# Effluent Limitations Guidelines and Pretreatment Standards for the Industrial Laundries Point Source Category

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URL: https://www.frixlaw.com/law-library/documents/fr%3A97-30240

## Record

- **Collection:** Federal Register
- **Document type:** Proposed Rule
- **Published:** December 17, 1997
- **Citation:** 62 FR 66182

## Text

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 441

[FRL-5922-2]
RIN 2040-AB97

Effluent Limitations Guidelines and Pretreatment Standards for
the Industrial Laundries Point Source Category

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: This proposed rule would limit the discharge of pollutants
into waters of the United States and publicly owned treatment works
(POTWs) from existing and new industrial laundries by establishing
pretreatment standards for existing and new sources (PSES and PSNS,
respectively). These standards are based on a determination of the
degree to which pollutants pass through or interfere with POTWs; the
best available technology economically achievable for PSES; and best
available demonstrated control technology for PSNS. EPA estimates the
proposed rule would cost approximately $139.4 million ($1997 pretax
total social cost) annually (posttax compliance costs to affected
facilities would be $93.9 million annually) while it reduces the
discharge of toxic and nonconventional pollutants to POTWs by
approximately 13 million pounds resulting in reduced discharges of 5
million pounds per year of such pollutants as well as significant
amounts of other conventional pollutants per year to waters of the U.S.
This proposed rule would also reduce the impacts of these discharges to
aquatic life and human health and reduce potential interference with
POTW operations. EPA is reserving effluent limitations guidelines for
direct dischargers since EPA has identified no direct dischargers and
has no means to evaluate performance to determine the appropriate level
of control. If any such discharges were to occur, they would be subject
to limitations set on a best professional judgement basis.

DATES: EPA must receive comments on the proposal by February 17, 1998.
EPA will conduct a public hearing on pretreatment standards on
January 15, 1998 from 9am EST to 12 noon.

ADDRESSES: Submit comments in writing to W-97-14, Ms. Marta Jordan,
Engineering and Analysis Division (4303), U.S. EPA, 401 M. St. SW,
Washington, DC 20460. Please submit any references cited in your
comments. EPA requests an original and three copies of your comments
and enclosures (including references). Commenters who want EPA to
acknowledge receipt of their comments should enclose a self-addressed,
stamped envelope. No facsimiles (faxes) will be accepted. For
additional information on how to submit electronic comments see
SUPPLEMENTARY INFORMATION ``How to Submit Comments''.
The public record for this proposed rulemaking has been established
under docket number W-97-14 and is located in the Water Docket, Room
M2616, 401 M. St. SW, Washington, DC 20460. The record is available for
inspection from 9:00 a.m. to 4:00 p.m., Monday through Friday,
excluding legal holidays. For access to the docket materials call (202)
260-3027 to schedule an appointment. You may have to pay a reasonable
fee for copying.
EPA will conduct a public hearing on pretreatment standards in
EPA's Auditorium, Waterside Mall, 401 M. St. SW, Washington, DC.
Persons wishing to present formal comments at the public hearing should
have a written copy for submittal.

FOR FURTHER INFORMATION CONTACT: For technical information contact Ms.
Marta E. Jordan at (202) 260-0817. For economic information contact Mr.
George Denning at (202) 260-7374.

SUPPLEMENTARY INFORMATION:

Regulated Entities

This proposed rule would apply to industrial laundries. An
industrial laundry is any facility that launders industrial textile
items from off-site as a business activity (i.e., launders industrial
textile items for other business entities for a fee or through a
cooperative arrangement). Either the industrial laundry facility or the
off-site customer may own the industrial laundered textile items. This
definition includes textile rental companies that perform laundering
operations. For this proposed rule, laundering means washing with
water, including water washing following dry cleaning. This proposed
rule would not apply to laundering exclusively through dry cleaning.
Industrial textile items include, but are not limited to, industrial:
shop towels, printer towels/rags, furniture towels, rags, mops, mats,
rugs, tool covers, fender covers, dust-control items, gloves, buffing
pads, absorbents, uniforms, filters and clean room items. If any of
these items otherwise considered to be industrial textile items are
used only by hotels, hospitals, or restaurants, they are not industrial
items and would not be covered by this rule.

------------------------------------------------------------------------
Examples of regulated
Category entities
------------------------------------------------------------------------
Industry.................................. Facilities that launder
industrial textile items
from off-site as a business
activity.
------------------------------------------------------------------------

This table is not intended to be exhaustive, but rather provides a
guide for readers regarding entities likely to be regulated by this
action. This table lists the types of entities that EPA is now aware
could potentially be regulated by this action. Other types of entities
not listed in the table could also be regulated by this proposed
action. To determine whether your facility is regulated by this
proposed action, you should carefully examine the Industrial Laundries
Definition section of the proposed rule. If you have any questions
regarding the applicability of this proposed action to a particular
entity, consult the person(s) listed in the ``For Further Information
Contact'' section of this proposed rule.
The proposed rule would not apply to discharges from: on-site
laundering at industrial facilities, laundering of industrial textile
items originating from the same business entity, and facilities that
exclusively launder linen items, denim prewash items, new items (i.e.,
items directly from textile manufacturers, not yet used for intended
purpose), any other laundering of hospital, hotel, or restaurant items
or any combination of these items. This proposed rule would apply to
hotel, hospital, or restaurant laundering of industrial textile items
from off-site industrial users, (e.g., shop towels). In addition, this
proposed rule would not apply to the discharges from oil-only treatment
of mops.
By linen items, EPA means: sheets, pillow cases, blankets, bath
towels and washcloths, hospital gowns and robes, tablecloths, napkins,
tableskirts, kitchen textile items, continuous roll towels, laboratory
coats, household laundry (such as clothes, but not industrial
uniforms), executive wear, mattress pads, incontinence pads, and
diapers. This list is meant to be all inclusive. By linen items, EPA
does not mean to specify a particular type of fabric, but instead the
types of items listed above.
For facilities covered under the Industrial Laundry definition,
wastewater from all water washing operations would be covered,
including the washing of linen items as long as these items do not
constitute 100 percent of the items washed.

[[Page 66183]]

Exclusions

Under Pretreatment Standards for Existing Sources (PSES), EPA is
proposing to exclude existing facilities that launder less than one
million pounds of incoming laundry per calendar year and less than
255,000 pounds of shop and/or printer towels/rags per calendar year.
EPA proposes this exclusion in order to eliminate unacceptable
disproportionate adverse economic impacts on these smaller facilities.
The excluded facilities would be disproportionately adversely affected
relative to all facilities covered by this proposed rule, as discussed
further below. If any excluded facility launders one million pounds or
more of incoming laundry per calendar year or 255,000 pounds or more of
shop and/or printer towels/rags per calendar year, it will no longer be
excluded from the standards. All of the excluded facilities are small
entities under the Small Business Administration (SBA) definition of
small entity. The excluded facilities account for less than three
percent of the pollutant removals from the waters of the U.S. than
would occur if the proposed rule were implemented without the
exclusion.
Under Pretreatment Standards for New Sources (PSNS), EPA is
proposing no exclusion since the economic projections indicate that
there would be no barrier to entry as a result of the proposed new
source standards.

Supporting Documentation

The basis for this proposed rule is detailed in five documents,
each of which is supported in turn by additional information and
analyses in the rulemaking record. EPA's technical foundation for the
regulation is presented in the Technical Development Document for
Proposed Pretreatment Standards for Existing and New Sources for the
Industrial Laundries Point Source Category. (Hereafter, ``Development
Document''; EPA Report No. EPA-821-R-97-007). EPA's economic analysis
is presented in the Economic Assessment for Proposed Pretreatment
Standards for Existing and New Sources for the Industrial Laundries
Point Source Category. (Hereafter, ``Economic Assessment''; EPA Report
No. EPA-821-R-97-008) and the Cost-Effectiveness Analysis for Proposed
Pretreatment Standards for Existing and New Sources for the Industrial
Laundries Point Source Category (Hereafter, ``Cost-Effectiveness
Analysis''; EPA Report No. EPA-821-R-97-005). EPA's statistical
analysis is presented in the Statistical Support Document for Proposed
Pretreatment Standards for Existing and New Sources for the Industrial
Laundries Point Source Category. (Hereinafter, ``Statistical Support
Document''; EPA Report No. EPA-821-R-97-006). EPA's environmental
benefits analysis is presented in the Water Quality Benefits Analysis
for Proposed Pretreatment Standards for Existing and New Sources for
the Industrial Laundries Point Source Category. (Hereinafter, ``WQBA'';
EPA Report No. EPA-821-R-97-009). These background documents are
available from the Office of Water Resource Center, RC-4100, at the
U.S. EPA, Washington, DC address shown above; telephone (202) 260-7786
for the voice mail publication request line.

How to Submit Comments

Comments may be filed electronically to
Jordan.M[email protected]. Electronic comments must be submitted as
an ASCII or WordPerfect 6.1 file avoiding the use of special characters
and any form of encryption. Electronic comments must be identified by
the docket number W-97-14 and must be received by midnight of February
17, 1998. Electronic comments on this notice may be filed online at
many Federal Depository Libraries. No confidential business information
(CBI) should be sent via e-mail.

Protection of Confidential Business Information

EPA notes that many documents in the record supporting the proposed
rule have been claimed as confidential business information (CBI) and
therefore, are not included in the record that is available to the
public in the Water Docket. To support the rulemaking, EPA is
presenting certain information in aggregated form or is masking
facility identities to preserve confidentiality claims. Further, the
Agency has withheld from disclosure some data not claimed as CBI
because release of this information could indirectly reveal information
claimed to be confidential.
Some facility-specific data, claimed as CBI, are available to the
company that submitted the information. To ensure that all CBI is
protected in accordance with EPA regulations, any requests for company-
specific data should be submitted to EPA on company letterhead and
signed by a responsible official authorized to receive such data. The
request must list the specific data requested and include the following
statement, ``I certify that EPA is authorized to transfer confidential
business information submitted by my company, and that I am authorized
to receive it.''

Organization of this Document

I. Legal Authority
II. Summary of Proposed Pretreatment Standards
III. Background
A. Clean Water Act Statutory Requirements
B. Pollution Prevention Act
C. Industrial Laundries Definition
D. Summary of Public Participation
IV. Description of the Industry
V. Summary of Data Gathering Efforts
VI. Development of the Pretreatment Standards
A. Wastewater Characteristics
B. Selection of Pollutant Parameters to be Regulated
C. Available Treatment Technologies
D. Technology and Regulatory Options Considered
E. Costs
F. Rationale for Selection of PSES and PSNS
G. Determination of Long-Term Averages (LTAs), Variability
Factors, and Limitations for PSES and PSNS
VII. Economic Analysis
A. Introduction
B. Economic Impact Methodology
C. Summary of Costs and Economic Impacts
D. Cost-Benefit Analysis
E. Cost-Effectiveness Analysis
VIII. Non-Water Quality Environmental Impacts
IX. Environmental Benefits Analysis
A. Introduction
B. Overview of the Industrial Laundry Industry's Effluent
Discharges
C. Benefits of the Proposed Rule
D. Human Health Benefits
E. Ecological Benefits Valued on the Basis of Enhanced
Recreational Fishing Opportunities
F. Benefits From Reduced Cost of Sewage Sludge Disposal and
Reduced Incidence of Inhibition
G. Discussions With POTW Operators and Pre-Treatment
Coordinators
X. Related Acts of Congress, Executive Orders, and Agency
Initiatives
A. Regulatory Flexibility Act (RFA) as Amended by the Small
Business Regulatory Enforcement Fairness Act (SBREFA)
B. Executive Order 12866

C. Unfunded Mandates Reform Act (UMRA)
D. Paperwork Reduction Act
E. National Technology Transfer and Advancement Act
XI. Related Rulemakings
A. Office of Solid Waste (OSW) Activities Related to This
Effort
XII. Regulatory Implementation
A. Upset and Bypass Provisions
B. Variances and Modifications
Appendix A--Abbreviations, Acronyms, and Other Terms Used in This
Notice

I. Legal Authority

This regulation is being proposed under the authority of sections
301, 304, 306, 307, 308, and 501 of the Clean

[[Page 66184]]

Water Act (CWA), 33 U.S.C. sections 1311, 1314, 1316, 1317, 1318, and
1361.

