Cooling Water Intake Structures:
Summary of EPA’s Proposed Rule
Claudia Copeland
Specialist in Resources and Environmental Policy
July 8, 2013
Congressional Research Service
7-5700
www.crs.gov
R41786
CRS Report for Congress
Pr
epared for Members and Committees of Congress
Cooling Water Intake Structures: Summary of EPA’s Proposed Rule
Summary
Thermoelectric generating plants and manufacturing facilities withdraw large volumes of water
for production and, especially, to absorb heat from their industrial processes. Water withdrawals
by power producers and manufacturers represent more than one-half of water withdrawn daily for
various uses in the United States. Although water withdrawal is a necessity for these facilities, it
also presents special problems for aquatic resources. In particular, the process of drawing surface
water into the plant through cooling water intake structures (CWIS) can simultaneously pull in
fish, shellfish, and tiny organisms, injuring or killing them. Congress enacted Section 316(b) of
the Clean Water Act (CWA) specifically to address CWIS.
Regulatory efforts by the Environmental Protection Agency (EPA) to implement Section 316(b)
have a long and complicated history over 35 years, including legal challenges at every step by
industry groups and environmental advocates. Currently most new facilities are regulated under
rules issued in 2001, while rules for existing facilities were challenged and remanded to EPA for
revisions. In response to the remands, in March 2011 EPA proposed national requirements
affecting approximately 1,150 existing electric powerplants and manufacturing facilities. Even
before release, the proposed regulations were highly controversial among stakeholders and some
Members of Congress. The issue for Congress has been whether a stringent and costly
environmental mandate could jeopardize reliability of electricity supply in the United States.
Many in industry feared, while environmental groups hoped, that EPA would require installation
of technology called closed-cycle cooling that most effectively minimizes the adverse
environmental impacts of CWIS, but also is the most costly technology option.
The EPA proposal declined to mandate closed-cycle cooling universally and instead favors a less
costly, more flexible regulatory option. EPA’s recommended approach would essentially codify
current CWIS permitting procedures for existing facilities, which are based on site-specific
determinations and have been in place administratively for some time because of legal challenges
to previous rules. EPA acknowledges that closed-cycle systems reduce the adverse effects of
CWIS to a greater extent than other technologies, but in the proposed rule it rejected closed-cycle
cooling as a uniform requirement at existing facilities. The agency based that conclusion on four
factors: additional energy needed by electricity and manufacturing facilities to operate cooling
equipment and adverse consequences to reliability of energy delivery (i.e., energy penalty),
additional air pollutants that would be emitted because fossil-fueled facilities would need to burn
more fuel as compensation for the energy penalty, land availability concerns in some locations,
and limited remaining useful life of some facilities such that retrofit costs would not be justified.
Not surprisingly, stakeholder groups viewed the proposal differently. Environmental groups
endorsed the parts of the rule to establish nationally uniform requirements, but criticized those
allowing for site-specific determinations. Industry groups urged EPA to provide greater flexibility
that would be more cost-effective. State permitting authorities were divided on modifying the rule
to be more flexible. In June 2012, EPA said it is considering alternatives that reflect some
recommendations of industry and utility groups. In June 2013, the agency and environmental
litigants agreed to delay issuance of a final rule until November 4, 2013, a period of time that will
allow EPA to consult with federal wildlife services in an Endangered Species Act review of the
rule.
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Cooling Water Intake Structures: Summary of EPA’s Proposed Rule
Contents
Introduction ...................................................................................................................................... 1
Background ...................................................................................................................................... 2
Cooling Water System Technology ........................................................................................... 3
Technology for Impingement and/or Entrainment Control ....................................................... 5
The EPA Proposal ............................................................................................................................ 7
Facilities Covered by the Proposal ............................................................................................ 7
Regulatory Options .................................................................................................................... 8
Impingement ....................................................................................................................... 9
Entrainment ....................................................................................................................... 11
New Units at Existing Facilities ........................................................................................ 12
Compliance Schedule ........................................................................................................ 13
Phase I Restoration Measures ........................................................................................... 13
Costs and Benefits ......................................................................................................................... 13
Compliance Costs .............................................................................................................. 13
Uncertainties of Compliance Cost Estimates .................................................................... 17
Estimated Benefits............................................................................................................. 17
Uncertainties of Benefits Estimates .................................................................................. 19
Congressional Interest and Concluding Thoughts ......................................................................... 21
Figures
Figure 1. Once-Through and Closed-Cycle Wet Cooling System Designs ..................................... 5
Tables
Table 1. Analyzed Regulatory Options for Cooling Water Intake Structures .................................. 9
Table 2. Annualized Social Cost of CWIS Regulatory Options .................................................... 15
Table 3. Annual National Social Benefits from Eliminating or Reducing I&E Mortality ............. 20
Appendixes
Appendix. History of Regulating Cooling Water Intake Structures ............................................... 23
Contacts
Author Contact Information........................................................................................................... 26
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Cooling Water Intake Structures: Summary of EPA’s Proposed Rule
Introduction
Thermoelectric generating plants and many manufacturing facilities withdraw large volumes of
water for use in production and, especially, to absorb waste heat from their industrial processes.
Water withdrawals by electric generating plants, used primarily for cooling, are the largest
category by sector in the United States—201 billion gallons per day (BGD)—while water
withdrawals by industrial facilities, used both for production and cooling, are 18 BGD. Together,
water withdrawals by manufacturers and electricity generators represent more than one-half of the
410 billion gallons of water withdrawn daily for various uses in the United States.1
Withdrawing water from streams, rivers, lakes, and coastal waters is a necessity for most
electricity generating and manufacturing facilities, but facilities that require water for cooling also
present special problems for aquatic resources. For example, the direct release of heated water
after circulation through a powerplant or manufacturing facility can harm aquatic life in a stream
or lake. And the process of drawing surface water into the plant or facility can simultaneously
pull fish, shellfish, and tiny organisms into the plant, generally killing them. In recognition of
such impacts, Congress included Section 316 in the 1972 Federal Water Pollution Control Act
(the law is commonly known as the Clean Water Act, or CWA2) specifically to address the
potential problems of heat discharges3 and cooling water intake structures.
Cooling water intake structures (CWIS) can cause two types of adverse environmental impacts.
First, impingement occurs when fish, invertebrates, and other aquatic life are trapped on
equipment such as screens at the entrance to the CWIS. The force of the intake water traps the
organisms against the screen, and they are unable to escape. Second, entrainment occurs when
small aquatic organisms, eggs, and larvae pass through the intake screening system and are drawn
into the cooling mechanism, travel through the cooling system pumps and tubes, and then are
discharged back into the source water. Impingement and entrainment injure or kill large numbers
of aquatic organisms at all life stages. In turn, reducing impingement and entrainment mortality
rates is likely to increase the number of fish, shellfish, and other aquatic organisms in affected
waters.4 CWA Section 316(b) authorizes regulation of CWIS in order to protect such organisms
from being harmed or killed.
The Environmental Protection Agency (EPA) has been engaged in regulatory efforts to implement
Section 316(b) for 35 years. Most recently, in March 2011, EPA proposed national requirements
to be implemented through CWA discharge permits to minimize adverse environmental impact of
cooling water intake structures at existing electricity generating and manufacturing facilities.
1 Joan F. Kenny, Nancy L. Barber, and Susan S. Hutson et al., Estimated Use of Water in the United States in 2005,
U.S. Department of the Interior, U.S. Geological Survey, Circular 1344, 2009.
2 33 U.S.C. 1251 et seq.
3 Regulation of thermal discharges, under CWA Section 316(a), is not part of the regulatory proposal discussed in this
report and is not discussed here. Regulations to implement this provision are found at 40 CFR 125.70. See Section VII-
D-7 of the proposed rule for discussion of thermal discharge impacts of cooling water systems.
4 CWIS impacts on aquatic biota do not occur in isolation from other stressors, such as degraded water and sediment
quality, low dissolved oxygen, eutrophication, and habitat loss or modification. Effects of these manmade stressors on
local biota may contribute to or compound the local impact of CWIS impingement and entrainment mortality. See
generally, U.S. Environmental Protection Agency, Environmental and Economic Benefits Analysis for Proposed
Section 316(b) Existing Facilities Rule, EPA 821-R-11-002, March 28, 2011. Hereinafter, Environmental Benefits
Analysis.
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Cooling Water Intake Structures: Summary of EPA’s Proposed Rule
Even before release, the proposed regulations were highly controversial among stakeholders and
some Members of Congress. The issue for Congress has been whether a stringent and costly
environmental mandate could jeopardize reliability of electricity supply in the United States.
Many industry stakeholders feared, while environmental groups hoped, that EPA would require
installation of technology called closed-cycle cooling5 that most effectively minimizes
impingement and entrainment, but also is the most costly technology option.6 However, as
discussed in this report, the EPA proposal declined to mandate closed-cycle cooling universally
and instead proposed a less costly, more flexible regulatory option. EPA’s recommended option
would require uniform impingement mortality standards at all affected facilities and case-by-case
determination of entrainment controls for all facilities. The public comment period on the rule
ended on August 18, 2011.7 Based on its review of public comments and additional data, in June
2012, the agency announced that it is considering certain changes to the impingement standards
in the proposed rule (see “Impingement” below). Under the original court-ordered schedule, EPA
was to issue a final rule on July 27, 2012. That deadline was extended for 11 months to provide
time to assess possible changes to the proposal. In June 2013, as the deadline approached, EPA
and environmental litigants agreed to delay issuance of a final rule until November 4, 2013, a
period of time that will allow the agency to consult with federal wildlife services in an
Endangered Species Act (ESA) review of the rule.
