Jump to main content or area navigation.

Contact Us

Water: Regulatory Guidance

Discussion Summary: EPA Technology Design Workshop

November 6 to 7, 1997
Denver, Colorado

U.S. Environmental Protection Agency
Office of Ground Water and Drinking Water
401 M Street, SW
Washington, DC 20460

Table of Contents

1. Workshop Goals and Objectives

2. Background on Cost Modeling Assumptions

2.1 Defining the Breakpoint for Small Systems
2.2 Defining the Treatment Objective

3. Sizing the System

3.1 Use of Peak Production Flow for Design
3.2 Redundancy
3.3 Storage Use for Design Capacity Mitigation

4. Differences in Assumptions Between Packaged Systems and Engineered Systems

5. Permitting

5.1 Types of Permits
5.2 Waste Disposal of Brine
5.3 Costs to Obtain Permits
5.4 Treatability and Pilot Testing

6. How to Apply POU and POE Devices as Technology of Choice

7. Land

7.1 Amount Needed
7.2 Value of Land

8. Breakout Sessions

8.1 Key Characteristics of "Median" Large Water Systems
8.2 Key Characteristics of "Median" Small Water Systems
8.3 Key Characteristics of "Outlier" Large and Small Systems

9. Other Capital Costing Issues

9.1 Miscellaneous
9.2 Use Existing Models or Use WBS Build-Ups Using RS Means
9.3 Level of Detail if WBS Used and Additional Indirect Costs to be Included

10. O&M Costs

10.1 Labor Rates and Indirect Costs for O&M
10.2 Labor Requirements of Various Technologies

11. Technology Design

11.1 General
11.2 Membrane Technologies
11.3 Anion Exchange (AE)
11.4 Cation Exchange (CE)
11.5 Activated Alumina (AA)
11.6 Packaged Tower Aeration (PTA)

12. Economic Issues

Appendix A: Workshop Agenda

Appendix B: Detailed Listing of Comments

Appendix C: Workshop Participants



Top of page



1. Workshop Goals and Objectives

The purpose of the workshop was to bring together practicing water design and costing engineers to discuss the assumptions and components that should be included in models to predict the costs of various treatment alternatives on public water systems (PWSs). The models are being developed by the U.S. Environmental Protection Agency's (EPA's) Office of Ground Water and Drinking Water (OGWDW) and are intended to be used by the Agency as it develops best available technology (BAT) options under future National Primary Drinking Water Regulations (NPDWRs).

OGWDW uses costing data to estimate national compliance costs and to establish compliance technology definitions for small PWSs (i.e., those serving less than 10,000 people). As such, the models being developed must enable EPA to assess treatment costs for the "median" type of public water system. Models must also be developed that will enable the Agency to assess treatment costs on PWSs that are operating on the edges of a normal distribution (i.e., "the outliers").

The specific objectives of the workshop were as follows:

  • To identify major components needed in national cost models.
  • To define representative systems for inclusion in the models, both in terms of "median" and "outlier" systems.
  • To quantify the central tendencies of key parameters to be included in the models, using rules-of-thumb and generally recommended engineering principles (GREPs).
  • To identify additional research needs for furthering the development of the models.

See Appendix A for an agenda of the workshop and for a listing of participants.

The following document summarizes the principal points that were made by workshop participants for each major topic discussed. Additional comments that were made relative to each topic area are also presented in Appendix B to the document.


Top of page

2. Background on Cost Modeling Assumptions

2.1 Defining the Breakpoint for Small Systems


Overview:

EPA's existing cost model assumes that all large systems will fully engineer any treatment processes installed, while assuming that small systems (i.e., systems serving less than 10,000 people) will install packaged treatment units. Workshop participants were asked if a specific system size could be identified above which EPA could assume that the systems would opt for fully engineered treatment over packaged treatment or vice-versa. Below is a summary of the major points made with respect to this topic. See Appendix B for additional comments made.

Summary of Major Points Made:


  • Workshop participants generally agreed that PWSs make decisions on whether to use fully engineered or packaged treatment through assessments of the following factors:

    • the contaminant or contaminant groups under consideration
    • the process under consideration
    • the specific system's size
    • the nature of the system's source water (i.e., whether it is ground water or surface water)
    • the lifespan desired for the treatment
    • whether treatment results in costs that are capital intensive or O&M intensive.
  • Workshop participants generally agreed that it would be rare to see PWSs with flows less than 1 million gallons per day (MGD) choose fully engineered treatment. They also agreed that it would be rare to see systems with flows greater than 10 MGD choose packaged treatment. There was no real consensus about a possible breakpoint for PWSs in the 1 to 10 MGD range. Some participants indicated that the breakpoint was probably closer to 1 MGD as opposed to 10 MGD but were unable to pinpoint a specific system size. Participants in both the large and small system breakout groups(see Section 8) agreed that the breakpoint for small systems should be those with flows less than 1 MGD.

  • Participants agreed that all PWSs, regardless of their size, will uniformly choose a fully engineered design over packaged treatment for filtration, with the exception of cartridge or bag filters. However, they also believed packaged modules would be applied across all size ranges for the membrane technologies.