II. Summary of Proposed Pretreatment Standards

EPA proposes to establish ``Pretreatment Standards for Existing
Sources'' (PSES), and ``Pretreatment Standards for New Sources''
(PSNS). Under PSES, EPA is proposing pretreatment standards for the
entire facility wastestream based on Chemical Precipitation treatment
of the portion of facility wastewater generated by laundering the
industrial items only (CP-IL). EPA's data shows that these standards
can be met by treating only this portion of wastewater. EPA finds this
option to be the best available technology economically achievable
based on the data collected during development of the proposed rule.
CP-IL also provides effective treatment to minimize/prevent pass
through and interference at POTWs. Under PSNS, EPA is also proposing
standards based on Chemical Precipitation treatment of the portion of
facility wastewater generated only by laundering of the industrial
items since it is the best available demonstrated technology for
pretreatment and the costs are not projected to be a barrier to entry.
EPA is not developing effluent limitations guidelines and New
Source Performance Standards for direct dischargers because EPA has
identified no direct dischargers and there is no available information
with which to accurately determine ``Best Available Technology
Economically Achievable'' (BAT) or ``Best Available Demonstrated
Control Technology'' (BADCT) performance for direct dischargers.
Proposed limitations based on pretreatment control technologies would
not likely represent best available technology or best available
demonstrated technology for direct dischargers because the treatment
technologies at existing industrial laundries that EPA evaluated were
not designed for treatment prior to discharging directly to surface
waters. The type or design (i.e., size) of treatment would not
represent BAT because in all cases facilities rely on additional
treatment at POTWs. For the pollutants evaluated in this proposed rule,
the POTW's biological treatment removes from 4%-99% depending on the
pollutant. Because EPA has not identified any POTWs receiving a very
large proportion of their load (70-100%) from an industrial laundry, a
determination of direct discharge effluent limitations cannot be
performed. Thus, EPA is reserving effluent limitations guidelines and
standards for direct dischargers in this rulemaking.
This proposed rule would not apply to discharges from: on-site
laundering at industrial facilities, laundering of industrial textile
items originating from the same business entity, and facilities that
exclusively launder linen items, denim prewash items, new items (i.e.,
items directly from textile manufacturers, not yet used for intended
purpose), any other laundering of hotel, hospital, or restaurant items
or any combination of these items. This proposed rule would apply to
hotel, hospital, or restaurant laundering of industrial textile items.
In addition, this proposed rule would not apply to laundering
exclusively through dry cleaning and the oil-only treatment of mops.
The rule also would not apply to certain small industrial
laundries; see ``Regulated Entities'' discussion above, industrial
laundries definition, and rule text below.
Pursuant to CWA section 307(b)(1), indirect dischargers are
required to comply with pretreatment standards for existing sources by
three years of the effective date of the final rule. For purposes of
this rule, indirect dischargers must comply with this rule by three
years after the date of publication of the final rule.

III. Background

A. Clean Water Act Statutory Requirements

The objective of the Clean Water Act (CWA) is to ``restore and
maintain the chemical, physical, and biological integrity of the
Nation's waters.'' CWA section 101(a). To assist in achieving this
objective, EPA issues effluent limitation guidelines, pretreatment
standards, and new source performance standards for industrial
dischargers. These standards relevant to this rulemaking are summarized
here:
1. Best Available Technology Economically Achievable (BAT)--Section
304(b)(2) of the CWA
BAT effluent limitations guidelines apply to direct dischargers of
toxic and nonconventional pollutants. In general, they represent the
best existing economically achievable performance of plants in the
industrial subcategory or category. The factors considered in assessing
BAT include the age of equipment and facilities involved, the process
employed, potential process changes, non-water quality environmental
impacts, including energy requirements, and such factors as the
Administrator deems appropriate. EPA retains considerable discretion in
assigning the weight to be accorded these factors. An additional
statutory factor considered in setting BAT is economic achievability.
Generally, the achievability is determined on the basis of total costs
to the industrial subcategory and the rule's effect on the overall
industry financial health. Where existing performance is uniformly
inadequate, BAT may be transferred from a different subcategory or
category. BAT may be based upon process changes or internal controls,
even when these technologies are not common industry practice.
2. New Source Performance Standards (NSPS)--Section 306 of the CWA
NSPS are based on the best available demonstrated control
technology (BADCT) and apply to all pollutants (conventional,
nonconventional, and toxic). New facilities have the opportunity to
install the best and most efficient production processes and wastewater
treatment technologies. Under NSPS, EPA is to consider the best
demonstrated process changes, in-plant controls, and end-of-process
control and treatment technologies that reduce pollution to the maximum
extent feasible. In establishing NSPS, EPA is directed to take into
consideration the cost of achieving the effluent reduction and any non-
water quality environmental impacts and energy requirements.
3. Pretreatment Standards for Existing Sources (PSES)--Section 307(b)
of the CWA
PSES are designed to prevent the discharge of pollutants that pass
through, interfere with, or are otherwise incompatible with the
operation of publicly owned treatment works (POTWs). The CWA authorizes
EPA to establish pretreatment standards for pollutants that pass
through POTWs or interfere with treatment processes or sludge disposal
methods at POTWs. Pretreatment standards are technology-based and
analogous to BAT effluent limitations guidelines.
The General Pretreatment Regulations, which set forth the framework
for the implementation of categorical pretreatment standards, are found
at 40 CFR part 403. Those regulations contain a definition of pass
through that addresses localized rather than national instances of pass
through and establish pretreatment standards that apply to all non-
domestic dischargers. See 52 FR 1586 January 14, 1987.

[[Page 66185]]

4. Pretreatment Standards for New Sources (PSNS)--Section 307(b) of the
CWA
Like PSES, PSNS are designed to prevent the discharges of
pollutants that pass through, interfere with, or are incompatible with
the operations of POTWs. New indirect dischargers have the opportunity
to incorporate into their plants the best available demonstrated
technologies. The Agency considers the same factors in promulgating
PSNS as it considers in promulgating NSPS.
5. Best Management Practices (BMPs)
Section 304(e) of the CWA gives the Administrator the authority to
publish regulations, in addition to the effluent limitations guidelines
and standards listed above, to control plant site runoff, spillage or
leaks, sludge or waste disposal, and drainage from raw material storage
that the Administrator determines may contribute significant amounts of
pollutants. Some industrial laundry facilities have BMPs in place and
these BMPs are further discussed in Sections III.B. and VI.C.1. below
and in more detail in the Development Document.
6. CWA Section 304(m) Requirements
Section 304(m) of the CWA requires EPA to establish schedules for
(I) reviewing and revising existing effluent limitations guidelines and
standards and (ii) promulgating new effluent limitations. On January 2,
1990, EPA published an Effluent Guidelines Plan (55 FR 80), in which
schedules were established for developing new and revised guidelines
for several industry categories, including the industrial laundries
point source category. Natural Resources Defense Council, Inc.,
challenged the Effluent Guidelines Plan in a suit filed in the U.S.
District Court for the District of Columbia, (NRDC et al v. Reilly,
Civ. No. 89-2980). On January 31, 1992 the Court entered a consent
decree (the ``304(m) Decree''), which establishes schedules for, among
other things, EPA's proposal and promulgation of effluent guidelines
for a number of point source categories, including the industrial
laundries point source category. The most recent Effluent Guidelines
Plan Update was published in the Federal Register on February 26, 1997
(62 FR 8726). This plan requires, among other things, that EPA propose
the Industrial Laundries Effluent Limitations Guidelines and
Pretreatment Standards by September 1997 and take final action on the
Guidelines and Standards by June 1999.

B. Pollution Prevention Act

The Pollution Prevention Act of 1990 (PPA) (42 U.S.C. 13101 et
seq., Pub. L. 101-508, November 5, 1990) ``declares it to be the
national policy of the United States that pollution should be prevented
or reduced whenever feasible; pollution that cannot be prevented should
be recycled in an environmentally safe manner, whenever feasible;
pollution that cannot be prevented or recycled should be treated in an
environmentally safe manner whenever feasible; and disposal or release
into the environment should be employed only as a last resort * * *''
(Sec. 6602; 42 U.S.C. 13101(b)). In short, preventing pollution before
it is created is preferable to trying to manage, treat or dispose of it
after it is created. The PPA directs the Agency to, among other things,
``review regulations of the Agency prior and subsequent to their
proposal to determine their effect on source reduction'' (Sec. 6604; 42
U.S.C. 13103(b)(2)). This effluent guideline was reviewed for its
incorporation of pollution prevention.
According to the PPA, source reduction reduces the generation and
release of hazardous substances, pollutants, wastes, contaminants or
residuals at the source, usually within a process. The term source
reduction ``include[s] equipment or technology modifications, process
or procedure modifications, reformulation or redesign of products,
substitution of raw materials, and improvements in housekeeping,
maintenance, training or inventory control. The term ``source
reduction'' does not include any practice which alters the physical,
chemical, or biological characteristics or the volume of a hazardous
substance, pollutant, or contaminant through a process or activity
which itself is not integral to or necessary for the production of a
product or the providing of a service.'' 42 U.S.C. 13102(5). In effect,
source reduction means reducing the amount of a pollutant that enters a
waste stream or that is otherwise released into the environment prior
to out-of-process recycling, treatment, or disposal.
EPA has undertaken several pollution prevention related activities
involving the industrial laundries industry. Part of the efforts were
Agency wide, including the Office of Research and Development (ORD) and
EPA's Region 9, while other efforts were included as part of the
engineering studies in the development of the proposed rule.
The Agency-wide efforts, called the Industrial Pollution Prevention
Project (IP3), were multi-media and examined how industrial pollution
prevention can be incorporated into EPA's regulatory framework and how
the pollution prevention ethic can be promoted throughout industry, the
public and government. A report summarizing the results of these
efforts, entitled ``Summary Report of the Industrial Pollution
Prevention Project (IP3),'' EPA-820-R-95-007, July 1995, included the
results of two case studies involving industrial laundries. More
detailed discussions of the two studies are contained in the individual
reports, ``Pollution Prevention at Industrial Laundries: Assessment
Observations and Waste Reduction Options,'' EPA-820-R-95-010, July
1995, and ``Pollution Prevention at Industrial Laundries: A
Collaborative Approach in Southern California,'' EPA-820-R-95-012.
These studies identified a number of ``best management practices''
(BMP's) and water and energy savings technologies as potential
pollution prevention practices at industrial laundries.
Similarly, during the engineering study phase of the development of
the proposed rule, a number of potential pollution prevention practices
and technology applications were identified. Discussion of the
pollution prevention technologies and practices and their uses with
respect to this proposed rule are contained later in Section VI of this
preamble and in the Development Document.

