2013 UPDATE OF REPORT ON THE COMPLIANCE COSTS FOR THE FINAL (2013) DRAFT INDUSTRIAL GENERAL PERMIT (IGP) SEPTEMBER 6, 2013 DESCRIPTION On July 16, 2012 State Water Board staff provided an Analysis of the Compliance Costs for the IGP (2012 Cost Report). This cost report summarized discharger compliance costs for the 2012 Draft Industrial General Permit (Draft 2012 IGP) compared to the cost of complying with existing requirements in the 1997 Statewide General Permit for Discharges of Storm Water Associated with Industrial Activity (1997 IGP). State Water Board staff is now providing an updated cost report summarizing discharger compliance costs of the 2013 Final Draft Industrial General Permit (2013 Final Draft IGP), compared to the 1997 IGP. The 2012 Cost Report is available at the follow website: http://www.waterboards.ca.gov/water_issues/programs/stormwater/2012npdes_genprmt.shtml The methodologies and assumptions used in this 2013 Cost Update are essentially the same as the methodology and assumptions used in the 2012 Cost Report; therefore the 2013 Cost Update solely includes the updated conclusions. The Microsoft Excel workbook containing the data and formulas used for the 2013 Cost Update will be available at the website below following the release of this update: http://www.waterboards.ca.gov/water_issues/programs/stormwater/industrial_permitdocs.shtml BACKGROUND / PURPOSE The purpose of the 2013 Cost Update is to provide an updated estimate of discharger compliance costs associated with the 2013 Final Draft IGP as compared to the cost of complying with existing requirements in the 1997 IGP. In preparing this cost update, State Water Board staff implemented the US EPA-recommended methodology in preparing the economic analysis of water quality standards. Both the 2013 Cost Update and the 2012 Cost Report are not a full economic analysis but an estimate of the pollution control project costs necessary to comply with the regulations as described in section 3.1 of the referred US EPA-recommended methodology. In our 2012 Cost Report, three different versions of the IGP were analyzed: the 1997 IGP (current permit); the previously proposed 2011 Draft Industrial General Permit; and the previously proposed 2012 Draft IGP. The 2013 Cost Update compares discharger compliance costs of the 2013 Final Draft IGP with the costs to comply with the existing 1997 IGP. RESULTS OF 2013 COST UPDATE To conduct the 2013 Cost Update facilities were categorized with corresponding assumed probabilities of Numeric Action Level (NAL) exceedances. Table 1 below provides estimated annual average costs for an average facility over a five year period depending upon the predicted NAL exceedances. Since the analysis uses present values, the timeline for this five year analysis (shown in Figure 1 below) starts with the current date the analysis was performed (July 1, 2013) versus the proposed effective date of the new permit. The Appendix of the 2013 Cost Update contains tables that show further details. Costs estimates are derived using available information from studies conducted by other states and by various industry groups. A list of costs, estimates and assumptions are included in the 2013 Cost Update. When considering the cost estimates, readers are reminded that the projected costs reflect average costs; therefore the anticipated costs for most small facilities will be less than the average costs, and the costs for most large facilities will be greater. 