2.2 Defining the Treatment Objective

Overview:

This discussion topic focused on the assumptions EPA should use in its models regarding the type of treatment objectives PWSs define for themselves. One question that was considered by the group was whether PWSs above certain population service categories or flow ranges tend to overtreat beyond compliance needs and to what degree. Below is a summary of the major points made with respect to this topic. See Appendix B for additional comments made.

Summary of Major Points Made:

  • The majority of workshop participants agreed that small systems will define treatment objectives differently than larger PWSs.
  • Group members agreed that PWSs will define their treatment objectives by assessing some of the following factors:

    • the cost of the unit to be removed
    • the consequences of exceeding treatment
    • the contaminant to be treated and its associated health risks (i.e., is it a contaminant that poses an acute or a chronic health risk).

  • For contaminants posing acute health effects, participants noted that one is likely to see all systems, despite their size, treat the entire flow. For contaminants with chronic health effects, one is likely to see small systems treat proportional flows first. [This latter situation is likely to vary by community. In some small communities, the cost of the technology will be the most important decision criterion. In other communities, concerns over health effects may act as the compelling force for decision-making.] Large systems are more likely to treat entire flows for chronic contaminants as with acute contaminants because of public pressures for full treatment.
  • Most participants agreed that small systems are likely to see blending as a viable "treatment" option for inorganic contaminants or other expensive to treat contaminants. Nitrate is one example of a contaminant for which small systems will likely use blending as a treatment approach. If blending fails for these systems, participants agreed that they would then most likely opt for full treatment. Larger systems are not likely to blend because of public pressure to treat the entire flow to get as close as possible to health goals.
  • Participants in the breakout group on representative small systems (see Section 8) confirmed many of the points on blending. They noted that blending would be the first option of small systems for chronic contaminants. If blending were not viable, the systems would likely look for an alternative source. Group members noted that blending should not be an option for small systems for microbial contaminants.

Top of page

3. Sizing the System

3.1 Use of Peak Production Flow for Design

Overview:

The purpose of this session was to identify the flows that could be used to represent design flow within EPA's models. Below is a summary of the major points made with respect to this topic. See Appendix B for additional comments made.

Summary of Major Points Made:

  • Workshop participants agreed that it was appropriate for EPA to use average flows to assess operation and maintenance (O&M) costs.
  • Group members agreed that EPA should use design capacity rather than peak daily flow as an indicator of system size. The presumption should be that design flow is at least twice the size of average flow. Members of the large system breakout group recommended that EPA use design capacity for the plant as well (see Section 8). On the other hand, they recommended that EPA use maximum daily flow for very large systems with diminishing populations.

  • For smaller systems, group members recommended that EPA look at flow data separately because design capacity is likely to be more than twice the average flow.


3.2 Redundancy

Overview:

The intent of this discussion was to consider how EPA should define redundancy and subsequently build redundancy components into its cost models. Below is a summary of the major points made with respect to this topic. Appendix B contains additional comments.

Summary of Major Points Made:

  • Group members agreed that redundancy is not generally required, nor an issue, for noncommunity water systems.

  • Workshop participants believe that redundancy is generally covered by prudent design, which is inclusive of 10 State Standards, except perhaps for really small systems. Adequate design flows address the issue of redundancy. Members of the large system breakout group concurred again with this point (see Section 8).

  • Workshop participants also believe that redundancy is not a major concern for small community water systems, especially for those with at least 1 day of storage capacity.

  • Group members agree that complete redundancy is necessary for carbon, chemicals feeders, and pumps. Participants in the large system breakout group also reemphasized this point (see Section 8). Members of the small system breakout group (see Section 8) indicated that small systems should have redundancy in their designs for technologies aimed at treating acute contaminants.

  • Many participants thought that EPA should use the 10 State Standards as its guide for developing model criteria. There seemed to be agreement on this point even though there was also agreement that a wide range of "applications" are possible within the 10 State Standards.

3.3 Storage Use for Design Capacity Mitigation

Overview:

The objectives of this discussion were to determine whether small systems use storage to address design capacity issues and, if so, to determine how EPA should account for the practice in its models. Below is a summary of the major points made. Appendix B contains additional comments.

Summary of Major Points Made:

  • Workshop participants indicated that it is generally not an accepted practice for small systems to use storage as a mitigation approach for design capacity. If storage is added to these systems, it is generally incorporated for fire purposes.

  • Group members generally agreed that storage is a viable treatment technique for radon.


Top of page

4. Differences in Assumptions Between Packaged Systems and Engineered Systems

Overview:

The focus of this discussion was to determine the assumptions EPA should be using when it develops its cost models to distinguish between small and large PWSs and their respective uses of packaged and fully engineered treatment technologies. A draft table of assumptions that had been developed for the workshop was reviewed by participants as part of the discussion. Below is a summary of the major points made on the topic of assumptions. See Appendix B for additional comments made.