Background
The primary goal of the CWA is “to restore and maintain the chemical, physical, and biological
integrity of the Nation’s waters.”8 To further this goal, the act prohibits the “discharge of any
pollutant by any person” unless a statutory exception applies; the primary exception is
procurement of a CWA permit.9 Under the law, EPA or an authorized state agency can issue a
permit for the discharge of any pollutant provided that the discharge complies with the conditions
of the CWA.10 The act requires technology-based solutions to minimize adverse environmental
impacts of pollutant discharges, and Sections 301 and 306 require EPA to develop technology-
5 Throughout this report, the terms “closed-cycle,” “recirculating,” and “cooling tower” will be used interchangeably.
The term “closed-loop cooling” also is commonly used.
6 The North American Electric Reliability Corporation (NERC), in an October 2010 report, concluded that
implementation of four EPA rules, including a 316(b) rule, could result in a loss of up to 19% of fossil-fuel-fired steam
capacity in the United States by 2018, with the potential for “significantly deteriorating future … system reliability.”
However, NERC incorrectly assumed that EPA would mandate closed-cycle cooling for all power plants and on that
basis concluded that the 316(b) rule would be the most costly of the rules that it analyzed. North American Electric
Reliability Corporation, 2010 Special Reliability Scenario Assessment: Resource Adequacy Impacts of Potential U.S.
Environmental Regulations, October 2010, http://www.nerc.com/files/EPA_Scenario_Final.pdf.
7 U.S. Environmental Protection Agency, “National Pollutant Discharge Elimination System—Cooling Water Intake
Structures at Existing Facilities and Phase 1 Facilities,” 76 Federal Register 22,174-22,228, April 20, 2011.
Hereinafter, CWIS Proposal.
8 CWA Section 101(a) (33 U.S.C. 1251(a)).
9 CWA Section 301 (33 U.S.C. 1311) and CWA Section 402 (33 U.S.C. 1342).
10 CWA Section 402. The CWA vests permitting authority with EPA, but allows the agency to authorize qualified
states to do so in lieu of EPA. Currently, 46 states have been authorized to issue CWA permits, and EPA is the
permitting authority in other states (i.e., Idaho, Massachusetts, New Hampshire, and New Mexico), the District of
Columbia, and all U.S. Territories except the Virgin Islands.
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Cooling Water Intake Structures: Summary of EPA’s Proposed Rule
based effluent limitation guidelines for existing sources and performance standards for new
sources, respectively, that are used as the basis for restrictions specified in discharge permits.11
Section 316, the provision concerned with thermal discharges and cooling water intake structures,
cross-references both Sections 301 and 306.12 Section 316(b) provides in full—
Any standard established pursuant to section 301 or section 306 of this Act and applicable to
a point source shall require that the location, design, construction, and capacity of cooling
water intake structures reflect the best technology available for minimizing adverse
environmental impact.
EPA’s efforts to implement Section 316(b) have a long and complicated history, including legal
challenges at every step by industry groups and environmental advocates (for details, see the
Appendix). In summary, however, CWIS regulation involves three rulemaking phases. These
regulatory requirements are applied to individual facilities through discharge permits issued by
EPA or an authorized state agency.
• Phase I, issued in 2001, covers CWIS at new facilities,
• Phase II, issued in 2004, covers large existing electric generating plants, and
• Phase III, issued in 2006, covers certain existing facilities (manufacturing
facilities and small electric generating plants) and new offshore and coastal oil
and gas extraction facilities.
EPA’s March 2011 proposal stems from legal challenges to the Phase II rules (including a
Supreme Court ruling in 2009) and the Phase III rules.13 Eventually, EPA determined that the
most efficient regulatory approach would be to consolidate the regulations for existing facilities
in a single proposal. In November 2010, EPA signed a settlement agreement with environmental
group plaintiffs regarding rulemaking dates for establishing CWIS technology-based standards
for existing facilities. EPA agreed to propose standards by March 14, 2011, and to take final
action by July 27, 2012. On March 15, the parties agreed to an amendment to extend the date for
the proposed rule to March 28, 2011. The 2012 deadline for a final rule is unchanged. EPA
proposed the regulations on March 28; the proposal was published in the Federal Register on
April 20, 2011.
Cooling Water System Technology
Most power generators and manufacturing facilities use various types of water-based systems to
cool power production processes14 or manufacturing equipment.15 On average, existing power
11 CWA Section 301, and CWA Section 306 (33 U.S.C. 1316).
12 33 U.S.C. 1326.
13 The current regulatory proposal does not address the Phase III rules for new offshore and coastal oil and gas
facilities. The proposal does address one provision of the Phase I rules, which is discussed below (see “Phase I
Restoration Measures”).
14 According to the Department of Energy—
At nuclear and fossil-fuel power plants, electricity is produced by heating purified water to create
high-pressure steam. The steam is expanded in turbines, which drive the generators that produce
electricity. After leaving the turbines, the steam passes through a condenser that has multiple tubes
and a large surface area. A large volume of cool water circulates through the tubes, absorbing heat
(continued...)
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Cooling Water Intake Structures: Summary of EPA’s Proposed Rule
generators use 85% of withdrawn water for cooling, while manufacturing facilities on average use
52% of withdrawn water for cooling.16 As defined in the proposed rule, “cooling water” is water
used for equipment cooling, evaporative cooling tower makeup, and dilution of waste heat.17
Most facilities use either once-through cooling or recirculating cooling (also known as closed-
loop or closed-cycle). The basic designs are illustrated in Figure 1.
Once-through cooling refers to cooling systems in which untreated water is withdrawn from a
source, circulated through heat exchangers, and then returned to a surface-water body. Large
amounts of water—typically in the range of tens of millions to billions of gallons per day—are
needed for once-through cooling. The vast majority of it is returned to the stream or lake, but at
higher temperatures. The discharged water also may contain chemicals or pollutants from the
cooling process. Once-through systems are used by 63% of electric generators and 48% of
manufacturers subject to EPA’s proposed rule.18
Recirculating, or closed-cycle, cooling systems receive their cooling water from and return it to a
cooling tower and basin, cooling pond, or cooling lakes. Water is withdrawn from a source,
circulated through heat exchangers, cooled using ponds or towers, and then recirculated. Some
water is removed from the recirculating system as a blowdown stream to control the buildup of
suspended and dissolved solids. Amounts of water that are lost to evaporation, blowdown, and
leakage are replaced with new withdrawal, usually from surface water bodies. Closed-cycle
systems are used by 26% of electric generators and 20% of manufacturers subject to the proposed
rule. There also are combination systems, facilities with multiple cooling water systems that use
both once-through and closed-cycle cooling; combination systems account for another 9% of
electric generators and 21% of manufacturers.19
There are two main types of closed-cycle systems. Both reduce the quantity of water that must be
withdrawn: they achieve flow reductions of 97.5% for freshwater and 94.9% for saltwater
sources, compared with once-through cooling systems, according to EPA.20 In a wet cooling
tower system, water that has absorbed waste heat transfers that heat through evaporation into the
surrounding air and recirculates the water to continue the cooling process. In dry cooling tower
systems, waste heat is transferred completely through convection and radiation, rather than
evaporation. Dry cooling towers are much larger and therefore more expensive—reportedly five
to 10 times more expensive—than wet cooling towers. Because dry cooling towers virtually
(...continued)
from the steam. As the steam cools and condenses, the temperature of the cooling water rises.
U.S. Department of Energy, Office of Fossil Energy, Energy Penalty Analysis of Possible Cooling Water Intake
Structure Requirements on Existing Coal-Fired Power Plants, October 2002, p. 13.
15 Manufacturers withdraw water both for on-site power production (like electric utilities) and for process water that is
used directly in an industrial process (e.g., water used as raw material in a product). Process water is more typically
associated with manufacturers than electric plants.
16 CWIS Proposal p. 22,217.
17 Cooling water is further subcategorized into either water that does not come into contact with any industrial
materials, equipment or processes (non-contact cooling water) or water that comes in direct contact with hot equipment
or heated materials and often requires treatment to remove pollutants such as metals before it may be discharged
(contact cooling water). Ibid., p. 22,189.
18 Ibid., p. 22,190, Exhibit IV-1.
19 CWIS Proposal, p. 22,191. In some cases, the closed-cycle system uses cooling ponds, rather than cooling towers.
The focus of EPA’s regulatory proposal is cooling towers as an alternative to once-through cooling systems.
20 Ibid., p. 22,203.
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eliminate the need for cooling water withdrawals, they have been used as part of newly
constructed cooling systems in areas with limited water supplies, such as the arid southwest of the
United States.21
Figure 1. Once-Through and Closed-Cycle Wet Cooling System Designs
Source: Prepared by CRS, from North American Electric Reliability Corporation, “2010 Special Reliability
Scenario Assessment: Resource Adequacy Impacts of Potential U.S. Environmental Regulations,” October 2010,
p. 46.
Regardless of the plant design, a facility with a once-through cooling system will always
withdraw more water, but evaporate (that is, consume, or remove water from the immediate
environment) less water than a closed-cycle system. There are other types of tradeoffs between
the two systems. Closed-cycle systems are more expensive to construct and operate. Once-
through systems minimize evaporative losses and make facilities more energy efficient, because
large amounts of power are not needed to operate cooling towers and condensers. However, their
use is potentially limited during low-flow conditions, such as drought. Also, because they
withdraw large quantities of water, once-through systems will have greater potential impacts on
aquatic life.
Technology for Impingement and/or Entrainment Control
Section 316(b) requires EPA to establish standards for CWIS that reflect the “best technology
available [BTA] for minimizing adverse environmental impact.” Because the two main adverse
effects of CWIS are impingement and entrainment (I&E), EPA’s regulatory proposal encompasses
the best technology to minimize both of those effects. The proposal describes two basic
approaches to reducing I&E.
The first approach is flow reduction, where the facility installs technology or operates in a
manner to reduce or eliminate the quantity of water being withdrawn.…The second way to
21 Ibid., pp. 22,199-22,200.
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reduce I&E is to install technologies or operate in a manner that either a) gently excludes
organisms or b) collects and returns organisms [back to the source water].22
EPA identified a number of technologies that can minimize impingement and/or entrainment
mortality associated with CWIS, as described in the following text box, “Technology to Minimize
Impingement and/or Entrainment Mortality.”
