Petitioners Brief — Utility Water Water Act Group Group v. Riverkeeper, Inc. (Nos. 07-597, 07-588, 07-589)
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73
Iu the
Supreme Court of the Anited States
ENTERGY CORP.,
PSEG LLC AND PSEG NUCLEAR LLC, AND
UTILITY WATER ACT GROUP,
Petitioners,
Vv.
RIV" RKEEPER, INC., et al.,
Respondents.
ON WRITS OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
——-
BRIEF OF PETITIONER
UTILITY WATER ACT GROUP
KRISTY A. N. BULLEIT
Counsel of Record
HUNTON & WILLIAMS LLP
1900 K STREET, N.W.
WASHINGTON, DC 20006-1109
(202) 955-1547
WILSON-EPES PRINTING CO... INC. — (20?) 785-0096 — WaSHINGTON.D C 20002
Counsel for Petitioner JULY 14, 2008
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QUESTION PRESENTED FOR REVIEW
Whether Section 316(b) of the Clean Water
Act, 33 U.S.C. §1326(b), authorizes’ the
Environmental Protection Agency (“EPA”) to
compare costs with benefits in determining the “best
technology available for minimizing adverse
environmental impact” at cooling water intake
structures.
PARTIES TO THE PROCEEDING
The Utility Water Act Group (““UWAG’”) is a
petitioner in this Court and was a petitioner in the
court of appeals.
PSEG Fossil LLC, PSEG Nuclear LLC, and
Entergy Corporation are petitioners in this Court
and were petitioners in the court of appeals.
Appalachian Power Company and the Illinois Energy
Association, which participated below, are not
parties to this appeal.
The United States Environmental Protection
Agency is a respondent in this Court and was a
respondent in the court of appeals.
The following parties are respondents in this
Court and were petitioners in the court of appeals:
Riverkeeper, Inc., Natural Resources Defense
Council, Waterkeeper Alliance, Soundkeeper, Inc.,
Scenic Hudson, Inc., Save the Bay-People for
Narragansett Bay, Friends of Casco Bay, American
Littoral Society, Delaware Riverkeeper Network,
il
Hackensack Riverkeeper, Inc., New York/New Jersey
Baykeeper, Santa Monica Baykeeper, San Diego
Baykeeper, California Coastkeeper, Columbia
Riverkeeper, Conservation Law Foundation,
Surfrider Foundation, State of Connecticut, State of
Delaware, Commonwealth of Massachusetts, State of
New Jersey, State of New York, and Commonwealth
of Rhode Island.
The industry parties, environmental groups,
and States jointly petitioned to intervene in the other
petitioners’ cases in the court of appeals on August
27, 2004.
Pursuant to Rules 24.1 and 29.6, there is no
change to the disclosure statement previously filed
by the Utility Water Act Group.
Page
QUESTION PRESENTED FOR REVIEW. .............. i
PARTIES TO THE PROCEEDING......................00. i
TABLE OF CITED AUTHORITIES ..........0.00.000..... vi
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ITT ss nninindcodtessss ncnsibiciguanisbinbapnaatshduibiaiaiinetioue 1
STATUTORY AND REGULATORY
PROV BBS EN VOLVED ..0cccccescsveccesesssescesescosessees 1
STATEMENT OF THE CASE ................cccccscssssssseees 2
I. ee connie 5
A. Cooling Water Intake
RN cicdscisciesleenintnasiaesdnneinrinienitanginens 5
B. I ge 11
C. EPA’s Long-Standing Approach
To § 316(b) Implementation ............. 15
II. Sy i I iaiiniistecpntiecttiestuileiansidaies salads 16
A. ES Si hi hn cntcnmiiaseniatiiaaieedieeda 16
B. National Standarde.......................006 22
C. Site-Specific Standards..................... 23
iii
TABLE OF CONTENTS
III. .
SUMMARY OF THE ARGUMENT
iv
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SPUIET, sictiiidnssinitcninniitinatsinnncinsnsinneiitnneninetooniee
I.
II.
EPA’s Interpretation of § 316(b) as
Authorizing Cost-Benefit Analysis Is
BEOREIOE BO TIOTIIOINGO.0....cccccccscsncescccsesecsseses
A. The Second Circuit’s
Interpretation Is Not Dictated
by Statutory Language or
ici tadi cnainnneaiinbinaniipannnianiins
1. The Wording of Section
316(b) Does Not
Foreclose Cost-Benefit
FE itinnctnieeraiitaietannmmniin
2. The Second Circuit's
Reliance on Crushed
Stone Was Misplaced .............
b. The Phase II Rule Embodies the
Same Reasonable Policy Choir:
EPA Has Made for the Past 30
EPA Reasonably Concluded _ that
§ 316(b) Permits Site-Specific Cost-
BemOTit COMMIGOTALION........00cccsccccccrsceccessessees
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31
Vv
A. Other Clean Water Act Sections
Do Not Foreclose Site-Specific
Cost-Benefit Analysis Under
i SPIN svicnsuiesntdecniidieissscnansnnedidaidiaulaald 45
B. The Relationship Between
§ 316(a) and § 316(b) Supports
EPA’s Use of Site-Specific Cost-
Benefit Analysis Under § 316(b) ...... 48
C. The Record Supports EPA’s
Reading of § 316(b) .....................000008 51
1. Impingement and
Entrainment Vary
Widely Based on Site-
Specific Conditions................. 51
2. The Availability,
Effectiveness, and Cost of
Intake Technologies Vary
WEGCEY BBY BIRO 0. ccccccccccscsccsccsces 54
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TABLE OF AUTHORITIES
FEDERAL CASES
Alaska Dep't of Envtl. Conservation v. EPA,
Be BP GE COE)... .ccccccccccccvccscese:
Appalachian Power Co. v. Train,
566 F.2d 451 (4 Cir. 1977)...........
Arkansas v. Oklahoma,
SE EE SP EEEED csacancccccscecsesceccssese
Barnhart v. Walton,
535 U.S. 212 (2O002)...............ccesceees
Bethlehem Steel Corp. v. EPA,
538 F.2d 513 (2d Cir. 1976)...........
Bragdon v. Abbott,
624 U.S. 624 (1908)........................
Chemical Mfrs. Ass’n v. NRDC,
Ge RP. BO CED vncccesccccccsscceeess.
Chevron U.S.A. Inc. v. NRDC,
467 U.S. 837 (1964)......................4
City of Columbus v. Ours Garage &
Wrecker Serv.,
SOS U.S. 424 (BO0B)........000.0.2000025...
Page
ConocoPhillips v. EPA,
(5t Cir., No. 06-60662, filed 7/14/06)............ 17
EPA v. Nat'l Crushed Stone,
Oe ls Te I crciicheshcbceiniinicstinaiisiinlorenie 35, 36, 37
FDA v. Brown & Williamson Tobacco Corp.,
I 3 Nf ed 29
Hudson Riverkeeper Fund v. Orange &
Rockland Utils.,
835 F. Supp. 160 (S.D.N.Y. 1993) ........... 41, 44
Kapral v. United States,
166 F.3d 565 (3d Cir. 1999)..................ccceeeee 50
Nat’ Cable & Telecomms. Ass’n v. Brand X
Internet Servus.,
I sadeiabisnniaatiadien 30
Nat'l Wildlife Fed’n v. EPA,
286 F:3d 554 (D.C. Cir. 2002)........................ 46
NationsBank of N.C. v. Variable Annuity
Life Ins. Co.,
Sr Sy I ios isc cnscincinistiisanaiiidatiacbuciusionin 29
North Haven Bd. of Ed. v. Bell,
Is a 37
PSEG Fossil LLC v. Riverkeeper, Inc.,
ne Ss I I aii sci aciaeiisieenninisinsindingionnbanciiih 1
Pauley v. BethEnergy Mines,
Pe Reis Ce CI iicccnhcsiintccenecscceninaiinebdiiansiseidiin 30
vill
Riverkeeper, Inc. v. EPA,
358 F.3d 174 (2d Cir. 2004)
LOT
Riverkeeper, Inc. v. EPA,
475 F.3d 83 (2d Cir. 2007)
I I aiid sdiicicsimsinindinnepnnaenans
_ Russello v. United States.
ne ene
Seacoast Anti-Pollution League v. Costle,
597 F.2d 306 (1%* Cir. 1979)..............
Skidmore v. Swift & Co.,
323 U.S. 134 (1944)............cecssccseeress
Smiley v. Citibank (S.D.), N.A..,
BF Te Fe iticcccsenceesevevsescsvene
United States Steel Corp. v. Train,
556 F.2d 822 (7* Cir. 1977)..............
United States v. Pozsgai,
999 F.2d 719(3d Cir. 1993)..............
United States v. Ressam,
126.8. Ct. 1858 (2008) ......................
pivimianveition 50
1x
EPA ADMINISTRATIVE DECISIONS
In re Dominion Energy Brayton Point, LLC
(formerly USGen New England, Inc.)