Summary of Major Points Made:

  • With regard to the components being considered for the engineering line item for packaged treatment (and thus for small systems), workshop participants recommended that EPA not rely exclusively on an R.S. Means percent figure because the figure does not consider engineering for both process and balance of plant costs. It only considers engineering for balance of plant costs.

  • It was agreed that engineering should be considered across the board for all system size categories and for both types of technology applications (i.e., packaged and fully engineered).

  • Members of the extreme systems breakout group (see Section 8) indicated that systems falling into the low side extreme category should be modelled as having clean groundwater sources with constant year-round water quality. Moreover, these systems should be assumed to use a packaged unit that requires minimal engineering costs.

  • With regard to the overhead line item, there was no clear agreement about the components that should be considered. There seemed to be passive agreement that EPA move forward with its proposed approach to not consider overhead for packaged systems (small systems) and include a percentage of 59 percent of labor costs for fully engineered treatment (for large systems). It was recommended that EPA be especially clear about the components it is considering as factoring into overhead when it puts forth its cost models. The Agency might receive input at that time either supporting or negating the approach. [Note: Resolution of the issue is achieved in Section 9 by "lumping" some costs.]


Top of page

5. Permitting

5.1 Types of Permits

Overview:

The objective of this discussion was to identify the types of permits EPA should be considering in its cost models. A draft listing of the types of permits discussed include the following:

Permits Required for All Additions:

  1. Land Development Plan (local)
  2. Storm Water Management Plan (State and/or local)
  3. Soil Erosion and Sediment Control Permit (local)
  4. Building Permit (local)
  5. Potable Water Permit (State or federal)

Technology-Dependent Permits:

  1. Land Disposal Restrictions Sludge Disposal Permit (State or federal)
  2. Air Quality Permit (State, local, and/or federal)
  3. National Pollutant Discharge Elimination System NPDES (State or federal) or Industrial/Wastewater Pretreatment Permit (local)

Site-Dependent Permits/Requirements:

  1. UST/AST (Underground Storage Tank/Above-ground Storage Tank) Registrations (State)
  2. Storm Water NPDES (State or federal)
  3. SPCC/PPC (Spill Prevention Control and Counter-measure/Pollution Prevention and Contingency) Plans (State)
  4. Highway Occupancy (State or local)
  5. Rodent and Insect Control (local)
  6. Environmental Impact Assessment/Environmental Impact Statement (State or local)
  7. Building Occupancy Permit (State or local)

Below is a summary of the major points made with regard to the issue of permitting. Appendix B contains additional comments.

Summary of Major Points Made:

  • Participants generally recommended that EPA add Occupational Safety and Health Administration (OSHA) and EPA's 112R risk management permit requirements for chlorine to its list of permits.

  • It was also recommended that EPA be more clear about the specific permitting activities it is including under its percentage in the cost models. The draft EPA list of permits, once the OSHA/EPA 112R permit for chlorine was added, was seen as a reasonable representation of the potential types of permits that should be considered.

  • See Section 5.3 (second bullet) regarding later recommendations on costing permit activities.


5.2 Waste Disposal of Brine

Overview:

Workshop participants raised the issue of waste disposal for brine as a permitting activity EPA must consider. Below is a summary of some of the major points made. Additional comments may be found under Appendix B.

Summary of Major Points Made:

  • Participants indicated that EPA should not expect too much reverse osmosis (RO) use when framing compliance assumptions because of concentrate issues. Brine and its relationship to permitting needs to be part of EPA's decision trees.

  • For RO (and presumably all membrane technologies), EPA needs to assume facilities are able to (a) discharge to the ocean; (b) inject into deep wells; (c) discharge to evaporative ponds in arid areas, (d) directly discharge to a large stream if they are a small system, or (e) discharge to privately-owned or publicly-owned treatment works (POTW). It was noted that it is more likely for a facility to discharge to a publicly-owned treatment works rather than a private system.

5.3 Costs to Obtain Permits

Overview:

Under this discussion item, workshop participants focused on reviewing some of EPA's draft assumptions and estimates for permitting activities. A listing of the major points made with respect to this topic are noted below. Additional comments may be found in Appendix B.

Summary of Major Points Made:

  • It was noted that a large number of permits are required. As such, the percentage would need to take the number of permits into consideration. However, it was also noted that there is too much variation in permit costs to break down cost models to look at individual types of permits.

  • Group members concluded that 3 percent of construction value should be allocated to permitting. This percentage would not include piloting costs. Members of the large system breakout group (see Section 8) also recommended the 3 percent of construction value be used for permitting. Members of the extreme systems breakout group (see Section 8) indicated that EPA should conduct an analysis to support the 3 percent cut-off factor.

  • Participants also noted that there ought to be a floor on permit costs. One suggestion was that a floor of $2,500 be established for systems serving less than 10,000 people.

  • Group members generally agreed that EPA should not cap permitting costs on the high side since the increased complexity of the permits (i.e., due to hearings, etc.) would probably contribute to the higher costs being realized.