1 Updated Cost Analysis for 2013 Final Draft Industrial General Permit September 9, 2013 2013 Cost Update Findings: The following findings are based on the assumptions that 70 percent of all industrial facilities will remain in Baseline status for the 5-year permit term of the 2013 Final Draft IGP, 20 percent will have Level 1 NAL exceedances only, and an additional 10 percent will have both Level 1 and Level 2 NAL exceedances: • • • • • The average cost per facility to comply with the existing 1997 IGP is estimated to be approximately $32,700 per year or $162,500 over a five year period. The 2013 Final Draft IGP will increase costs for a facility o without numeric action level (NAL) exceedances (Baseline or Level 0 status) by 13%, o with NAL exceedances in one year (Level 1 status) by 17%, and o with exceedances in two years (Level 2 status) by 33%. The additional costs for 70 percent of facilities to comply with the 2013 Final Draft IGP, in addition to the current cost to comply with the existing 1997 IGP, will be approximately $4,500 more per year. The calculated total cost for all facilities to comply with the 2013 Final Draft IGP over a five year period is $1.74 Billion, compared to the total compliance cost of the 1997 IGP of approximately $1.57 Billion. There is an increase of approximately $170 Million for statewide compliance with the new 2013 Final Draft IGP over a five year period for all facilities subject to Notice of Intent (NOI) coverage. Table 1 - Five Year Costs 5 Year Estimated Total Cost # Facilities 1997 Permit 2013 Permit % Increase 6,489 $162,500 $183,400 13% 1,854 $162,500 $188,900 17% (10 percent of all industrial dischargers) 927 $162,500 $215,700 33% TOTAL Average Cost 9,270 $162,500 $188,400 15% Level 0 (Baseline) Scenario (70 percent of all industrial dischargers) Level 1 Scenario (20 percent of all industrial dischargers) Level 2 Scenario 2 Updated Cost Analysis for 2013 Final Draft Industrial General Permit September 9, 2013 $250,000 $215,700.00 $200,000 $188,900.00 $183,400.00 $162,500.00 Cost Increase in dollars $150,000 $100,000 $50,000 97 Permit $2013 2014 Level 0 2015 Level 1 2016 Level 2 2017 2018 Year Figure 1 - Five Year Costs 3 Updated Cost Analysis for 2013 Final Draft Industrial General Permit September 9, 2013 APPENDIX - DETAILED TABLES Existing 1997 Industrial General Permit 1st Year 2nd year 3rd year 4th Year 5th year TOTAL Average One Time Cost $ 280 $ - $ - $ - $ - $ 280 Training (50/50) Permit Registration (excludes permit fee) (50/50) SWPPP Development (use existing) Equipment (pH/EC Meter & Rain Gauge) $ $ $ $ 280 - - $ $ $ $ - $ $ $ $ - $ $ $ $ - $ $ $ $ 280 - Average Annual Cost $ 32,400 $ 32,400 $ 32,400 $ 32,400 $ 32,400 $ 162,200 Sample Collection / Analysis Implement operational source control BMPs (05/95) Annual Report (50/50) Visual Observations (50/50) Recordkeeping (50/50) Permit Fee (assume same price) $ $ $ $ $ $ $ 5,950 21,560 690 640 2,060 190 1,360 5,950 21,560 690 640 2,060 190 1,360 5,950 21,560 690 640 2,060 190 1,360 5,950 21,560 690 640 2,060 190 1,360 5,950 21,560 690 640 2,060 190 1,360 TOTAL AVERAGE COST $ 32,700 $ 32,400 $ 32,400 $ 32,400 $ 32,400 $ 162,500 Structural/Treatment BMP Operation & Maintenance (05/95) Updated Cost Analysis for 2013 Final Draft Industrial General Permit 4 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ September 9, 2013 $ $ $ $ $ $ $ $ 29,750 $ 107,800 $ 3,450 $ 3,200 $ 10,300 $ 950 $ 6,800 2013 Level 0 Scenario 1st Year 2nd year 3rd year 4th Year 5th year TOTAL Average One Time Cost $ 610 $ - $ - $ - $ - $ 610 Training (50/50) Permit Registration (excludes permit fee) (50/50) SWPPP Development (use existing) Equipment (pH/EC Meter & Rain Gauge) $ $ $ $ 600 10 - $ $ $ $ - $ $ $ $ - $ $ $ $ - $ $ $ $ 600 10 $ 36,600 $ 36,600 $ 36,600 $ 36,600 $ 36,600 $ 182,800 Annual Report (50/50) Visual Observations (50/50) Recordkeeping (50/50) Permit Fee (assume same price) $ $ $ $ $ $ $ 10,020 21,560 690 490 2,250 190 1,360 10,020 21,560 690 490 2,250 190 1,360 10,020 21,560 690 490 2,250 190 1,360 10,020 21,560 690 490 2,250 190 1,360 10,020 21,560 690 490 2,250 190 1,360 TOTAL