Brayton Point Station, NPDES 03-12,
2006 EPA App. LEXIS 9 (EAB
I
In re Pub. Serv. Co. of N.H. (Seabrook
Station, Units 1 & 2), 1 E.A.D. 332,
10 Env’t Rep. Cas. (BNA) 1257, 1977
EPA App. LEXIS 16, *47 (June 10,
1977), reud on other grounds and
remanded, Seacoast Anti-Pollution
League v. Costle, 572 F.2d 872 (ist
Se ee Se
In re Pub. Serv. Co. of N.H. (Seabrook
Station, Units 1 and 2), 1 E.A.D. 455,
1978 EPA App. LEXIS 17 (1978),
aff'd, Seacoast II, 597 F.2d at 311............
STATE CASE
In the Matter of Riverkeeper, Inc. v.
Johnson,
2008 NY Slip Op. 5608, 2008 N.Y.
App. Div. LEXIS 5503 (N.Y. App.
Div. 3d Dep’t June 19, 2008) ....................
STATE ADMINISTRATIVE DECISIONS
Athens Generating Co., 2000 WL 33341184
(N.Y. Dep't Envtl. Conservation
El RR
x
In the Matter of Dynegy Northeast
Generation, Inc. (Danskammer
Generating Station), 2006 N.Y. ENV
LEXIS 23 (Deputy Commissioner, NY
Dep’t Envtl. Conservation May 24,
al ES ar 41
STATUTES
16 U.B.C. §§ 4701, 4712 (1904) ...............cccccccccereoess. 10
16 U.S.C. 95 4701-61 (4007)..................................... 10
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ania ich biadienbenabaiabinnatl passim
IE ois scnssntsiiniiiinsnonssncaiabiiacsnnranneil 35
Be iiiccicenesaceissitinssiatiienisumeesiannatl 35, 36
II on vssiinsinninescinininesssibenseiisieiiteckcomninnel 47
a cetera nssicahipndnadsndibaiiauanih passim
I hlemaiiee passim
Es Oe I oc necictcsicnccsanndnnenncewndeeanee’ 35
I cidinsiccteindsagnstenitsaiodessoednibeel passim
I as ccasicnncescdaodauooevateveninunnens passim
I... <ssncnerddnncnnonsrantevondaiuuanlial 14
= ——eUgi, © ame eam
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RULES
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REGULATIONS
I Ce BE TI vnc csceescnccscsncccsecsssconsesssses 16
a siitanrtnieniccntciticocnnidnitindpningmnidanennliies 33
40 C.F.R. § B26:D aie MID)... 020... ccerenee ees 23, 25
BD Gee Te. S I 0 hes stcesetattrnsesscscamnacsrmesunnesaie 22
8 Eee 22
I isriccecenssserecrcesecccecncsitisespleviemions 25
Se ee Or Se iiiirtscccncnsstecncnempsccenseseusensptniitiea 24
40 C.F.R. § 125.95 (b)(6)(i) ........eccccccccccecesceeceeceeeseveees 24
40 C.BR. § 125.OGG OGD) .............200...cccccccessasscerees 24
40 C.F-R. § 125:05(6 (6) Gi((B)............................ceeee 24
40 C.F... F 125. GEGEN) ....0...20220..0.cececcsececseees 24
40 C.F-R. § 125.95(b)(6)Gi)(D) «o.oo eee cc ceec cece eeceeees 24
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BF I envcescscceescccvcessescscesesscsssveseses 55
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OTHER AUTHORITIES
41 Fed. Reg. 17,387 (Apr. 26, 1976)......................... 15
41 Fed. Reg. 17,387-90 (Apr. 26, 1976).............:00006 38
41 Fed. Reg. 17,388 (Apr. 26, 1976)............. 15, 38, 39
41 Fed. Reg. 17,389 (Apr. 26, 1976)...............:00ceeeees 38
66 Fed. Reg. 65,338 (Dec. 18, 2001).................0...008 16
68 Fed. Reg. 13,527 (Mar. 19, 2003) ...................00. 56
68 Fed. Reg. 13,541 (Mar. 19, 2003).....................04. 42
68 Fed. Reg. 36,754 (June 19, 2003)........................ 16
69 Fed. Reg. 41,575-693 (July 9, 2004)............ passim
71 Fed. Reg. 35,006 (June 16, 2006)........................ 17
71 Fed. Reg. 35,017 (June 16, 2006).....................44. 17
72 Fed. Reg. 37,459 (July 10, 2007).............0.....0..0.. i0
1 A Legislative History of the Water Pollution
Control Act Amendments of 1972 (hereinafter
Leg. Hist.) 263 (93d Cong. 1% Sess.) (1973)....... 13, 14
American Heritage Dictionary of the English
I i inc cscceinictntdavisasnnitituseseseuiees- «ses 34
xill
Merriam-Webster’s Collegiate Dictionary (10%
I leit id i a a ee ll 34
In re Central Hudson Gas & Elec. Corp.,
et al. Opinion No. 63, July 29, 1977, 1977 WL
et IG ce cittcsa cincincdeceddiiicainensiimnonnedentid 40, 49
EPA, Draft Guidance for Evaluating the
Adverse Impact of Cooling Water Intake
Structures on the Aquatic Environment:
Section 316(b) P.L. 92-500 (May 1, 1977).... 15, 39, 40
I 21
NERC 2007 Long-Term Reliability
Assessment 2007-2016 at 10, 97 (available at
ftp://ftp.nerc.com/pub/sys/all_updl/docs/pubs/L
TRA2007.pdf or at
http://www.nerc.com/~filez/rasreports.! ‘ml) .......... 11
OPINION BELOW
The opinion of the U.S. Court of Appeals for
the Second Circuit (Pet. App. la-94a)! is reported at
Riverkeeper, Inc. v. EPA, 475 F.3d 83 (2d Cir. 2007)
(“Riverkeeper II’).
JURISDICTION
The Second Circuit entered judgment on
January 25, 2007, and denied petitions for rehearing
and rehearing en banc on July 5, 2007. Timely
petitions for certiorari were filed on November 2,
2007 following an extension of time. Certiorari was
granted April 14, 2008, PSEG Fossil LLC ov.
Riverkeeper, Inc., 128 S. Ct. 1867, 1868 (2008). The
jurisdiction of this Court is invoked under 28 U.S.C.
§ 1254(1).
STATUTORY AND REGULATORY
PROVISIONS INVOLVED
This case concerns § 316(b) of the Federal
Water Pollution Control Act, commonly known as the
Clean Water Act (“CWA” or the “Act”), 33 U.S.C.
§ 1326(b). Section 316(b) states:
' Citations to “Pet. App.” refer to the Appendix to the
Petition for Certiorari filed by Entergy Corp. in No. 07-588.
“J.A.” refers to the Joint Appendix. There ts also a “UWAG
Appendix” attached to this brief.
2
Any standard established pursuant to
section 1311 of this title or section
1316 of this title 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.
This provision, as well as parts of CWA §§ 301, 304,
and 306, 33 U.S.C. §§ 1311, 1314, 1316, are
reproduced in the addendum to this brief and at Pet.
App. 97a-113a. The rule at issue here (National
Pollutant Discharge Elimination System —- Final
Regulation to Establish Requirements for Intake
Structures at Phase I] Facilities, 69 Fed. Reg. 41,575-
693 (July 9, 2004) (“Phase II” rule)) was codified at
40 C.F.R. Part 125, Subpart J, and is reproduced at
Pet. App. 122a-593a.
STATEMENT OF THE CASE
This case concerns the regulations for existing
power plant cooling water intake structures (“intake
structures” or simply “intakes”) that EPA adopted
under § 316(b) of the Clean Water Act, 33 U.S.C.
§ 1326(b). More specifically, this case focuses on
whether EPA may use cost-benefit analysis to
develop national intake structure standards for
existing power plants and allow permit writers to use
cost-benefit analysis on a_ site-specific basis in
selecting the “best technology available” (“BTA”) for
3
“minimizing” “adverse environmental impact” as
required by § 316(b).
For the past 30 years, EPA has implemented
§ 316(b) case-by-case, taking into account costs and
benefits in deciding which intake technology is the
best for minimizing adverse environmental impact at
a particular site. In developing the rule at issue
here, EPA’s deliberations were informed by this
history, and by its understanding of the biological
and technological complexities involved in § 316(b)
implementation, especially at existing facilities.
After nine years of deliberation, it developed the
“Phase II” rule, which attempts to streamline the
BTA selection process by setting national standards
based on the estimated performance of a suite of
commercially available intake structure technologies.