C. Industrial Laundries Definition

An industrial laundry is any facility that launders industrial
textile items from off-site as a business activity (i.e., launders
industrial textile items for other business entities for a fee or
through a cooperative arrangement). Either the industrial laundry
facility or the off-site customer may own the industrial laundered
textile items. This definition includes textile rental companies that
perform laundering operations. For this proposed rule, laundering means
washing with water, including water washing following dry cleaning.
This proposed rule would not apply to laundering exclusively through
dry cleaning. Industrial textile items include, but are not limited to
industrial: shop towels, printer towels/rags, furniture towels, rags,
mops, mats, rugs, tool covers, fender covers, dust-control items,
gloves, buffing pads, absorbents, uniforms, filters and clean room
garments. If any of these items are used by hotels, hospitals, or
restaurants, they are not industrial items.
The proposed rule would not apply to discharges from: on-site
laundering at industrial facilities, laundering of

[[Page 66186]]

industrial textile items originating from the same business entity, and
facilities that exclusively launder linen items, denim prewash, new
items (i.e. items directly from textile manufacturers, not yet used for
intended purpose), any other laundering of hotel, hospital, or
restaurant items or any combination of these items. This proposed rule
would apply to hotel, hospital, or restaurant laundering of industrial
textile items. In addition, this rule would not apply to discharges
from the oil-only treatment of mops.
The focus of this rule is on industrial laundries that function
independently of other industrial activities that generate wastewater.
The reason EPA is excluding from applicability on-site laundries is
that EPA believes it is more appropriate to address on-site laundry
discharges at industrial facilities as part of the effluent from the
facility as a whole, for several reasons. First, many such facilities
commingle laundry wastewater with wastewater from other processes.
Second, EPA anticipates that contaminants removed from laundered items
can best be treated with process wastewater containing similar
contaminants. EPA has already established effluent limitations
guidelines and standards for 51 industries (see Development Document).
These regulations generally apply to wastewater generated from these
industries, including on-site laundering. For example, the OCPSF
effluent guidelines control discharges from garment laundering at OCPSF
facilities. For industries not yet covered by effluent limitations
guidelines and standards, it makes sense to examine these industries
and the wastewater treatment processes at these industrial facilities
in the context of the entire industrial facility, not just the
laundering portion of the facility. Addressing on-site laundering
discharges along with other industrial discharges in an industry allows
EPA to examine all of the production and processing equipment used by
the industry, all of the discharges in an industry, all the potential
wastewater treatment applicable to the industry, and all of the
economic impacts of any such national regulation for the industrial
subcategory as a whole. This is consistent with EPA's efforts to make
common-sense regulatory decisions.
EPA has also considered concerns expressed by industrial launderers
that by excluding on-site laundering of industrial items, EPA has
created an incentive for businesses to switch from using industrial
launderers covered by the rule to on-site laundering. EPA does not
believe this will happen because the average increased price per pound
of laundering as a result of the proposed rule ($0.003 per pound) is so
small that the cost of buying the equipment and operating the equipment
on-site (capital, operation and maintenance including labor, chemicals,
water) to do on-site laundering rather than using industrial launderers
would not be justified. Furthermore, an increase in pollutant loads at
the facility may necessitate additional changes in the facility's NPDES
permit if it is a direct discharger or its pretreatment permit issued
by the local POTW if it is an indirect discharger. See Section 8 of the
EA and Chapter 6 of the Development Document.
EPA also looked at the types of items that were water washed to
determine if any specific items should be excluded from regulation. EPA
reviewed the available data to determine differences in types of items
laundered, and determined that wastewater characteristics of denim
prewash items and linen items are significantly different from the
wastewater characteristics of industrial items, based on a statistical
comparison of untreated wastewater pollutant concentrations. The
pollutant concentrations in wastewater from laundering denim prewash
items and linen items are lower on average than industrial item
wastewater concentrations. The available data indicate that the
pollutant concentrations are lower for denim prewash items and linen
items, and POTWs can adequately treat wastewater streams generated from
these types of items. Therefore, EPA is excluding facilities
discharging 100 percent denim prewash items and linen item wastewater
from the scope of this proposed rule.
EPA is excluding new items from regulation since these items are
laundered prior to being used for their intended purpose and therefore
may not contain pollutants at concentrations that are incompatible with
or interfere with POTWs.
The rule also would not apply to certain small facilities; see
``Regulated Entities'' discussion above and rule text below.

D. Summary of Public Participation

EPA encouraged full public participation in developing the proposed
rule. During the data gathering activities that preceded development of
the proposed rule, EPA met with industry trade associations, state and
local governments, and industrial laundry and linen facilities. EPA has
also participated in numerous industry talks and meetings. To further
public participation on this rule, on March 4, 1997, EPA held a public
meeting about the content and status of the proposed regulation. The
meeting was announced in the Federal Register (62 FR 3849; January 27,
1997) and information packages were distributed at the meeting. The
public meeting also gave interested parties an opportunity to provide
information, data, and ideas or comments on key issues.
During the development of the proposed rule, EPA sent a screener
questionnaire to assess the number of facilities that could potentially
be considered industrial laundries, and followed this with a detailed
questionnaire to a stratified random sample of the industry under
authority of section 308 of the CWA. During the design of the detailed
questionnaire, EPA met with industry trade associations to discuss
EPA's plans to issue a questionnaire; and distributed several drafts of
the questionnaire to both the industry trade associations and the
Natural Resources Defense Council, Inc., for review and comment. The
detailed questionnaire was subsequently completed, reviewed and
approved by the Office of Management and Budget (OMB) and sent to
industrial laundry facilities. Two trade associations, the Textile
Rental Services Association of America (TRSA) and Uniform and Textile
Service Association (UTSA) sent letters to OMB supporting EPA's data
collection efforts, particularly the detailed questionnaire. EPA held
workshops for the public on how to complete the detailed questionnaire.
EPA also sent a screener questionnaire to hotels, hospitals, and
prisons to assess whether these facilities should be included in the
scope of the industrial laundries regulation. Also, following receipt
of the detailed questionnaire responses and as part of the technology
performance data gathering effort, EPA requested detailed monitoring
data from 37 facilities that had already received the detailed
questionnaire so that data specific to these facilities could be
evaluated as part of EPA's analyses.

IV. Description of the Industry

Industrial laundry facilities are located in all 50 states and all
10 EPA regions. By State, the largest number of industrial laundries
are in California. By EPA Region, the largest concentration of
industrial laundries is in Region V. Most of the industrial laundering
facilities are in large urban areas. EPA estimates that there are 1,747
facilities nationwide.
Industrial laundries vary in size from one- or two-person
facilities to large corporations that operate many facilities

[[Page 66187]]

with hundreds of employees nationwide. Annual laundry production per
facility ranges from 44,100 to 32,620,000 pounds.
Facilities launder most items using water washing. Water washing
involves washing items in water. Some facilities launder items using
dry cleaning, which involves washing items in an organic solvent.
Facilities that only dry clean (with solvent washing) are not covered
by this proposed rule. Dry cleaning is not a water washing process and
generates little, if any, wastewater, therefore EPA excluded this
process from this proposed rule. The pollutants generated in the dry
cleaning operation are recovered from the solvent through distillation
and then disposed of off-site as a hazardous waste. Air emissions from
dry cleaning may be controlled by EPA in Maximum Achievable Control
Technology (MACT) standards issued under the Clean Air Act. In some
cases, facilities combine the two processes to wash items that have
large amounts of both water soluble and organic-solvent soluble soils.
When water washing and dry cleaning are performed in series without
drying the items between the solvent and water phases, the process is
called dual-phase washing. The order in which these processes are
performed depends on the solvent used, type of soil, and drying energy
requirements. Typically, in dual-phase washing, the solvent wash occurs
prior to the water wash; none of the facilities responding to the
detailed questionnaire reported performing water washing followed by
solvent wash. Facilities performing dual-phase washing of industrial
items are covered by this proposed rule if they process industrial
textile items.
At some facilities, dust mops are not water washed, but are cleaned
and treated with heated oil instead of water. After cleaning, the oil
is extracted from the mops, leaving them coated with the desired
quantity of oil. Since the oil treatment of mops is not a water washing
process and generates no wastewater, EPA excluded this process from
this proposed regulation.
A more detailed description of the industry is included in the
Industrial Laundries Development Document contained in the record for
this proposed rule.

V. Summary of Data Gathering Efforts

EPA has collected data from various sources. EPA has collected
industry-supplied data from industrial laundries through the screener
questionnaires, detailed questionnaires and the detailed monitoring
data requests. EPA has also collected data through site visits and
sampling activities. EPA distributed a screener questionnaire in 1993
and a supplemental screener questionnaire in 1994 to develop the scope
of the rule, identify the population of the industry, and select
facilities to receive the more-detailed questionnaire. Also, in
response to comments from industrial laundry and linen trade
associations, EPA mailed 100 screener questionnaires in January 1995 to
hospitals, hotels, and prisons, which potentially operate on-site
laundries.
The industrial laundries industry detailed questionnaires were sent
to a stratified random sample of facilities that were identified from
two sources: Trade association mailing lists and information obtained
from Dun & Bradstreet. These sources produced a list of 3,726 possible
facilities generating industrial laundry wastewater. Based on responses
to the screener questionnaires, EPA estimated there were 1,960
facilities generating industrial laundry wastewater.
To minimize the burden on the respondents to the trade association
screener questionnaire, EPA chose to send detailed questionnaires to
only a selected sample group of facilities. EPA grouped facilities by
the type of items they laundered, their 1992 revenues, and the type of
wastewater treatment they had in place. The Dun & Bradstreet detailed
questionnaire (which was identical to the trade association detailed
questionnaire in content) was based on groupings of Standard Industrial
Classification codes of 7218 (industrial laundering) and 7213 (linen
supply servicing). This technique is known as stratification of the
population. Depending on the number of facilities within the strata,
EPA either censused or chose a random sample of facilities within each
strata. The chosen facilities were given survey weights based on a
facility's probability of selection. If the stratum was censused, those
facilities represent themselves only. Otherwise, the facility is given
a survey weight that allows them to represent themselves and other
facilities, within that stratum, that were not selected to receive a
detailed questionnaire.
Of the 1,960 facilities generating industrial laundry wastewater,
255 received detailed questionnaires and were used to develop survey
weights. After analyzing responses to the questionnaires, EPA chose to
exclude facilities that launder 100% linen items. EPA was left with 193
complete responses representing 1,747 industrial laundry facilities
nationwide. After examining economic impacts, EPA then decided to
exclude existing facilities that launder less than one million pounds
of incoming laundry per calendar year and less than 255,000 pounds of
shop and/or printer towels/rags per calendar year. Therefore, EPA
estimates the total number of facilities that currently would be
subject to the standards in this proposed rule to be 1,606 facilities.
All analyses of impacts of the rule are based on 193 questionnaire
respondent facilities and then the survey weight is applied to develop
national estimates for all facilities. See the Statistical Support
Document for the Industrial Laundries Pretreatment Standards for
additional information on the development of survey weights.
The responses to the detailed questionnaires provided EPA with
detailed technical, economic, and financial information from industrial
laundry and linen supply facilities. EPA used the information reported
to develop an industry profile, characterize industry production and
water use, develop pollutant loadings and reductions estimates, and
develop compliance cost estimates.
In 1995, EPA mailed out 37 requests for detailed monitoring data to
a selected group of industrial laundries. EPA identified this selected
group of facilities because they indicated in their initial responses
in the detailed questionnaires that they had available monitoring data
that EPA determined might be useful in characterizing performance of
certain treatment technologies. EPA has also collected data through
site visits and sampling activities. EPA conducted more than 30 site
visits between 1992 and 1997 to collect information about industrial
laundry processes, water use practices, pollution prevention practices,
wastewater treatment technologies, and waste disposal methods. EPA
conducted eight sampling episodes to characterize industrial laundry
wastewaters and to assess treatment technology effectiveness. A more
detailed description of these data collection efforts can be found in
Chapter 3 of the Industrial Laundries Development Document.

VI. Development of the Pretreatment Standards

A. Wastewater Characteristics

Industrial laundry facilities generate wastewater discharges from
water washing industrial textile items. All of the facilities
identified in the data gathering phase of this rulemaking were found to
be indirect dischargers and discharge all laundry process wastewater to
publicly owned treatment works.

[[Page 66188]]

The detailed questionnaires requested information on the types of
analytes tested during wastewater sampling activities performed at the
facilities in 1993. The facilities reported analytes in the following
categories: oil and grease/total petroleum hydrocarbons (O&G/TPH),
conventional pollutants, metals, organics, and pesticides.
Based on data collected through the detailed questionnaires and
sampling and analysis of industry wastewater, EPA has determined that
67% of the total industry raw wastewater toxic pollutant loading is
generated from laundering of shop and printer towels. Shop and printer
towels represent 80% of the raw wastewater toxic pollutant loading from
industrial laundry items.