5.4 Treatability and Pilot Testing

Overview:

Under this topic area, workshop participants were asked to provide guidance on the development of assumptions regarding the extent to which pilot testing would be required for various technologies. Both the proportion of pilot testing and the duration of the activity were discussed. Major comments made are listed below. Appendix B contains additional comments.

Summary of Major Points Made:

  • Some workshop participants recommended that EPA review findings of a recent State survey conducted by EPA and the National Sanitation Foundation (NSF) under their Environmental Technology Verification program for data on piloting costs (data from 28+ states) to develop a model.

  • There was general agreement that piloting will remain a necessary activity for some systems. The issue is really the degree to which piloting will occur and by what types of systems. There was agreement that piloting needs to be part of EPA's high cost models. Members of the large system breakout group indicated that large systems will need to conduct pilot tests in all cases for treatment optimization (see Section 8).

  • It was noted that piloting involves substantial costs, but is technology-dependent. Some method for incorporating a fraction of piloting expenses into the median system costs should be considered.

Top of page

6. How to Apply POU and POE Devices as Technology of Choice

Overview:

The purpose of this discussion was to identify components for modeling point of use (POU) and point of entry (POE) devices as treatment options. The objective was to determine the specific steps involved in operating a POU or POE device so that they could be incorporated into EPA's models. The major points made with respect to this discussion topic are presented below. Appendix B contains additional comments.

Summary of Major Points Made:

  • Members of the small system breakout group (see Section 8) indicated that small systems would only use POU/POE devices for chronic contaminants.

  • Workshop participants generally agreed that unit monitoring programs will be required if POU/POE devices are used as treatment. The frequency of monitoring will need to be based on the likelihood that the given device will fail. This information will influence the number of sites that must be monitored as would the nature of the health risks posed by the contaminant(s) for which the devices were installed. The number of devices to be monitored and at which locations would need to be statistically determined.

  • Workshop participants agreed that initial monitoring would likely occur more frequently and at a greater number of sites until such time as monitoring data suggest that monitoring frequencies and/or sampling sites could be reduced.

  • It was suggested that EPA review the Suffolk County study because it might suggest cost component items that could be used by the Agency.

Top of page

7. Land

7.1 Amount Needed

Overview:

Under this topic area, workshop participants discussed the need for land to be acquired for the technologies under consideration. In addition, participants discussed the types of systems for which land availability might be an issue. A summary of the major points made on these discussion topics is provided below. Additional comments are contained in Appendix B.

Summary of Major Points Made:

  • It was noted that the equipment access factors in EPA's draft footprints are too small for new facilities. It was also recommended that EPA revisit the square footage in the footprints for small systems (systems less than 1 MGD).

  • Workshop participants were generally comfortable with the notion of EPA using its proposed "menu-based" or "unit process by unit process" approach for estimating land needs. While there was some discussion of a more composite approach being used, it was recognized that a unit process approach was probably necessary given that EPA's job is to evaluate the incremental costs of various regulatory options. It was further discussed that EPA will have to evaluate the components of a given technology for each regulatory package and determine the buffer factor at that point. Some technology options will have more components than others.

  • Members of the large system breakout group (see Section 8) noted that costs need to be considered for water treatment residues by calculating the footprint for treating waste concentrates and backwash water.

  • There was some disagreement regarding whether land is an issue for groundwater systems. Some participants have not seen land ownership as a problem for groundwater systems, whereas other participants had considerable experience where wells were actually located in people's backyards. It was concluded that EPA models should consider some systems as being completely landlocked. Participants could not specify the size of the entry point above or below which the availability of land becomes an issue, nor of the relative prevalence.

  • Some participants recommended that low flow entry points in systems with multiple entry points be assumed to need new land for those entry points. Group members were not clear on the system size cut-off, however, for applying this criterion.

  • There seemed to be agreement that if a system has a large entry point, it is likely to have land. Members of the large system breakout group (see Section 8) concurred that representative large systems will have land available.

  • Members of the large system breakout group also noted that large systems may incur costs for wetlands mitigation.

7.2 Value of Land

Overview:

Under this topic area, workshop participants discussed the cost to be assigned to any land needed for compliance equipment addition. A summary of the major points made on these discussion topics is provided below. Additional comments are contained in Appendix B.

Summary of Major Points Made:

  • It was suggested that EPA see if it were possible to develop a weighted average of land costs by examining zip codes where systems (and generally entry points) occur. Note: It was discussed at a later point in the workshop that the use of zip codes would not be that feasible because of the varying pixel sizes of Census Bureau data.

  • Members of the extreme systems breakout group (see Section 8) indicated that the high side extreme cases will involve water systems that are located in urban areas where land is unavailable and some system repiping may be necessary. They also noted that land will be the major cost element for these extreme cases.

Top of page

8. Breakout Sessions

During this portion of the workshop, participants were separated into one of three breakout sessions to assess the issues discussed throughout the day on a target group of PWSs. [NOTE: Small and large as used in this context refer to the distinction in design practices and not to statutory or regulatory categories] The three breakout groups and the respective target groups are outlined below:

  • Breakout Group 1: Key Characteristics of "Median" Large Water Systems
  • Breakout Group 2: Key Characteristics of "Median" Small Water Systems
  • Breakout Group 3: Key Characteristics of "Outlier" Large and Small Water Systems

For each breakout group, a summary of the major points made are listed. See Appendix B for additional comments.

