Using work breakdown structure models to develop unit treatment costs

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1 E628 Using work breakdown structure models to develop unit treatment costs Rajiv Khera, 1 Pat Ransom, 2 and Thomas F. Speth 3 1 US Environmental Protection Agency (USEPA), Washington, D.C. 2 Leidos (formerly part of SAIC), Arlington, Va. 3 USEPA, Cincinnati, Ohio This article describes the US Environmental Protection Agency s new cost modeling approach to developing unit costs for drinking water technologies. The technique uses a work breakdown structure (WBS) methodology, which involves dividing technology into discrete components for the purpose of estimating unit costs. The article demonstrates the application of this approach for three technologies that are effective at removing volatile organic compounds (VOCs) from drinking water: packed tower aeration, multistage bubble aeration, and granular activated carbon. It presents example outputs, for illustration only, for these three WBS technology models for the removal of trichloroethylene, which, among the regulated VOCs, occurs most commonly in drinking water. The WBS models were designed for the purpose of estimating the national costs of drinking water regulations. As such, they are intended to be transparent and versatile. Keywords: air-stripping, drinking water, granular activated carbon, regulations, treatment cost, volatile organic compounds The Safe Drinking Water Act Amendments of 1996, as well as a number of other statutes and executive orders, require the US Environmental Protection Agency (USEPA) to estimate regulatory compliance costs as part of its rulemaking process. Historically, the agency has relied on parametric cost models that were monolithic in design. These models lacked the flexibility to adapt to changes in technology, development of new construction materials, availability of new treatment media, automation, changes in manufacturing processes, and market competition. They were also difficult to update to reflect price changes and could not be adjusted for different combinations of treatment technologies and contaminants. Underlying assumptions in these models were not always readily apparent or easily modified, and outputs were often limited to a few lump-sum totals. In 1997, a Technology Design Panel convened to review USEPA s methods for estimating drinking water compliance costs (USEPA, 1997). The panel consisted of personnel from USEPA, water treatment consulting firms, public and private water utilities and suppliers, equipment vendors, and federal and state regulators, in addition to cost-estimating professionals. In response to the panel s recommendations, USEPA has developed a suite of cost models known as work breakdown structure (WBS) models. The WBS models are transparent, spreadsheet-based engineering models for individual treatment technologies, linked to a central spreadsheet of component unit costs. The WBS approach involves dividing the technology into discrete components for the purpose of estimating unit costs. Using WBS models to identify the components that should be included in a cost analysis produces a detailed assessment of the capital and operating cost requirements of a treatment system. The WBS models are more easily updated than previous models because the model inputs and assumptions can be varied, and the internal calculations are visible and auditable by the user. The completed models described in this article have been peerreviewed by nationally recognized treatment technology experts for completeness, accuracy, and usability. These models have not been used in support of any regulatory action to date, but USEPA expects to use them for upcoming regulations. Public release of selected models will commence in January MODEL DEVELOPMENT The USEPA has developed (or is in the process of developing) WBS models for more than 20 drinking water treatment technologies (Table 1). These include primary technologies that drinking water providers can use to remove or destroy contaminants, as well as add-on technologies that can enhance contaminant removal or complement the primary technologies (Table 1). This article focuses on the WBS models for three specific technologies as examples: packed tower aeration (PTA), multistage bubble aeration (MSBA), and granular activated carbon (GAC). Each WBS model is capable of estimating treatment costs for a variety of contaminants. For example, the PTA model allows the user to select from a list of volatile organic compounds (VOCs) and other contaminants that are amenable to removal by aeration. The GAC model s contaminant selection list includes

2 E629 organic contaminants and certain inorganic contaminants that are readily adsorbed by carbon. Though each model contains standard input sets that automatically populate the appropriate inputs for a few specific contaminants, the models also allow users to enter or change contaminant-specific inputs manually so that any appropriate contaminant can be modeled. One source of contaminant-specific information is USEPA s Drinking Water Treatability Database (USEPA, 2013). The models also accommodate a range of contaminant removal scenarios. In the PTA model, for example, the user specifies the influent concentration and treated water concentration goal for the target contaminant as part of the model s input process. For the purpose of illustration, this article includes information for a hypothetical scenario in which trichloroethylene (TCE) must be removed to < 0.5 µg/l, starting from an influent concentration of 5 µg/l. MODEL STRUCTURE Each WBS model contains the work breakdown for a particular treatment process and preprogrammed engineering criteria and equations that estimate equipment requirements for userspecified design requirements (e.g., system size and influent water quality). Each model also provides unit cost information by component (e.g., individual items of capital equipment) and totals TABLE 1 Technologies under development or included in the suite of WBS models Primary Technologies Adsorptive media* Greensand filtration Anion exchange Cation exchange Conventional and direct filtration Lime softening GAC Low-pressure membrane filtration Nanofiltration and reverse osmosis Packed tower aeration Multistage bubble aeration Chlorine and hypochlorite disinfection Ozone addition UV light disinfection Dissolved air flotation Magnetic ion exchange Advanced oxidation with UV light Biological treatment Nontreatment options POU/POE technologies Add-on Technologies Powdered activated carbon addition Chlorine and hypochlorite preoxidation Permanganate addition Lime addition Coagulant addition Clearwell storage Caustic addition Acid addition GAC granular activated carbon, POU/POE point of use/point of entry, UV ultraviolet, WBS work breakdown structure *Including activated alumina and several proprietary arsenic removal media Including pressure-driven microfiltration, pressure-driven ultrafiltration, and vacuum-driven immersed membrane systems Including new wells and interconnections Including adsorptive media, GAC, ion exchange, and reverse osmosis POU/POE devices the individual component costs to obtain a direct capital cost. Additionally each model estimates add-on costs (e.g., pilot study and land acquisition costs), indirect capital costs (e.g., construction management and engineering), and annual operations and maintenance (O&M) costs, thereby producing a complete estimate of the cost of compliance. Each WBS model can also generate cost information based on the unit s treatment performance in any given situation (i.e., data on the rate of carbon use for a given contaminant and water). Therefore, the models can generate not only unit cost estimates over a wide range of raw water quality conditions, but they can also generate cost information for any combination of contaminant and treatment technology. All of the WBS models