B. Selection of Pollutant Parameters To Be Regulated

1. Pollutants Regulated
EPA collected data to determine the conventional, toxic/priority,
and nonconventional pollutants present in industrial laundries
wastewaters. EPA analyzed industrial laundries wastewater for 315
pollutants consisting of four conventional, 98 toxic or priority, and
213 nonconventional organic and metal pollutants, during the 1993-1996
industrial laundries sampling program. This section of the preamble
discusses how EPA determined the pollutants to be regulated under the
selected option. Other options have the same list of regulated
pollutants, although EPA's rationale for regulating these pollutants
varies depending on the option. This is discussed in Chapter 7 of the
Development Document.
EPA reduced the list of 315 pollutants to 72 pollutants for further
consideration for control using the following criteria: eliminating
pollutants never detected in laundry wastewater, pollutants detected
only a small percentage of the time in laundry wastewater (less than
10% of the time), pollutants detected in source water at concentrations
similar to concentrations in laundry wastewater, pollutants analyzed
for screening purposes, but not analyzed in a quantitative manner due
to a lack of acceptable analytical methods, and pollutants likely to be
adequately regulated on a case-by-case basis by POTWs using the current
regulations on controlling pass through and interference. (See
Development Document, Chapter 7).
For the selected option (CP-IL), the 72 pollutants were
subsequently reduced to 59 pollutants by eliminating n-alkanes (11
separate pollutants), which make up part of TPH as measured by SGT-HEM,
as well as two pollutants used as treatment chemicals (Aluminum and
Iron). EPA also eliminated 31 pollutants from regulation because these
pollutants are not removed by the treatment technology for the selected
option or because these pollutants were present below treatable
concentrations in wastewaters influent to the treatment system and
therefore would not be substantially removed by the treatment
technology. For purposes of this rule, EPA considers treatable
concentrations to be greater than 10 times the method detection level.
Based on these analyses, this left EPA with 28 pollutants under
consideration for regulation.
Before proposing pretreatment standards, EPA examines whether the
pollutants discharged by the industry pass through a POTW to waters of
the U.S. or interfere with the POTW operation or sludge disposal
practices. Generally, in determining whether pollutants pass through a
POTW, EPA compares the percentage of the pollutant removed by well-
operated POTWs achieving secondary treatment with the percentage of the
pollutant removed by facilities meeting BAT effluent limitations. In
this case, where only pretreatment standards are being considered, EPA
compared the POTW removals with removals achieved by indirect
dischargers using the candidate technology that satisfies the BAT
factors. For specific pollutants, such as volatile organic compounds or
highly biodegradable compounds, EPA may use other means to determine
pass through. For volatile compounds, a volatile override test based on
the Henry's Law Constant is used to determine pass through. If a
pollutant has a Henry's Law Constant greater than 2.4 x 10-5 atm-m \3\/
mole, it is generally determined to pass through because it is assumed
to be sufficiently volatile such that a significant portion of the
compound would not be treated by the POTW. For highly biodegradable
compounds, the pass through determination may be conducted using
engineering modeling.
The primary source of POTW data was the Fate of Priority Pollutants
in Publicly Owned Treatment Works (also known as the 50 POTW Study).
Since the 50 POTW Study did not cover all the pollutants detected in
industrial laundry wastewater, EPA used additional data from the Risk
Reduction Engineering Laboratory (RREL) database. The RREL database EPA
used included data relating to activated sludge and aerated lagoons
reflecting POTW secondary treatment from domestic and industrial
wastewater sources.
EPA eliminated three conventional pollutants (O&G, BOD, and TSS)
from regulation without conducting the percent removal comparison
because EPA believes POTWs adequately treat these parameters in the
concentrations found in IL wastewaters. Thus, these parameters are
deemed to not pass through. EPA conducted the pass through analysis on
the remaining 25 pollutants.
For this proposed rule, the percent removal comparison between
indirect dischargers using the candidate PSES-BAT technology and POTWs
and the volatile override test were used to determine pass through.
Since EPA has not identified any direct dischargers, EPA used PSES
percent removals for evaluating pass through. EPA finds that a
pollutant passes through when the average percentage removed nationwide
by well-operated POTWs (those meeting secondary treatment requirements)
is less than the percentage removed by facilities meeting candidate
PSES standards for that pollutant.
EPA eliminated POTW and PSES data from the analysis where the
influent levels for the pollutant were less than 10 times the method
detection level because EPA reasoned that low removals may simply
reflect low influent rather than ineffective treatment. For pollutants
for which none of the POTW influent concentrations exceeded 10 times
the method detection level, in order to conduct the analysis using the
50 POTW Study, EPA modified its editing criteria to eliminate data
where the influent values were less than 20 g/L or the method
detection level. EPA selected 20 g/L or the method detection
level because for pollutants with low influent concentrations, i.e.,
less than 20 g/L or the method detection level, the effluent
concentrations were consistently below the detection level and could
not be precisely quantified.
EPA then averaged the remaining influent data and the remaining
effluent data. The percent removals achieved for each pollutant were
determined from these averaged influent and effluent levels. This
percent removal was then compared to each of the PSES treatment
technology options.
Of the 25 pollutants that were evaluated, 23 were found to pass
through. A more detailed description of the results of the pass through
analysis is provided in Chapter 7 of the Development Document.
The remaining 23 pollutants were reviewed in an attempt to
streamline the control and compliance process. To do this, EPA
determined whether certain pollutants could serve as ``indicator''

[[Page 66189]]

pollutants for others. Because many of the pollutants originate from
similar sources and have similar treatability properties, setting
standards for some ``indicator'' pollutants would effectively control a
broader set of pollutants. Based on this analysis, EPA determined that
setting limits for 11 pollutants would control the remaining 23
pollutants. The list of 11 pollutants is as follows: SGT-HEM, Copper,
Lead, Zinc, Bis(2-Ethylhexyl) Phthalate, Ethylbenzene, Naphthalene,
Tetrachloroethene, Toluene, m-Xylene and o&p-Xylene. The limitations
for the Xylenes parameters contained in the proposed rule are based on
data obtained from EPA sampling episodes using EPA Method 1624 and
detailed monitoring questionnaires which reported EPA Method 624 which
are contained in Part 136 but not identified for use in measuring
Xylenes. A more detailed description of the selection of the regulated
pollutants and the pollutants controlled by regulation of these
pollutants is in Chapter 7 of the Development Document.
EPA is proposing to establish PSES and PSNS that would regulate
SGT-HEM as an indicator pollutant controlling the discharge of toxic
and nonconventional pollutants. Chemical precipitation technology has
shown that the SGT-HEM limitation is a good indicator reflecting the
correct operation of the control technology that results in removals of
both organic and metal compounds. EPA is regulating SGT-HEM rather than
total recoverable oil and grease since SGT-HEM more closely corresponds
to the toxic portion of oil and grease in industrial laundry
wastewaters, while POTWs can generally treat the other portions of oil
and grease consisting of vegetable oils, animal fats, soaps, etc. Also,
since petroleum-based oils degrade slowly at the POTWs, if sufficient
quantities exist in the influent, it can pass through the treatment
plant as discussed in Pretreatment of Industrial Wastes prepared by the
Water Environment Federation, 1994. The SGT-HEM measurement used to
develop the limitations is based on the proposed analytical method 1664
(Silica Gel Treated N-Hexane Extractable Material; ``SGT-HEM'') (61 FR
1730; January 23, 1996) and not on the current method contained in 40
CFR Part 136, which uses freon extraction. The data collected from the
detailed monitoring questionnaires are based on the current Part 136
method of measuring TPH, while the EPA sampling data are based on the
proposed Method 1664, which measures SGT-HEM. EPA proposes to regulate
SGT-HEM based on calculating limitations with EPA sampling data only.
EPA is soliciting comment or information on any additional data
regarding the use of this analytical method.
EPA is also regulating SGT-HEM based on interference. Petroleum-
based oils have a low rate of biodegradation at the POTWs. These oils
tend to coat the biological organisms, preventing or reducing oxygen
transfer and degradation of other organics as discussed in Pretreatment
of Industrial Wastes prepared by the Water Environment Federation,
1994. Pretreatment coordinators have indicated that interference can be
a problem at POTWs as discussed further in Section IX.G.
2. Pollutants Not Regulated
Tables 7-3,7-4, and 7-5 in Chapter 7 of the Development Document
list the pollutants EPA proposes not to regulate and the bases for
these decisions.

C. Available Treatment Technologies

1. Current Practice
Facilities in the detailed questionnaire reported having a range of
wastewater treatment equipment from no treatment to well-operated
Chemical Precipitation (CP) or Dissolved Air Flotation (DAF) systems.
Many industrial laundry facilities currently have no treatment (approx.
87%). Although many facilities have no treatment, some facilities have
reported that they have best management practices in place to limit
pollution. Many laundries have adopted the practice of requiring
incoming laundry to have no free liquids. Liquids may be removed
through various mechanisms at the laundry or by the customer (e.g.,
hand wringing, mechanical wringing, or centrifuging).
EPA, based on responses to the detailed questionnaire, considered
several technologies to develop standards for this industry. The major
wastewater treatment technologies reported included: Chemical Emulsion
Breaking (CEB), DAF, and CP. Other technologies reported included:
screening, equalization, gravity settling, sludge dewatering, pH
adjustment, ultrafiltration, centrifugation, filtration, oil/water
separation, carbon adsorption, air stripping and vacuum degassing. In
addition, facilities reported dry cleaning and steam tumbling as in-
process treatment technologies to remove pollutants from items prior to
water washing.
During the site visit and field sampling phase of the proposed rule
development and as follow up to responses in the detailed
questionnaires, EPA identified three major technologies for further
evaluation. These major technologies, CEB, DAF and CP are described
below.
CEB is used primarily to remove oil and grease, as well as other
related pollutants, from process wastewater streams. CEB is effective
in treating wastewater streams having stable oil-in-water emulsions.
The treatment consists of lowering the pH of the wastewater to break
the emulsions, and skimming the surface of the water to remove the
floating substances.
DAF is used to remove suspended solids, oil, and some dissolved
pollutants from process wastewater. DAF treatment involves coagulating
and flocculating the solids and oil and grease and then floating the
resulting floc to the surface using pressurized air injected into the
unit and removing the floating material. Some DAF systems also have the
means to remove material that settles to the bottom of the tank on a
continuous basis.
CP is used to remove dissolved pollutants from process wastewater.
Precipitation aids, such as lime, work by reacting with the cations
(e.g., metals) and some anions to convert them into an insoluble form
(e.g., metal hydroxides). The pH of the wastewater also affects how
much pollutant mass is precipitated, as pollutants precipitate more
efficiently at different pH ranges. Coagulation and flocculation aids
are usually added to facilitate the formation of large agglomerated
particles that settle more readily and can be removed from the bottom
of the clarifiers.
In addition to these major technologies identified and described
above, a number of controls that are common to or make up part of the
treatment systems at many facilities include: screening, equalization,
gravity settling and pH adjustment or neutralization.
Screening is often performed prior to subsequent treatment to
remove grit and suspended solids that may potentially damage or clog
process equipment located downstream.
Equalization controls fluctuations in flow and pollutant loadings
in process wastewater prior to treatment to overcome operational
problems that may result from the fluctuations, reduce the size and
cost of the downstream treatment units, and improve the overall
performance of these units.
Gravity settling is primarily used to remove suspended solids,
including pollutants that are in insoluble particulate form such as
metals from industrial laundry process wastewater.