8.1 Key Characteristics of "Median" Large Water Systems

Summary of Major Points Made:

Breakpoint:

  • Breakout group members agreed that large water systems should include those systems with flows greater than 1 MGD.

Capacity:

  • Use design capacity for the plant to size capital improvements.

  • Use maximum daily flow for very large systems with diminishing populations.

  • Very large systems (i.e., those serving more than a million people) should be costed explicitly rather than modelled.

Redundancy:

  • For large systems, redundancy is not an issue. Prudent design practices cover downing scenarios and redundancy. This is another factor in why design capacities were preferred for cost estimating.

  • For systems with flows significantly greater than 1 MGD, single point failure equipment should be redundant (e.g., special metering for chemical feed pumps and process pumping).

Permitting:

  • Breakout group members agreed that 3 percent of construction value should be used for estimating permitting costs for large systems. It was recommended that EPA conduct a cost estimation study to validate the 3 percent figure.

  • Large systems will conduct pilot tests in all cases for treatment optimization.

Land:

  • Representative large systems will have land available.

  • Median large water systems will incur mitigation costs for wetlands.

  • Costs need to be considered for wastewater treatment by calculating the footprint for treating waste concentrates and backwash water.

Technology:

  • Large systems will use packaged technology (modular units) for aeration, IE, and membrane and other pressure systems.

  • Large systems will incur additional costs for technologies that disrupt their hydraulic profile (e.g., GAC and ozone).

8.2 Key Characteristics of "Median" Small Water Systems

Summary of Major Points Made:

Breakpoint:

  • The breakpoint for small systems should be those systems with flows less than 1 MGD. There was some discussion regarding further breakpoints based on population served within the small system category. The breakpoints discussed included the following:

    • 10,000 to 3,300 people
    • 3,300 to 500 people
    • 500 to 100 people
    • < 100 people

Contaminants and Occurrence:

  • On the contaminant occurrence side, most of the systems will be clustered around the MCL being evaluated. The compliance cost estimates should reflect this reality. With regard to occurrence, there will always be a few extreme cases on the high side (e.g., high values for radon at 50,000 PCi/L).

  • There is a need for EPA to conduct separate analyses for waters with extreme contaminant levels.

  • When determining occurrence distributions, EPA may need data on relevant water quality parameters (raw water).

Technologies and Decision Trees:

  • The following decisions were made regarding the types of technologies small systems might use or actions they might take to achieve compliance:

    • For chronic contaminants, small systems would first choose blending. If blending were not viable, small systems would look for an alternate source.

    • Small systems would only use POE/POU technologies for chronic contaminants.
    • Contaminants posing acute health effects would require systems to have redundancy in their designs.

Costing Factors:

  • For costing purposes, EPA should consider the following:

    • baseline characteristics

    • part-time operators
    • O&M requirements (the group felt EPA estimates were reasonable for overall effort)
    • capital available (and their sources: State Revolving Fund, etc.)
    • level of automation

  • EPA's decision trees should include the following analyses:
    • Examine the median system and determine what is affordable given its economic characteristics.

    • Identify affordable technologies for compliance.
    • Identify and credit existing practices that will have an impact on reducing a contaminant level.

8.3 Key Characteristics of "Outlier" Large and Small Water Systems

Summary of Major Points Made:

High Side Extreme Systems:

  • It was noted that most of the extreme cases on the high side would be those systems using groundwater. As a result, it was recommended that EPA consider groundwater systems for the high side extreme cases.

  • The high side extreme cases will involve combinations of contaminants rather than single contaminant scenarios. For example, there will be a number of high side extreme cases with radon, arsenic, and disinfection problems.

  • The high side extreme cases will involve water systems that are located in urban areas where land is unavailable.

  • Land will be the major cost element in extreme cases.

  • EPA needs to consider retrofitting expenses for high side extreme systems. Retrofitting would include the removal of old technologies.

Low Side Extreme Systems:

  • Systems falling into the low side extreme category are assumed to be those with clean groundwater sources that have constant water quality on a year-round basis. Moreover, these systems are assumed to use a package unit that requires minimal engineering costs.

Both High Side and Low Side Extreme Systems:

  • It was recommended that EPA conduct an analysis to determine the degree to which permitting must be undertaken for various system size categories. Participants in the breakout group noted their belief that the 3 percent cut-off factor was not adequate for high side cost analysis and that EPA should evaluate the pervasiveness of high side permitting issues.

  • In addition to requiring land for the technologies themselves, extreme case systems will also require land for other structures such as sound barriers and aesthetic structures. Therefore, EPA's costing with respect to land needs to look broader than at the technologies themselves.