Technology to Minimize Impingement and/or Entrainment Mortality
•
The potential for impingement and entrainment is greatly minimized by using closed-cycle cooling systems, which
withdraw less water than once-through systems.
•
Flow reduction is commonly used to reduce impingement and entrainment. One approach to flow reduction is
limiting the velocity of intake water to 0.5 feet per second or less to allow fish to swim away and escape the
intake current.
•
Screens are installed in front of water intakes and work by collecting or “impinging” fish and shellfish on the
screen. They generally are either traveling screens, which rotate up and out of the water where debris and
impinged organisms are removed from the screen surface by a high pressure spray wash, or cylindrical
wedgewire screens, which act passively to block passage. The size of the screen mesh is an important
consideration, because entrainment typical y decreases as mesh size decreases. EPA believes that traveling
screens are used by a large majority of electric generators (93%) and manufacturers (73%) that have CWIS.
•
Barrier nets prevent impingement by ful y encircling the intake area of water withdrawal to prevent fish and
shellfish from coming in contact with intake structures and screens. Typically they have large mesh sizes that are
designed to prevent impingement, but with no reduction in entrainment. Barrier nets are more effective than
traveling screens to minimize shel fish impingement, because many types of shel fish grab hold of the traveling
screen surface and are not removed by high pressure spray wash.
•
Aquatic filter barriers are similar to barrier nets but are made of water-permeable fabric panels with smal pores.
Because they present a physical barrier to large and very small organisms, they can reduce both impingement and
entrainment.
•
Changing the water intake location from nearshore to far offshore areas that are less biological y productive can
reduce impingement and entrainment. Most offshore intakes are fitted with a velocity cap, thus converting the
direction of flow from vertical to horizontal, which triggers a physiological avoidance response in fish that
reduces impingement. Re-location may be possible for facilities located on coasts but is not possible on many
rivers and streams.
•
In some cases, it may be possible to restrict a facility’s operation so that water intake does not occur during
spawning or other periods when large numbers of aquatic organisms are present near intake structures.
Source: CWIS Proposal, pp. 22,200-22,202.
As detailed below, EPA’s current Phase I regulations for new facilities generally require closed-
cycle cooling systems. Since promulgation of the Phase I rules in December 2001, 225 new units
at power plants (and an unknown number of manufacturing facilities) have been built in
compliance with the rules’ requirement for closed-cycle cooling or equivalent alternative.23
For existing facilities, in the absence of nationwide regulations issued by EPA (because of legal
challenges to the Phase II and III rules), permitting authorities make BTA determinations for
CWIS on a case-by-case basis, using the permit writer’s best professional judgment.24 In a few
22 Ibid., p. 22,198.
23 U.S. Energy Information Administration, Electric Power Annual 2009, Table 5.1, Count of Electric Power Industry
Power Plants, 2001 through 2009, November 2009, http://www.eia.doe.gov/cneaf/electricity/epa/epaxlfile5_1.pdf.
24 In circumstances when national standards do not exist or do not apply, permit writers use their best professional
judgment to determine applicable requirements for individual facilities.
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states, permitting authorities have proposed or are requiring installation of closed-cycle cooling
systems at existing facilities. For example, New York regulators proposed a policy in March 2010
to establish closed-cycle cooling or its equivalent as BTA for existing facilities, and they have
used the draft policy as the basis for imposing strict cooling water requirements at the Indian
Point Units 2 and 3 nuclear power facilities in the state.25 Similarly, in May 2010, California
regulators adopted a policy intended to require powerplants that use marine or estuarine waters as
a source of cooling water to replace once-through cooling systems with closed-cycle systems.26
At least two other states—Delaware and New Jersey—have recently proposed to issue permits for
existing powerplants that would require closed-cycle cooling systems in order to reduce cooling
water use and protect aquatic organisms.27
The EPA Proposal
Facilities Covered by the Proposal
From a biological perspective, the effect of intake structures on impingement and entrainment is
identical whether a CWIS is associated with a powerplant or a manufacturing facility. Thus, the
regulatory requirements in the EPA proposal announced in March would apply identically to all
covered facilities. It does not differentiate requirements for existing power producers and existing
manufacturing facilities, although it does propose different compliance schedules for
manufacturers and powerplants (see “Compliance Schedule”). In total, the proposed rule would
apply to approximately 1,150 facilities.
The universe of manufacturers affected by the proposal is 592 facilities; 575 of these are in six
primary manufacturing industries. EPA estimates that the proposal would affect 26 aluminum
manufacturers, 179 chemical manufacturers, 37 food manufacturers, 225 pulp and paper
manufacturers, 39 petroleum manufacturers, 68 steel manufacturers, and 17 additional facilities in
other categories (e.g., mining). Overall, these 575 represent 2% of all manufacturing facilities in
the six industries. The percentage of facilities within these industries that are within the scope of
the proposed rule ranges from less than 0.1% (food) to 38% (pulp and paper).28 Small entities
(with fewer than 500 employees) comprise 46% of the affected manufacturing facilities; the
chemical manufacturing sector has the largest percentage of small manufacturing entities.
The universe of steam electric generators that would be affected is 559 facilities; 66 are nuclear
plants, and the remainder are fossil-fuel plants. Of the total, 389 are owned by utilities that are
engaged in generating, transmitting, and distributing electricity for sale in regulated markets (306
are investor-owned, 58 are publicly owned, and 25 are cooperatives), and 170 are owned by non-
utilities.29 Together, these facilities comprise approximately 11% of all steam electric generating
25 For information, see http://www.dec.ny.gov/animals/32847.html.
26 For information, see http://www.swrcb.ca.gov/board_decisions/adopted_orders/resolutions/2010/rs2010_0020.pdf.
27 See http://www.dnrec.delaware.gov/News/Pages/
DNREC_to_require_95_percent_cooling_water_reduction_for_Indian_River_power_plant_permit.aspx, and
http://www.state.nj.us/dep/newsrel/2010/10_0001.htm.
28 CWIS Proposal, p. 22,191, Exhibit IV-2.
29 Non-utility power producers generate electricity for their own use and/or for sale in nonregulated, wholesale markets
(selling power to electric utilities for subsequent sale to consumers). Nonutility power producers include independent
power producers and cogenerators (combined heat and power producers). See http://www.eia.doe.gov/cneaf/electricity/
(continued...)
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facilities and over 45% of the electric power sector capacity in the United States.30 Twenty-five of
the plants are large (with more than 2,500 megawatts (MW) of generation capacity), while 214
(38%) generate less than 500 MW of electricity. Regionally, 31% of the affected powerplants are
located in the Upper Midwest/Mid-Atlantic states, and 26% are located in the Southeast. These
facilities represent 19% and 16% of electricity generation capacity in those regions,
respectively.31
EPA’s 2011 proposal describes four regulatory options. All would apply to power producers and
manufacturers that withdraw over 2 MGD of water, at least 25% of which is used for cooling
purposes. While nearly all water withdrawn by electricity generators is for cooling, manufacturers
withdraw water for multiple purposes that include cooling and various direct industrial processes
(e.g., water needed as a raw material or used as an ingredient in intermediate products). EPA
believes that a significant amount of reduction, reuse, and recycling of water has already occurred
in most manufacturing processes, in part due to other existing CWA requirements. Under the
proposal, water used in a manufacturing process, either before or after it is used for cooling,
would not be considered cooling water for purposes of determining the 25% threshold.
Additionally, the proposal excludes cooling water obtained by manufacturers from a public water
system, reclaimed water from wastewater treatment facilities, or treated effluent from the
manufacturing facility that is reused.
According to EPA, the 2 MGD/25% thresholds in the proposed rule would potentially cover
99.7% of water withdrawals by existing utilities and other industrial sources. The proposed
thresholds would cover approximately 68% of manufacturers and 93% of power-generating
facilities (100% of electric utilities and 70% of non-utilities).32
Regulatory Options
EPA evaluated four regulatory options to minimize impingement mortality and entrainment
mortality by CWIS at existing facilities, which are summarized in Table 1. Each has varying
costs and environmental benefits, as discussed below. Three would require the same impingement
mortality standards (uniform impingement standards—modified traveling screens—for all
existing facilities), but they differ with respect to the approach to controlling entrainment
mortality. The fourth option would allow permitting authorities to establish both impingement and
mortality controls on a case-by-case basis for facilities with water-intake flow between 2 MGD
and 50 MGD and would require uniform controls for larger facilities. The agency’s identified
preference is Option 1. It would require uniform impingement mortality standards everywhere
(i.e., modified traveling screens) and case-by-case determination of entrainment mortality
controls for all facilities.
(...continued)
page/prim2/chapter2.html.
30 The EPA proposal excludes 20 electric generators that already are required by state policies to comply with
equivalent standards, as well as 39 electric generators and 76 manufacturing facilities that are projected to be baseline
closures (having closed or are projected to close independent of the requirements in the proposed rule). CWIS Proposal,
p. 22,190 and p. 22,220.
31 U.S. Environmental Protection Agency, Economic and Benefits Analysis for Proposed Section 316(b) Existing
Facilities Rule, EPA 821-R-11-003, March 28, 2011, p. 2H-17. Hereinafter, Economic Analysis.
32 Ibid., p. 22,193.
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Table 1. Analyzed Regulatory Options for Cooling Water Intake Structures
(All options would apply to facilities withdrawing over 2 million gallons per day (MGD) of water
and using at least 25% of withdrawn water for cooling purposes.)