The rule requires hundreds of existing steam electric
power plants to use one or more of those technologies
to achieve national standards for reducing the degree
to which aquatic organisms are trapped against
(“impinged” by) or drawn through (“entrained” by)
cooling water intake structures.
EPA selected this approach after carefully
considering many alternatives, including requiring
some or all existing Phase lI facilities that have
once-through or “open-cycle” cooling systems to
replace them —with recirculating systems.
Recirculating or “closed-cycle” facilities reduce the
amount of water withdrawn, but only at a
substantial cost both in environmental and economic
terms. EPA looked at those environmental and
economic costs, compared them to the additional
q
reduction in impingement and entrainment that
closed-cycle cooling might achieve, and concluded
that requiring closed-cycle cooling was not BTA.
EPA recognized, however, that determining
what is necessary to minimize adverse
environmental impacts can necessitate a site-specific
inquiry of the type it had previously required for all
facilities. Therefore, the rule also includes a
provision authorizing alternative standards for a
particular site where the facility can demonstrate
that the overall costs of achieving the national
standards are substantially greater than the overall
benefits.
The Second Circuit rejected this reasonable
approach, concluding that EPA is not permitted to
weigh costs and benefits in implementing § 31 3(b).
For the reasons given in the separate brief filea by
Entergy Corp., PSEG Nuclear, and PSEG Fossil in
the consolidated cases 07-588 and _ 07-589
(“Entergy/PSEG Brief’), EPA’s conclusion that
§ 316(b) permits some comparison of marginal
environmental benefits with the costs of achieving
them, both at the national level and at particular
sites, is the only reasonable reading of the Act and
thus should have been upheld under “step one” of the
analysis required by Chevron U.S.A. Inc. v. NRDC,
467 U.S. 837 (1984). In addition, as explained in the
Entergy/PSEG Brief and more fully herein, the Act is
at least ambiguous as to whether EPA may compare
costs and benefits under § 316(b). EPA’s reading of
the Act to permit such comparisons, both nationally
and at particular sites, is wholly reasonable and thus
5
should have been upheld under “step two” of the
Chevron analysis. In either case the decision below
is wrong and must be reversed.
I. Background
A. Cooling Water Intake Structures
EPA has always understood that regulating
intake structures involves myriad complex, site-
specific environmental, energy, and economic trade-
offs that can appropriately be evaluated by using
cost-benefit analysis. For example, the Agency has
long understood that the “environmental impact” of
an intake structure depends partly, but only partly,
on the type of cooling system it serves.
Steam electric power plants come in different
sizes and configurations, but they all operate on the
same principle: water is boiled to make steam,
which drives a turbine, which powers an electric
generator. All steam electric plants need a way to
condense the steam back to water. Most use cooling
water for that purpose.?
2 A few employ “dry cooling,” which uses natural or
mechanical air drafts to remove heat and requires little or no
water. Pet. App. 270a (69 Fed. Reg. 41,608). Even for new
facilities, where it would be easiest and cheapest to install dry
couling systems, EPA did not require them, because they are
costly, reduce water intake only minimally compared to closed-
cycle wet cooling, increase air pollution and energy penalties,
and have other disadvantages. In ruling on challenges to EPA's
earlier “Phase I” rule for new facilities (66 Fed. Reg. 65,256
(continued...)
6~
The amount of cooling water withdrawn from
a waterbody by a steam electric plant depends on a
variety of factors, one of which is the type of
condenser cooling system. There are two basic types
of “wet” condenser cooling systems: open-cycle and
closed-cycle. Open-cycle systems pass water through
the condenser only once before returning virtually all
the water to its source, albeit at a_ higher
temperature. Closed-cycle systems recirculate the
heated water from the condenser through an
evaporative cooling structure (typically a cooling
tower, pond, or lake) two or more times before the
build-up of salts in the water requires the system to
“blow down” (i.e., discharge). Closed-cycle systems
withdraw from 70% to 98% less water than open-
cycle systems, depending on the water’s salinity
level, Pet. App. 240a (69 Fed. Reg. 41,601 n.44), but
they evaporate (i.e., consume) most of the water
withdrawn, returning very little to its source.
EPA also understood that the amount of water
withdrawn does not alone’ determine’ the
“environmental impact” that a cooling water intake
structure will have, even if impact is gauged solely
by intake-induced impingement and entrainment
mortality. Local characteristics of the waterbody
(Dec. 18, 2001)), the Second Circuit upheld EPA's decision.
Riverkeeper, Inc. v. EPA, 358 F.3d 174, 182 n.5 (2d Cir. 2004)
(“Riverkeeper I’). For existing facilitics, no party to this case
has disputed EPA's determination that dry cooling is not BTA.
7
and its fish are just as important, as are the
characteristics of the intake structure.®
In formulating the Phase II rule, EPA
identified 20 distinct ecosystem and_= species
characteristics and 18 intake features that influence
impingement and entrainment losses.4 These factors
interact to determine the numbers and types of
healthy organisms near the intake at any given time;
the likelihood those organisms will survive an
encounter with the intake; and.the consequences of
any losses that occur. Which factors are most
important varies by site.
Indeed, EPA’s record demonstrates that the
types and numbers cf organisms impinged and
entrained over time and among different sites could
vary tremendously — for some species, by factors in
excess of 40,000.5
3 See, e.g., Pet. App. 216a, 226a-227a, 235a (69 Fed. Reg.
41,596, 41,598, 41,600).
4 EPA, Economic and Engineering Analysis (July 20,
2000) (“EPA EEA”), Ch. 11, p. 11-4, Table 11-1, Docket EPA W-
00-03, DCN:1-5046-PR, incorporated into Docket EPA-HQ-OW-
2002-0049 by reference at DCN:4-0000), J.A. 165-67.
5 See, eg., EPA EEA 11-13, Table 11-11 (showing
115,384-fold vanmation im annual impingement of Atlantic
croaker by eight estuarine plants); 11-13, Table 11-10 (showing
3,515-fold variation in entrainment of Atlantic tomcod eggs and
larvae by three estuarine facilities); 11-10, Table 11-6 (showing
1,033-fold vanation in annual entrainment of alewife by five
Great Lakes facilities); 11-9, Table 11-5 (showing 18,750-fold
(continued...)
8
This is not to say that impingement and
entrainment rates at the lower end of the range are
necessarily trivial. But the record shows that EPA
had good cause to believe that impingement and
entrainment rates vary substantially from site to site
and may not be as significant at some sites as at the
handful of large facilities located on _ sensitive
waterbodies that the Agency presented as examples
of power plant intake structure effects.®
EPA also understood that not all organisms
that become impinged or entrained are harmed by
the intake structure. For example, whether an
organism’s encounter with an intake causes harm,
even to that individual, depends on whether the
organism is alive on arrival. Many are not, due to
the enormously high natural mortality to which
variation in annual impingement of freshwater drum by four
lake or reservoir facilities); 11-6, Table 11-2 (showing 1,101-fold
variation in entrainment of sunfish eggs, larvae, and juveniles
by five riverine facilities); 11-15, Table 11-13 (showing 19-fold
variation in impingement of queenfish by two ocean facilities).
6 Compare Pet. App. 175a-181la (69 Fed. Reg. 41,587-88)
with UWAG Comments on Proposed § 316(b) Rule for New
Facilities 81-87 (Nov. 9, 2000) (“UWAG Phase I Comments”),
incorporated by reference per DCN:4-0000 (discussing issues
raised by EPA reliance on information for a small group of
power plants to derive its estimate of national impacts); see also
UWAG Comments on Proposed § 316(b) Rule for Existing
Facilities, Public Comment 1.041 (Aug. 7, 2002) 15-17 (““UWAG
Phase II Comments’) (describing site-specific factors that affect
impingement and entrainment levels).
9
aquatic organisms are subject.? Equally important,
many organisms will survive their encounter with
the intake, resulting in no harm even to the
individual. |
The broader implications of those individual
losses depend on the species affected, the size of the
population from which the losses occur, and the
’ See, e.g. EPRI Comments on Proposed § 316(b) Rule
for Existing Facilities, Public Comment 1.074 (Aug. 7, 2002) 9,
16; UWAG Phase II Comments at 15. High mortality in wild
populations is natural, and due to compensation and other
demonstrated natural mechanisms, increased mortality can
result in increased production. UWAG Phase I Comments at 32
& App. B; see also EPA’s Response to Public Comment, Author
Version, DCN:6-5049A (“EPA’s Response to Comment”) 689-90;
Seacoast Anti-Pollution League v. Costle, 597 F.2d 306, 309 (1*
Cir. 1979) (“Seacoast IT’); In re Pub. Serv. Co. of N.H. (Seabrook
Station, Units 1 & 2), 1 E.A.D. 332, 10 Env’t Rep. Cas. (BNA)
1257, 1977 EPA App. LEXIS 16, *47 (June 10, 1977), reud on
other grounds and remanded, Seacoast Anti-Pollution League v.