Top of page

9. Other Capital Costing Issues

9.1 Miscellaneous

Overview:

This section provides discussion points made by participants on capital costing approaches and concepts. Participants concentrated their discussion in assigning cost percentages to major capital cost categories.

Summary of Major Points Made:

Retrofits:

  • Workshop participants generally agreed that the issue of retrofits needs to be considered by EPA. However, group members did not agree as to how the retrofits issue should be addressed. Some sample retrofit adjustment factors for Greenfield cases were presented to facilitate discussion. Some participants felt there was a real danger in trying to use a specific factor for representative systems. There were also disagreements with reference to: (1) the applicability of the factors, (2) the need for a retrofits factor in groundwater systems.

Cost Allocations:

Participants noted that allocating system costs to regulatory and nonregulatory factors was a difficult, if not impossible, task. One participant commented that it would be worthwhile to retroactively study cost allocation issues with respect to the Lead Rule and the Surface Water Treatment Rule. Workshop participants did not think it would be feasible for EPA to sort out the cost allocation issue in time for the next wave of rules.

While the issue is not likely to be resolved in the short term, EPA needs to take some steps to address this issue in the interim. Several recommendations were made by the participants. Among these recommendations were the following:

  • One participant recommended that EPA look to sources outside the water industry, e.g. Superfund and NPDES. Another suggested turning to Means and Dodge to get a more accurate assessment of construction cost data. These approaches would focus on indirect capital expenses rather than evaluate costs on a unit by unit or technology basis. These approaches would generate the data that one would use, similar to what was accomplished in the Greenfield case study.

  • A participant recommended that cost allocations be based on percentages of total construction costs.

  • Regional variations in labor costs could be a significant factor.

9.2 Use Existing Models or Use WBS Build-Ups Using RS Means

Overview:

In this section of the workshop, EPA solicited the input of participants as to whether EPA should use the existing WaterCost and Water models or go with a WBS build-up approach. One value of the WBS approach is that it provides detail. One criticism EPA has received is that it has no documentation for its past costing efforts. WBS would provide documentation of assumptions and clearly delineate an analytical process. Another option would be to fine tune the WaterCost and Water models and develop the appropriate documentation. An additional objective of the discussion was to identify the level of detail required if a WBS build-up approach were desired. A table comparing the models and the WBS approach was presented to workshop participants to facilitate discussion. Additional comments made during the session are presented in Appendix B.

Summary of Major Points Made:

  • Participants recognized that current models had value and that there was widespread familiarity with these models. Consequently, these models should continue to be used for the near term. However, the assumptions inherent in these models needs to be clearly stated and evaluated.

  • One participant noted that the existing models do not work well for emerging technologies (e.g., membrane technologies)and require some revision.

  • Most workshop participants agreed that WBS is a good long-term approach because it is defensible and provides a means for validating assumptions. However, concern was expressed regarding EPA's ability to build new models from WBS within the time frames necessary for the next rules scheduled to be proposed.

  • Workshop participants generally agreed that the long-term national costing efforts should strive for the detail of Level 4 WBS. However, it was noted that the higher level of WBS require increasingly well- defined assumptions. Concern was expressed that EPA lacks the data to make the necessary assumptions, consequently affecting the value-added one might otherwise achieve with a WBS-based approach. One recommendation made, which the group agreed upon, was that EPA should begin using WBS at Level 3, and aspire to achieving Level 4 at a later date, as more information becomes available. Additional recommendations were made to retrofit the current Water and WaterCost models, as necessary, defining focal areas by using WBS at Level 3 to identify cost drivers.

9.3 Level of Detail if WBS Used and Additional Indirect Costs to be Included

Overview:

The purpose of this discussion was to: (1) identify the level of detail required if a WBS build-up approach were used and (2) identify any additional indirect costs that should be considered by EPA. References were made throughout the discussion to draft technology tables that EPA had provided to participants at the onset of the meeting. Additional comments made during the session are presented in Appendix B.

Summary of Major Points Made:

  • The factors involved in site work were discussed as including piping, road work, fencing, and landscaping. There was general agreement by participants for EPA to use a factor of 5 to 10 percent for site work. Some participants, however, felt that the costs were closer to 5 percent, whereas others felt it was closer to 10 percent.

  • Two workshop participants noted that they did not see electrical work (i.e., power requirements at the switchboard and motor control center) and instrumentation covered by WBS in EPA's draft tables. After discussion, most participants agreed that EPA should combine electricity and instrumentation and use a factor of 15 to 20 percent of capital costs on unit process.

  • Workshop participants subsequently discussed the factors that should be considered to assess add-on costs. It was noted that add-on costs (i.e. indirect capital costs such as interest during construction, etc.) are generally expressed as a percentage of total construction cost. The factors and percentages initially agreed to by participants included the following:

Total Project Capital


Add-On Cost Factors* Percent of Construction Costs
Process 40%
Site Work 5 to 10%
Electrical Work 10%
Instrumentation and Controls 10%
Engineering Design 10% (15% and 20% had also been recommended)
Mechanical 10%
Construction/Project Management 10% (some felt too high)

*Each factor exclusive of the others

  • One participant indicated that in a design/build job, costs can be broken into three major categories: (1) engineering; (2) process/equipment costs; and (3) construction.