Impingement
Entrainment Mortality
Estimated Annual
Mortality Controls
Controls for Existing
New Units at
Social Costs and
for Existing Facilities
Facilities
Existing Facilities
Benefits (2009 $)a
Option 1
Uniform controlsb
Case-by-case determination
Closed-cycle coolingc $384
million
everywhere
everywhere
costs/$18 million
benefits
Option 2 Uniform controls
Closed-cycle cooling for
Closed-cycle coolingc $4.463
billion
everywhere
facilities with DIFd > 125
costs/$121 million
MGD; case-by-case
benefits
determination for smaller
facilities
Option 3
Uniform controls
Closed-cycle cooling
Closed-cycle coolingc $4.632
billion
everywhere
everywhere
costs/$126 million
benefits
Option 4
Uniform controls for
Closed-cycle cooling for
Closed-cycle coolingc $327
million
facilities with DIF > 50
facilities with DIF > 50
costs/$17 million
MGD; case-by-case
MGD; case-by-case
benefits
determination for
determination for smaller
smaller facilities
facilities
Source: Compiled by CRS from CWIS Proposal, including Exhibit X-1, p. 22,262.
a. Social costs include federal and state government costs for administering the rule. Costs and benefits for
Options 1,2 and 4 do not include costs or benefits associated with site-specific, case-by-case
determinations. In addition, benefits for all options reflect monetized benefits only (e.g., increased harvest
for commercial fisheries) but do not include non-monetized benefits (e.g., nonuse benefits that reflect
human values associated with existence and bequest motives), which are difficult to quantify. Non-
monetized benefits have potential to be significant, according to EPA, but the agency does not have the
same confidence in those estimates as in monetized benefits estimates. Costs and benefits were annualized
over 50 years and discounted at a 3% rate. See the proposal for cost and benefit estimates using a 7%
discount rate.
b. BTA for impingement is modified traveling screens. EPA also would allow facilities to comply by reducing
through-screen intake velocity to 0.5 ft/sec or less where available or feasible at the facility.
c. EPA alternatively would allow facilities to comply by reducing entrainment mortality to the equivalent of
90% of reductions achieved by closed-cycle cooling.
d. DIF = Design Intake Flow.
Based on evaluating the efficacy of technologies, their availability, and cost, EPA identified three
best performing technologies in order to select the “best” technology for the proposed rule.
Impingement
For impingement mortality at existing facilities, EPA evaluated several possible technologies (see
“Technology for Impingement and/or Entrainment Control”) and, from them, concluded that the
best technology available is modified travelling screens with a fish handling and return system,
plus barrier nets for intake systems located on ocean or estuarine tidal waters. Based on its
assessment of best performing technology, EPA proposed to limit fish impingement mortality to
no more than 12% on an annual average and 31% on a monthly average. Under the proposal, the
owner or operator of a facility would be able to choose one of two options to comply with
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standards based on this BTA technology. Under the first, a numeric fish impingement limitation,
the owner or operator would have to sample to measure fish mortality directly to show it will
meet specified mortality performance standards and could use any appropriate technology to meet
the standard. Under the second option, a velocity limitation, a facility could meet the standards by
demonstrating that the through-screen design velocity does not exceed 0.5 feet per second, or by
demonstrating that the actual average intake velocity does not exceed 0.5 feet per second. As
shown in Table 1, three of the regulatory options considered by EPA, including the agency’s
preferred Option 1, would require these performance standards at all covered facilities. Option 4
would require these technologies at facilities with water-intake flow of more than 50 MGD, while
requirements for facilities with intake flow between 2 MGD and 50 MGD would be determined
case-by-case by permitting authorities.
EPA estimates that half of all manufacturers and more than three-fourths of all electric generators
may already meet some or all of the proposed requirements for reducing impingement mortality
under the preferred option.33
This part of the proposal generated significant comment and criticism from industry and some
states. These commenters urged EPA to adopt more flexible approaches, including more site-
specific approaches and allowing for once-through cooling systems, rather than the stringent
nationwide standard for impingement contained in the proposed rule. Industry groups contend
that, when it comes to intake structures and their impacts on biological organisms, it is difficult to
fashion a one-size-fits-all standard, given the variability of plants’ technology and surroundings in
terms of stream flow, temperature, and aquatic life characteristics. In discussions with EPA, some
industry groups proposed that EPA develop a database of pre-approved BTAs. Then, the facility
owner and state would then be responsible for justifying why pre-approved BTA would be
infeasible at a particular site and for ranking alternative technology, based on cost-benefit analysis
and effectiveness of control. Some states, too, said that a more flexible rule would allow states to
prioritize implementation of the new rules. A group of state water officials expressed concern that
the proposed numeric limits are not uniformly achievable, and they recommended that the rule
allow permitting authorities to set impingement mortality rates on a site-specific basis.
Environmental advocacy groups, on the other hand, endorsed the uniform approach in this part of
EPA’s proposal.
Based on public comments and additional data, in June 2012, the agency announced in a Notice
of Data Availability (NODA) that it is considering certain changes to the impingement
standards.34 Since publication of the proposed rule, EPA reviewed data from 80 studies
documenting fish impingement, and in the NODA the agency indicated that it is considering
several alternatives to the uniform requirements originally proposed. The possible revisions
would tailor the rule’s requirements to site-specific circumstances, while providing regulated
entities with greater flexibility in complying with the rule, according to EPA. For example, the
agency is considering adopting an approach that would allow establishing impingement controls
on a site-specific basis, either generally or limited to circumstances in which a facility
demonstrates that the national controls are not feasible. Further, EPA is considering changes to the
33 CWIS Proposal, p. 22,248.
34 EPA’s Acting Assistant Administrator for Water signed the Notice of Data Availability on May 31. It was published
in the Federal Register on June 11; see U.S. Environmental Protection Agency, “National Pollutant Discharge
Elimination System—Proposed Regulations to Establish Requirements for Cooling Water Intake Structures at Existing
Facilities; Notice of Data Availability Related to Impingement Mortality Control Requirements,” 77 Federal Register
34315-34326, June 11, 2012.
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intake velocity compliance alternative, such as how to measure or calculate volumetric flow. The
agency received data showing that some facilities have very low impingement rates, and it is also
considering permitting authorities to make a site-specific determination that the facility is already
employing BTA. EPA accepted public comment on the NODA until July 11, 2012.
Entrainment
According to EPA, BTA impingement control alone would reduce CWIS-related mortality at
existing facilities by up to 31%. The agency’s analysis determined that some existing facilities
may be able to do more to reduce mortality by also controlling entrainment. As described
previously, wet cooling towers reduce both impingement mortality and entrainment mortality.
However, in developing the 2011 proposed rule, EPA could not identify cooling towers or any
other single technology as BTA for entrainment mortality control at all existing facilities
nationwide.
As shown in Table 1, EPA evaluated four options ranging from case-by-case determinations by
permitting authorities for all covered facilities (Option 1, the agency’s preference) to closed-cycle
cooling for all covered facilities (Option 3). Options 2 and 4 combine closed-cycle cooling for
some facilities, based on a threshold of water-intake flow, and case-by-case permitting for
facilities below the threshold. Options 1, 2, and 4 would require permitting authorities to conduct
a resource-intensive site-specific analysis of candidate BTA technologies for entrainment control
for some or all covered facilities. This would involve analysis of the localized benefits of
entrainment reductions along with the costs of controls. The agency acknowledges that the
outcome of the analysis may be a determination that no other technologies beyond impingement
controls are feasible and/or justified by their costs.
EPA concluded that closed-cycle cooling reduces impingement and entrainment mortality to a
greater extent than other technologies. However, the agency determined that closed-cycle cooling
is not the “best technology available” for the regulatory proposal, and it rejected closed-cycle
cooling as the uniform basis for national entrainment controls at existing facilities. This
conclusion is based on four factors discussed in the CWIS proposal.35
• There may be adverse consequences to the reliability of energy delivery on the
local level from installing cooling towers. Retrofitting existing once-through
cooling systems reduces output from the powerplant due to additional equipment
(pumps and fans) that must be run to operate the cooling system. This is referred
to as energy penalty. Retrofitting also is likely to involve extended downtime.
During such periods, some geographic regions could experience electricity
reliability problems, because existing transmission systems would not be able to
transfer sufficient electricity to ensure reliability. Further, if required to retrofit,
some operators will elect to close, or retire, existing facilities. The loss of
efficiency and generating capacity means that less electricity is available to meet
demand.
• Fossil-fueled facilities would need to burn additional fuel to compensate for the
energy required to operate cooling towers, thus emitting additional pollutants,
including nitrogen oxides, sulfur dioxide, mercury and especially additional
35 CWIS Proposal, pp. 22,208-22,210.
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particulate matter formation associated with plume drifts. It may be difficult to
obtain air permits for cooling towers at existing facilities located in
nonattainment areas because of the need to identify emission offsets.
• Land availability concerns might limit the feasibility of installing cooling towers
on a site-specific basis. This may affect 25% of facilities covered by the proposal,
according to EPA.
• Under some circumstances, remaining useful life of a particular facility may not
justify the cost of installing closed-cycle cooling.
Considering all four factors together, EPA concluded that closed-cycle cooling is not practically
feasible in a number of circumstances, thus it is not possible to uniformly require that technology
at existing facilities nationwide. However, the case-by-case evaluations contemplated under the
preferred regulatory option would result in site-specific determinations of BTA that could justify
closed-cycle cooling or other technologies, or it could result in requiring no additional controls
for entrainment mortality.
Industry groups and some states endorsed the flexibility provided in this part of the proposal of
not establishing a blanket requirement that closed-cycle cooling be installed at all existing
facilities, while environmental advocacy groups and some states were equally critical of it.
Environmental groups said that the case-by-case approach would ensure continuation of the
current inadequate permitting process, because most state permitting agencies lack sufficient
financial and technical resources to address cooling water impacts in the absence of national
categorical requirements. Similarly, several individual states, such as Kansas and Minnesota, said
that EPA’s approach would require state permitting authorities to undertake a level of effort and
site-specific analysis with every permit action to justify why a specific technology is chosen for a
given facility that would result in excessive resource and cost implications. EPA’s June 2012
NODA did not address the proposed entrainment standards or indicate if the final rule will modify
the proposal.