Costle, 572 F.2d 872 (1* Cir. 1978) (loss of Mya clam larvae
would be 100,000,000,000, but this was at most about 5% of the
standing crop of Mya clam in the area, and a single adult clam
releases several million eggs per spawning and may spawn
several times a years).
8 Pet. App. 234a-235a (69 Fed. Reg 41,600) (citing
differences in impingement survival rates among species as
basis for setting performance standard ranges). See also In the
Matter of Riverkeeper, Inc. v. Johnson, 2008 NY Ship Op.
5608, 2008 N.Y. App. Div. LEXIS 5503 (N_Y. App. Div. 3d Dep't
June 19, 2008) (upholding agency consideration of entrainment
survival in setting BTA requirements)
10
presence of other significant stressors. Some species
are so abundant that intake-related losses, even if
large in the abstract, are unlikely to affect the
species’ well-being. Other species are considered a
nuisance by state and federal fisheries managers,
who do their best to extirpate them.!°
In short, the extent to which an intake
structure causes impingement or entrainment
mortality at a particular site and the environmental
relevance of any such mortality are highly site-
specific. Equally important, such impacts are not the
only “environmental impacts” associated with the
technology choices under § 316(b). For example,
closed-cycle cooling systems can create other adverse
environmental impacts such as noise, salt drift, ice,
fog, elimination of favorable thermal habitat, and
others of which EPA is well aware. See infra at 20.
Most notably, because retrofitted closed-cycle
systems are less efficient than once-through systems
9 See, eg. UWAG Phase I Comments at 172-73
(evaluation of effects of entrainment of Atlantic mackerel by a
Northeastern plant showed that annual entrainment of Atlantic
mackerel eggs loss equaled less than one millionth the number
spawned yearly by that species).
10 See, e.g., Nonindigenous Aquatic Nuisance Prevention
and Control Act of 1990, 16 U.S.C. §§ 4701, 4712 (1994);
National Invasive Species Act of 1992, 16 U.S.C. §§ 4701-51
(1997); 72 Fed. Reg. 37,459 (July 10, 2007) (U.S. Fish and
Wildlife Service lists silver carp as “injurious fish” because they
carry pathogens, compete with native species, and degrade
habitat).
11
at removing heat, they extract a_ significant,
permanent “energy penalty,” resulting in less
electricity per unit of fuel. Pet. App. 254a-261a (69
Fed. Reg. 41,605-06). This means each affected
power plant would have a lower output because of
the retrofit. This raises serious concerns about the
nation’s electric supply.'! The costs of various
technological alternatives also are highly site-
specific, as EPA recognized. See, e.g., 69 Fed. Reg.
41,670-75 (Appendix A). The Agency made an
attempt to capture those costs in its analysis, but it
recognized that the assumptions it made might not
be correct for any given case. Pet. App. 435a (69 Fed.
Reg. 41,647).
B. Section 316(b)
The Agency found legal authority for
evaluating costs and benefits at both the national
1! Indeed, closed-cycle cooling retrofits, if required,
could have a very negative impact on the reliability of the
electrical supply system in the United States. The North
American Electric Relhability Corp. (“NERC”) is charged with
overseeing the reliability of the nation’s electric supply.
NERC’s recent assessment of long-term energy found that long-
term capacity margins already are inadequate in many regions,
and retrofitting existing power plants with closed-cycle cooling
pursuant to § 316(b) could result in a 12 percent reduction in
available capacity margin, thus compounding an already
serious reliability picture. See NERC, 2007 Long-Term
Reliability Assessment 2007-2016 at 10, 97 (available af
ftp://ftp.nerc.com/pub/sys/all_updl/docs/pubs/LTRA2007.pdf — or
at http://www_nere com/~filez/rasreports. html)
12
and site-specific Jevels in the language and
legislative history of the statute. Pet. App. 150a-
157a (69 Fed. Reg. 41,582-83); Pet. App. 253a (69
Fed. Reg. 41,604); Pet. App. 348a-354a (69 Fed. Reg.
41,625-26).
As EPA recognized, among the provisions of
the Clean Water Act that rely on technology to
achieve an outcome, § 316(b) is unique. It is the only
provision that applies to structures that withdraw
water, rather than to discharges that add pollutants
to water. Thus, its subject — the location, design,
construction, and capacity of cooling water intake
structures — is different from the subject of the
statute’s other technology-based provisions. Pet.
App. 156a-157a (69 Fed. Reg. 41,583).
Equally important, unlike the technology-
based program for point sources, the goal of which is
to “eliminate” pollutant discharges, § 316(b) has a
broadly stated objective of “minimizing adverse
environmental impact.” Section 316(b) does not
specify the impacts on which EPA must focus, does
not identify the threshold at which impacts are
considered “adverse,” and does not require that
adverse impacts be eliminated wherever it ts
technologically possible to do so.
There are other differences as well. Section
§ 316(b) refers to but is structurally removed from
the technology-based provisions of §§ 301 and 306,
which the Entergy/PSEG Brief describes in some
detail. Unlike those sections, it does not require
development of several tiers of uniform national
13
standards for categories and classes of industrial
discharges. In fact, § 316(b) does not require
categorical or numeric performance standards of any
kind.
Section 316(b) does not reside with the Act’s
technology-based provisions but in a separate section
of the Act that, as its title states, addresses “Thermal
Discharges.” 33 U.S.C. § 1326. The cornerstone of
the section is § 316(a), which affords relief from
otherwise applicable technology or water quality-
based effluent limits for heat where the discharger
can demonstrate that alternate thermal limits will
ensure the “protection and propagation of balanced,
indigenous population of shellfish, fish and wildlife
in and on the water to which the discharge is
made.”!2 Pet. App. 59a, n.27. |
By its terms, § 316(b) does not require controls
based solely on what technology can achieve, without
regard to the environmental outcome. Rather, as the
Agency concluded, § 316(b) authorizes EPA “to
2 Section 316 was originally included in the House-
passed water pollution control bill because “the arguments
which justified a basic technological approach to water quality
control did not apply in the same manner to the discharges of
heat.” 1A Legislative History of the Water Pollution Control Act
Amendments of 1972 (hereinafter Leg. Hist.) 263 (93d Cong. 1*
Sess.) (1973). Among the reasons offered in support were the
relatively local, non-accumulative, and temporary effects of
heat in comparison to other pollutants and the potential for
thermal discharges in some cases to enhance the aquatic
environment. /d. at 263-64, 267-28.
14
consider not only technologies but also their effects
on and benefits. to” the environment. Pet. App. 157a
(69 Fed. Reg. 41,583).
Although legislative history on § 316(a)
abounds, there is relatively little on § 316(b). Section
§ 316(b) appeared for the first time in the Conference
Committee Report.'* See Riverkeeper J at 186 n.12.
The only substantive comment was offered by one of
the House floor managers, Representative Don
Clausen (R. Calif.), who explained that § 316(b) “is
intended to be interpreted to mean the best
technology available commercially at an
economically practicable cost.” 1 Leg. Hist. at 264;
Pet. App. 252a (69 Fed. Reg. 41,604). This brief
discussion places § 316(b) within the tradition of
§§ 301, 304, and 306, all of which authorize EPA to
weigh costs and benefits.
Thus, while § 316(b) refers to and therefore
logically should be read in conjunction with §§ 301,
304, and 306, both its subject (intake structures) and
its object (minimizing adverse’ environmental
impacts) are markedly different in ways that EPA
13 Indeed, to the best of our knowledge, the only other
references to cooling water withdrawals occurred during the
debate over § 511(c), 33 U.S.C. § 1371(c), which limits the
applicability of the National Environmental Policy Act to
specified federal actions under the Clean Water Act. 1 Leg.
Hist. at 194-98 (Statement of Senator Buckley) and 198-200
(Senator Muskie). (Section 511(c) is in the appendix to this
brief.)
15
was obliged to consider when interpreting and
implementing that provision. The Second Circuit
itself recognized this in its earlier decision, largely
upholding the Phase I § 316(b) rule for new facilities.
See Riverkeeper I at 193 (recognizing that “intake
structures are in a class by themselves”).
C. EPA’s Long-Standing Approach To
§ 316(b) Implementation
For over 30 years, EPA has read § 316(b) to
authorize permit writers to select BTA on a site-
specific basis and to weigh costs and benefits in
doing so. The Agency’s early rules relied exclusively
on site-specific decision-making. J.A. 44 (41 Fed.
Reg. 17,387, 17,388 (Apr. 26, 1976). Those rules
were set aside on procedural grounds a year later in
Appalachian Power Co. v. Train, 566 F.2d 451, 457
(4t» Cir. 1977).