[[Page 66190]]

Most facilities currently have gravity settling alone without chemical
addition. The wastewater is typically collected in a catch basin where
the water is detained for a period of time, allowing solids with a
higher specific gravity to settle to the bottom of the tank and solids
with a lower specific gravity to float to the surface. The
effectiveness of the solids settling depends on the characteristics of
the laundry wastewater, the length of time the wastewater is held in
the catch basin and the regular maintenance of the basin, especially
regular removal of the solids.
pH adjustment is used to increase treatment effectiveness--since
many treatment technologies used in this industry are sensitive to pH
fluctuations--and to meet discharge requirements.
Other wastewater treatment technologies identified as being used in
this industry are carbon adsorption, air stripping with and without
carbon adsorption, ultrafiltration, centrifugation, sludge dewatering,
filtration, oil/water separation without chemical addition, and vacuum
degassing.
Carbon adsorption uses activated carbon to remove
dissolved VOCs from process wastewater.
Air stripping is normally performed in a countercurrent,
packed tower, or tray tower column. The wastewater is introduced at the
top of the column and allowed to flow downward through the packing
material or trays. Air is simultaneously introduced at the bottom of
the column and blows upward through the water stream. Volatile organics
are stripped from the water stream, transferred to the air stream, and
carried out of the top of the column with the air, preferably through
activated carbon. The treated water is discharged out of the bottom of
the column.
Ultrafiltration uses semipermeable polymeric membranes to
separate emulsified or colloidal materials suspended in the process
wastewater stream by pressurizing the liquid so that it permeates the
membrane.
Centrifugation applies centrifugal forces to settle and
separate higher density solids from process wastewater. Some facilities
use centrifugation as a method to separate solids from wastewater; and
centrifugation can be chemically enhanced to remove additional
pollutants.
Sludge dewatering processes remove water from sludge
generated from the wastewater treatment process. Many industrial
laundry facilities (31%), including some of those with only screening
or gravity settling but no additional treatment, reported dewatering
their sludge prior to disposal. The types of dewatering devices used in
the industrial laundries industry include: plate and frame filters,
rotary vacuum filters, and sludge dryers.
Industrial laundries use bag and sand filters to remove
solids from wastewater. Among the facilities visited or responding to
the detailed questionnaire, filtration most common to this industry
included bag filters and sand filters.
Oil/water separation without chemical addition technology
removes a separated oil layer. The oil layer can be removed by a
skimming device or decanted from the wastewater.
EPA sampled one facility using vacuum degassing. At this
facility the vacuum degasser was intended to remove organic compounds.
EPA identified the following in-process treatment technologies that
remove pollutants from industrial laundry items prior to water washing:
Dry cleaning involves cleaning soiled items with an
organic-based solvent that removes VOCs as well as organic pollutants
(e.g., oil and grease). The pollutants generated in the dry cleaning
operation are recovered from the solvent through distillation and then
disposed of off-site as a hazardous waste.
Steam tumbling involves agitating soiled items within a
modified washer/extractor while steam is injected into the chamber. The
tumbling items contact the steam, which removes the VOCs. The steam is
condensed, and the pollutants are recovered through a phase separation
and are then disposed of as a hazardous waste.
2. Technologies Rejected From Further Consideration
The technologies described above were those reported in the
detailed questionnaire. EPA then determined that certain major
technologies should be considered as best available in the industry and
chose to sample these candidate technologies.
Based on the data EPA gathered and evaluated, EPA rejected the
following technologies from further consideration: bag filtration, sand
filtration, ultrafiltration, oil/water separation and vacuum degassing.
EPA removed sand and bag filtration from the list of technology
options because data for both sand filtration and bag filtration showed
poor removals of most pollutants.
EPA sampled one facility using ultrafiltration. Based on
conversations with industrial laundries and corporate contacts, many
laundry facilities that have tried ultrafiltration as wastewater
treatment have reported problems with fouling, and solids building up
in the unit requiring constant maintenance and/or inhibiting the
performance of the unit. Some facilities have replaced ultrafiltration
units with dissolved air flotation or chemical precipitation units.
Therefore, EPA did not further consider ultrafiltration as a regulatory
option.
EPA investigated oil/water separation as part of the data analysis.
After some assessment, EPA determined that oil/water separation without
chemical addition to lower the pH is not nearly as effective as CEB.
EPA sampled one facility using CEB.
Vacuum degassing, which was sampled for the removal of organics,
did not remove organic pollutants effectively. Therefore, EPA did not
continue evaluating this technology as an option. See Chapter 9 of the
Development Document.

D. Technology and Regulatory Options Considered

1. Initial Regulatory Options for PSES and PSNS
For the proposed rule, EPA initially developed the following
regulatory options based on evaluating screener and detailed
questionnaire data submitted by industry. In addition to using the
major technologies described above (CEB, DAF, and CP), EPA considered
regulatory options using stream splitting, a common practice at some
facilities. Stream splitting provides a means of treating a portion of
the total wastewater generated at industrial laundries. Stream
splitting may be used to isolate and treat a stream with a higher
pollutant load, while a stream with a lower load is either recycled and
reused or discharged to the POTW without treatment. A divided trench
and sump system is used to split process wastewater streams. Washer
modification (dual valves) is also part of stream splitting.
The initial regulatory options included standards based on:
Chemical Emulsion Breaking of wastewater from the washing of heavy
industrial items only (CEB-heavy), Dissolved Air Flotation of
wastewater from the washing of heavy industrial items only (DAF-heavy),
Chemical Precipitation of wastewater from the washing of heavy
industrial items only (CP-heavy), Dissolved Air Flotation of all
wastewater (DAF-all), Chemical Precipitation of all wastewater (CP-all)
and a Combined Option establishing limits based on using either DAF or
CP of all wastewater (Combo-all). For the

[[Page 66191]]

``heavy'' options in this proposed rule, heavy is defined as wastewater
from the laundering of shop towels, printer towels, fender covers,
filters and mops. As part of the options listed above EPA also included
gravity settling, screening, equalization, pH adjustment, sludge
dewatering (for CP and DAF only), and the use of common pollution
prevention practices (or best management practices).
Based on evaluation of the effluent concentration data from these
site visits and sampling, some of the initial options were no longer
pursued, or were further modified. The DAF-heavy and CP-heavy options
were determined not to be appropriate because at some facilities the
untreated waste streams for those items not considered to be heavy by
the facility had higher concentrations of pollutants than the average
treated effluent concentrations for the same pollutants. This problem,
in part, was caused by the different mix of ``heavy'' items being
laundered at the different facilities from which wastewater data were
obtained. If sufficient treated effluent data could be obtained related
to the laundering of the same set of ``heavy'' items, the heavy option
may be a feasible alternative for the final rule. However, any option
that would regulate only the wastewater from washing heavy industrial
items would require an in-plant compliance monitoring location or a
separate discharge point to the sewer after the treatment system which
could increase the compliance burden on the control authority. In some
cases where the end-of-pipe monitoring for some parameters was still
required based on local limits, the costs of this option would increase
due to the in-plant plus end-of-pipe monitoring. At the same time, EPA
recognizes that targeting the rule to heavy items only could reduce
costs to the regulated community by removing some facilities from the
scope of the rule. Some facilities could also save money by segregating
heavy items from other items and treating only the heavy items. The
CEB-heavy option was determined not to be feasible due to less
pollutant removals at higher costs than the DAF-heavy and CP-heavy
options. See Chapters 9 and 10 of the Development Document. EPA
solicits comments and data on the feasibility of either the DAF or CP
heavy only options where the definition of heavy includes only the
laundering of printer rags, shop towels, mops, fender covers and
filters.
2. Modified Regulatory Options
EPA evaluated proposing pretreatment standards for the entire
facility wastestream based on only a portion being treated,
specifically only the portion of facility wastewater generated by
laundering industrial items was costed for treatment by DAF and CP. The
basis for costing partial treatment is that EPA's data shows these
standards can be met by treating only the portion of wastewater from
laundering industrial items. EPA called these options DAF-IL, CP-IL,
Combo-IL and Combo-IL2Lim.
EPA evaluated the combo option in two scenarios. Under the first
scenario (Combo-IL) either DAF or CP would form the basis of the
standards by establishing one set of standards based on the less
stringent of the two standards for each regulated pollutant for the two
technologies. Having one set of such standards would allow some
flexibility for facilities with either technology to meet the
limitations. This option would base the standard for each parameter on
the lesser performance between DAF and CP, and based on current data,
remove less total pollutants.
Under the second combo scenario (Combo-IL2Lim), facilities with DAF
in place as of the publication date of the proposal would have to
comply with the standards based on DAF and all other facilities would
have to comply with standards based on CP.
EPA additionally considered an organics control option, which
involves the use of steam tumbling for treatment of shop and printer
towels and mops for removal of organic pollutants.
EPA also considered proposing a no regulation option, but rejected
it because the available discharge loadings data identified a number of
pollutants that were estimated to pass through or have the potential to
interfere with POTW operations.
Under Section 307(b) of the CWA, EPA is directed to establish
pretreatment standards that prevent the discharge of pollutants to
POTWs that interfere with, pass-through, or are otherwise incompatible
with the operation of POTWs. EPA has interpreted the pass-through
provision to mean that a pollutant ``passes through'' the POTW if the
removal efficiency of an available pretreatment option is greater than
the removal efficiency of the POTW. Based on available data, EPA
believes that pretreatment technology is available to the industrial
laundries industry that removes some pollutants with greater efficiency
than is achieved by most POTWs.
Nonetheless, both the Small Business Regulatory Enforcement
Fairness Act (SBREFA) panel, which is comprised of representatives from
three federal agencies (EPA, the Small Business Administration, and the
Office of Management and Budget), and small entity representatives
recommended that EPA solicit comments on a no regulation option. EPA
has the discretion under the CWA to decline to regulate an industrial
subcategory based on lack of pollutant loadings, the small number of
affected facilities, or other relevant factors, one of which could be a
determination that there is no pass through or interference due to the
pollutant discharges of the industry. The SBREFA Panel noted, among
other things, that ``the total pollutant loadings (pre-regulation) are
not as high for this industry as they were for most industries with
effluent guidelines in place and that the regulatory options are not as
cost-effective as those selected for most other effluent guidelines.''
In addition, EPA notes that if we did not use a toxic weighting factor
for TPH (see Section VII.E below), the cost per pound equivalent
removed of this rule relative to previous rules would be still higher.
As indirect dischargers, industrial laundries are subject to the
general prohibitions in the pretreatment requirements and any
additional pretreatment requirements set by local POTWs. Any pass-
through or interference problems potentially caused by a laundry can be
directly addressed by the POTW through the establishment of appropriate
local limits. Some POTWs support the no regulation option because it
provides them with the flexibility to design less stringent local
pretreatment requirements that are appropriate to local conditions.
Other POTWs prefer to have EPA establish uniform pretreatment standards
because of the resources required to determine and enforce local limits
on a case-by-case basis.
EPA solicits comments on the no regulation option and encourages
commenters to support such arguments with information and data,
particularly data on the loadings and the degree of pass through at
POTWs. Further, EPA encourages commenters to explain how the no
regulation option would be consistent with those requirements of
sections 301, 304 and 307 of the CWA that require the control of
pollutants discharged to POTWs that pass through or interfere with POTW
operations.
Based on the above evaluations, EPA decided to evaluate the
following options: organics control(OC), combo-IL, combo-IL2Lim, DAF-
IL, and CP-IL.

