Cost Estimate for Closure

Section 724.242  Cost Estimate for Closure a)         The owner or operator must have detailed a written estimate, in current dollars, of the cost of closing the facility in accordance with the requirements in Sections 724.211 through 724.215 and applicable closure requirements in Sections 724.278, 724.297, 724.328, 724.358, 724.380, 724.410, 724.451, 724.701 through 724.703, and 724.1102. 1)         The estimate must equal the cost of final closure at the point in the facility's active life when the extent and manner of its operation would make closure the most expensive, as indicated by its closure plan (see Section 724.212(b)). 2)         The closure cost estimate must be based on the costs to the owner or operator of hiring a third party to close the facility.  A third party is a party who is neither a parent nor a subsidiary of the owner or operator. (See definition of parent corporation in Section 724.241(d).)  The owner or operator may use costs for on-site disposal if the owner or operator demonstrates that on-site disposal capacity will exist at all times over the life of the facility. 3)         The closure cost estimate must not incorporate any salvage value that may be realized with the sale of hazardous wastes, or non-hazardous wastes if permitted by the Agency pursuant to Section 724.213(d), facility structures or equipment, land, or other assets associated with the facility at the time of partial or final closure. 4)         The owner or operator must not incorporate a zero cost for hazardous wastes, or non-hazardous wastes if permitted by the Agency pursuant to Section 724.213(d), that might have economic value. b)         During the active life of the facility, the owner or operator must adjust the closure cost estimate for inflation within 60 days prior to the anniversary date of the establishment of the financial instruments used to comply with Section 724.243.  For owners and operators using the financial test or corporate guarantee, the closure cost estimate must be updated for inflation within 30 days after the close of the firm's fiscal year and before submission of updated information to the Agency as specified in Section 724.243(f)(3). The adjustment may be made by recalculating the maximum costs of closure in current dollars, or by using an inflation factor derived from the annual Implicit Price Deflator for Gross National Product (Deflator) as published by the U.S. Department of Commerce in its Survey of Current Business, as specified in subsections (b)(1) and (b)(2).  The inflation factor is the result of dividing the latest published annual Deflator by the Deflator for the previous year. 1)         The first adjustment is made by multiplying the closure cost estimate by the inflation factor. The result is the adjusted closure cost estimate. 2)         Subsequent adjustments are made by multiplying the latest adjusted closure cost estimate by the latest inflation factor. BOARD NOTE:  The table of Deflators is available as Table 1.1.9.,"Implicit Price Deflators for Gross Domestic Product", in the National Income and Product Account Tables, published by U.S. Department of Commerce, Bureau of Economic Analysis, National Economic Accounts, available on-line at the following web address:  www.bea.gov/national/nipaweb/Table View.asp?SelectedTable=13&FirstYear=2002&LastYear=2004&Freq=Qtr. c)         During the active life of the facility the owner or operator must revise the closure cost estimate no later than 30 days after the Agency has approved the request to modify the closure plan, if the change in the closure plan increases the cost of closure.  The revised closure cost estimate must be adjusted for inflation, as specified in subsection (b). d)         The owner or operator must keep the following at the facility during the operating life of the facility:  the latest closure cost estimate prepared in accordance with subsections (a) and (c) and, when this estimate has been adjusted in accordance with subsection (b), the latest adjusted closure cost estimate.