During the next 30 years, until EPA
promulgated the rules at issue here, EPA and state
permit writers. successfully relied on Agency
guidance that required permit writers to select BTA
site-by-site, taking into account the relationship
between costs and benefits.'4 That guidance
14 EPA, Draft Guidance for Evaluating the Adverse
Impact of Cooling Water Intake Structures on the Aquatic
Environment: Section 316(b) P.L. 92-500 (May 1, 1977) (“1977
draft guidance”), DCN:1-5045-PR, incorporated into Docket
EPA-HQ-OW-2002-0049 by reference at DCN:4-0000), also
available at
http://www.epa.gov/waterscience/3 16b/files/1977AEI guid pdf.
16
provided permit writers with a general framework
for evaluating the potential environmental impacts
of existing intake structures, deciding whether those
impacts are adverse, and, if they are, selecting the
modifications to the structure’s location, design,
construction, or capacity that best minimizes those
impacts at a cost not “wholly disproportionate” to the
benefit gained. Pet. App. 161a (69 Fed. Reg. 41,584).
The approach embodied in EPA’s guidance was
approved by the First Circuit in Seacoast I], 597 F.2d
at 311, and followed in numerous administrative
decisions thereafter.
Il. The Phase IT Rule
A. Background
In the mid-1990s, to resolve a lawsuit filed by
environmental groups, EPA entered a consent decree
obligating it to initiate § 316(b) rulemaking
proceedings, which it did in three phases.'®© The
15 EPA’s Phase I rule, adopted in 2001, governs new
facilities of all kinds, including new steam electric power plants.
66 Fed. Reg. 65,338 (Dec. 18, 2001), as amended at 68 Fed. Reg.
36,754 (June 19, 2003), codified at 40 C.F.R. §§ 125.80-125.89.
The Second Circuit reviewed and largely upheld those
regulations, including a variance’ provision ’§ allowing
consideration of local environmental impacts. Riverkeeper I at
174. For a detailed discussion of the Second Circuit’s decision
in Riverkeeper I, see Entergy/PSEG Brief, Statement of the
Case (“SOC”) § A.5.
Phase II] encompasses existing power plants and
industnial facilities not subject to Phase II. See Pet. App. 159a
(continued...)
17
“Phase II” rule at issue here resulted from that
process. Pet. App. 122a-593a (69 Fed. Reg. 41,576).
The rule applies to cooling water intake structures at
approximately 540 large steam electric generating
plants built before January 17, 2002. EPA estimated
that Phase II facilities produce about 50% of the
nation’s electric energy. Pet. App. 203a (69 Fed. Reg.
41,593); EPA, Economic and Benefits Analysis for the
Final Section 316(b) Phase II Existing Facilities Rule
A3-12-13 (2004), DCN:6-0002.
EPA’s Phase II rule embodies both site-
specificity and cost-benefit principles, but with two
significant innovations. First, to promote greater
consistency and ease administrative burdens on the
permit writers responsible for implementing
§ 316(b), the Phase IT rule establishes new nationally
applicable performance standard ranges for reducing
impingement mortality and entrainment!® and
(69 Fed. Reg. 41,583). For these facilities, EPA has determined
that uniform national standards are not the most effective way
to ensure comphance with § 316(b), opting instead to continue
regulating exclusively case-by-case. 71 Fed. Reg. 35,006 (June
16, 2006). The Agency based this determination on its
judgment that “the monetized costs associated with the primary
option under consideration are wholly disproportionate to the
monetized environmental benefits.” 71 Fed. Reg. 35,017 (June
16, 2006). Environmental groups have challenged that
determination in a case now pending in the Fifth Circuit.
ConocoPhillips v. EPA, (5% Cir., No. 06-60662, filed 7/14/06)
(stayed pending outcome of Phase II appeal):
16 Although EPA recognized that entrained organisms
sometimes survive passage through the cooling system, it also
(continued...)
18
imposes new, more uniform procedural
requirements. Those performance ranges and
procedural requirements, described in greater detail
below, provide a consistent framework for selecting
the “most effective and efficient approach and
technologies for minimizing adverse environmental
impact” at each site, at a cost that is “economically
practicable.” Pet. App. 226a, 356a (69 Fed. Reg.
41,598, 41,627).
Second, the Phase II rule does not require a
threshold evaluation of whether the type and level of
impact occurring at a site is truly “adverse” in any
meaningful sense. Instead, it addresses that issue
through an_ optional site-specific compliance
alternative. That alternative, described in greater
detail below, authorizes establishment of alternative
performance standards where the overall costs of
achieving the national standards exceed the overall
benefits.
recognized that entrainment survival rates are very site-
specific. Pet. App. 325a-327a (69 Fed. Reg. 41,620). Therefore,
for purposes of setting national standards, the Agency assumed
that no survival occurs and established standards for
entrainment per se, rather than for intake-induced entrainment
mortality. However, as _ discussed below, it allowed
consideration of facility-specific entrainment survival through
the site-specific cost benefit provision. Throughout this brief,
we will refer to “impingement,” “impingement mortality,”
“entrainment,” and “entrainment mortality” as the context
"a
_
19
For purposes of setting national standards in
the Phase II rule, the Agency chose not to draw
distinctions (though it could have) based on the type
of species affected, the life stages affected, the size of
the losses, or the effects on the ecosystem. Instead,
it took a precautionary approach, based on its
national findings about the likely benefits of
reducing impingement mortality and entrainment,
the acceptability of the other environmental and
energy impacts that would impose, and _ the
associated costs of achieving the required reductions.
Pet. App. 249a-252a (69 Fed. Reg. 41,603-04); see
also 247a-249a (69 Fed. Reg. 41,603). To avoid
irrational or counterproductive results at the site-
specific level, however, EPA included provisions
allowing site-specific standards based on actual costs
and benefits. Jd.
Besides the regulatory option it chose, EPA
considered a number of others. Several were whoily
site-specific. EPA rejected these in favor of an
approach that promoted consistency, reduced
administrative burdens, and decreased the likelihood
of disputes and delay in the permit process. Pet.
App. 268a-269a (69 Fed. Reg. 41,608).
It also considered and rejected severa] options
requiring all or some existing facilities with once-
through cooling to retrofit closed-cycle systems,
which would reduce flow substantially and, EPA
estimated, achieve a comparable reduction in
- 20
entrainment and, in some cases, impingement.!?
Pet. App. 287a-289a (69 Fed. Reg. 41,612). Although
recognizing that the reduction in impingement and
entrainment achievable by closed-cycle cooling could
be greater in some cases than was achievable from
technologies directly applicable to the _ intake
structure, such as barriers, behavioral devices, or
screening, EPA chose not to base the Phase II
standards on closed-cycle cooling. Pet. App. 254a-
273a (69 Fed. Reg. 41,605-09).
EPA based this choice partly on its conclusion
that “other technologies approach the performance of
|closed-cycle cooling],” Pet. App. 255a (69 Fed. Reg.
41,605), at about one-ninth the cost of closed-cycle
cooling. Compare Pet. App. 256a (69 Fed. Reg.
41,605) (total social cost for cooling towers about $3.5
billion per year, not counting land acquisition) with
Pet. App. 450a (69 Fed. Reg. 41,650) (total social cost
for Phase II rule of $389 million per year). Other
factors also influenced EPA’s decision: the huge
plant-specific and national cost of retrofitting
existing facilities with closed-cycle cooling; the
energy penalties associated with retrofitting existing
17 EPA found that entrainment is related to flow, and
impingement is related to a combination of flow, intake velocity,
and fish swim speed, and that installing flow reduction
technologies would result in a similarly high reduction in
impinged and entrained organisms. Pet. App. 288a-289a (69
Fed. Reg. 41,612).
21
facilities;!* increases in air emissions from additional
generation needed to compensate for such penalties;
the fact that retrofitting might be impossible at some
plants; and other adverse environmental effects,
such as fog, icing, and noise. See Pet. App. 255a-
259a (69 Fed. Reg. 41,605-06).
In other words, the Agency considered overall
costs, weighed them against overall benefits, and
concluded that the approach it chose was the best
way to minimize adverse environmental impacts
overall. Pet. App. 169a (69 Fed. Reg. 41,586).
In fact, EPA adopted a Phase II rule that
would produce benefits at a relatively high cost. The
Agency performed a cost-benefit analysis of the rule,
as required by Executive Order 12866. That analysis
estimated that the costs of the Agency’s chosen
alternative exceeded the quantifiable benefits by
almost 5-to-1. Pet. App. 526a (69 Fed. Reg. 41,666)
(total pre-tax social costs of $389.2 million and total
use benefits of $82.9 million).
18 For existing facilities, the Department of Energy
estimated that retrofitting closed-cycle cooling at existing
facilities would impose an energy penalty ranging from 2.4 to 4
percent (or, at one plant, over 5 percent) of existing generating
capacity, requiring the construction of approximately 20
additional 400-megawatt power plants to replace that lost
capacity. Pet. App. 257a-258a (69 Fed. Reg. 41,605). The “net
effect” of the energy penalty would be more consumption of
fossil fuel, which in turn increases emissions of carbon dioxide,
sulfur dioxide, NOx, mercury, and other pollutants. Pet. App.