E. Costs

EPA estimated the cost for industrial laundries to implement each
of the

[[Page 66192]]

model technologies considered for the proposed standards. These
estimated costs are summarized in this section and discussed in more
detail in the Development Document. All cost estimates in this preamble
are expressed in 1997 dollars. The cost components reported in this
section represent estimates of the investment cost of purchasing and
installing equipment, and the annual operating and maintenance costs
associated with that equipment. In section VII, costs are expressed in
terms of a different cost component, total annualized costs, which are
used to estimate economic impacts. Annualized costs better describe the
actual compliance costs that a facility/company would incur, allowing
for interest, depreciation, and taxes. A summary of the economic impact
analysis for the proposed regulation is contained in section VII of
today's notice. See also the Economic Assessment.
EPA estimated the cost for implementing the candidate PSES by
calculating the engineering costs of meeting the required effluent
reductions for each industrial laundry facility. EPA used information
from the 193 in-scope facilities responding to the questionnaire as the
basis for the cost estimates calculated by the cost model for these
facilities. Using statistically calculated facility weighting factors,
EPA then extrapolated the results to the entire industrial laundries
industry. The facility-specific engineering cost assessment for PSES
began with a review of present wastewater treatment technologies at
each facility. For facilities without treatment-in-place equivalent to
the candidate PSES technology options, EPA estimated the cost to
upgrade the facility's existing treatment technology or if none was in
place install treatment to achieve the proposed discharge standards.
EPA based these estimates on vendor quotes and engineering judgment.
Facilities that had treatment in place equivalent to that option were
costed for monitoring only. EPA believes that this approach
overestimates the costs to achieve the candidate PSES standards because
many facilities can achieve the standards without using all of the
components of the technology basis or by treating wastewater from
certain items only. For the current options, EPA assumed treating all
wastewater except for wastewater from linen items, denim prewash items,
and new items. EPA solicits comments on these costing assumptions. See
Development Document for more details. The following table summarizes
by option, the capital expenditures, the annual operating and
maintenance costs, and the annual pretax cost for implementing PSES.
Note that pretax costs are presented here, but are not used in
determining economic achievability of the proposed rule on the
industrial laundries industry. Rather, the posttax costs, the costs
industry actually bears, are used to determine economic achievability
(see Table VII.C.3.1). The annual costs in this table below also
account for the ability of some facilities to haul wastewater at a
lower cost than the cost of installing and operating the pollution
control technology.

Table VI.E.1. Costs of Implementing PSES Regulations
[In millions of 1997 dollars]
------------------------------------------------------------------------
Annual
operating
Options Capital and Annual
costs maintenance pretax cost
costs
------------------------------------------------------------------------
OC................................. 290 35.0 65.7
CP-IL.............................. 470 86.6 136.4
DAF-IL............................. 364 138.2 176.8
Combo-IL........................... 440 98.5 145.1
Combo-IL2Lim....................... 364-470 86.6-138.2 136.4-176.8
------------------------------------------------------------------------

In addition to costs, EPA estimated the removals for industrial
laundry facilities for the following technology options.

Table VI.E.2. Removals for PSES Options
------------------------------------------------------------------------
Option Removals (lb-eq)
------------------------------------------------------------------------
OC................................................... 5,278
CP-IL................................................ 407,358
DAF-IL............................................... 402,921
Combo-IL............................................. 402,253
Combo-IL2Lim......................................... 402,921-407,358
------------------------------------------------------------------------

The estimated removals summarized in the table are discussed in
more detail in the Development Document. The removals are based on the
difference between each facility's current discharge load and each
facility's discharge load after implementation of the proposed rule.

F. Rationale for Selection of PSES and PSNS

1. Existing Sources
After considering all of the technology options described above,
and in light of the factors specified in section 304(b)(2)(B) of the
CWA, EPA has tentatively selected Chemical Precipitation-IL (CP-IL) as
the technology basis for the pretreatment standards for existing
sources in the proposed rule. As discussed in more detail below, the
proposed rule would exclude existing facilities laundering less than
one million pounds of incoming laundry per calendar year and less than
255,000 pounds of shop and/or printer towels/rags per calendar year.
However, these excluded facilities would still be subject to local
pretreatment standards where appropriate. If any excluded facility
launders one million pounds or more of incoming laundry or 255,000
pounds of shop and/or printer towels/rags per year, it will no longer
be excluded from the standards. Further, once a facility is subject to
the standards, even if the facility becomes ``small'' as defined by the
rule's exclusion, it would still be subject to the rule. This is
because once a facility has installed wastewater treatment to meet the
requirements of the rule, it is technologically available and
economically achievable for the facility to continue to comply with the
standards.
The record establishes that this option is technically available.
As discussed in more detail below, EPA also tentatively concludes that
this option is economically achievable and represents the best
performance that is economically achievable. Further, this option has
acceptable non-water quality environmental impacts.
The specific standards proposed in this rule were derived based on
a statistical analysis of the performance of

[[Page 66193]]

chemical precipitation in industrial laundries that are sufficiently
similar to all facilities that are subject to the standards, as
discussed below and in the Development Document. Although chemical
precipitation is currently only used at 3 percent of industrial laundry
facilities, chemical precipitation is a widely used technology in other
industries such as the metal products and machinery industry, chemicals
and allied products industry and centralized waste treatment industry.
Thus, although CP is only used at three percent of industrial
laundry facilities, EPA is well within its authority to select it as
BAT. BAT means not that the technology be in routine use, but rather
that the technology must be available at a cost and at a time that the
Administrator determines to be reasonable, and that the technology has
been adequately demonstrated if not routinely applied. See American
Frozen Food Institute v. Train, 539 F.2d 107, 132 (D.C. Cir. 1976),
citing ``A Legislative History of the Water Pollution Control Act
Amendments of 1972'' (Comm. Print 1973), at 1469-1470. See also
Kennecott v. United States EPA, 780 F.2d 445, 448 (4th Cir. 1985). (The
BAT standard reflects the intention of Congress to use the latest
scientific research and technology in setting effluent limits, pushing
industries toward the goal of zero discharge as quickly as possible. In
setting BAT, EPA uses not the average plant, but the optimally
operating plant--the pilot plant that acts as a beacon to show what is
possible.); Association of Pacific Fisheries v. EPA, 615 F.2d 794, 816
(9th Cir. 1980) (BAT can be based on statistics from a single plant).
EPA has determined that the selected option for the industrial
laundries category is economically achievable for the following
reasons. EPA estimates that the proposed standards would cause 33
industrial laundry facility closures and a direct loss of 2,872 jobs
from facility closure (although longer term, net direct losses are
estimated to total only 470 as the market equilibrates). The number of
incremental closures (33) is about 1.9 percent of in-scope industrial
laundry facilities (1,747) and 2.1 percent of the (1600) facilities in
the facility level analysis. The loss of jobs associated with these
closures is about two percent (short-term) or 0.4 percent (longer term)
of the category employment. EPA's bankruptcy analysis shows that 65
firms (of 681 total firms in the firm level analysis, or 9.5 percent)
move into the bankruptcy likely category under the proposed standards
(i.e., they would have trouble obtaining the financing necessary to
install the required pollution control equipment). In all cases, these
are single-facility firms where EPA's closure analysis shows that the
facility would still be financially viable (making money) after
complying with the rule if financing could be obtained. In this
industry in particular, where demand is relatively inelastic and
facilities are geographically tied to their service areas, production
is not easily shifted to another geographic area. Therefore, EPA
predicts that these bankruptcies do not mean that the facilities will
close down, but rather that they may be a target for acquisition by
another entity that has better access to financing for pollution
control equipment and continue to operate with all or nearly all
employees. Based on this analysis, EPA finds the standards to be
economically achievable as that term is used in the CWA.
EPA has concluded that application of the selected option is not
economically achievable for the smallest industrial laundries that
launder less than one million pounds of incoming laundry per calendar
year and less than 255,000 pounds of shop and/or printer towels/rags
per calendar year. If EPA were to require standards based on chemical
precipitation, the closure rate among facilities with annual revenues
less than $1 million, would be 28.9 percent, as compared to 4.4 percent
for the category as a whole without the size exclusion. This economic
impact is clearly disproportionate and EPA is exercising its discretion
under sections 301 and 304 of the CWA to determine what is economically
achievable to establish this exclusion.
Further, EPA believes that it is appropriate to establish this
exclusion because it alleviates the harshest economic impact, facility
closure, without excluding from the national standards a significant
pollutant load. A chart illustrating what EPA found follows:

Table VI.F.1.1--Closures and Removals With and Without Exclusion
----------------------------------------------------------------------------------------------------------------
Closures Pollutant Removals (lb-eq)
-------------------------------- taking POTW removals into
account
Option Without -------------------------------
exclusion With exclusion Without
exclusion With exclusion
----------------------------------------------------------------------------------------------------------------
CP-IL........................................... 70 33 416,920 407,358
----------------------------------------------------------------------------------------------------------------

As the chart demonstrates, the exclusion would alleviate closures
for the smallest facilities. EPA also notes that the excluded
facilities account for less than three percent of the pollutant
removals from the waters of the U.S. that would occur if the rule were
implemented without the exclusion. Thus, the exclusion represents a
reasonable approach to addressing the disproportionate adverse economic
impacts of the rule consistent with the objectives and requirements of
the CWA.
The Agency also evaluated higher thresholds reflecting up to 3 to 5
million pounds of total production and from 255,000 to 500,000 pounds
of shop and/or printer towels. See Section X.A. for more discussion of
the SBREFA panel findings. The Agency solicits comments on these
alternative exclusions as well as the exclusion proposed today.
Finally, EPA has determined that the selected option has acceptable
non-water quality environmental impacts discussed further in section
IX, below and in chapter 14 of the Development Document.
EPA evaluated the organics control option as a low cost
alternative, however, this technology was not effective in terms of
pollutant removals and was rejected.
EPA, based on the data gathered to date, did not select DAF-IL
because EPA's current data show that CP technology achieves slightly
higher toxic pollutant removals. While, DAF is currently more prevalent
in the industry than CP (EPA estimates that approximately eight percent
of the industry are currently using DAF compared to approximately four
percent using CP) EPA estimates that DAF is more costly to operate than
CP on an annualized basis. DAF requires a smaller initial capital
investment and

[[Page 66194]]

may be attractive to many facilities for this reason, however, EPA
estimates that its lower capital costs are more than offset by higher
operating and maintenance costs associated with the need to chemically
condition the flotation residual sludges, making it more expensive than
CP overall.
The Combo-IL option would base the standard for each parameter on
the lesser performance between DAF and CP, and current data indicate
that it would remove slightly fewer pounds of pollutants than if all
facilities were required to meet standards based on CP only.
EPA also rejected the Combo-IL2Lim option because current data
indicate that overall this option did not remove as many pollutants as
the CP option and would cost more than the selected CP-IL option. See
Chapters 9 and 12 of the Development Document. EPA solicits additional
information and data on the costs and performance of both CP and DAF
technologies used to treat wastewaters from laundering industrial
textile items. Although EPA rejected the options based on DAF, the
pollutant removals were similar enough for further consideration of the
DAF and Combo options. If additional data and information provides
support that DAF is generally comparable to CP in removing pollutants,
EPA would consider for the final rule basing standards on either the
less stringent of CP or DAF standards or on DAF for those facilities
that already have it in place and on CP for all other facilities.
If the standards for the final rule are based on the Combo-IL2Lim
option, the standards based on DAF technology would apply to those
facilities with DAF in place as of the publication date of this
proposal. Although EPA estimates that CP is cheaper to operate on an
annualized basis than DAF (even for facilities that already have DAF
installed), EPA's costing analysis for the Combo-IL and Combo-IL2Lim
options assumed that some facilities that already have DAF installed
would continue to operate it if given the choice because of constraints
on financing. This is the explanation for the results in Table VI.E.1
that a less stringent regulatory option would apparently have higher
compliance costs. EPA recognizes that while its cost estimates are
based on simplifying assumptions that it believes to be correct on
average, actual costs will vary from facility to facility, so that DAF
may in fact be the cheaper technology for some facilities. This is
particularly likely for facilities that already have DAF installed. In
this case, the Combo-IL and Combo-IL2Lim options would be expected to
entail lower national compliance costs than either the DAF-IL or the
CP-IL options. EPA is soliciting information that may help it refine
its estimates of the relative costs on a facility-by-facility basis of
DAF and CP. Given that EPA's estimates that CP's removals are only
slightly better than DAF, this could also be a factor in determining
whether CP only, or both CP and DAF represent BAT and/or BADCT in
addition to the other factors specified in Section III of this
preamble.
2. New Sources
After considering all of the technology options described above,
and in light of the factors specified in sections 306 and 307 of the
CWA, EPA has selected CP-IL as the technology basis for the
pretreatment standards for new sources in the proposed rule. As stated
in Section III.A. of the preamble, PSNS are analogous to NSPS, which in
turn are based on best available demonstrated control technology. New
facilities have the opportunity to install the most efficient treatment
technologies and under NSPS, EPA is to consider standards that will
eliminate pollution to the maximum extent feasible. These PSNS are
based on the performance of CP at one or more facilities using CP
depending on the pollutant. Although CP is currently only used at three
percent of industrial laundry facilities, CP is a widely used
technology in other industries such as the metals products and
machinery, chemicals and allied products, and centralized waste
treatment industries. See, e.g., American Iron and Steel Institute v.
EPA, 526 F.2d 1027, 1058 (3rd Cir. 1975) (By demonstration, it will be
sufficient that there be one operating facility which demonstrates that
the level can be achieved or that there is sufficient information and
data from a relevant pilot plant or semi-work plant to provide the
needed economic and technical justification for such new source).
EPA has determined that the proposed PSNS are economically
achievable and present no barrier to entry. EPA has found that overall
impacts from the proposed IL standards on new sources would not be any
more severe than those on existing sources, since the costs faced by
new sources generally will be the same as or less than those faced by
existing sources. It is typically easier to incorporate pollution
prevention technologies such as those identified in the Development
Document in Chapter 8 & 10, and it is less expensive to incorporate
pollution control equipment into the design at a new plant than it is
to retrofit the same pollution control equipment in an existing plant
because no demolition is required, and space constraints, which can add
to costs if specifically designed equipment must be ordered, are not an
issue in new construction. Because most new sources face either less or
similar costs than existing sources, EPA has determined that PSNS
requirements should not pose a barrier to entry on the basis of
competitiveness for new facilities based on available data. EPA also
has shown CP to be an economically achievable option for existing
sources. Therefore, the same requirements for PSNS also should have an
acceptable level of impact on new facilities.
EPA also examined whether there would be a barrier to entry for
small new sources. EPA's analysis showed no closures of new sources at
single-facility firms. See section VII.C.2.b of this preamble or the EA
for more details. Thus, EPA proposes not to exclude these new sources
based on a finding that it is economically achievable for these new
sources to comply with the CP standards contained in the proposed rule.
EPA solicits comments on its proposed finding that the proposed CP
option is economically achievable and does not constitute a barrier to
entry for new small sources and on its proposal not to include a small
facility exclusion for PSNS. See also section VII.B. below.

