the 500-ft threshold assumption
made by EPA; however, the exclusion of septic systems in springsheds
is a significant deficiency of EPA’s analysis. EPA received cost estimates
from vendors of equipment capable of meeting a total nitrogen target
of 20 mg/l and a total phosphorus target of 10 mg/L, values which are
much higher than EPA’s numeric nutrient criteria.
RECOMMENDATION: Efforts should be made to consider septic sys-
tems in springsheds and a wider range of systems including permeable
reactive barriers, which are known to be more effective in removing
nutrients to levels consistent with the numeric nutrient criteria.
Government Costs
FINDING: The incremental costs for the government sector are ex-
pected to be higher than EPA estimates. The key factors in determin-
ing government cost are the number of incrementally affected units
(WBIDs requiring a TMDL) and the unit cost of a TMDL. In the EPA
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84 EPA’S ECONOMIC ANALYSIS OF NUTRIENT STANDARDS IN FLORIDA
analysis, WBIDs with insufficient data were not used, thus potentially
underestimating the number of incrementally impaired waters requiring
TMDLs. Unit costs were based on low-end estimates of costs from a
2001 study that focused on a broad range of TMDL work not specifi-
cally related to either Florida TMDL development or nutrient TMDL
development. The unit cost selected was less than the national unit cost
referenced in the 2001 report.
RECOMMENDATION: Effort should be made to quantify costs for
Florida-specific and/or nutrient-specific TMDLs to provide more ac-
curate unit costs for TMDL development. Additional government costs
should also be considered, including costs for developing or approving
SSACs and variances, costs associated with downstream protective
values effectively reducing upstream criteria, future costs of adaptively
managed TMDLs, and consideration of additional waters becoming
impaired in the future.
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