POWER September 2014 - 54

WATER
quantifies a cooling tower's site-specific
environmental impacts and discusses and
applies social cost-type values for many of
these. EPRI Report 102275 (2011) and Report
1023100 (2011) describe national-level
equilibrium-based assessments of increases
in production costs, as well as shutdown
likelihoods. EPRI Report 1023100 (2011)
describes techniques for evaluating hourly
energy penalty effects. EPRI Report 1023174
(2011) uses an avoided cost framework to
identify the social costs of maintaining system
reliability with unit closures.
Site-specific examples may also be useful.
A 2009 article by this article's authors (available
at http://1.usa.gov/1sz0ehR) applies
similar avoided cost techniques to evaluate
the social costs of maintaining reliability and
also provides an evaluation of the economic
impacts of facility closure.
Other potentially important effects are
less well studied. For example, environmental
economists commonly apply the
hedonic valuation technique (this approach
statistically decomposes the overall value
of a property into the value of individual
components) to evaluate the implications of
negative externalities for property values.
However, to our knowledge, the implications
of viewshed-related property value effects
that could arise with cooling tower retrofits
have never been specifically studied. Likewise,
no published studies have considered
the economic value of outfall fisheries.
The two fishery-specific studies we located
that have investigated this phenomenon
are from the 1970s. Based on these studies,
such sites are potentially valuable because of
trips made by out-of-state anglers; winter angling
pressure at one location was 3,500 anglers;
at another location, there were 24,000
estimated trips. The prevalence of these winter
fisheries is unknown; however, numerous
sources indicate that winter fishing in warm
water outfalls occurs for many different species
and waterbody types.
The stack emissions and related social
costs described in this article are a particularly
important effect that has not been well studied.
The rule notes that the EPA " has concluded
that the proper forum to address such local
impacts fully is in a site-specific setting. " An
implication is that an improved understanding
of the site-specific and system-level effects of
stack emissions may be important.
Site-specific emission changes arise
from effects described earlier in this article.
Although no examples are yet available,
changes in deposition of emissions could be
identified with air impact modeling software.
There is no report that describes a comprehensive
system-level approach for assessing
the social benefits and costs of cooling towers.
However, the publically available EPRI
Report 1019927 contains a multi-sector
multi-cohort analytical framework for an application
with very similar effects.
The (Challenging) Opportunity
Properly identifying and quantifying the social
costs of entrainment reduction technologies
will play an important role in complying with
the new 316(b) rule. While the process will be
challenging, the measurement of social costs in
this context also brings opportunity. More so
than ever before, issues that affect the electricity
system and the environment require thoughtful
determinations. The EPA's novel social cost requirement
provides a structured arena in which
to study and evaluate the concerns of important
constituency groups, including homeowners,
anglers, and ratepayers, as well as energy efficiency
and anti-pollution advocates. ■
-Matthew F. Bingham (Matthew
.Bingham@VeritasEconomics.com) and
Jason C. Kinnell are principal economists
of Veritas Economic Consulting.
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