G. Determination of Long-Term Averages (LTAs), Variability Factors, and
Limitations for PSES and PSNS

Although chemical precipitation (CP) is widely used in other
industries, CP only exists at an estimated three percent of industrial
laundry facilities. EPA based the proposed standards on sampling data
EPA gathered at one industrial laundry facility using CP and from data
submitted by as many as four CP facilities (depending on the pollutant)
in response to EPA's detailed monitoring questionnaire. Because
effluent from even the best performers in an industry can reasonably be
expected to vary both above and below the long-term average (LTA)
concentration for a given pollutant, even when treatment systems are
operating optimally, EPA calculates limitations and standards by
multiplying LTAs by variability factors to insure that reasonable
excursions from the LTAs do not result in violation of the CWA.
The proposed limitations, as presented in today's notice, are
provided as daily maximums and monthly averages for SGT-HEM and daily
maximums for all other regulated pollutants. Monitoring was assumed to
occur four times per month for SGT-

[[Page 66195]]

HEM and one day per month for all other pollutants. Monitoring
requirements are determined by the pretreatment control authority, but
EPA has assumed a schedule that might be appropriate. However, EPA
notes the high costs to facilities ($20,000-$23,000 annually) of
monitoring at this frequency and requests comment on whether it should
recommend a less frequent schedule to pretreatment control authorities.
The limitations for a pollutant are the product of the pollutant
long-term average and the pollutant variability factor. The procedures
used to estimate the pollutant LTAs and variability factors are briefly
described below. A more detailed explanation is provided in the
Statistical Support Document.
The LTA of a pollutant for each facility was calculated based on
either an arithmetic average or the expected value of the distribution
of the samples, depending on the number of total samples and the number
of detected samples for that pollutant at that facility. The pollutant
long-term average for a treatment technology was the median of the
long-term averages from the facilities using CP.
EPA calculated variability factors by fitting a statistical
distribution to the data. The distribution was based on an assumption
that the furthest excursion from the LTA that a well operated plant
using chemical precipitation could be expected to make on a daily basis
was a point below which 99% of the data for that facility falls, under
the assumed distribution. The daily variability factor for each
pollutant at each facility is the ratio of the estimated 99th
percentile of the distribution of the daily pollutant concentration
values divided by the expected value of the distribution of the daily
values. The pollutant variability factor for a treatment technology was
the median of the pollutant variability factors from the facilities
with that technology. The daily maximum limitation is a product of the
pollutant long-term average and the pollutant variability factor.
The monthly maximum limitation is also calculated as the product of
the pollutant long-term average and the pollutant variability factor,
but the pollutant variability factor is based on the 95th percentile of
the distribution of daily pollutant concentrations.
By accounting for these reasonable excursions above the LTA, EPA's
use of variability factors results in standards that are generally well
above the actual LTAs. Thus, if a facility operates its treatment
system to meet the relevant LTA, EPA expects the plant to be able to
meet the standards. Variability factors ensure that normal fluctuations
in a facility's treatment are accounted for in the limitations.
As stated above, EPA rejected an option that would be based on one
set of standards for facilities with DAF currently in place and another
set of standards based on CP for all other facilities. Although EPA has
rejected this option for the reasons stated in section VI.D above, EPA
has also provided standards based on sampling data EPA gathered at two
facilities using DAF and from data submitted in response to EPA's
detailed monitoring questionnaire by as many as four facilities
(depending on the pollutant) that were using DAF. These DAF standards
are shown for comparative purposes below. EPA solicits comments on both
the proposed CP and DAF standards and encourages commenters to
substantiate their comments by submitting data.

Table VI.G.1--Pretreatment Standards
----------------------------------------------------------------------------------------------------------------
DAF CP
---------------------------------------------------------------
Pollutant parameter Daily Monthly Daily Maximum Monthly
Maximum(mg/L) Average (mg/L) (mg/L) Average (mg/L)
----------------------------------------------------------------------------------------------------------------
Bis (2-Ethylhexyl) Phthalate.................... 0.44 .............. 0.13 ..............
Ethylbenzene.................................... 0.73 .............. 1.64 ..............
Naphthalene..................................... 0.24 .............. 0.23 ..............
Tetrachloroethene............................... 1.35 .............. 1.71 ..............
Toluene......................................... 5.63 .............. 2.76 ..............
m-Xylene........................................ 2.11 .............. 1.33 ..............
o&p-Xylene...................................... 0.98 .............. 0.95 ..............
Copper.......................................... 1.83 .............. 0.24 ..............
Lead............................................ 0.52 .............. 0.27 ..............
Zinc............................................ 3.47 .............. 0.61 ..............
TPH (as measured by SGT-HEM).................... 42.9 21.3 27.5 15.4
----------------------------------------------------------------------------------------------------------------

EPA is proposing concentration-based limits. An alternative is
mass-based limits calculated by multiplying the concentrations in the
table above by the 75th percentile production normalized flow of 3.13
gallons per pound laundered. However, EPA found no relationship between
gallons per pound laundered and items washed, total production or the
amount of recycle/reuse. Because of this, even if operators were
employing the appropriate level of control, it would be difficult to
develop achievable mass limits.
Some stakeholders have advocated mass-based standards while others
prefer concentration-based standards. POTWs generally prefer
concentration-based standards because it is much easier for them to
implement. Mass-based standards require information about flow and/or
production both to set the standards and to enforce them, but have the
added advantage of encouraging flow reduction. EPA solicits comments on
this issue.

VII. Economic Analysis

A. Introduction

This section describes the capital investment and annualized costs
of compliance with the proposed industrial laundries pretreatment
standards and the potential impacts of these compliance costs on
current and future facilities and firms in the industrial laundries
industry. EPA's economic assessment is presented in detail in the
Economic Assessment (EA) included in the rulemaking record. The EA
estimates the economic effect of compliance costs on facilities, firms,
employment, domestic and international markets, inflation,
distribution, environmental justice and industrial laundries customers.
EPA also has conducted an Initial Regulatory Flexibility Analysis
(IRFA) under the Regulatory Flexibility Act (RFA) as amended by the
Small Business Regulatory Enforcement Fairness Act (),

[[Page 66196]]

which estimates effects on small entities, and a cost-effectiveness
analysis of all evaluated options. Except where otherwise noted, only
the results for the option used as the basis for the proposed rule are
presented here. Impacts for other options are presented in Section C.3
below and in the EA.

B. Economic Impact Methodology

1. Introduction
This section (and, in more detail, the EA and record for the
proposed rule) evaluates several measures of economic impacts that
result from compliance costs. The analysis in the EA consists of eight
major components: (1) an assessment of the number of facilities that
could be affected by this rule; (2) an estimate of the annual aggregate
cost for these facilities to comply with the rule using facility-level
capital and operating and maintenance (O&M) costs; (3) an evaluation,
using a financial model, of compliance cost impacts on facilities' cash
flow (closure analysis); (4) an evaluation, using a financial model, of
compliance cost impacts on the financial health of firms in the
industry (firm failure analysis); (5) an evaluation of secondary
impacts such as those on employment, markets, inflation, distribution,
environmental justice and industrial laundry customers; (6) an
assessment of the potential for impact on new sources (barrier to
entry); (7) an analysis of the effects of compliance costs on small
entities pursuant to the RFA as amended by; and (8) a cost-benefit
analysis pursuant to E.O. 12866.
All costs are reported in this preamble in 1997 dollars, with the
exception of cost-effectiveness results, which, by convention, are
reported in 1981 dollars. The EA report presents all costs in 1993
dollars. In the EA, any costs not originally in the base year (1993)
dollars have been inflated or deflated to 1993 dollars using the
Engineering News Record Construction Cost Index, unless otherwise noted
in that report (see the EA for details). This same cost index is used
to further inflate costs to 1997 dollars for this preamble. Generally,
other indices are used to inflate benefits to 1997 dollars, as cited in
the EA. The primary source of data for the economic analysis is the
1994 Industrial Laundries Industry Detailed Questionnaire (Section 308
Survey). Other sources include government data from the Bureau of the
Census, industry trade journals, and several preliminary surveys of the
industry, including the 1989 Preliminary Data Summary for Industrial
Laundries, the 1993 Industrial Laundries Industry Screener
Questionnaire, the 1994 Industrial Laundries Supplemental Screener
Questionnaire, and EPA's Development Document for this rulemaking.
2. Methodology Overview
Central to the EA is the cost annualization model, which uses
facility-specific cost data and other inputs (discussed in Chapter 12
of the Development Document) to determine the annualized capital and
operating and maintenance (O&M) costs of improved wastewater treatment.
This model uses these costs along with an annual compliance monitoring
cost with the industry-specific real cost of capital (discount rate)
over a 16-year analytic time frame to generate the annual cost of
compliance for the selected option, as well as the other options
considered during the course of the proposal effort. EPA chose the 16-
year time frame for analysis based on the depreciable life for
equipment of this type, 15 years according to Internal Revenue Service
(IRS) rules, plus approximately one year for purchasing and installing
the equipment. As an alternative to installing wastewater treatment,
facilities may choose, within many of the technology options
considered, to have wastewater hauled offsite (a decision handled
within the model, as discussed below). The model generates the
annualized cost for each option (including the annual cost of hauling
wastewater) for each facility in the survey, which is then used in the
facility and firm analyses, discussed below.
In the facility analysis, EPA models the economic impacts of
regulatory costs on individual industrial laundry facilities,
irrespective of ownership. In this part of the analysis, the model uses
the annualized costs of each option, compares them to the alternative
annual wastewater hauling costs (where this alternative is available),
and selects the lowest of the two.
EPA then reduces this resulting cost to take into account that
portion of compliance costs that can be passed through to customers.
Compliance costs are adjusted downward by a factor (the cost pass-
through factor) that is calculated using EPA's model of the industrial
laundries market. This model, which quantifies the price and quantity
changes in the industrial laundries market due to the proposed rule,
shows that the industry will be able to pass some portion of the
compliance costs of the proposed rule through to their customers and
calculates the percentage that can be passed through. The market model
is a simultaneous equation for determining price and quantity using
supply and demand curves for the industry that EPA developed based on
data in the Section 308 Survey and U.S. Census Bureau economic data.
EPA estimates, for this industry, that 32 percent of compliance costs
can be passed through to customers. Although EPA believes that its cost
pass-through projection is reasonable, an analysis in the EA shows that
a zero-cost pass through assumption produces nearly identical closure
analysis results.
EPA then converts the adjusted annual cost for each facility into a
present value change in cash flow, which is subtracted from the
estimated baseline present value of facility cash flow. Estimated
baseline present value of facility cash flow is based on the average of
three years of financial data from each facility in the Section 308
survey under an assumed no-growth scenario (i.e., the annual cash flow,
calculated as the 3-year average, is expected to remain the same over
the 16-year period of analysis). If the change in present value of cash
flow (which is derived from the adjusted annualized costs of
compliance) causes a facility's estimated cash flow to change from
positive in the baseline to zero or negative after implementing the
requirements of the proposed rule over the 16-year period of analysis,
EPA considers the facility likely to close (i.e., liquidate) as a
result of the regulation. This approach is somewhat different from
methodologies used in other EAs and economic impact analysis for
manufacturing industries, since salvage value is not considered in the
closure analysis here. For a number of reasons, outlined in the EA (see
Section 5 and Appendix C), EPA found that using salvage value in a
closure analysis for this industry is not the best way for determining
whether a facility would be liquidated. EPA found that baseline
closures calculated using salvage value accounted for a large
percentage (nearly 30 percent) of existing facilities. Furthermore, EPA
found that many of these closures using salvage value were driven by
current assets. EPA believes that firms would not be likely to
liquidate on the basis of high current assets (cash on hand) relative
to cash flow. EPA also believes that costs of liquidation could easily
equal or exceed salvage value in low-asset service industries such as
this one, unlike in the more highly capital-intensive manufacturing
industries.
Note that facilities that reported negative cash flow over the 3-
year period of the survey are considered baseline closures and are not
considered affected by the rule for several reasons:
(1) Many of these facilities (50 non-excluded facilities) are
nonindependent