  • Workshop participants generally agreed that costs should be considered by the following activities and percentages for small systems:

    Percentages for Costs for Small Systems
    40% for process (includes capital elements)
    20% for engineering (design and construction management)
    40% for construction (mechanical, I&C, etc.)
    100% Total

  • It was agreed, after some discussion, that the owner's staffing costs were captured in the 40-20-40 split identified above.

  • Participants discussed whether large and small systems really differed in terms of the percentages. One participant indicated that it is standard to see all systems, regardless of size, use a design-bid-construction approach. Another participant, however, indicated that small systems in a design-build process are oriented toward meeting regulatory requirements, whereas larger systems are more apt to look at design to meet other nonprocess related requirements (e.g., board to show process, etc.). It was noted, however, that some States do not allow design-build approaches.

  • There was general agreement that the representative large system would involve the following entities/functions:

    Owner
    Project Manager


    Design Firm
    Construction Firm

    Construction Management Function

    In a design/build situation, a single firm would assume design firm and construction responsibilities.

  • Some of the recommendations that were made for the design, bid, construction costs (as a percentage of construction costs) for large systems were as follows:

    Percentages for Costs for Large Systems
    22 to 29% for process
    25% for engineering
    25 to 50% for construction

    Note: Participants did not come to any firm agreement on the percentages noted above. Therefore, the "low estimates" provided do not add to 100 percent.)

  • Participants discussed whether costs were likely to vary depending on whether the system were in the public or private sector. One participant believed many private systems would be well below ASCE cost curves for design. Another participant indicated that there is a document out that was developed by CDC (Engineering Joint Council) discussing engineering fees as percentage of revenues. One recommendation was that EPA use 25 percent for the low end for the private sector and use 25 to 35 percent for the public sector. Nonconstruction costs for small FHA water and wastewater plants in one state ranged from 25 to 35 percent of construction costs.

  • One participant subsequently provided data summarizing several recent projects. The projects included both renovations and new treatment facilities for large and intermediate sized, privately-owned water systems. Process costs were 45 to 50 of total costs, engineering was 10 percent, construction was 35 to 40 percent, permits were one percent and interest was eight percent.

  • It was recommended that some percent needs to be added to capture costs to owner for their financial costs related to bonding. It appears the cost is considered for small systems.

Top of page

10. O&M Costs

10.1 Labor Rates and Indirect Costs for O&M

Overview:

The purpose of this discussion session was to discuss labor rates and indirect costs for O&M that should be considered by EPA when developing its costing models. Various labor rates were reviewed by participants during the discussion. The major points made by participants regarding the issue of labor rates and indirect costs for O&M are summarized below. See Appendix B for additional comments on the topic.

Summary of Major Points Made:

  • It was noted that operator labor rates should be the only labor factor considered under O&M. There was considerable discussion on possible rates. Some of the rate figures suggested included the following:

    • $52 to $75 (loaded cost) for licensed operators; costs vary by system size and qualifications required for system operator
    • $28 per hour
    • $30 per hour
    • $14 per hour (unloaded) for small systems
  • One participant indicated that the Bureau of Labor Statistics (BLS) publishes monthly reports that include fully burdened labor costs that can be analyzed on a regional basis. It was noted by other participants that some of the States have conducted operator surveys, which have included reviews of prevailing labor rates. It was recommended that EPA review and compare both the BLS and State material to derive representative rates.

10.2 Labor Requirements of Various Technologies

Overview:

The purpose of this discussion session was to identify the necessary labor requirements for the technologies. Draft listings of labor requirements by technology were reviewed by participants during the course of the discussion. The major points made by participants regarding the issue of labor requirements are summarized below. See Appendix B for additional comments on the topic.

Summary of Major Points Made:

  • Some participants indicated that EPA needs to consider the additional level of operation (hours) required in addition to the rate for each technology. They noted that operator hours will vary by technology type. Adjustments in staffing or shifting of activities are the first, and preferred, method for operating new equipment. For example, incremental labor costs would be small for microfiltration technologies.

  • Several participants felt O&M associated labor should be limited to the additional maintenance that comes with a new process. All other labor is substitute labor.

  • When asked at what point EPA might see a particular technology as contributing to additional costs (beyond replacement costs), there appeared to be general agreement that EPA should only consider the incremental cost of maintenance for the medium to larger systems. It was noted that each technology application will also generate efficiencies due to automation impacts but these impacts will not necessarily affect a large number of people.

  • It was recommended that the calibration of turbidity and other performance monitoring meters be included under O&M.

  • There was general agreement by group members that EPA should include an assumption of only certified operators. This suggested greater reliance should be placed on State operator survey data for rates.

Top of page

11. Technology Design

11.1 General

  • It was noted that AWWA has a manual of practice on NF and RO that should be issued shortly. The Association is supposedly working on a similar document for MF and UF. EPA should incorporate these as they are finalized.