New Units at Existing Facilities
The proposal also includes provisions that would apply to newly installed units built at existing
facilities. These requirements are the same under all four regulatory options in the proposal—that
is, impingement mortality requirements the same as those for existing facilities, and entrainment
mortality reductions by installation of closed-cycle cooling systems, which EPA determined is the
best performing technology. The latter is essentially the same requirement that applies to new
facilities under the Phase I CWIS rules, defined as those that commence construction after
January 17, 2002. EPA’s rationale is similar, explaining that it is generally more feasible and cost-
effective to install closed-cycle systems at brand new facilities (Phase I) and newly built units that
increase operational capacity at an existing facility, than it is to retrofit the same technology at
existing facilities. In contrast to retrofits, new units can have their CWIS optimized for cooling
towers, reducing the size of the cooling towers, increasing their efficiency, and reducing energy
requirements.36 As with the current Phase I rules, a facility could demonstrate compliance with
this portion of the rule by establishing reductions in entrainment mortality for the new unit that
are 90% of the reductions that would be achieved by closed-cycle cooling.
36 Ibid., p. 22,196.
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Compliance Schedule
Compliance with the rule, when promulgated, will be required as soon as possible. For individual
facilities, specific compliance deadlines will be set when the facility next seeks renewal of its
existing CWA discharge permit; such permits are issued for five-year periods and then must be
reissued by the permitting authority (state or EPA). Permitting agencies often allow facilities
some time period to come into compliance with new requirements.
As proposed by EPA, for facilities already in compliance with the rule or needing to install
technologies other than cooling towers, the compliance period is assumed to be a five-year period
from 2013 to 2017. EPA expects that facilities required to install cooling towers for entrainment
mortality control will do so over a longer period of time. Fossil-fuel electric power generating
facilities would achieve compliance from 2018 to 2022, and nuclear power generating and
manufacturing facilities would achieve compliance from 2023 to 2027.37 Thus, 2028 will be the
first year in which all covered existing facilities would be expected to have achieved compliance.
A new unit installed at an existing facility would be required to comply when it begins operation.
Phase I Restoration Measures
The CWIS Phase I rules for new facilities included a provision that would have allowed facilities
to use “restoration measures” or other mitigation such as restocking with fish bred in a hatchery,
reclamation (for example, improving the habitat surrounding the intake structure), and migration
barrier removal, as part of demonstrating that alternative technologies are comparable to closed-
cycle cooling systems. A federal court invalidated this provision of the Phase I rules in 2004,38 but
EPA had never removed the provision from the regulations. EPA now proposes to remove the
restoration provisions from the Phase I rule. Phase I facilities still could demonstrate alternatives
to cooling towers, but the change may reduce the alternatives available to some facilities.39
Costs and Benefits
Compliance Costs
Not surprisingly, much of the interest by stakeholders in EPA’s CWIS proposal was on costs of
meeting new regulatory requirements, especially under a scenario in which EPA were to mandate
cooling towers for all existing facilities (Option 3). Several reports and analyses preceding the
proposed rule examined potential impacts of mandating cooling towers (as well as other
environmental rules, in some cases) on powerplants and the adequacy/reliability of electricity
supply that would result from such requirements.
Two Department of Energy (DOE) reports examined potential impacts of an across-the-board
requirement that existing powerplants retrofit with closed-cycle cooling systems and concluded
37 EPA believes that permitting authorities would need to coordinate outages by multiple power generating facilities in
a geographic area so as to minimize impacts on reliability of power generation. In these circumstances, EPA expects a
facility could reasonably require as long as eight years to attain compliance. Ibid., p. 22,248.
38 Riverkeeper, Inc. v. EPA, 358 F.3d 174 (2d Cir. 2004). See the Appendix for details.
39 CWIS Proposal, p. 22,183.
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that the potential energy penalty of such a mandate could result in adverse effects on energy
supplies. In a 2002 report, DOE said that, depending on the type of cooling tower installed (wet
or dry) and weather conditions (peak summer demand or not), energy penalties ranging from
0.8% to 8.8% could occur. In a hypothetical worst-case scenario of retrofitting 100% of
powerplants with cooling towers, a number of additional powerplants would have to be
constructed to account for the energy penalty: 19 additional 400-megawatt plants if all retrofits
were to wet cooling towers, or 66 new 400-megawatt plants if some portion were dry cooling
towers.40 In a related 2008 report, DOE concluded that a mandatory cooling tower rule for
existing powerplants could result in a loss of generation capacity that could jeopardize adequate
reserve capacity margins of electricity available to meet peak demand growth. This loss of
generating capacity would be due to a combination of reduced operational efficiency41 and early
retirement of facilities that cannot or choose not to retrofit. Potentially vulnerable regions would
include California, New York, New England, and the Mid-Atlantic states, according to DOE. The
report estimated that 90% of facilities likely to retire are older oil- and natural gas-fired steam
plants, which are not as likely to be used for baseload purposes as coal-fired plants.42
Other recent reports also have focused on potential electricity reliability problems that could
occur if EPA were to mandate closed-cycle cooling everywhere.43 It is important to recognize that
potential impacts and scenarios described in these reports, including need for additional
powerplant capacity, depend on a number of assumptions such as tight compliance deadlines,
many of which differ greatly from EPA’s proposal. Thus, while they indicate the types of issues
(e.g., reliability) raised in anticipation of the current proposal—and which EPA has attempted to
address in the proposal—they are not accurate predictors of impacts of the actual proposed rule.
Moreover, as described in this report, EPA did not propose uniform closed-cycle cooling, which
the agency acknowledged would be the most costly technology. Based on potential energy
penalty and other factors, EPA recommended site-specific determination of the need for
entrainment mortality controls (Option 1), which might require cooling towers, or it might not.
Table 2 summarizes EPA’s estimated annual costs of compliance under the four regulatory
options considered in the CWIS proposal. For manufacturers and power producers, these costs
include one-time technology costs of complying with the rule, one-time costs of installation
downtime, annual operation and maintenance costs, recurring costs for permit renewal, and the
value of electricity requirements for operating compliance technology.
For federal and state regulators, administrative costs for rule implementation include start-up
activities, permit issuance and reissuance, analysis of entrainment studies, and annual monitoring.
40 U.S. Department of Energy, Office of Fossil Energy, National Energy Technology Laboratory, Argonne National
Laboratory, Energy Penalty Analysis of Possible Cooling Water Intake Structure Requirements on Existing Coal-Fired
Power Plants, October 2002, pp. 2-3.
41 As described above, retrofitting an existing once-through system reduces output from the power plant due to
additional equipment (pumps and fans) that must be run to operate the cooling system.
42 U.S. Department of Energy, Office of Electricity Delivery and Energy Reliability, Electricity Reliability Impacts of a
Mandatory Cooling Tower Rule for Existing Steam Generation Units, October 2008. Baseload plants generally are
operated continuously, in contrast to peaking plants that operate during periods of high electricity demand.
43 See North American Electric Reliability Corporation, 2010 Special Reliability Scenario Assessment: Resource
Adequacy Impacts of Potential U.S. Environmental Regulations, October 2010, http://www.nerc.com/files/
EPA_Scenario_Final_v2.pdf; and Metin Celebi, Frank Graves, and Gunjan Bathla, et al., Potential Coal Plant
Retirements Under Emerging Environmental Regulations, The Brattle Group, December 8, 2010,
http://www.brattle.com/_documents/uploadlibrary/upload898.pdf.
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Implementation of EPA’s proposed rule will depend significantly on the capacity of state
regulatory agencies, many of which already are coping with constrained resources and budgets.
EPA estimated that administrative costs for regulators would be the greatest under Options 1 and
4, because of higher costs to review monitoring reports and studies to determine if entrainment
mortality controls are needed. In contrast, Options 2 and 3 assume closed-cycle cooling is
required for some or all facilities. Thus, the need for regulators to review facilities’ reports and
studies and to make case-by-case determinations is much less under these options.44 The
incremental administrative burden on state regulators also depends on the extent of the state’s
current practices for regulating CWIS. States that currently require limited analysis, monitoring,
and reporting of CWIS impacts may require more permitting resources to implement EPA’s rule,
while states that currently require very detailed analysis may require fewer additional resources.45
Table 2. Annualized Social Cost of CWIS Regulatory Options
(millions of 2009 dollars)
Option 1
Option 2
Option 3
Option 4
Direct Compliance Cost for Manufacturers
$61.31
$141.69
$172.92
$33.99
Direct Compliance Cost for Electric
$318.77 $4,319.59
$4,457.79 $289.77
Generators
Total Direct Compliance Cost
$380.08
$4,461.28
$4,630.71
$323.77
State and Federal Administrative Cost
$3.71
$1.62
$0.92
$2.79
Total Social Cost
$383.80
$4,462.90
$4,631.62
$326.55
Source: CWIS Proposal, p. 22,218, Exhibit VII-3.
Notes: Costs are annualized over 50 years and discounted at a 3% rate. See the CWIS proposal for cost
estimates using a 7% discount rate.
EPA first considered how many electric generation and manufacturing facilities subject to the
proposed rule already have cooling towers installed and meet the water intake velocity
requirement, and thus will not have any further technology requirements to meet. The agency
determined that 27 manufacturing facilities and 39 power producers already have the cooling
tower and IM technology required under Option 3 (out of 592 and 559 that are covered by the
rule, respectively); thus, they are not expected to need to upgrade or incur compliance technology
costs. Further, EPA estimates that 130 manufacturing plants and 92 electric generators already
meet the IM technology requirements of Option 1. All of these facilities would still incur
administrative costs required to demonstrate compliance with the proposed rule.46
Next, EPA evaluated costs for facilities that are not already in compliance with the proposed rule.