258a (69 Fed. Reg. 41,605).
22
B. National Standards
The rule sets national standards requiring all
Phase II facilities to substantially reduce the
“impingement mortality” that can occur when
aquatic organisms become trapped against the
intake structure. EPA found that “best technology”
varies among sites but is reflected by national
performance standards that require all Phase II
plants to reduce impingement mortality by 80-95%
from an uncontrolled or “calculation baseline” level.
Pet. App. 560a (40 C.F.R. § 125.94(b)(1)).
The Phase II rule also requires some facilities
to reduce “entrainment” of very small aquatic
organisms (usually eggs and very small larvae) that
are drawn into the facility’s cooling system through
the intake. The Agency concluded that entrainment
levels could be significant enough to warrant
regulation at facilities that (1) have a “capacity
utilization rate” of 15% or greater, and (2) are located
on oceans, estuaries, tidal rivers or the Great Lakes,
or are located on a freshwater stream or river (but
only if the plant has a design flow of 5% or greater of
the mean annual flow of river or stream). Pet. App.
229a-234a (69 Fed. Reg. 41,599-600). These facilities
must reduce entrainment 60-90% from. the
calculation baseline. Pet. App. 560a (40 C.F.R.
§ 125.94(b)(2)). For other facilities, the Agency
decided that the risks from entrainment were not
sufficient to justify additional controls — a decision
that no party challenged. ,
23
The Agency focused on impingement mortality
and entrainment as a “quick, certain, and consistent
metric for determining performance at Phase II
existing facilities.” Pet. App. 168a-188a (69 Fed.
Reg. 41,586-90). But because EPA recognized that
the availability, performance, cost, and
environmental effects of intake technology
alternatives varied significantly by site, the Agency
did not base its performance standards on a single
technology. Pet. App. 216a, 226a, 234a-235a (69 Fed.
Reg. 41,596, 41,598, 41,600). Instead, the standards
are based on a suite of commercially available
technologies, including fine- and wide-mesh screens,
aquatic filter barriers, barrier nets, and fish return
systems. Pet. App. 226a-228a (69 Fed. Reg. 41,598-
99).
C. Site-Specific Standards
To provide a “level of flexibility comparable” to
its long-standing site-specific approach, EPA also
included a provision allowing permit writers to set
site-specific alternative performance standards
where a facility can demonstrate that the overall
costs of achieving the national standards exceed the
overall benefits. Pet. App. 269a (69 Fed. Reg.
41,608); Pet. App. 556a-560a (40 C.F.R.
§ 125.94(a)(5)(@1)). Alternate standards set under
this provision must be as close as practicable to the
national standard without resulting in significantly
greater costs than benefits.
To qualify, a facility must submit a “Benefits
Valuation Study” fully valuing the impacts of
24
impingement mortality (and, where applicable,
entrainment) at its site, and providing a quantitative
and qualitative assessment of all of the benefits
(recreational, commercial, and_ ecological) of
achieving applicable national standards. Pet. App.
579a-581la (40 C.F.R. § 125.95(b)(6)(1)). —- Facilities
subject to entrainment standards may document
entrainment survival and factor that survival into
the Benefits Valuation Study. Pet. App. 579a (40
C.F.R. § 125.95(b)(6)(Gii)((B)). In fact, this is the only
point in the rule at which entrainment survival can
be considered. To avoid any bias in the benefits
estimate, the rule authorizes a permit writer to
require an applicant to provide at its own expense an
independent peer review of the Benefits Valuation
Study. Pet. App. 580a (40 C.F.R.
§ 125.95(b)(6)i)(D)). The rule also requires the
applicant to explain how the uncertainties involved
in benefits estimation wil] be identified and factored
into the assessment. Pet. App. 579a (40 C.F.R.
§ 125.95(b)(6)(1)(C)).
An applicant for alternate limits also must
submit a “Comprehensive Cost Evaluation Study.”
The rule does not limit the types of costs that can be
considered to only those economic costs borne by the
permittee. It simply requires submission of
“engineering cost estimates” (Pet. App. 578a-579a
(40 C.F.R. § 125.95(b)(6)G)), an undefined term that
is broad enough to encompass estimates for a variety
of different costs, whether borne by the facility,
society, or the environment. Ultimately, according to
the rule, the determination regarding any site-
specific alternative limitation must be made based
25
on “reliable, scientifically valid cost and performance
data” submitted by the facility “and any other
information the Director deems appropriate.” Pet.
App. 559a (40 C.F.R. § 125.94(a)(5)(ii)).
All of this information must be submitted as
part of the facility's “Comprehensive Demonstration
Study,” which becomes part of its NV’DES permit
renewal application. Pet. App. 564a-582a (40 C.F.R.
§ 125.95(a), (b)). As such, it becomes part of the
public record, available for review and comment.
Ill. The Decision Below
The Second Circuit invalidated the Phase Il
rule based on its own highly selective interpretation
of § 316(b) and §§ 301 and 306, to which § 316(b)
refers.'9 Although the circuit court stated that EPA
may consider technology cost and must consider
technology performance in selecting BTA at the
national level, it held that § 316(b) forbids any
comparison of the two. Pet. App.20a-33a. Instead,
EPA must select the technology that achieves the
greatest reduction in impingement mortality and
entrainment, unless the Agency finds that the
industry cannot “reasonably bear” its cost. Pet. App.
26a-27a. The court also prohibited EPA from
allowing site-specific variation from the national
standards based on_ cost-benefit evaluation,
reasoning that weighing costs and benefits is
19 For a detailed discussion of the basis for the Second
Circuit's decision, see Entergy/PSEG Brief, SOC § B
26
generally prohibited and, applied on a site-specific
basis, would involve consideration of forbidden
“water quality” factors. Pet. App. 56a-60a.
The court agreed that EPA may consider
energy and non-water quality impacts in selecting
BTA (Pet. App. 26a n.12). But its decision strongly
suggests that EPA may not use any form of economic
cost-benefit analysis as a means of balancing those
competing factors and selecting the alternative that
best “minimizes adverse environmental impact”
overall, even though the definition of “cost-benefit
analysis” cited by the court suggests that is a task for
which such an analysis is ideally suited. Cf Pet.
App. 23a n.10 (citing OMB circular describing cost-
benefit analysis as a “systematic quantitative
method of assessing the desirability of government
... policies when it is important to take the long view
of future effects and a broad view of possible side-
effects”) (internal citations omitted).
SUMMARY OF THE ARGUMENT
The Second Circuit’s decision misreads
§ 316(b) and the other technology-based provisions of
the Clean Water Act, ignores the legislative history,
and musapplies this Court’s precedents to reach a
conclusion that is inconsistent with § 316(b)’s
mandate.
Section 316(b) does not forbid EPA to compare
costs and benefits on either a national or site-specific
basis. As the Entergy/PSEG Brief demonstrates,
§ 316(b), read both alone and within the broader
27
structure of the Act, clearly permits EPA to weigh
costs and benefits in regulating cooling water intake
structures. UWAG agrees with and adopts the
arguments presented by Entergy and PSEG.
At the very least, however, § 316(b) is
ambiguous as to EPA’s authority to weigh costs and
benefits in setting national standards or in making
site-specific BTA determinations. Other. than
requiring EPA to focus on the “location, design,
construction, and capacity” of cooling water intake
structures, and to “minimize” those “environmental
impacts” that are “adverse,” § 316(b) is silent on the
factors to be considered and how they should be
considered. EPA’s interpretation of § 316(b) was
entirely reasonable and thus was entitled to
deference under Chevron. The Second Circuit’s
decision gave it none; indeed, the court makes almost
no mention of EPA’s interpretation. Instead, the
court’s decision upsets 30 years of Agency
interpretation and precedent and denies EPA the
deference to which it is due when interpreting a
statute the Agency is charged with administering.
The Second Circuit’s cost-benefit decision
places a harmful and artificial limit on EPA's
thinking. As the discussion above of EPA’s findings
shows, the Agency knew that saving some fish is
more important than saving others; that installing
some equipment to save fish, in some places, will
harm the environment or at least have no
worthwhile overall effect; and that some equipment
that saves fish will also reduce electric supply and
increase air pollution. All these are relevant to “best
28
technology available” for “minimizing adverse
environmental impact.”