use the following structural features to generate treatment cost estimates: treatment component selection, design, and cost output based on a WBS approach, process design based on state-of-the-art techniques and generally recommended engineering practices that are documented in the individual treatment technology models, and a centralized reference spreadsheet containing unit costs for components and reference tables for component sizing and chemical properties. Figure 1 shows conceptually how these features relate to one another. In practice, each model is a spreadsheet workbook consisting of multiple worksheets (identified in Figure 1). Each technology model links to a central cost-and-engineering reference spreadsheet, which is a separate workbook. Using this structure, the WBS models generate cost estimates that include a consistent set of cost elements, including treatment equipment costs, residuals management costs, building and add-on costs, O&M costs, and indirect costs. Table 2 identifies these cost elements, which are common to all of the WBS models, in greater detail. The following sections discuss the various design sheets and cost elements in more detail, using the PTA, MSBA, and GAC models for TCE removal as examples. CRITICAL DESIGN INPUTS AND ASSUMPTIONS Common model inputs. The input sheet in each WBS model requires user input for design parameters that tend to vary by contaminant, regulatory scenario, system size, or other considerations. The input sheet allows a user to change a single input parameter (such as the daily peak flow of water through the plant) and immediately see the effect on design requirements and costs. Table 3 lists the input parameters in the WBS models for the three technologies discussed in this article. It also identifies a few of the many critical design assumptions included in each model. As Table 3 shows, some inputs and critical design assumptions are common to all of the WBS models. Others are specific to the technology under consideration. Inputs that are common to all of the technology models include: design and average flow rates, system automation, and component level. Design and average flow allow the models to determine the size and number of treatment components needed.

3 E630 FIGURE 1 Structure of the WBS models WBS Engineering Analysis User Input Required User Input Optional Input Sheet User-defined design parameters such as flow rates, raw water quality, bed depth Critical Design Assumptions Sheets Key design criteria e.g., loading rate, bed expansion; O&M and indirect assumptions WBS Component List Applicable components such as tanks, vessels, piping, instrumentation, and buildings Reference Sheets Applicable only for some models; includes guidance on setting input parameters and critical design assumptions Engineering Design Sheets Design of applicable components and systems e.g., vessels, tanks, membranes, backwash systems, pumps, pipes, valves; structure design; chemical and media requirements WBS System Cost Analysis Cost Equations Component functions Output Sheet Process capital costs Useful-life data Indirect costs Add-on costs O&M - costs Total annualized cost O&M and Indirect Sheets Annual O&M requirements; some indirect costs WBS Cost Spreadsheet Documented cost and useful-life estimates by component type and size; some engineering reference data O&M operations and maintenance, WBS work breakdown structure For purposes of the WBS models, design flow is defined as the peak instantaneous flow of water into the treatment system, and average flow is the annual average flow with daily and seasonal variations in demand taken into account. For the purpose of estimating national costs, the models would be run over a range of flow rates. The resulting outputs would be used to generate cost curves as shown in the section under the subheading Example cost equations. For the system automation input, the WBS models recognize that control of drinking water treatment systems can be manual, automated, or semiautomated. Because the method of control can have a significant effect on both capital and O&M costs, each model includes an optional input that allows the user to select from among the three control options. The input for component level is another optional input that determines whether the cost estimate generated is low, medium, or high. Among other things, this input drives the selection of material for equipment that can be constructed of various materials. For example, a low-cost system might include fiberglass pressure vessels and polyvinyl chloride (PVC) piping. A high-cost

4 E631 TABLE 2 Cost elements included in all WBS models Cost Category Direct capital costs Add-on costs Indirect capital costs O&M costs Components Included Technology-specific equipment (e.g., vessels, basins, pumps, blowers, treatment media, piping, valves) Instrumentation and system controls Buildings Residuals management equipment Land Permits Pilot testing Mobilization and demobilization Architectural fees for the building to house treatment facilities Equipment delivery, equipment installation, and contractor s overhead and profit Site work Yard piping Geotechnical engineering Standby power Electrical power infrastructure Process engineering Contingency funds Miscellaneous allowance Legal, fiscal, and administrative expenditures Sales tax Financing during construction Construction management and general contractor overhead Operator labor for operation and maintenance of process equipment Operator labor for other technology-specific tasks (e.g., managing regeneration, backwash, or media replacement) Operator labor for building maintenance Managerial and clerical labor Materials for maintenance and operation of technology-specific equipment Materials for maintenance of booster or influent pumps Materials for building maintenance Replacement of technology-specific consumables (e.g., chemicals) or other frequently replaced items (e.g., treatment media) Energy for operation of technology-specific items of equipment (e.g., blowers, mixers) Energy for operation of booster or influent pumps Energy for lighting, ventilation, cooling, and heating Residuals management materials, energy, and operator labor Residuals discharge and disposal costs (including transportation) O&M operations and maintenance, WBS work breakdown structure system might include stainless steel pressure vessels and stainless steel piping. Material selection affects the total cost by taking into account the initial cost of the materials, their maintenance costs, and their ultimate life cycle or replacement cost. The input for component level also drives other model assumptions that can affect the total cost of the system (e.g., building quality and heating and cooling options). If the component level input is left blank, the models will generate a low cost estimate. The user can change this input to select a medium or high cost estimate. A national cost estimate would consider model results for all three component levels to develop a range of costs that cover high-, medium-, and low-cost compliance options. Common model assumptions. Each WBS model also includes at least three sheets for critical design assumptions: one for process and building design assumptions, one for assumptions used in calculating annual O&M costs, and one for assumptions used in calculating certain indirect capital costs. Critical design assumptions are parameters that are needed in the design process but are not expected to vary greatly by contaminant, scenario, or system. They include design constraints and structural and chemical engineering assumptions based on generally recognized engineering practices. User adjustment of critical design assumptions is optional. Assumption values are clearly documented in the spreadsheets. The assumptions sheets also include a comment column explaining the use of the assumption, providing guidance on appropriate values for most assumptions, or both. Users are free to vary the critical design assumptions, but such adjustments are not required. Critical assumptions that are common to all of the WBS models can fit into several categories: design assumptions, O&M assumptions, and indirect cost percentages. Table 4 summarizes the design assumptions that are common to most WBS models. As the table indicates, users can change many of these assumptions in each WBS model s critical design assumptions sheet. Only a few assumptions are built into the design formulas and cannot be readily changed. The common design assumptions are based