For electric power producers, the agency analyzed potential closures/retirements, which it
concluded would not be significant under Option 1 (the most flexible option), but would be more
significant under Option 3 (the most stringent option). EPA estimated that Option 1 would result
in full or partial closure of nine powerplant units by 2028, representing 1 gigawatt of power, or
less than 0.2% of baseline electricity generation capacity by facilities covered by the rule, while
Option 3 would result in 74 unit closures/retirements, or 17 gigawatts of power, or 3.6% of
44 Conversely, direct compliance costs for manufacturers and power producers are much higher under Options 2 and 3.
45 Economic Analysis, p. 3-28. See Footnote 8 regarding state permitting authorities.
46 Economic Analysis, pp. 3-2 – 3-3, p. 12-1.
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baseline electricity generation capacity in 2028.47 The estimated nine closures under Option 1 are
net closures. That is, overall 39 units would close, and 30 would avoid closure, because they are
expected to become more attractive sources of electricity due to changes in the economics of
electricity production across the full market. Similarly, under Option 3, 162 generating units are
expected to close, and 88 units to avoid closure, for a net closure of 74 generating units. Under
either Option 1 or Option 3, additional electricity generation supply that is anticipated to be built
during the compliance period of the rule is expected to fully offset reductions from early
retirements or closures.48
EPA also analyzed the electricity price impacts if utilities pass through all CWIS compliance
costs to consumers. Looking across three consumer groups (industrial, commercial, and
residential), under any of the regulatory options, industrial consumers are expected to experience
the highest price increases, and residential consumers are expected to experience the lowest price
increases.49 On average, for a typical U.S. household, Option 1 results in the lowest average
annual electricity increase per household, $1.41, while electricity price increases would be
highest under Option 3, $17.60 on average. Regionally, under Option 1, average annual electricity
cost increases would be lowest in the West ($0.05) and highest in the region that includes
Nebraska, Kansas, Oklahoma and portions of adjacent states ($3.93). In contrast, under Option 3,
average annual electricity cost increases would be lowest in the far West ($0.11) and highest in
Texas ($26.52) and the Southeast ($27.88).50
For manufacturers, EPA evaluated how compliance costs would likely affect the financial health
of facilities, including the potential for closures or financial stress short of closure. First, EPA
analyzed baseline closures by manufacturers, that is, facilities in sufficiently weak financial
condition before outlays for the regulation that they are likely to close independent of the rule.
The agency concluded that 76 manufacturing facilities likely to be subject to the rule are baseline
closures. The highest percentage of baseline closures are in the steel industry sector (32%).51 EPA
then evaluated impacts on remaining manufacturing facilities subject to the rule and concluded
that none would close or incur employment losses as a result of any of the regulatory options,
even the most stringent. Under Option 3, 17 facilities would be expected to incur moderate
financial performance impacts, but not at a sufficient level to close (three chemical, three pulp
and paper, and one petroleum facility). EPA also examined impacts of compliance costs in terms
of manufacturers’ revenue and concluded that the number and percentage of firms likely to incur
costs greater than 3% of revenue under any of the options is small—only a single petroleum
manufacturing facility—while 99% will incur costs of less than 1% of revenue.52
47 CWIS Proposal pp. 22,232-22,234, Exhibit VII-13. EPA excluded from analysis 15 electricity plants expected to
retire before the rule’s scheduled promulgation in 2012 and an additional 39 facilities projected to close independent of
the rule. EPA also excluded 19 powerplants in California that use coastal and estuarine waters for cooling and already
are required by the state to comply with standards at least as stringent as the proposed EPA rule, thus are not expected
to incur any additional costs for installation of compliance technology. Economic Analysis, p. 3-3.
48 Economic Analysis, pp. 6-18 – 6-24.
49 Ibid., p. 5-17.
50 CWIS Proposal, pp. 22,227-22,228, Exhibit VII-10.
51 Ibid., p. 22,220, Exhibit VII-4.
52 Ibid., p. 22,222, Exhibit VII-6; Economic Analysis, p. 4-11.
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In comments on the proposed rule, several industry groups said that EPA had greatly
underestimated compliance costs, as well as costs of the rule’s monitoring requirements, such as
routine monitoring to confirm that a facility is complying with numeric standards.
Uncertainties of Compliance Cost Estimates
There are a number of uncertainties about EPA’s compliance cost estimates. First, it is important
to recognize what is omitted from the agency’s analysis. In particular, EPA makes no attempt to
estimate manufacturers’ and electricity generators’ compliance costs associated with site-specific,
case-by-case determinations under Options 1, 2, and 4. EPA believes that costs of these site-
specific determinations are highly speculative, because permitting authorities will consider
waterbody-specific data, local impacts, public comments, costs and benefits, land availability,
grid reliability, and other factors. If those determinations result in few requirements for existing
facilities to install closed-cycle cooling, then actual compliance costs are likely to be close to
EPA’s estimates. However, if regulators make site-specific determinations that widely require
retrofitting with cooling towers, compliance costs will be higher than costs shown in Table 2—
perhaps much higher, depending on which option is promulgated.
Second, compliance costs for new generating units at existing facilities are not included in total
compliance cost estimates because benefits associated with reduced I&E mortality at those
facilities have not been estimated.53
Third, EPA recognizes a number of data limitations and other uncertainties. For example, for both
electric generators and manufacturing facilities, EPA relied heavily on industry and facility data
collected during previous phases of the CWIS rulemaking, and some of it may no longer reflect
current circumstances of facilities, business conditions, or cooling water usage. Downtime
schedules and cost estimates are uncertain. There may be economic and operating differences
between analyzed facilities (based on sampling) and all affected facilities. Further, impacts of
electricity cost increases to various consumer classes could be different based on the utility’s
applicable rate structures (for example, a structure that includes lifeline rates could moderate the
impact of increased rates on lower income households).54
Estimated Benefits
None of the recent reports by DOE and other organizations described above addresses benefits of
requiring CWIS controls, but EPA’s proposal does. Environmental benefits would occur because
of reductions in impingement and entrainment. EPA’s analysis considered three categories of
benefits: use benefits such as increased harvests of recreational and commercial fisheries, nonuse
benefits such as improved ecosystem function, and reduced harm to threatened and endangered
species. For each of the three categories of benefits, EPA concluded that the greatest percentage
of benefits (compared with a baseline of eliminating all I&E mortality losses entirely) would
result from Option 3, followed closely by Option 2, and then by Options 1 and 4 (see Table 3). As
discussed below, the agency recognizes large uncertainties in its analysis. EPA estimated the
economic benefits from the regulatory options using a range of valuation methods, depending on
53 Economic Analysis, p. 11-10.
54 Economic Analysis, pp. 3-25–3-26, 5-5, 5-14–5-15.
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the benefit category, data availability, and other factors, and derived national benefit estimates
from a series of U.S. regional studies.
By reducing I&E mortality rates, any of the options is likely to increase the number of fish,
shellfish, and other aquatic organisms in affected bodies of water. In turn, this increased number
of aquatic organisms directly improves the welfare of individuals who use the affected aquatic
resources; this is referred to as “use benefit,” such as increases to the value of recreational and
commercial fisheries. EPA relied on a number of studies to estimate a “baseline” of aquatic
organisms that are lost due to impingement and entrainment, in the absence of additional
regulation, and then estimated reductions in losses likely to occur under various regulatory
options. EPA’s analysis of fish mortality found that Option 3 (uniform closed-cycle cooling)
would result in the greatest reduction in I&E mortality (92% of fish deaths of age-one equivalent
organisms would be avoided55), followed by Option 2 (91% of fish deaths avoided), Option 1
(28% of fish deaths avoided), and Option 4 (27.5% of fish deaths avoided).56
EPA estimated the economic benefits of its regulatory options on commercial and recreational
fisheries. Total annualized recreational fishing benefits for the United States range from $15.3
million to $44.9 million, and total annualized commercial fishing benefits range from $1.0
million to $4.5 million, for total fishing benefits ranging from $16.3 million to $49.5 million (see
Table 3).
Reducing I&E mortality also improves the welfare of individuals independent of any specific use
of the affected resources; this is referred to as “nonuse benefits” such as improved ecosystem
function and resource bequest values.57 Individuals may not use these resources directly, but they
may value change in their status or quality. Monetizing nonuse benefits involves analytic methods
which ask people to state their willingness to pay for particular ecological improvements, such as
abundance of migratory fish species, and then attempts to calculate total values. For the current
proposal, EPA estimated the nonuse benefits of increased abundance of winter flounder in the
North Atlantic and Mid-Atlantic regions (see Table 3).
Finally, EPA estimated the benefits from improved protection of threatened and endangered
(T&E) species, since I&E mortality may either lengthen population recovery time, or hasten the
demise of the species. Threatened and endangered species are characterized by low population
levels to begin with, and based on available data, EPA was unable to quantify effects on T&E
populations from 316(b) regulation. However, EPA developed a qualitative database that assessed
the geographic distribution of habitat of aquatic T&E species in relation to CWIS structures. The
agency found 89 federally listed T&E species that overlap with at least one CWIS, including
freshwater mussels, sea turtles, and marine and anadromous fish, and concluded that the primary
value of T&E species is in the nonuse category. Nevertheless, because of data limitations, EPA
was unable to quantify nonuse benefits of T&E species, so the estimates shown in Table 3 are
55 Age-one equivalent losses is an analytic method of standardizing the number of individuals of different ages to
equivalent one-year-old fish.
56 CWIS Proposal p. 22,239, Exhibit VIII-2.
57 Nonuse benefits, or values, are values that individuals place on goods or services that are not consumed directly, but
because the amenity or resource simply exists. For discussion, see CRS Report RL30242, Natural Resources: Assessing
Nonmarket Values through Contingent Valuation, by Joseph T. Breedlove and Ross W. Gorte.
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actually based on nonuse valuation techniques applied to two species of recreational fish in one
U.S. region.58
Uncertainties of Benefits Estimates
EPA’s estimated benefits for the 2011 proposal were partial estimates only, as the agency was not
able to monetize all benefits, especially non-use values (e.g., values that people may hold for an
environmental improvement that are not tied to any use of the resource such as recreation). EPA
acknowledged that quantifying and monetizing the benefits of reductions in I&E mortality losses
is challenging because of a large number of uncertainties in approaches used to value benefits.