Yet the reasoning underlying the Second
Circuit’s decision suggests that EPA is.
inappropriately restricted from thinking about these
things in certain ways. It may not consider, for
example, how intake technologies increase air
pollution, increase undesirable fish, or harm electric
supply if considering them would involve translating
those costs and beneiits into economic terms for
comparison. This restriction on an _ agency’s
deliberative process is irrational. The various
“factors” (all of which can be thought of as either
“costs” or “benefits”) must assuredly be compared to
one another at some point, and cost-benefit analysis
is one tool for making such comparisons. Is it not a
requirement of rational decision-making that EPA
consider, for example, that a large increase in air
pollution would produce only a_— minimal
improvement in a fish population? And is not that
comparing “costs” to “benefits”?
It is inconceivable that Congress intended to
impose irrational limits on EPA’s thinking, especially
where such lmits would undercut the statutory
objective (minimizing adverse environmental
impact). If that is what Congress intended, there
would be clear evidence of it in the statute or
legislative history. But there is none.
29
ARGUMENT
Judicial review of an agency’s interpretation of
a statute that the agency is charged with
administering proceeds under the familiar two-step
procedure articulated in Chevron. At step one of a
Chevron analysis, reviewing courts must examine
the text of the statute and ask “whether Congress
has directly spoken to the precise question at issue.”
Chevron, 467 U.S. at 842. If it has, then the “inquiry
is at an end” and the agency must follow Congress’s
command. See FDA v. Brown & Williamson Tobacco
Corp., 529 U.S. 120, 132 (2000).
If a court determines that the statute is
ambiguous, however, the inquiry moves to step two
of Chevron’s test. At step two, a court must defer to
the agency’s interpretation of an ambiguous
provision so long as it represents “a reasonable policy
choice for the agency to make,” Chevron, 467 U.S. at
845, and is thus a “permissible” construction of the
statute. Jd. at 843. This can be framed as an aspect
of statutory interpretation and of the requirement
that agencies engage in reasoned decision-making.
Compare NationsBank of N.C. v. Variable Annuity
Life Ins. Co., 513 U.S. 251, 257 (1995) (citing
Chevron, 467 U.S. at 844) (“If the administrator's
reading fills a gap or defines a term in a way that is
reasonable in light of the legislature’s revealed
design, we give the administrators judgment
‘controlling weight.”) with Smiley v. Citibank (S.D.),
N.A., 517 U.S. 735, 741 (1996) (citing Chevron, 467
U.S. at 844) (“In its lovic, at least, the line [drawn by
30
the agency! is not ‘arbitrary [or] capricious,’ and
thereby disentitled to deference under Cheuron.”).
Review at step two is deferential. The court
may not “simply impose its own construction on the
statute, as would be necessary in the absence of an
administrative interpretation.” Chevron, 467 U.S. at
843. It must affirm an agency’s interpretation even
if it is not the best interpretation of a statute or the
interpretation that the court would have devised.
See id. at 843 n.J1. The rationale for agency
deference is clear. As this Court has explained,
Chevron is based upon “a presumption that
Congress, when it left ambiguity in a statute meant
for implementation by an agency, understood that
the ambiguity would be resolved, first and foremost,
by the agency, and desired the agency (rather than
the courts) to possess whatever degree of discretion
the ambiguity allows.” Smiley v. Citibank, 517 U.S.
at 740-41 (citing Chevron, 467 U.S. at 843-44).
Under Chevron, deference to reasoned agency
decision-making is particularly appropriate where
the statute at issue is highly technical or complex.
Chevron, 467 U.S. at 865 (1984); see also Natl Cable
& Telecomms. Ass'n v. Brand X Internet Serus., 545
U.S. 967, 1002-03 (2005); Barnhart v. Walton, 535
U.S. 212, 222 (2002); Pauley v. BethEnergy Mines,
501 U.S. 680, 697 (1991). As this Court has
explained, the Clean Water Act is exactly the type of
“very complex statute” for which Chevron deference
is particularly appropriate. See Chemical Mfrs. Ass'n
v. NRDC, 470 U.S. 116, 125 (1985). Accordingly,
courts regularly defer to the EPA's expertise in
31
construing silent or ambiguous provisions of the
CWA. See, e.g., Arkansas v. Oklahoma, 503 U.S. 91,
112-14 (1992) (reversing Court of Appeals decision to
invalidate Clean Water Act permit issued by EPA
because that court failed to defer to EPA’s
interpretation of its water quality regulation and
therefore “made a policy choice that it was not
authorized to make”); United States v. Pozsgai, 999
F.2d 719, 729 (3d Cir. 1993) (giving deference to
Army Corps of Engineers interpretation of Clean
Water Act because, “[lJike the Clean Air Act in
Chevron, the Clean Water Act addresses a
scientifically complicated subject, and has an
intricate regulatory structure’).
1. EPA’s Interpretation of §316(b) as
Authorizing Cost-Benefit Analysis Is
Entitled to Deference
Reviewing the language of § 316(b) itself, and
the full statutory context, the only conclusion that
can be drawn is that, for the reasons given’ by
Entergy and PSEG, the provision unambiguously
permits EPA to weigh costs and benefits. If this
Court concludes otherwise, however, then, at the
very least §316(b) is” silent, and_ therefore
ambiguous, on the. issue; it certainly does not
unambiguously forbid the Agency to weigh costs and
benefits. EPA’s imterpretation of § 316(b) to
authorize cost-benefit analysis both at the national
and site-specific level is entirely consistent with a
reasonable, common sense interpretation of § 316(b),
and the Second Circuit erred in not deferring to the
Agency's interpretation.
32
A. The Second Circuit’s Interpretation
Is Not Dictated by Statutory
Language or Precedent
1. The Wording of Section 316(b)
Does Not Foreclose Cost-
Benefit Analysis
As the Second Circuit itself recognized in
Riverkeeper I, the paucity of legislative history,
combined with the brevity of the section itself,
“counsels against imputing much specifie intent to
Congress beyond the section’s words themselves.”
Riverkeeper I at 187 n.12. Thus, “[t]o the extent the
provision is silent on issues to which other sections
speak” (such as EPA’s authority to consider costs and
benefits under § 316(b), “we hesitate to draw the
negative inference that the brevity of section 316(b)
reflects an intention to hmit the EPA’s authority
rather than a desire to delegate significant
rulemaking authority to the Agency.” /d.
If such a prohibition exists, then, it must be
apparent from the terms Congress used in § 316(b).
That those terms do not unambiguously prohibit
balancing costs and benefits finds support in the
same arguments presented by Entergy and PSEG
demonstrating why §316(b) is’ best read as
unambiguously authorizing cost-benefit balancing.
In Section IIA of their Argument, Petitioners
Entergy and PSEG discuss in detail the ordinary
meaning of “best,” “available,” “minimize,” and
“adverse environmental impact.” As that analysis
demonstrates, the ordinary meaning of all these
33
terms, individually and collectively, is entirely
consistent with EPA’s use of cost-benefit analysis in
selecting BTA at the national level and at specific
sites.
Focusing further on the phrase “minimize
adverse environmental impact,” nothing in the
statute suggests, as the Second Circuit assumed,
that Congress intended a single-minded focus on
reducing impingement and entrainment as much as
physically possible. See Pet. App. 26a (assuming
“best” means “most effective” or “optimally best
performing” at reducing impingement mortality and
entrainment).
That EPA chose impingement mortality and
entrainment as a measure of “adverse environmental
impact” does not mean that it forfeited the right to
weigh other factors in deciding when “adverse
environmental impact” in the broader sense occurs
and when it is minimized. As EPA was careful to
explain, its decision to set national standards did not
limit its diseretion to decide that environmental
impacts are “minimized” at something less than
those standards.*2° Pet. App. 356a (69 Fed. Reg.
41,627).
2° Indeed, in the Phase I rule, EPA adopted a regulatory
definition of “minimize” that accommodates cost-benefit
balancing to decide what level of additional control] is
“reasonably possible.” See 40 CFR§125.83 (defining
“minimize” for purposes of the Phase I rule as meaning “reduce
(continued...)
34
Had the Second Circuit examined the phrase
“adverse environmental impact,” it would have found
no bar to EPA’s interpretation. “Adverse” commonly
means “contrary to one’s interests or welfare;
harmful or unfavorable.” American Heritage
Dictionary of the English Language (4% ed. 2000).
“Environmental” means “relating to or being
concerned with the ecological impact of altering the
environment.” Jd. And definitions of “impact”
include “the force or impression of one thing on
another: a significant or major effect.” Merriam-
Webster's Collegiate Dictionary (10% ed. 1996).
Collectively, they suggest Congress’s intent to reduce
significant effects that have ecological impact and
that are contrary to the interests of the
“environment” writ large.
It is eminently reasonable to use cost-benefit
comparisons to decide when such effects have
occurred and at what point they are “minimized.” In
short, the objective of § 316(b) is not so narrow that
it suggests a Congressional intent to forbid cost-
benefit comparisons, as the Second Circuit assumed.