5 E632 TABLE 3 WBS model inputs and critical design assumptions Technology Inputs Example-Critical Design Assumptions Common to all three models PTA MSBA GAC Contaminant Design and average flow Component level System automation Number of booster pumps Contaminant removal requirements (influent concentration and effluent concentration or percent removal) Design safety factors Contaminant characteristics (Henry s law constant, molecular weight, molar volume, boiling point) Operating temperature and characteristics of air (density and viscosity) Packing characteristics (size, surface area, critical surface tension, friction factor) Clearwell detention time Off-gas treatment options Number of blowers Number of redundant columns Design type (pre-engineered package or custom design) Number of operating basins Air-to-water ratio Maximum water depth Number of stages Off-gas treatment options Number of blowers Number of redundant basins Design type (pressure or gravity) Carbon life Empty bed contact time Number of contactors in series (i.e., parallel or series operation) Bed depth and contactor dimensions Interval between backwashes Residuals management options (for spent backwash and spent carbon) Number of redundant vessels Backwash pumping design Backwash storage design Indirect cost percentages O&M labor per activity (e.g., hours per day for recording operating parameters) Column design constraints (e.g., maximum height, minimum and maximum diameter) Usage rates for antiscalant and other chemicals Chemical constants (e.g., molecular weights of air and water, viscosity of water) Number of valves and instruments per column... and more than 100 additional critical design assumptions Basin design constraints (e.g., maximum basin length, maximum air intensity, minimum length-to-width ratio, access space for diffusers) Basin freeboard Quiescent chamber length Pump and blower head Number of valves and instruments per basin... and more than 100 additional critical design assumptions Contactor design constraints (e.g., minimum and maximum surface loading rate, maximum contactor size) Carbon expansion during backwash Backwash parameters (e.g., backwash loading rate, backwash duration) Carbon bulk density Carbon loss rate Number of valves and instruments per basin... and more than 300 additional critical design assumptions GAC granular activated carbon, MSBA multistage bubble aeration, O&M operations and maintenance, PTA packed tower aeration, WBS work breakdown structure on a combination of sources, including standard design handbooks, engineering textbooks, and comments of external reviewers (AWWA/ASCE, 1998; USEPA, 1997; Viessman & Hammer, 1993; AWWA, 1990; Permutit Inc., 1961). Some of the general design assumptions differ for small versus large systems. For example, small systems are often built as packaged, pre-engineered, or skid-mounted systems. In most cases, the design and cost assumptions for small systems are based on the comparison of model outputs with as-built designs and costs for actual small treatment systems. The subsequent section on the WBS models engineering design process provides further information on assumptions for small, package systems (which are particularly relevant in the WBS model for GAC). Although some O&M activities are technology-specific (e.g., GAC regeneration or replacement), many occur at all or most drinking water treatment facilities, regardless of the specific technology used (e.g., pump maintenance). For these activities, the WBS models share a common set of O&M assumptions, which are summarized in Table 5. As the table indicates, users can change all of these assumptions, either in the O&M assumptions sheet of each WBS model or in the central unit-cost spreadsheet. The WBS models compute most indirect capital costs as percentages of the estimated cost of the installed process, building cost, or direct capital cost. These percentages are common to all of the WBS models. Users can change the percentages in each WBS model s indirect assumptions sheet, which contains guidance regarding a typical range of percentages for each item and indicates the base cost to which the percentage will be applied. The guidance also describes conditions that might require an assumption outside the range of typical values. CONTAMINANT- AND TECHNOLOGY-SPECIFIC INPUTS AND ASSUMPTIONS Air-stripping. As shown in Table 3, many of the WBS model inputs and assumptions are specific to the contaminant and technology under consideration. Some of these are numeric values (e.g., Henry s law constant in the PTA model), whereas others are selected from a drop-down menu (e.g., options for managing

6 E633 residuals). For the purpose of national cost modeling, values for each of these inputs and assumptions would be based on detailed review of the scientific literature, consultation with treatment technology experts, and consideration of the compliance scenario being evaluated. In many cases, a national estimate would vary these values to develop a range of costs representing the spectrum of compliance options or to reflect uncertainty or variability in the underlying data for a contaminant. In the PTA model, the most crucial input parameters include: removal efficiency (i.e., influent and treated water concentrations), Henry s law constant, other contaminant-specific properties (molecular weight, molar volume, and boiling point), and off-gas treatment options. Required removal efficiency depends on the compliance scenario under consideration. Henry s law constant and the other contaminant properties are contaminantspecific numeric values selected through review of the scientific literature. For selected contaminants (e.g., TCE), the model contains standard input sets that populate the contaminant property inputs automatically. For maximum flexibility, however, the models also allow users to enter or change contaminant properties manually (i.e., the properties are not hard-coded). One source of contaminant-specific information is USEPA s Drinking Water Treatability Database (USEPA, 2013). Off-gas treatment options available in the model include vapor-phase GAC, thermal oxidation, catalytic oxidation, and no treatment. The need for off-gas treatment depends on environmental regulations and rates of contaminant release; thus, it depends on removal efficiency and system size and location. In the MSBA model, the most crucial input parameters include air-to-water ratio, water depth, number of stages, and off-gas treatment options. The air-to-water ratio is contaminant-specific and depends on the removal efficiency required by the compliance scenario under consideration. Maximum water depth and number of stages are also contaminant-specific and are determined by engineering experience. The off-gas treatment options available are identical to those in the PTA model. GAC. In the GAC model, the most crucial input parameters include design type (i.e., pressure versus gravity), empty bed contact time (EBCT), carbon bed life, contactor configuration, and residuals management options for spent backwash and spent carbon. Options for type of design include contactor vessels operated under pressure and concrete basins fed by gravity. Generally, the size of the system determines which type of design is more cost-effective. EBCT and carbon bed life