Examples of uncertainty and limitations include not all ecological goods and services impacted
by CWIS are modeled or monetized, or data is not always available at a national scale;
simplifying assumptions used in order to make national-scale estimates may over- or
underestimate losses and benefits; and species-specific quantitative estimates may not be precise.
Further, there is little information and high uncertainty about the magnitude and importance of
indirect and/or cumulative impacts of CWIS, particularly effects on lower trophic organisms or
ecosystem functions, in part because the permitting process does not consider the additive or
cumulative effects of other major manmade stressors such as habitat loss on aquatic organisms.59
The combined effect of these uncertainties is of unknown magnitude or direction—that is,
the estimates may over- or understate the anticipated national-level benefits. While EPA has
no data to indicate that the results for each benefit category are atypical or unreasonable,
EPA believes that some potentially significant benefit categories have not been fully
monetized, and thus the national monetized benefits presented below likely underestimate
total benefits, challenging the Agency’s ability to base BTA decision making on the
relationship of quantified costs and benefits alone.60
At the time of proposal, EPA used the best available scientific and economic methodologies but
could only partially monetize benefits. Nonuse benefits are sometimes measured by asking
consumers about their willingness to pay for a particular good or service. The agency hoped to
improve its benefits estimates by incorporating the results of a new national willingness to pay
survey, which could be used to inform the final CWIS rule. Thus, EPA undertook a survey of U.S.
households seeking to determine how much most ratepayers would be willing to pay to reduce
fish losses and mitigate other aquatic concerns resulting from the use of CWIS, as a way to
measure the benefits of the regulation. However, EPA’s announcement of this survey in January
201161 was criticized by industry groups who said that the survey design would make
inappropriate conclusions about the loss of life in fish populations due to CWIS, and thus would
likely overstate the benefits of strict regulation.62
58 CWIS proposal, p. 22,245 Exhibit VIII-9.
59 Environmental Benefits Analysis, p. 2-22.
60 CWIS Proposal, p. 22,247.
61 U.S. Environmental Protection Agency, “Agency Information Collection Activities; Submission to OMB for Review
and Approval; Willingness to Pay Survey for §316(b) Existing Facilities Cooling Water Intake Structures (New),” 76
Federal Register 3883-3884, January 21, 2011.
62 American Chemistry Council, American Forest & Paper Association, American Petroleum Institute, Utility Water
Act Group, “Comments on ICR for Willingness to Pay Survey for §316(b) Existing Facilities Cooling Water Intake
Structures,” February 22, 2011.
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Table 3. Annual National Social Benefits from Eliminating or Reducing I&E Mortality
(monetized benefit categories)
Recreational
Recreational
and
and
Commercial
Commercial
Fishing
Nonuse
T&E Species
Fishing
Benefits
Nonuse
Benefits
T&E Species
Benefits
Total Benefits
Regulatory
Benefits
(percentage
Benefits
(percentage
Benefits
(percentage
Total Benefits
(percentage
Option
(million 2009 $)
of baseline)
(million 2009 $)
of baseline)
(million 2009 $)
of baseline)
(million 2009 $)
of baseline)
Baseline $84.94 100.0%
$128.64 100.0% $1.14 100.0%
$214.72 100.0%
Option
1
$16.61 19.6%
$0.52 0.4%
$0.50 43.9%
$17.63 8.2%
Option
2 $47.99 56.5%
$72.09 56.0%
$0.72 63.2%
$120.79 56.3%
Option
3 $49.46 58.2%
$75.48 58.7%
$0.72 63.2%
$125.65 58.5%
Option
4
$16.33 19.2%
$0.52 0.4%
$0.49 43.0%
$17.33 8.1%
Source: Calculations by CRS, from CWIS Proposal, Exhibits VIII-4, VIII-5. p. 22,242, Exhibit VIII-10, p. 22,247.
Notes: Baseline represents the annual economic benefit of eliminating I&E mortality losses entirely. Benefits estimates are annualized over 50 years and discounted at a 3%
rate. See the CWIS proposal for benefits estimates using a 7% discount rate.
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In June 2012 EPA published a notice reporting preliminary data from the stated preference survey,
which consisted of four regional and one nationwide surveys.63 At the time of this notice, EPA
had completed analysis of the data from one region only (the Northeast). Until all analyses and
external peer review are complete, EPA has not decided whether to use results of the stated
preference survey in the benefits analysis for the final rule. The purpose of the notice was to
solicit public comment on the information gathered so far and on what role, if any, it should play
in EPA’s assessment of the benefits of regulatory options for the final rule. The agency took
public comment until July 12, 2012.
Congressional Interest and Concluding Thoughts
Congressional interest in EPA’s CWIS proposal has been evident in the context of potential
impacts, individually and cumulatively, of EPA regulatory proposals involving air quality, climate
change, water quality, and other issues on electric generating facilities and other sectors of the
economy. Several recent legislative proposals have sought to restrict or prohibit EPA’s regulatory
authority in a number of areas. For example, legislation in the 112th Congress called for study of
the cumulative impacts of EPA regulations—including the CWIS proposed rule—on the
economy, especially on electric utilities.64 Some suggest that upcoming EPA rules should be more
attentive to costs, for consistency with President Obama’s Executive Order 13563, which
provides for a retrospective review of existing significant regulations by agencies “to quantify
anticipated present and future benefits and costs as accurately as possible.”65
In December 2010, Congressman Upton, chairman of the House Energy and Commerce
Committee in the 112th Congress, wrote to EPA Administrator Lisa Jackson about the possible
direction of EPA’s CWIS proposal, since potential retrofit costs, if EPA were to mandate cooling
towers everywhere, could be substantial, he said. He asked the Administrator to take all necessary
time to “produce a well-reasoned, well-supported proposal” and to allow generous time for the
public to comment on the proposal. 66 In response, the Administrator said that the proposal, when
released, would be intended to reasonably accommodate site-specific circumstances while
minimizing adverse environmental impacts, and would not be a “one-size-fits-all federal
mandate.” She wrote to the Congressman, “I do not want EPA to spend another five years
litigating over cooling water intake structures.”67
63 U.S. Environmental Protection Agency, “National Pollutant Discharge Elimination System—Proposed Regulations
to Establish Requirements for Cooling Water Intake Structures at Existing Facilities; Notice of Data Availability
Related to EPA’s Stated Preference Survey,” 77 Federal Register 34927-34931, June 12, 2012. Additional documents
related to the stated preference survey can be found at http://water.epa.gov/lawsregs/lawsguidance/cwa/316b/
index.cfm.
64 For example, S. 1871, the Comprehensive Assessment of Regulations on the Economy Act, would establish an
interagency committee to assess the economic impact of a number of environmental rules, including the CWIS
proposal. For discussion of several recent and pending EPA regulatory proposals that have drawn attention, see CRS
Report R41561, EPA Regulations: Too Much, Too Little, or On Track?, by James E. McCarthy and Claudia Copeland.
65 Executive Order 13563, “Improving Regulation and Regulatory Review,” 76 Federal Register 3821, January 21,
2011.
66 Honorable Fred Upton, letter to Lisa P. Jackson, Administrator of EPA, December 3, 2010, http://upton.house.gov/
UploadedFiles/Upton_letter_to_Admin_Jackson_re_Cooling_Water_Intake_Structures.pdf.
67 EPA Administrator Lisa P. Jackson, letter to Honorable Fred Upton, December 16, 2010, http://www.epa.gov/ocir/
pdf/2010_1216_adm_jackson_upton.pdf.
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Viewed exclusively on a strict cost/benefit basis, none of the options in EPA’s CWIS proposal
would be justified. Table 1 shows that under all of the options, estimated costs greatly exceed
estimated economic benefits, even when allowing for conservative estimation of benefits and
additional benefits that might be identified from EPA’s willingness to pay survey.
Still, the CWA does not require that the benefits of regulation exceed or even equal the costs.
Moreover, the Supreme Court, in its ruling on the use of cost/benefit analysis in the development
of 316(b) regulations, said that EPA has the discretion to consider costs, but is not required to do
so.68 In its 2011 proposal, the agency clearly has done so, preferring a more flexible, less costly
regulatory option than a more costly one that would provide greater reduction in I&E mortality
(and greater economic benefits of reducing I&E mortality). Even so, critics argued that the costs
of the rule were underestimated and are wholly disproportionate to its benefits.
The period for public comment on EPA’s proposal has ended. As described in this report,
stakeholder groups differed in their evaluation of the rule. Environmental advocates support the
uniform requirements of the impingement standards, but criticized EPA for not requiring
uniformity in the entrainment portion of the rule in order to protect aquatic resources and provide
for timely permitting. Industry groups focused their critiques on the impingement standards and
urged EPA to revise the rule to provide greater flexibility that would be more cost-effective.
States were somewhat divided in their responses, with many favoring more flexibility in the rule
to lessen the administrative burden on permitting authorities, but some advocating a more
prescriptive approach regarding entrainment, rather than one providing for site-specific
determinations, as proposed.
EPA’s consideration of the proposed rule continues. Also as described above, in June 2012, EPA
issued a notice indicating a number of alternatives under consideration for revising the
impingement portion of the rule. These alternatives reflect some recommendations of industry
and utility groups. On July 24, 2012, EPA announced that it would delay issuance of a final rule
beyond the previous court-ordered schedule—to June 27, 2013. The postponement would give the
agency additional time to evaluate possible changes to the impingement or other parts of the
proposal and to complete analysis of its stated preference survey and determine its utility for the
benefits analysis of the final rule.
However, that 11-month extension proved insufficient. On June 27, EPA and environmental
litigants agreed to extend the deadline for a final rule until November 4, 2013. The additional
time allowed under the revised settlement agreement will provide time for EPA to consult with
federal wildlife agencies, pursuant to the Endangered Species Act (ESA), to evaluate potential
effects on listed species or designated critical habitat that may be affected by the rule. EPA also
announced, as part of the agreement, that it has asked its Science Advisory Board to evaluate the
stated preference survey and results of the survey.
