Review of the EPA's Economic Analysis of Final Water Quality Standards for Nutrients for Lakes and Flowing Waters in Florida (2012) / Chapter Skim
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From page 1... ...
These actions may lead to new or revised discharge permits for point sources such as municipal and industrial wastewater treatment plants, and/or nutrient control requirements for nonpoint sources of nutrients. Because of these implications, EPA produced an economic analysis of the potential incremental implementation costs that might be incurred if numeric nutrient criteria replaced Florida's narrative standard for nutrients.
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From page 2... ...
First, the Committee was not asked to review the numeric nutrient criteria themselves. Second, the Committee was not asked to address the benefits of implementing the numeric nutrient criteria, such as potential improvement in water quality, nor the indirect costs associated with implementing the criteria, such as the number of jobs lost or gained, or how certain sectors of the economy will fare under the numeric nutrient criteria.
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From page 3... ...
These factors have made and will continue to make nutrient management in Florida an important but formidable and costly challenge, regardless of the regulatory paradigm used. Indeed, the total costs to meet Florida water quality goals will exceed the reported incremental costs of the EPA analysis and also may exceed the costs of implementing the suite of practices currently used to control point and nonpoint source dischargers of nutrients.
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From page 4... ...
were considered in compliance with the NNC rule. Incrementally Impaired Waters and Watersheds One component of how EPA defined the incremental effect of the NNC rule was to estimate the number of new waterbodies that would be in noncompliance with the numeric nutrient criteria, as well as to estimate the location and amount of land area that would need attention in the form of runoff controls to return those waterbodies to compliance.
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Although it is uncertain what proportion of plants will be permitted to treat to 3 mg/L TN and 0.1 mg/L TP, it appears likely that at least some plants will have to treat to more stringent levels. Second, there is significant uncertainty in the cost estimate for municipal wastewater treatment plants because the unit treatment costs were not thoroughly verified by comparison to the existing and extensive Florida advanced wastewater treatment experience.
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As with the municipal wastewater treatment plants, efforts should be made to compare the unit costs used by EPA 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 For the urban stormwater sector, the costs of complying with the NNC rule in those watersheds determined by EPA to be incrementally impaired are expected to be higher than EPA estimates.
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From page 7... ...
In accordance with what is required in EPA guidelines for preparing economic analyses, the chapter first provides a comprehensive analysis of the differences between the narrative and numeric nutrient criteria rules, organized by five broad stages of water quality management. Indeed, discrepancies in the cost estimates of EPA and other analysts can be traced to different assumptions about how the rules would affect actions taken in each of those five stages.
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From page 8... ...
How the Alternative Cost Analysis Works A more comprehensive cost analysis requires comparing the future time paths of costs at each stage of water quality management under either the NNC rule or proposed Florida rule vs. the narrative rule (the baseline)
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From page 9... ...
This can be done for each time period and would provide information important to formulating annual public budgets and forecasting when water quality results might be realized. Findings about the Alternative Cost Analysis The incremental costs of the NNC rule are attributable to more than an increase in waterbodies listed and a requirement that all NPDES-permitted municipal and industrial sources discharging to surface water have certain effluent concentration limits.
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From page 10... ...
Cost analysis as outlined above can help convey cost estimates in a more transparent way and thus facilitate learning, reduce misunderstandings among stakeholders, and increase public confidence in the results. Conducting an alternative cost analysis, with increased attention to careful assessment of rule differences, stakeholder engagement, and uncertainty analysis, might not have been possible with the budget and time EPA spent on its cost analysis.
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