are contaminant-specific and depend on the influent and target concentrations as well as on other water quality parameters and contactor configuration. Contactor configuration options include vessels in parallel or in series. For the purpose of national cost modeling, values for EBCT, contactor bed life, and contactor configuration would be based on a review of the scientific lit- TABLE 4 Design assumptions common to all WBS models Element Assumption Can Be Changed By: Influent pumps Includes flooded suction Replacing unit costs in the WBS cost spreadsheet All pumps Design flow incorporates a safety factor of 25% Editing the critical design assumptions sheet for each technology Access space for pumps Provides a minimum of 4 ft of service space around three sides of each unit, assuming the fourth side can share access space with relevant tanks or vessels Editing the critical design assumptions sheet for each technology Pipe size Determined using Permutit Inc. (1961) Editing the engineering look-up table in the WBS cost spreadsheet Process pipe size Based on maximum flow to each unit (not total system flow) Cannot be changed Tank and pressure vessel capacity Pressure vessel diameter Storage tank diameter Access space for tanks and pressure vessels Process vessels and basins, all pumps, and chemical feed systems Based on design capacity, freeboard, and standard manufactured sizes Based on user input, within limits specified on a technologyspecific basis Assumes a cylindrical design, with diameter equal to half of height Provides service space around each unit equal to its diameter (half its diameter for small systems) to a maximum of 6 ft Multiple units required to protect from a single-point failure Cannot be changed Changing user inputs (for diameter) and editing the critical design assumptions sheet for each technology (for constraints) Cannot be changed Editing the critical design assumptions sheet for each technology (only the maximum can be changed) Editing the critical design assumptions or input sheet for each technology (depending on the specific item) Chemical storage Storage requirement based on 30-day delivery frequency Editing the critical design assumptions sheet for each technology Concrete pad under heavy equipment 1 ft thick for large systems, 6 in. thick for small systems Editing the critical design assumptions sheet for each technology Office space WBS work breakdown structure 100 sq ft per employee for large systems; excluded for small systems Editing the critical design assumptions sheet for each technology

7 E634 TABLE 5 O&M assumptions common to all WBS models Element Assumption Can Be Changed By: Operator labor for O&M of process equipment Unit labor assumptions are based on a detailed list of O&M tasks, which vary by degree of system automation. For example: Adjust pump operating parameters: 5 min/d per pump in manual systems, 0 min/d in automated systems Maintain pumps: h/year per pump Editing the critical design assumptions sheet for each technology Managerial and administrative labor Each estimated as 10% of operator labor Editing the critical design assumptions sheet for each technology Labor and materials for building maintenance Materials for maintenance of pumps Energy for lighting Energy for ventilation Energy for heating and cooling O&M operations and maintenance, WBS work breakdown structure Based on a unit cost per square foot of building area, which varies depending on whether heating and cooling systems are included 1% of preinstallation capital cost, accounting for consumable supplies and small parts requiring frequent replacement Based on watts per hour per square foot of building area, which varies by building quality Based on detailed assumptions about air change rate, pressure drop across ventilation fans, and number of days with mechanical ventilation Based on detailed assumptions about R-values, annual number of days requiring heating or cooling, ventilation infiltration load, and efficiency of heating and cooling equipment Changing unit costs in the WBS cost spreadsheet Editing the critical design assumptions sheet for each technology Editing the critical design assumptions sheet for each technology Editing the critical design assumptions sheet for each technology Editing the critical design assumptions sheet for each technology erature and pilot study results representing a range of typical water quality data. Residuals management options for spent backwash include multiple options of varying effect and likelihood, direct discharge to surface water (under an appropriate permit), discharge to a publicly owned treatment works, discharge to a septic system, and recycling (including treatment and solids disposal). Residuals management options for spent carbon include onsite regeneration, offsite regeneration, and throwaway operation (i.e., replacement and disposal). The choice of a residuals management option depends on system size and location, environmental regulations, and cost-effectiveness. For the example case of TCE removal, Table 6 shows the values selected for each crucial input parameter for each of the three WBS models considered here. The example cost outputs described in the following section use these input values. DESIGN AND COST CALCULATIONS The engineering design and cost sheets of each WBS model take the input values and assumptions just discussed and perform the calculations necessary to convert these into capital equipment requirements and line-item costs. The sheets comprise multiple worksheets within each WBS model workbook. The equations used in each worksheet are fully visible and auditable to provide for transparency and user review. Engineering design costs. Applying the user inputs and critical design assumption values, the engineering design sheets calculate the number and size of each item of equipment identified in the WBS component list for the treatment technology under consideration. Many major equipment components are technologyspecific (e.g., contactor vessels for GAC, aeration columns for PTA), but others are common to all of the technology models. Table 7 provides examples of the classes of components that can be included in the WBS models. The engineering design sheets calculate requirements for all of the components relevant to the technology being modeled. The specific design calculations that are performed can vary within an individual model, depending on system size. This is because small drinking water systems often use package plants to accomplish treatment goals. The primary difference between these package plants and the custom-designed plants used by larger systems is that the package treatment systems are preassembled in a factory, mounted on a skid, and transported to the site. Package plants can be partially engineered to meet the treatment requirements of a specific system or available in fixed configurations and sizes. Therefore the WBS models for technologies that are commonly deployed as package plants use different design parameters for small systems. For example, the GAC model handles package systems by costing all line items for individual pieces of equipment (e.g., vessels, interconnecting piping and valves, instrumentation, and system controls) in the same manner as custom-engineered systems. This approach is based on vendor practices of partially engineering these types of package plants for specific systems (e.g., selecting vessel size to meet flow and treatment criteria). For small systems with a capacity of < 1 mgd, however, the model applies a separate set of design inputs and assumptions that are intended to simulate the use of a package plant. Also included are assumptions that reflect the smaller capacity and reduced complexity of the treatment system. These design modifications typically reduce the size and cost of the treatment system. Table 8 identifies the design modifications used in the GAC model for small systems.