68 Entergy Corp. v. Riverkeeper, Inc., 556 U.S. 1498 (2009). See the Appendix for details.
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Appendix. History of Regulating Cooling Water
Intake Structures
Efforts to regulate cooling water intake structures have a lengthy regulatory and judicial history,
spanning several decades, since Congress enacted CWA Section 316(b) in 1972.
EPA first promulgated a rule to implement the provision in 1976. That regulation was challenged
by utility companies, and in 1977 a federal court determined that the agency had failed to adhere
to the procedural requirements of the Administrative Procedure Act, thus invalidating the rule
without reaching the merits of the regulations themselves.69 EPA withdrew the remanded portions
of the rule, but left intact those unremanded portions that required each permitting authority to
use its best professional judgment to determine the best technology available for regulating
cooling water intake structures. The agency published draft guidance for use in implementing
316(b)’s requirements through case-by-case, site-specific permit decisions. This draft guidance
did not establish national standards based on the best technology available for minimizing
adverse environmental impact of cooling water intake structures. Rather, it left decisions on the
appropriate location, design, capacity, and construction of each facility to the appropriate
permitting authority (EPA or a state).
This regulatory regime remained in effect but was challenged in 1993 by a coalition of
individuals and environmental groups that sued EPA for failing to promulgate regulations under
316(b). In 1995, EPA entered into a consent decree which, as subsequently amended, set a
multiphase timetable for regulations, first for new facilities and later for existing facilities.70
Phase I
In the first phase, in December 2001, EPA promulgated rules governing certain new, large cooling
water intake structures.71 These rules, called Phase I, apply to new facilities with water-intake
flow greater than 2 million gallons per day (MGD), at least 25% of which is used for cooling.
New facilities with smaller water-intake systems are regulated by permitting authorities on a site-
by-site basis, not by EPA standards. For the largest new facilities, those with water-intake flow
greater than 10 MGD, the Phase I rules require that their inflow be restricted to a level
commensurate with what can be attained by a closed-cycle cooling water system. In addition, new
facilities with water-intake flow between 2 MGD and 10 MGD may alternatively comply by
reducing the volume and velocity of water removal to certain levels, and all new facilities may
alternatively comply by demonstrating that the technologies employed will reduce adverse
environmental impacts to a level comparable to a closed-cycle cooling system. These rules were
challenged but were largely upheld in 2004.72 However, the court invalidated a provision of the
rules that would have allowed facilities to use “restoration measures” or other mitigation such as
restocking with fish bred in a hatchery, reclamation (for example, improving the habitat
69 Appalachian Power Co. v. Train, 566 F.2d 451 (4th Cir. 1977).
70 Settlement Agreement among the United States Environmental Protection Agency, Plaintiffs in Cronin, et al. v.
Reilly, 93 CIV. 314 (LTS) (SDNY), and Plaintiffs in Riverkeeper, et al. v. EPA, 06 CIV. 12987 (PKC) (SDNY),
October 10, 1995.
71 66 Federal Register 65256, December 18, 2001.
72 Riverkeeper, Inc. v. EPA, 358 F.3d 174 (2nd Cir. 2004). (“Riverkeeper I”)
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surrounding the intake structure), and migration barrier removal, as part of demonstrating that
alternative technologies are comparable to closed-cycle systems. “Restoration measures correct
for the adverse environmental impacts of impingement and entrainment, they do not minimize
those impacts in the first place,” the court said.73
Phase II
Next, in July 2004 EPA promulgated Phase II rules. They applied to existing facilities whose
primary activity is the generation and transmission (or sale for transmission) of electricity, and
whose water-intake flow is more than 50 MGD, at least 25% of which is used for cooling
purposes. Over 500 facilities, accounting for approximately 53% of the nation’s electric-power
generating capacity, were covered by the Phase II rules.74 EPA expressly declined to mandate
adoption of closed-cycle cooling systems or equivalent reductions in impingement and
entrainment, as it had required for new facilities under the Phase I rules. As justification, EPA
cited the generally high costs of converting existing facilities to closed-cycle operations and the
availability of other technologies approaching closed-cycle performance. Instead, the rules
required Phase II facilities to reduce impingement and entrainment by specified ranges (e.g., 80%
to 95%) from baseline, and the rules allowed issuance of site-specific variances from the national
performance standards if a facility could demonstrate either that the costs of compliance would be
significantly greater than costs considered by EPA in setting the standards, or would be
significantly greater than the benefits of complying with the applicable performance standards.
The Phase II rules allowed use of restoration measures to demonstrate compliance with the
standards—even though a similar provision in the Phase I rules had been invalidated by a federal
court.
Multiple parties challenged the Phase II rules. In 2007, the U.S. Second Circuit Court of
Appeals—in an opinion authored by then-Circuit Court Judge Sonia Sotomayor—ruled the cost-
benefit variance provision of the regulations to be unlawful. The court held that, while cost could
be considered to determine benchmark technology or to engage in cost-effectiveness analysis,
Section 316(b) does not permit the use of cost-benefit analysis. The court also found that EPA had
exceeded its authority by permitting existing plants to meet national performance standards by
using restoration measures.75
Utility companies appealed this ruling to the Supreme Court, and the Court agreed to review the
single question of whether Section 316(b) authorizes use of cost-benefit analysis in determining
best technology available for cooling water intake structures. The Court’s ruling, in 2009, held
that it is permissible to apply a cost-benefit analysis in determining the best technology available
to minimize adverse environmental impacts and in providing for cost-benefit variances from
those standards as part of the Phase II rules. The Court held that EPA has the discretion to
consider costs and benefits under 316(b) but is not required to do so.76 In September 2009, the
Second Circuit granted the government’s request to remand the Phase II rules for further review
in light of the Supreme Court’s ruling.
73 Ibid., p. 189.
74 69 Federal Register 41576, July 9, 2004.
75 Riverkeeper, Inc. v. EPA, 475 F.3d 83 (2nd Cir. 2007). (“Riverkeeper II”)
76 Entergy Corp. v. Riverkeeper, Inc., 556 U.S. 1498 (2009).
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Phase III
Concurrent with the judicial consideration of the Phase II rules, in June 2006 EPA promulgated
the final required 316(b) rules.77 The Phase III rules apply to existing powerplants whose water-
intake flow is between 2 MGD and 50 MGD and existing industrial facilities (including paper,
chemical, petroleum, aluminum, and steel manufacturers) whose water-intake flow is greater than
2 MGD. For these existing facilities, EPA determined that uniform national performance
standards would not be the most effective way to address cooling water intake structures, so the
Phase III rules continue to rely on case-by-case decisions by permitting authorities. Phase III also
applies to new offshore oil and gas extraction facilities that had been expressly excluded from
Phase I. The rules specify requirements for new offshore oil and gas extraction facilities with
water-intake flow of more than 2 MGD, at least 25% of which is used for cooling purposes; those
not meeting that threshold also would continue to be authorized via case-by-case permitting.
Challenges to the Phase III rules were filed in several federal courts of appeals and were
consolidated in the Fifth Circuit, but proceedings were stayed during the Supreme Court’s
consideration of the Phase II rules in Entergy v. Riverkeeper. After that decision, the government
and environmental plaintiffs jointly asked the Fifth Circuit Court of Appeals to remand the
existing facilities provisions of the Phase III rules to EPA, for consideration along with the
remanded Phase II rules for existing large facilities, in light of the Entergy decision. The court
approved this request in July 2010.78
Separately, environmental groups also had filed a challenge related to the existing facilities
provisions of the Phase III rules in the same federal court that in 1995 had approved the consent
decree providing for the multiphase promulgation of the 316(b) rules.79 To settle that litigation, in
November 2010 EPA entered into a consent decree that provides a schedule for proposing and
promulgating combined Phase II and Phase III existing facilities regulations. In December 2010,
the court approved a schedule that established a March 14, 2011, deadline for the agency to
propose a revised cooling water intake rule. On March 15, EPA announced that parties to the
litigation had agreed to EPA’s request to delay release of the proposed rule until March 28. The
resulting proposal is discussed in this report. Under the settlement agreement, EPA was required
to promulgate a final rule by July 27, 2012. Because of time needed to assess possible changes to
the proposal, on July 24, EPA announced that it would delay issuing the final rule for 11 months.
However, when that deadline arrived, EPA and environmental litigants agreed to a revised
settlement agreement under which EPA is to issue a final rule by November 4, 2013.80
After 1977 and prior to promulgation of the Phase I rules in 2001, applicable CWIS requirements
for all facilities were developed on a case-by-case bases by permitting authorities, using best
professional judgment. As a result of litigation involving all three phases of rulemaking since
2001 and court-ordered and government-requested remands, only certain facilities are subject to
technology-based standards in EPA CWIS rules that remain in effect—new facilities with water-
77 71 Federal Register 35006, June 16, 2006.
78 At the same time, the Fifth Circuit rejected industry’s challenge to the new facilities provisions of the Phase III rules.
ConocoPhillips Co. v. EPA, No. 06-60662 (5th Cir., July 23, 2010).
79 In that court (U.S. District Court for the Southern District of New York), environmental groups challenged what they
termed EPA’s “inaction” in the Phase III rule for existing facilities, which continues to allow case-by-case permitting.
80 Third Amendment to Settlement Agreement among the United States Environmental Protection Agency, the
Plaintiffs in Cronin, et al. v. Reilly, 93 CIV. 314 (LTS) (SDNY), and the Plaintiffs in Riverkeeper, et al. v. EPA, 06
CIV. 12987 (PKC) (SDNY), June 27, 2013.
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intake flow greater than 2 MGD (Phase I rules) and new offshore oil and gas facilities (Phase III).
Until EPA promulgates revised rules, existing facilities of all sizes continue to be subject to
requirements developed on a case-by-case basis by permitting authorities. Additionally, new
facilities with water-intake flow of less than 2 MGD also are subject to case-by-case permitting,
under provisions of the Phase I rules unchanged since 2001.
Author Contact Information
Claudia Copeland
Specialist in Resources and Environmental Policy
ccopeland@crs.loc.gov, 7-7227
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