The following provisions apply to cost estimates.
The method used to calculate a present value for closure cost estimates must have the following form:
P = | F --------- (1 + i)n | |
in which: | P = | the present value, |
F = | the estimated cost of facility closure as calculated under subitem (1), | |
i = | the interest rate, and | |
n = | the time period in which the design capacity of the facility is filled, expressed as the number of years after the date on which the cost estimate is made. |
The interest rate used must be the Federal Reserve Bank discount rate in effect at the Federal Reserve Bank in Minneapolis, Minnesota.
A present value must be reported for each year of the postclosure care period. The time periods used must begin the year after facility closure. The method used to calculate a present value must have the following form:
P = | F --------- (1 + i)n | |
in which: | P = | the present value, |
F = | the estimated cost of postclosure care and maintenance during the year in which cost will be incurred as calculated under subitem (1), | |
i = | the interest rate, and | |
n = | the time period in which the cost will be incurred, expressed as the number of years after the date on which the cost estimate is made. |
The interest rate used must be the Federal Reserve Bank discount rate in effect at the Federal Reserve Bank in Minneapolis, Minnesota.
where f(x) = the probability of occurrence of event x;
µ = the mean (or average) value of the normal random variable x;
= [summation]x/n;
n = the number of times x is evaluated;
pi = 3.1416;
e = 2.7183; and
x = a specified dollar interval that controls the number of times x will be evaluated within the range defined by zero and the worst case series of events.
During the operating life of the facility, the owner or operator shall adjust the cost estimates required in subpart 1 for inflation annually before the anniversary of the date on which the first cost estimates were prepared. The adjustment must be made using an inflation factor derived from the annual Implicit Price Deflator for Gross National Product as found in the Survey of Current Business issued by the United States Department of Commerce. The inflation factor is the result of dividing the latest published annual deflator by the deflator for the previous year. The commissioner shall inform the owner or operator of the inflation factor needed to adjust cost estimates. Adjustments must be made by multiplying the latest cost estimate by the inflation factor. The result is the adjusted cost estimate.
In addition to any yearly update made under this subpart, the owner or operator must revise the cost estimates whenever a change in site conditions increases the cost of closure, postclosure care, or corrective action. The revised cost estimates must be adjusted for inflation as specified in this subpart.
The owner or operator must keep at the facility during the operating life of the facility: the latest cost estimates prepared in accordance with subpart 2, and, when the estimates have been adjusted in accordance with subpart 2, the latest adjusted cost estimates.
Minn. R. Part 7035.2685
Statutory Authority: MS s 115.03; 116.07