8 E635 TABLE 6 Example values for key WBS model inputs for TCE removal Technology Input Value Selected to Generate Example Costs PTA Influent concentration 5 µg/l Effluent concentration 0.5 µg/l Henry s law constant Molecular weight kg/1,000 mol Molar volume m 3 /1,000 mol Boling point o K Off-gas treatment None MSBA Air-to-water ratio 20:1 Maximum water depth 3 ft Number of stages 8 Off-gas treatment None GAC Design type Pressure vessels Empty bed contact time 15 min Carbon bed life 6 months Contactor configuration 2 vessels in series Management option for spent backwash Discharge to publicly owned treatment works Management option for spent carbon Offsite regeneration GAC granular activated carbon, MSBA multistage bubble aeration, PTA packed tower aeration, TCE trichloroethylene, WBS work breakdown structure O&M costs. The O&M cost sheet in each WBS model calculates annual expenses for a common set of labor, material, and energy requirements. In addition, each model includes technology-specific O&M requirements and costs. Table 9 identifies the common O&M items and the technology-specific additions for the three technologies considered here. The estimates of O&M requirements are intended to be incremental. For example, the estimates of labor hours include only labor associated with the new treatment system s components. Estimates of pump energy include only booster pumping required by the additional treatment system. O&M costs calculated in the models do not include annual costs for commercial liability insurance, inspection fees, domestic waste disposal, property insurance, or other miscellaneous expenditures not directly related to operation of the new technology. They also do not include labor associated with recordkeeping and reporting. Indirect costs. Indirect capital costs are not directly related to the treatment technology used or the amount or quality of the treated water produced but are associated with the construction and installation of a treatment process and appurtenant structures. Table 2 lists the indirect cost items included in all of the WBS models. Although the models compute most indirect capital costs as percentages of the estimates for the cost of the installed process, building cost, or direct capital cost, the costs of site work, geotechnical investigation, yard piping, and standby power are computed on the basis of system requirements determined in the engineering design and O&M sheets. Cost calculations for site work and geotechnical investigation are based on the treatment system s footprint size, as calculated in the engineering design sheet. The cost of yard piping is calculated on the basis of space between buildings and assumptions about trench excavation, backfill, and pipe bedding requirements. Cost calculations for standby power are based on the maximum generation capacity required to supply the treatment process s energy requirements, as calculated in the O&M sheet. Building costs. Although new buildings are not needed for every treatment system, some may require them. Also, when a new treatment system is installed in an existing building, use of the existing space represents an opportunity cost. Therefore the WBS models include building costs as a default. The models calculate the size of required buildings on the basis of the treatment equipment s footprint, as calculated in the engineering design sheets. The models include 14 possible design configurations for buildings. These configurations represent all 12 combinations of three construction design and quality categories (low, medium, and high) and four space-conditioning options (heating only, cooling only, both heating and cooling, and neither heating nor cooling), plus two small, low-cost, prefabricated (shed-type) buildings (with and without heating). The WBS models select from among these configurations on the basis of system size, structure size, and the user s input for component level. Unit costs (in dollars per square foot) for each configuration vary by structure size. Add-on costs. The WBS models also include three categories of add-on costs: permits, pilot studies, and land acquisition costs. Permit costs include building permits, surface water discharge permits (for technologies that produce liquid residuals to be discharged directly to surface water), stormwater permits (for systems requiring one acre of land or more), risk management plans (for systems storing large quantities of certain chemicals,

9 E636 TABLE 7 Component Classes Vessels Tanks, basins Pipes Valves Pumps Mixers Instrumentation System controls Chemicals Treatment media WBS work breakdown structure Component classes included in the WBS models Pressure vessels Example Components Storage Backwash Mixing Contact Flocculation Sedimentation Filtration Process Backwash Chemical Inlet and outlet Bypass Check (one-way) Motor- or air-operated Manual Booster Backwash High-pressure (for membrane systems) Chemical metering Rapid Flocculation Inline static Pressure gauge Level switch, alarm Chlorine residual analyzer Automatic switchover Flow meter ph meter Air monitor, alarm High and low pressure gauge, alarm Gas flow meters rotameters Scales Programmable logic control units Operator interface equipment Control software Acids Bases Coagulants and coagulant aids Antiscalants Corrosion control chemicals Oxidants and disinfectants Activated alumina Activated carbon Membranes Sand Resins such as hydrochloric acid), and compliance with the National Environmental Policy Act (included only for the high-cost component level). Pilot study costs are specific to the drinking water treatment technology being modeled and vary according to system size. For PTA, which is a proven technology for removing VOCs, the model assumes that no pilot-study cost is incurred. The models calculate land area requirements on the basis of the treatment system s footprint, plus buffer space requirements around the site and between buildings. The models include land acquisition costs even though the purchase of additional acreage might not be required for every treatment system. As with buildings, the use of existing property represents an opportunity cost. CENTRAL COST SPREADSHEET AND COMPONENT COST EQUATIONS The central WBS cost spreadsheet is shared by all of the WBS models. The spreadsheet contains unit costs for all the capital equipment and all the elements of O&M costs (e.g., labor rates, electricity rates) used by the WBS models. For each piece of capital equipment, the spreadsheet provides estimates of the item s useful life. The spreadsheet also contains several tables that are used by each model s engineering design sheets. For example, these tables include information used in selecting pipe diameters, footprint and foundation requirements for pumps, and chemical properties. Unit costs. The WBS cost spreadsheet contains unit cost data for all of the components identified in Table 7, plus many