11.2 Membrane Technologies (Reverse Osmosis, Nanofiltration, Microfiltration, and Ultrafiltration)

Overview:

Workshop participants were asked to comment on EPA's draft assumptions and equations for membrane technologies, which include reverse osmosis (RO), nanofiltration (NF), microfiltration (MF), and ultrafiltration (UF). In addition, participants were asked to comment on design defaults and highlight any additional design needs. The subject design assumptions are presently undergoing revision and will be released at a later date. A summary of the major points made on these topics is presented below. Consult Appendix B for a fuller listing of comments made.

Summary of Major Points Made:

All Membrane Technologies:

  • Workshop participants indicated that EPA's first assumption about the water quality requiring pretreatment is a good one. At issue is how to determine what activities actually constitute adequate pretreatment.

  • One set of adequate pretreatment activities include cartridge filters for groundwater and microfiltration for surface water.

  • For all processes, EPA needs to decide which design criteria it is going to use to determine costs. Rather than two pages of requirements, participants saw only five factors that needed to be evaluated for unit costing purposes. In the case of a membrane plant, for instance: (1) design flux, (2) design pressure drop, (3) design cleaning frequency (6-8 weeks), (4) design percent recovery (80-85 percent, the latter if aggressive), and (5) life of membrane (4 or 5 years), would adequately characterize design.

Reverse Osmosis:

  • For RO, proposed flux rates ranged between 15 and 25 gfd. Workshop participants agreed that 15 gfd was the best proportion to consider.

  • TDSs of 1000 ppm as NaCl are unrealistically high for maximum treatable levels for the systems being costed.

  • Membrane cleaning cycles should not be assumed to be automated.

11.3 Anion Exchange (AE)

Overview:

Workshop participants were asked to comment on EPA's draft assumptions and equations for anion exchange (AE) technologies. In addition, participants were asked to comment on design defaults and highlight any additional design needs. A summary of the major points made with respect to these two technology types is presented below. Consult Appendix B for a fuller listing of comments.

Summary of Major Points Made:

  • There seemed to be general agreement on the assumptions of a 30-day supply of chemicals and a storage period of 7 days for waste.

  • Approximately 4 or 5 years was discussed as a reasonable resin life, rather than decades. Most participants were comfortable with EPA using an assumption of 4 years.

  • Participants agreed on a bed expansion rate of 75 percent.

11.4 Cation Exchange (CE)

Overview:

Workshop participants were asked to comment on EPA's draft assumptions and equations for cation exchange (CE). In addition, participants were asked to comment on design defaults and highlight any additional design needs. A summary of the major points made regarding CE is presented below. Consult Appendix B for a fuller listing of comments made.

Summary of Major Points Made:

  • It was recommended that EPA use 2 « times the nominal exchange capacity to calculate how much salt is required for CE for radium.

  • It was noted that the backwash rate is two times higher for CE than AE.

11.5 Activated Alumina (AA)

Overview:

Workshop participants were asked to comment on EPA's draft assumptions and equations for activated alumina (AA). In addition, participants were asked to comment on design defaults and highlight any additional design needs. A summary of the major point made regarding AA is presented below. Consult Appendix B for additional comments.

Summary of Major Points Made:

  • Regeneration is an issue under this technology. As such, EPA's assumptions need to be slightly modified. Activated alumina has to be physically dissolved when regenerated. No one participant had a sense of how much of the resin is lost over a year or other period of time. The main point being made and agreed to was that capacity decreases and resin is lost to the system as this technology is operated, thus affecting treatment costs. Shorter bed lives should be routinely assumed.

11.6 Packed Tower Aeration (PTA)

Overview:

Workshop participants were asked to comment on EPA's draft assumptions and equations for packed tower aeration (PTA). In addition, participants were asked to comment on design defaults and highlight any additional design needs. A summary of the major points made with respect to PTA are presented below. Consult Appendix B for additional comments.

Summary of Major Points Made:

  • It was agreed that a volumetric water loading rate of 25 gallons per minute per feet squared (gpm/ft2) is a very reasonable number.

  • The primary design parameter is the Henry's Constant for contaminant that is being removed.

Top of page

12. Economic Issues

Overview:

The purpose of this session was discuss economic issues such as equipment financing, escalation values, and cost allocations for premature retirements and outmoded facilities. The major point made with respect to these discussion items is noted below. See Appendix B for additional comments made.

Summary of Major Points Made:

  • Workshop participants recommended that EPA evaluate the Farmers' Home Administration (FHA) loan program and EPA's State Revolving Fund (SRF) program for input on equipment financing, escalation factors, and cost allocations for retired and outdated facilities.

  • It was noted that the duration of financing is dependent upon negotiations between the owner and the financing institution. Banks and lending institutions are less interested in the life of a process versus the life of equipment. They instead focus more on a facility's assets and liabilities.

  • It was reported that the duration of private source financing is between 20 and 30 years for large systems and between 5 and 10 years for small systems.

  • Several participants felt EPA should make an effort to develop a life cycle based analysis for estimating capital costing needs.


Jump to main content.