[[Page 66197]]

facilities owned by multifacility firms. These facilities may be
transferring production (laundering services at or near cost) from
other facilities owned by the same parent company, or otherwise not
expected to be self-supporting by the parent. EPA analyzes the parent
firms of these facilities in the firm-level analysis and as long as the
parent firm can afford to install and operate compliance equipment in
these facilities, EPA assumes these facilities will close neither in
the baseline nor postcompliance. (2) OMB guidance suggests that
agencies develop a baseline that is ``the best assessment of the way
the world would look absent from the proposed regulation. That
assessment may consider a wide range of factors, including the likely
evolution of the market * * *'' EPA's best assessment is that some
facilities currently operating may not remain in business to install
and operate the pollution control equipment. EPA cannot say for certain
which facilities these may be, but can assert that those facilities
that are currently considered not financially viable because their cash
flow is zero or negative (among those not owned by multifacility
firms--57 non-excluded facilities) are the likeliest facilities to
close without ever installing and operating pollution control
equipment. It is possible that a facility estimated to be a baseline
closure may remain open, but the converse is also true--a facility
projected to remain open until it is subject to the rule may actually
close independently of the effects of the rule (both results might be
equally possible). Thus, consistent with OMB guidance, EPA estimated
postcompliance closures by counting closures that are projected to
close solely due to the effect of the proposed rule.
In the firm failure analysis, EPA uses the adjusted annualized
costs to compute a change in earnings, assets, liabilities, and working
capital at the firm level (accounting for costs for multiple
facilities, where applicable). These postcompliance financial figures
are used in a computerized model of financial health on a firm-by-firm
basis. The model uses an equation known as ``Altman's Z'', which was
developed based on empirical data to characterize the financial health
of firms. This equation calculates one number, based on the financial
data, that can be compared to index numbers that define ``good''
financial health, ``indeterminate'' financial health, and ``poor''
financial health. All firms whose ``Altman's Z'' number changes such
that the firm goes from a ``good'' or ``indeterminate'' baseline
category to a ``poor'' postcompliance category are classified as likely
to have significant difficulties raising the capital needed to comply
with the proposed rule, which can indicate the likelihood of firm
bankruptcy, or loss of financial independence.
As the panel noted, there is uncertainty associated with both the
methodology for predicting facility and firm closures, and the figures
used to make those projections, such as interest rate, assumption of
the life of the pollution control equipment and compliance costs. One
of the small entity representatives consulted during the outreach
process specifically questioned several of EPA's costing assumptions,
relating to interest rate, use life of equipment, and labor
requirements to operate a treatment system. EPA recognizes the
uncertainties associated with its analyses, and has performed
sensitivity analyses in the EA that addresses some of these issues. EPA
believes that its choice of methodology and input data is appropriate
and results in a conservative calculation of costs and facility and
firm closures, but solicits comments and data that would support more
refined analyses for the final rule.
EPA also notes that a methodological concern has been raised
regarding its facility closure analysis that relates to its use of cash
flow as the appropriate measure of funds available to cover the
compliance costs of the proposed rule. Cash flow is defined as income
plus depreciation. It has been suggested that calculating a facility's
costs without including depreciation fails to account for the future
cost of replacing existing capital as it wears out, and thus
underestimates long-term costs and overstates funds available for
compliance. EPA, however, believes it is appropriate to include
depreciation in the funds available for compliance because, while under
standard accounting practices depreciation is deducted from gross
revenue during the calculation of income, it does not represent an
expenditure actually incurred in the current period but rather an
amortization of costs incurred in a previous period. EPA requests
comments on its use of cash flow as an appropriate measure of funds
available for compliance.
In the employment analysis, EPA undertakes several types of
analyses, all based in part on a type of analysis known as input-output
analysis. These employment analyses include: (1) a national-level
analysis for estimating employment gains and losses throughout the U.S.
economy in all industry sectors using both compliance costs and
employment losses driven by facility closures to determine a range of
possible gross and net (losses minus gains) impacts at the national
level; (2) a regional impact analysis using employment losses driven by
facility closures (closure losses) to determine whether impacts on
individual communities might be experienced; and (3) an analysis using
EPA's estimate of market-determined production losses to derive an
estimate of direct, net employment losses in the industrial laundries
industry alone. This last analysis is undertaken to determine losses
within the industrial laundries industry alone because while closure
losses can be considered the immediate impact of the proposed rule on
the industry, production-driven losses might be greater or less than
closure losses over time, as equilibrium in the market is attained.
Furthermore, closure losses do not account for the fact that some
portion of production workers might transfer wholly or in part to
operating pollution control equipment, thus some accounting for
employment gains within the industry is necessary.
National-level analysis. EPA uses input-output analyses to
determine the effects of the regulation using national-level employment
and output multipliers. Input-output multipliers allow EPA to estimate
the effect of a loss in output in the industrial laundries industry on
the U.S. economy as a whole. Every loss in output in the industrial
laundries industry results in employment losses in that industry.
Additionally, these losses have repercussions throughout the rest of
the economy, and the output and employment multipliers allow EPA to
calculate the total losses in output and employment nationally using
the output loss estimated for the industrial laundries industry alone.
See Section Seven of the EA for more details.
Regional-level analysis. EPA also determines the impacts on
regional-level employment, which is estimated using facility closures
and employment at those closing facilities. These analyses are based on
the use of Bureau of Economic Analysis RIMS II input-output regional
(not national-level) multipliers, which allow EPA to determine
employment impacts on other sectors of the regionally economy that
depend on the industrial laundries industry. EPA uses the regional-loss
estimates using the facility closure-driven estimates of employment
losses to perform a community impact analysis, which investigates the
potential for impacts on community unemployment rates based on the

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immediate dislocation effects of facility closures. Firm failures are
not considered in the job loss or community impact analyses because in
all cases, these firms are single-facility firms whose facility is
shown to be financially viable after complying with the rule. The
impact of the proposed rule on these facilities thus might be the loss
of their financial independence, as they would likely be purchased by a
larger firm and continue to operate with all or nearly all employees.
This is not always the case in all industries, but in this industry,
facilities are geographically tied to their service areas and thus
their production is not easily shifted to another geographic area.
Furthermore, they are generally not asset-rich and are thus not
suitable for acquisition for the purpose of selling off assets rather
than for operation.
EPA conducts a regional analysis because even if net employment
effects (losses minus gains) are relatively small on a national level,
an employment loss might still have a substantial negative effect on an
individual community (see the EA for more details).
Industry level analysis. Facility closure losses could overstate or
understate employment losses strictly within the industrial laundries
industry on a longer-term basis, since total longer-term employment
losses are driven by production losses and employment losses from
closures are driven by costs of compliance, and these two losses may
not be equal. Therefore, EPA uses its market model to predict any
reductions in production and the subsequent employment effects
(production-driven effects) within the industrial laundries industry
alone. This analysis also accounts for some gains within the industrial
laundries industry due to a need for operators of pollution control
equipment. This analysis also uses the national-level input-output
multipliers to compute a direct loss of employment on the basis of
output effects. EPA considers this employment loss the longer-term
impact of the rule on the industrial laundries industry.
EPA investigates additional secondary impacts qualitatively and
quantitatively. These impacts include impacts on domestic and
international markets, impacts on substitutes for industrial laundry
services, impacts on inflation, distributional impacts, and impacts on
environmental justice. EPA also investigates the impact of the rule on
domestic markets. The rule will affect domestic markets to the extent
that excluded facilities can affect market share. EPA makes an
assessment of the potential for effect on domestic market on the basis
of pounds of laundry processed by excluded facilities to the total
pounds processed by the industry.
EPA also looks at impacts on customers. The agency obtained IRS
data on the major customer groups and summed total operating costs for
their major customers. Under the worst-case assumption that all
compliance costs would be borne by only 10 percent of these major
customers, EPA conservatively determined a percentage by which total
operating costs might increase due to the proposed rule. Additionally,
EPA investigates the potential for any impacts on hotels, hospitals,
prisons and other such establishments should they be accepting
industrial items from off-site sources.
Another key analysis EPA performs is an analysis to determine
impacts on new sources, which is primarily a ``barriers-to-entry
analysis'' to determine whether the costs of the PSES would prevent a
new source from entering the market. This analysis looks at whether new
industrial laundries would be at a competitive disadvantage compared
with existing sources. Market effects and barriers to entry associated
with the small source exclusion also are qualitatively investigated.
Also, pursuant to E.O. 12866, EPA performs a cost-benefit analysis.
This analysis looks at the social cost of the regulation measured as
the pretax costs of compliance plus government administrative costs
plus the costs of administering unemployment benefits. See Section IX
of this preamble for more details of the benefits analysis.

C. Summary of Costs and Economic Impacts

1. Overview of the Economic Assessment Analyses
The EA focuses first on the costs and economic impacts of the
proposed rule, using the best data and information available--that
reported by industry in the Section 308 Survey data--as representative
of the regulatory baseline. The analysis addresses costs and economic
impacts of the pretreatment (PSES and PSNS) requirements for industrial
laundries wastewater. As noted earlier, EPA has elected to reserve Best
Practicable Control Technology Currently Available (BPT), Best
Conventional Pollutant Control Technology (BCT), BAT, and NSPS
requirements. Direct discharger requirements will be determined on a
case-by-case basis under CWA section 402(a)(1).
2. Total Costs and Impacts of the Proposed Rule
This section presents the total costs and impacts of the standards
in this proposed rule. EPA estimates that there a

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A97-30240. Public record. Not legal advice.