more. For most of these components, the spreadsheet s unit costs vary according to component size or capacity (e.g., 100-, 500-, or 1,000-gal tanks). For many components, the spreadsheet includes a further breakdown for alternative construction materials, because the cost of materials can differ substantially. For example, most pipes are constructed of stainless-steel, steel, PVC, or chlorinated PVC, and stainless-steel piping can cost twice as much as PVC. The unit costs included in the spreadsheet are based primarily on price quotes from equipment manufacturers and vendors. Other sources include published data on construction costs, reference books, and peer-reviewed literature. For equipment items that are major cost drivers in the WBS models (e.g., pumps, vessels), there is a document with detailed engineering specifications to guide the collection of unit-cost data. These specifications ensure that prices added to the unit cost spreadsheet are for equipment that is appropriate for use in drinking water treatment and consistent in design among vendors. The unit costs in the spreadsheet include equipment delivery, installation, and contractor overhead and profit. The spreadsheet adds these costs to price quotes when the vendor did not include them. Whenever possible, the spreadsheet includes prices from at least three vendors for each combination of component and construction material. The spreadsheet contains this minimum number of price quotes for most components and more than the minimum (up to six) for many items. Exceptions are components that are proprietary or are available through a limited number of vendors, such as membranes. Prices in the spreadsheet are frequently updated, with the goal that none of the quotes is more than five years old. To further ensure that the prices are consistent and up-to-date, the spreadsheet escalates all of the quotes to a recent, common year, using standard price indexes. For most components, the spreadsheet uses a commodity-specific Producer Price Index published by the Bureau of Labor Statistics (BLS) to update costs to the current year. The price indexes are closely matched with the components in the spreadsheet. For example, the spreadsheet escalates prices for stainless steel pressure vessels using a four-digit level index

10 E637 TABLE 8 Design modifications for small systems in the GAC model Small System Design Modification Reduced spacing between vessels and other equipment No redundant vessels (but a minimum of two operating vessels) Reduced instrumentation requirements Simplified system controls for automated systems No booster pumps No backwash pumps or tanks Reduced concrete pad thickness Reduced indirect costs Explanation This assumption simulates skid placement of treatment vessels (and of pumps, if included in the design), resulting in a reduced system footprint and therefore reduced costs for interconnecting piping, building structures, certain indirect costs, and O&M. Small systems typically do not include redundant treatment vessels because they are designed to operate at reduced capacity during the brief periods when one vessel is not operating (e.g., during backwash). Instrumentation required for small systems is limited to flow meters, sampling ports, and ORP sensors. Package plants, when automated, typically are controlled by a single, preprogrammed operator interface unit mounted on the skid. Therefore, for small systems, the model uses this type of operator interface only and excludes the multiple programmable logic controllers, personal computer workstations, printers, operator interface software, and plant intelligence software included for large, automated, custom-engineered systems. Small GAC systems result in limited head loss and typically do not require additional booster pumps. Small systems typically use existing pumps and water supplies and do not require separate backwash pumps or backwash water storage. Small capacity systems require less structural support. Package plants require less effort to design and install. Therefore, the model reduces or eliminates certain indirect costs (e.g., mobilization demobilization, construction management) for small package plants. GAC granular activated carbon, O&M operations and maintenance, ORP oxidation-reduction potential called BLS1072 Metal Tanks. The common year for the current version of the spreadsheet is 2010, the most recent year for which full price indexes were available at the time of the cost estimates described in the following sections. Component cost equations. After escalating each price quote to a common year (2010 in the current spreadsheet), the WBS cost spreadsheet averages the quotes from all vendors. This results in a single average price for each equipment item, construction material, and size. For components whose prices vary with size, the spreadsheet includes component-specific cost equations generated from these average prices for each type of equipment and material. The component cost equations are best-fit equations (developed using statistical regression analysis across the sizes available for each item) that estimate the unit cost of an item of equipment as a function of its size. To maintain vendor confidentiality, public release of the models will contain these equations but not the underlying price quotes. By default the WBS models use the component cost equations, rather than the individual price quotes, to estimate the unit cost of components whose prices vary with size. Using the equations instead of the price quotes allows the models to generate unit costs for equipment of the exact size determined by the design calculations. For example, a WBS model design might require a 250-gal steel tank, but the available price quotes might be limited to 100-gal, 500-gal, and larger sizes. The cost equation for steel tanks will allow the WBS model to generate a unit cost for the intermediate-size 250-gal tank. Estimates of useful life. The WBS cost spreadsheet also contains an estimated useful life, in years, for each item of capital equipment. The estimates of useful life vary according to type of component (e.g., buildings generally last longer than mechanical equipment) and material (e.g., steel tanks generally last longer than plastic tanks). The WBS models use the useful life estimates for components to calculate an average useful life for the entire system and to generate an annualized cost estimate. TABLE 9 Technology All WBS models PTA MSBA GAC Common and technology-specific O&M costs included in the WBS models O&M Costs Included Operator labor for system operation and maintenance Managerial and clerical labor Maintenance labor and materials and operating energy for booster pumps Maintenance materials for buildings Energy for lighting, heating, ventilating, and cooling Maintenance labor and materials and operating energy for blowers Materials for column maintenance Labor, materials, and