AVERAGE COST $ 37,200 $ 36,600 $ 36,600 $ 36,600 $ 36,600 $ 183,400 Average Annual Cost Sample Collection / Analysis Implement operational source control BMPs (05/95) Structural/Treatment BMP Operation & Maintenance (05/95) Updated Cost Analysis for 2013 Final Draft Industrial General Permit 5 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ September 9, 2013 $ $ $ $ $ $ $ $ 50,100 $ 107,800 $ 3,450 $ 2,450 $ 11,250 $ 950 $ 6,800 2013 Level 1 Scenario 1st Year 2nd year 3rd year 4th Year 5th year TOTAL Average One Time Cost $ 610 $ - $ - $ - $ - $ 610 Training (50/50) Permit Registration (excludes permit fee) (50/50) SWPPP Development (use existing) Equipment (pH/EC Meter & Rain Gauge) $ $ $ $ 600 10 - $ $ $ $ - $ $ $ $ - $ $ $ $ - $ $ $ $ 600 10 Average Annual Cost $ 36,600 $ 36,600 $ 36,600 $ 36,600 $ 36,600 $ 182,800 Sample Collection / Analysis Implement operational source control BMPs (05/95) Annual Report (50/50) Visual Observations (50/50) Recordkeeping (50/50) Permit Fee (assume same price) $ $ $ $ $ $ $ 10,020 21,560 690 490 2,250 190 1,360 10,020 21,560 690 490 2,250 190 1,360 10,020 21,560 690 490 2,250 190 1,360 10,020 21,560 690 490 2,250 190 1,360 10,020 21,560 690 490 2,250 190 1,360 Average Exceedance Dependent Costs Sum: $ - $ 5,520 $ - $ - $ - $ 5,530 Evaluate BMPs Prepare Level 1 ERA Report BMPs Equipment (if pH exceeded, less than 10% of all facilities) QISP training SWPPP Update $ $ $ $ $ - $ $ $ $ $ 1,650 750 20 2,730 380 - $ $ $ $ $ - $ $ $ $ $ - $ $ $ $ $ 1,650 750 20 2,730 380 TOTAL AVERAGE COST $ 37,200 $ 42,100 $ 36,600 $ 36,600 $ 36,600 $ 188,900 Structural/Treatment BMP Operation & Maintenance (05/95) Updated Cost Analysis for 2013 Final Draft Industrial General Permit 6 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ September 9, 2013 $ $ $ $ $ $ $ $ 50,100 $ 107,800 $ 3,450 $ 2,450 $ 11,250 $ 950 $ 6,800 2013 Level 2 Scenario 1st Year 2nd year 3rd year 4th Year 5th year TOTAL Average One Time Cost $ 610 $ - $ - $ - $ - $ 610 Training (50/50) Permit Registration (excludes permit fee) (50/50) SWPPP Development (use existing) Equipment (pH/EC Meter & Rain Gauge) $ $ $ $ 600 10 - $ $ $ $ - $ $ $ $ - $ $ $ $ - $ $ $ $ 600 10 Average Annual Cost $ 36,600 $ 36,600 $ 36,600 $ 36,600 $ 36,600 $ 182,800 Sample Collection / Analysis Implement operational source control BMPs (05/95) Annual Report (50/50) Visual Observations (50/50) Recordkeeping (50/50) Permit Fee (assume same price) $ $ $ $ $ $ $ 10,020 21,560 690 490 2,250 190 1,360 10,020 21,560 690 490 2,250 190 1,360 10,020 21,560 690 490 2,250 190 1,360 10,020 21,560 690 490 2,250 190 1,360 10,020 21,560 690 490 2,250 190 1,360 Average Exceedance Dependent Costs L1: $ - $ 5,500 $ - $ - $ - $ 5,500 Evaluate BMPs Prepare Level 1 ERA Report BMPs Equipment (if pH exceeded, less than 10% of all facilities) QISP training SWPPP Update $ $ $ $ $ - $ $ $ $ $ 1,650 750 20 2,730 380 $ $ $ $ $ - $ $ $ $ $ - $ $ $ $ $ - $ $ $ $ $ 1,650 750 20 2,730 380 Average Exceedance Dependent Costs L2: $ - $ - $ 26,800 $ - $ - $ 26,800 Evaluate need for treatment/structural control BMPs (50/50) Prepare Technical report for best option (50/50) Implement Additional Structural/Treatment BMPs (5/95) Additional BMP Operation & Maintenance (Annual O&M) (5/95) Increase Sample Collection / Analysis (twice per quarter annually) SWPPP Update $ $ $ $ $ $ - $ $ $ $ $ $ - $ $ $ $ $ $ 10,500 1,650 13,600 690 380 - $ $ $ $ $ $ - $ $ $ $ $ $ 10,500 1,650 13,600 690 380 TOTAL AVERAGE COST $ 37,200 $ 42,100 $ 63,400 $ 36,600 $ 36,600 $ 215,700 Structural/Treatment BMP Operation & Maintenance (05/95) Updated Cost Analysis for 2013 Final Draft Industrial General Permit 7 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ September 9, 2013 $ $ $ $ $ $ $ $ 50,100 $ 107,800 $ 3,450 $ 2,450 $ 11,250 $ 950 $ 6,800