energy for off-gas treatment systems* Maintenance labor and materials and operating energy for blowers Labor, materials, and energy for off-gas treatment systems* Maintenance labor and materials and operating energy for backwash pumps Operator labor for managing backwash events and media transfer Operator labor and materials for contactor maintenance Maintenance labor and materials and operating energy for residuals pumps Fees for discharge to publicly owned treatment works* Labor, materials, energy, and natural gas use for onsite GAC regeneration* Coagulant use during residuals management* Costs for transport and disposal of spent GAC* Costs for transport and disposal of backwash holding tank solids or septic tank solids* GAC granular activated carbon, MSBA multistage bubble aeration, O&M operations and maintenance, PTA packed tower aeration, WBS work breakdown structure *If this option is included in the design on the basis of the input options selected Accounts for vessel relining in pressure designs, concrete maintenance in gravity designs, and internal component maintenance in both

11 E638 FIGURE 2 Example annualized costs for PTA removal of TCE (2010 dollars)* High cost Mid cost Low cost 10,000,000 Total annual cost $ 1,000, ,000 10, ,000 Design size mgd < 1 mgd 1 to < 10 mgd 10 mgd and greater Low cost y = 7,785.4x 3 17,298x ,698x + 29,477 R 2 = y = x x ,288x + 34,049 R² = y = x x ,501x 8,533 R² = 1 Mid cost y = 8,091.2x 3 9,484.6x ,676x + 34,687 R² = y = x x ,606x + 37,027 R² = y = x x ,567x + 12,636 R² = 1 High cost y = 17,629x 3 22,705x ,321x + 39,812 R² = y = x x ,313x + 60,743 R² = y = 0.141x x ,238x + 17,426 R² = 1 In which y is the total annual cost in 2010 dollars and x is design flow in mgd PTA packed tower aeration, TCE trichloroethylene *Results are specific to the following inputs: influent concentration = 5 µg/l, effluent concentration = 0.5 µg/l, Henry's constant = 0.187, off-gas treatment = none. OUTPUTS The output sheet of each WBS model summarizes the results of the calculations performed by the engineering design sheets. It lists the size and quantity required for each item of equipment included in the design along with the corresponding unit cost from the central WBS spreadsheet. The output sheet multiplies unit cost by quantity to determine the total cost for each WBS component. Many of components are available in optional materials, all of which are illustrated on the output sheet worksheet. For example, pressure vessels can be constructed with different types of body material (stainless steel or carbon steel) and different types of internal material (stainless steel or plastic). When optional materials are available, the output sheet selects from among them. The inputs for component level and system size determine the specific materials selected. The direct capital cost is the sum of these selected component costs. The output sheet also contains sections that report add-on costs, indirect capital costs, annual O&M costs, and total annualized cost. The add-on, indirect capital, and annual O&M costs are derived from the calculations performed by the corresponding sheets. The output sheet derives annualized cost from the useful life estimates for the individual components, taken from the WBS cost spreadsheet, and it uses these estimates to calculate an average useful life for the entire system. The calculation uses a reciprocal weighted average approach, which is based on the relationship between a component s cost (C), its useful life (L), and its annual depreciation rate (A) under a straight-line depreciation method. Equation 1 shows the reciprocal weighted average calculation.

12 E639 Average useful life = N C n n = 1 N A n n = 1 = C A (1) FIGURE 3 Example annualized cost results for MSBA removing TCE (2010 dollars) High cost Mid cost Low cost Total annual cost $ 100,000 10, Design size mgd Low cost Mid cost High cost < 1 mgd y = 17,404x ,371x ,693x + 13,986 R² = y = 38,837x ,985x ,965x + 17,430 R² = y = 44,349x ,525x ,012x + 19,341 R² = In which y is the total annual cost in 2010 dollars and x is design flow in mgd MSBA multistage bubble aeration, TCE trichloroethylene in which C n denotes the cost of component n (n = 1 to N); C denotes the total cost of all N components; A n denotes the annual depreciation of component n, which equals C n /L n ; and A denotes total annual depreciation for the N components. The output sheet uses this average useful life calculation for the system, along with a discount rate, to annualize total capital cost, resulting in capital cost expressed in dollars per year. The models use a default discount rate of 7%, which users can adjust directly on the output sheet. The output sheet adds annual O&M cost to the annualized capital cost to arrive at a total annual cost in dollars per year. Example cost equations. The output sheet of each WBS model shows the detailed cost breakdown, total capital cost, annual O&M cost, and total annualized cost for a single set of inputs. That is, it provides results for a single system size and compliance scenario. Figures 2, 3, and 4 show example costs for varying system sizes and scenarios. Specifically they present high, mid, and low annualized costs for PTA, MSBA, and GAC used for TCE removal. The results shown in these figures represent multiple runs of the WBS models across a range of system sizes specifically, 49 flow rates ranging from 0.03 to 162 mgd. The high-, mid-, and low-cost scenarios result from varying each model s input for component level. Figures 2, 3, and 4 also show technology- and scenario-specific cost equations. These equations result from a statistical regression analysis across the system sizes. Figure 3, for MSBA, does not show results or equations beyond a design flow of 1 mgd because it is assumed that a national compliance forecast would not assign MSBA as a treatment option for larger systems. These results are specific to the inputs identified in Table 6. Thus, they reflect the hypothetical scenario in which TCE is removed to < 0.5 µg/l from an influent concentration of 5 µg/l. They also reflect the other assumptions inherent in the inputs selected in Table 6. For example, they assume no off-gas control for the aeration technologies. The costs of PTA and MSBA would be higher if off-gas control were included. Accuracy of cost estimates. During peer review of the GAC model, two of the three reviewers felt they had enough experience with GAC cost estimates to evaluate the model s accuracy. One of these reviewers expressed the opinion that the resulting cost estimates would be in the range of budget estimates (+30 to 15%). The other reviewer did not provide a precise estimate of the model s accuracy but commented that the resulting cost estimates were reasonable. During peer review of the PTA model, all three reviewers indicated that the resulting cost estimates would be in the range of budget estimates, although two of the reviewers expressed the opinion that elements of the estimates would be less accurate in certain specific situations. One of these reviewers suggested that O&M estimates for very small systems would be order-of-magnitude estimates (+50 to 30%). On the basis of this reviewer s comments, significant changes have been made to the WBS models O&M estimating assumptions generally and to the O&M estimates in the PTA model specifically. The other reviewer commented that the PTA model estimates would be order-of-magnitude estimates if applied to existing or older facilities where interactions between new and existing facilities were less defined. During peer review of the MSBA model, the first reviewer indicated that the accuracy range was between a budget estimate and an order-of-magnitude estimate. This reviewer indicated that the estimates would be considered budget estimates if a specific change was made to the miscellaneous allowance in the indirect cost assumption. The miscellaneous allowance has since been changed in response to the reviewer s recommendation. The second reviewer commented that capital costs were budget estimates but that O&M costs were between budget estimates and orderof-magnitude estimates. Specific changes were made to the O&M estimates in the MSBA model to address this reviewer s comments. The third reviewer expressed the opinion that the MSBA model estimates would be order-of-magnitude estimates. Additional information on the estimated accuracy of model outputs would be included when the models are used to support

13 E640 FIGURE 4 Example annualized cost results for GAC removing TCE (2010 dollars) High cost Mid cost Low cost 100,000,000 10,000,000 Total annual cost $ 1,000, ,000 10, ,000 Design size mgd < 1 mgd 1 mgd to < 10 mgd 10 mgd and greater Low cost y = 112,135x 3 224,404x ,738x + 9,675.3 R² = y = x 3 + 2,967.3x ,787x + 113,090 R² = y = x x ,985x + 79,651 R² = Mid cost y = 129,896x 3 268,487x ,257x + 12,111 R² = y = x 3 + 2,351x ,132x + 1,30149 R² = y = 0.507x x ,168x + 125,281 R² = High cost y = 133,808x 3 279,694x ,000x + 17,058 R² = y = x 3 + 4,397.7x ,203x + 148,011 R² = y = x x ,056x + 108,706 R² = In which y is the total annual cost in 2010 dollars and x is the design flow in mgd GAC granular activated carbon, TCE trichloroethylene

14 E641 national cost estimates. Furthermore, national estimates would include a range of costs, based on varying compliance scenarios, model inputs, and assumptions. Using model outputs to estimate national cost. Cost equations similar to the examples shown in Figures 2, 3, and 4 would be inputs to a national cost estimate. Specifically, they would be combined with a compliance forecast that assigns specific compliance actions to affected drinking water systems. For example, the compliance forecast might assume that a certain percentage of systems would install GAC treatment and a different percentage of systems would install PTA treatment. For each treatment choice, the forecast also might assume that a certain percentage of systems would use high-cost components and a different percentage would use low-cost components. On the basis of these percentages, the appropriate cost equation would be selected for each system and applied for that system s flow rate. The resulting individual system costs would then be aggregated to develop an estimate of total national cost. A full compliance forecast would use more cost equations than those represented by the examples in Figures 2, 3, and 4. For example, it would require equations for aeration both with and without off-gas treatment. The forecast also might encompass compliance options other than the installation of new GAC, PTA, or MSBA treatment systems (e.g., modifying existing treatment systems or taking nontreatment actions). A complete national cost estimate would also encompass multiple alternative compliance forecasts, so that a range of cost estimates could be generated. The alternative compliance forecasts would consider both alternative regulatory limits and uncertainties in the underlying model assumptions (e.g., they would use cost equations generated with more or less stringent model inputs). SUMMARY The WBS models embody a cost-modeling approach designed to develop unit costs for drinking water technologies. New to the drinking water field, this approach has demonstrated advantages in transparency and versatility. The WBS models described in this article can be used to estimate treatment costs that can be aggregated to develop national cost estimates. The discussion included example costs for TCE removal by means of three technologies PTA, MSBA, and GAC. Models for more than 20 additional technologies have been developed or are under development. Although these models have not yet been used in support of any regulatory action to date, USEPA expects to use them for upcoming regulations. Public release of selected models will commence in early ACKNOWLEDGMENT The authors thank the technology experts who provided peer reviews and other input on the WBS models and the many equipment vendors who provided the extensive price data comprising the WBS cost spreadsheet. Although the WBS modeling approach was funded wholly or in part by the USEPA, this article was not subject to the agency s policy review; therefore it does not reflect the views of the agency, and no official endorsement should be inferred. Furthermore, USEPA does not endorse the purchase of any commercial product or service mentioned in the publication. ABOUT THE AUTHORS Rajiv Khera (to whom correspondence should be addressed) is an environmental engineer at USEPA, MC 4607M, 1200 Pennsylvania Ave., N.W., Washington, DC USA; khera.rajiv@epa.gov. Khera has been with USEPA for 15 years and has been directly involved in the development of WBS models for drinking water technologies for about nine years. He holds an MS in engineering from Texas A&M University, College Station, Texas, and an MBA from Southern New Hampshire University, Hooksett, N.H.Pat Ransom is an environmental engineer and economist with Leidos (formerly part of SAIC), Arlington, Va. Thomas F. Speth is a supervisory engineer at USEPA, Cincinnati, Ohio. PEER REVIEW Date of submission: 12/04/2012 Date of acceptance: 06/26/2013 REFERENCES AWWA, 1990 (4th ed.). Water Quality and Treatment (F.W. Pontius, editor). McGraw Hill, New York. AWWA/ASCE (American Society of Civil Engineers), 1998 (3rd ed.) Water Treatment Plant Design. McGraw Hill, New York. Permutit Inc., Permutit Water and Waste Treatment Book. Siemens Water Technologies, Alpharetta, Ga. USEPA (US Environmental Protection Agency), Drinking Water Treatability Database. (accessed Mar. 28, 2013). USEPA, Discussion Summary: EPA Technology Design Workshop. USEPA Office of Ground Water and Drinking Water, Washington, D.C. Viessman, W.J. & Hammer, M.J., 1993 (5th ed.). Water Supply & Pollution Control. HarperCollins Publishers, New York.