Indeed, §§ 301, 304, and 306 are designed to make
progress toward the far more precise and demanding
goal of “eliminating pollutant discharges,” but, as
explained below, even those provisions permit cost-
benefit comparisons.
to the smallest amount or degree reasonably possible”). This
provision was not challenged and remains in effect today.
35
2. The Second Circuit’s Reliance
on Crushed Stone Was
Misplaced
In finding an unambiguous intent to prohibit
cost-benefit analysis, the Second Circuit largely
ignored the specific requirements of § 316(b).
Instead, it drew a strict analogy between § 316(b)
and the BAT (“best available technology”
economically achievable) and BADT (“best available
demonstrated control technology”) requirements of
§§ 301(b)(2) and 306(b)(1)(B). Having drawn this
analogy, it misinterpreted this Court’s decision in
EPA v. Natl Crushed Stone, 449 U.S. 64 (1980),
which construed those provisions, as “strongly
suggest[ing] that cost-benefit analysis is no longer
permitted under those sections....” Pet. App. 23a.
Nothing in Crushed Stone supports the Second
Circuit's rejection of EPA’s interpretation of § 316(b).
There, this Court examined whether the Clean
Water Act requires EPA to provide a variance from
BPT (“best practicable control technology” currently
available) limits that prove too expensive for a
facility to afford. ‘The Fourth Circuit had ruled that
EPA was required to provide such a variance to
account for individual affordability, because § 301(c),
the BAT variance provision, required it.
This Court disagreed, holding that EPA was
not required to provide a BPI variance based on
affordability. The Court reasoned that because the
statute requires EPA to weigh costs and benefits
when setting BPT requirements, those requirements
36
embodied EPA’s judgment that the costs, including
some individual closures of clearly deficient plants,
were necessary to make reasonable further progress
and thus were worth the benefits.
In reaching this conclusion, this Court noted
in passing that “[slimilar directions are given the
Administrator for determining effluent reductions
attainable from the BAT except that in assessing
BAT total cost is no longer to be considered in
comparison to effluent reduction benefits.” Crushed
Stone, 449 U.S. at 71 (emphasis added). The Court
then cited remarks made by Senator Muskie
describing the BPT standard and noting that the
BAT provision “lists ‘cost’ as a factor to consider in
assessing BAT, although it does not state that costs
shall be considered in relation to effluent reduction
benefits.” Jd. at 71 n.10 (internal citations omitted). -
The Second Circuit misread this Court’s remark as
tantamount to a statement that, in assessing BAT,
total cost may no longer be considered in relation to
effluent reduction benefits. But that is not what the
Court said, nor is that how its decision has been read
by other courts. See Entergy/PSEG Brief, Argument
§ 11.B.1.
‘The Court simply never considered whether
EPA had discretion to weigh costs and benefits in
setting BAT where it deemed such consideration
appropriate, because that was not the issue before it.
Indeed, later in its decision, the Court recognized
that the § 301(c) variance provides for exactly that
sort of balancing in adjusting BAT requirements on a
37
site-specific basis. See Crushed Stone, 449 U.S. at 77
n.16.
B. The Phase Il Rule Embodies the
Same Reasonable Policy Choice
EPA Has Made for the Past 30 Years
Given that § 316(b) is at least ambiguous on
the subject of EPA’s authority to weigh costs and
benefits, the question presented under step two of
Chevron is whether EPA’s conclusion that such
analysis is permitted by the Act is reasonable. It is.
As Entergy and PSEG have shown in their
brief, § 316(b), read both alone and within the
broader structure of the Act, clearly permits EPA to
weigh costs and benefits in regulating cooling water
intake structures. The same analysis supports the
conclusion that EPA’s interpretation is reasonable.
EPA’s interpretation here is consistent with
the same principles of site-specificity and cost-benefit
balancing that the Agency has applied for the past 30
years witho:* challenge by any court-or change by
Congress. The longevity of EPA’s interpretation and
its widespread application for so many years warrant
special deference, as this Court has recognized. See,
e.g., Alaska Dep't of Envtl. Conservation v. EPA, 540
U.S. 461, 487 (2004) (the Court “normally accord|[s]
particular deference to an agency interpretation of
‘longstanding’ duration”); Barnhart v. Walton, 535
U.S. 212, 220 (2002) (quoting North Haven Bd. of Ed.
v. Bell, 456 U.S. 512, 522 n.12 (1982), recognizing
that “well-reasoned views of an _ expert
38
administrator rest on “a body of experience and
informed judgment to which courts and litigants may
properly resort for guidance”); Bragdon v. Abbott,
524 U.S. 624, 642 (1998) (quoting Skidmore v. Swift
& Co., 323 U.S. 134, 139-40 (1944)).
In developing the Phase II rule, EPA did not
write on a blank slate. As discussed above, the
Agency adopted a § 316(b) rule in 1976, only to have
it remanded on procedural grounds a year later. See
supra at 15. The 1976 rule, unlike the rule at issue
here, made no attempt to set national standards.
J.A. 38-49 (41 Fed. Reg. 17,387-90 (Apr. 26, 1976)
(cited in Pet. App. 159a-162a (69 Fed. Reg. 41,583-
84)). Instead, the 1976 rule required that the best
technology available be determined by evaluating the
specifics of each plant and its site, including the size
and type of waterbody and relative magnitude of flow
withdrawn.
The Agency teok a broad view of what permit
writers ought to consider in determining whether an
adverse environmental impact exists and when it is
minimized. The number of organisms affected and
the potential for population impacts were both
factors it said were relevant. J.A. 45 (41 Fed. Reg.
17,389). It explained that, once a permit writer has
identified adverse environmental impacts for a given
site, its task is to identify economically practicable
technologies for the individual facility and to select
from among them the most effective at minimizing
the adverse environmental impacts identified. JA.
41-42 (41 Fed. Reg. 17,388). Although EPA said that
§ 316(b) does not require permit writers to conduct a
39
cost-benefit analysis before selecting BTA, it did not
suggest that permit writers were forbidden to
compare costs and benefits if they chose to when
deciding which technologies are the most effective at
minimizing adverse environmental impact. Jd.
The Agency also concluded that closed-cycle
cooling systems were not “universally and
necessarily the best technology available,” finding
that the available data did not support requiring
their use even for plants on biologically sensitive
waters. J.A. 43-44 (41 Fed. Reg. 17,388).
EPA later supplemented its initial § 316(b)
rule with draft § 316(b) guidance.2! Although never
finalized, the 1977 draft guidance is important
because it has been widely followed by state and
federal permit writers, and its principles are
reflected in hundreds of individual § 316(b) decisions.
2! The 1977 draft guidance (p. 11) states as follows:
Adverse aquatic environmental impacts occur
whenever there will be entrainment or
impingement damage as a result of the
operation of a specific cooling water intake
structure. The critical question i1s_ the
magnitude of any adverse impact. The exact
point at which adverse aquatic impact occurs
at any given plant site or water body segment
is highly speculative and can only be
estimated on a_ case-by-case basis’ by
considering the species involved, magnitude of
the losses, years of intake operation
remaining, ability to reduce losses, ete.
40
The 1977 draft guidance acknowledges that
the “adverse impact” of cooling water intakes is site-
specific and directs permit writers to make design,
location, construction, and capacity decisions case-
by-case. 1977 draft guidance at 4n.12. It suggests a
general process for decision-makiny, starting with a
site-specific study, which is used to determine
whether, based on the magnitude of the impact, the
facility needs to make changes for minimizing
adverse environmental impact. Id. at 11-14,
discussed at Pet. App. 16la (69 Fed. Reg. 41,584).
Besides the 1977 draft guidance, the Agency
issued a variety of decisions and opinions reflecting
its interpretation of § 316(b). Most important for
this case was the Administrator’s decision involving
a § 316/5) determination for the Seabrook generating
station. In re Pub. Serv. Co. of N.H. (Seabrook
Station, Units I and 2), 1 E.A.D. 455, 1978 EPA App.
LEXIS 17 (1978), affd, Seacoast II, 597 F.2d at 311.
There, the Administrator confirmed that § 316(b),
while not requiring a cost-benefit analysis to justify
BTA requirements, does not require selecting the
technology that most reduces impingement and
entrainment mortality, if its cost would be wholly
disproportionate to the benefits obtained (that is, the
number of organisms spared or the effects of reduced
losses on the waterbody). EPA’s General Counsel!
subsequently endorsed the Administrator's
determination. Jn re Central Iludson Gas & Elec.
Corp., et al. Opinion No. 63, July 29, 1977, 1977 WL
28250 (E.P.A.G.C.) at *9-10 (explaining that it would
be “unreasonable to interpret Section 316(b) as
requiring use of a technology whose cost is wholly
41
disproportionate to the environmental benefit to be
gained”).
In permitting decisions over the past 30 years,
EPA and the states have relied on this “wholly
disproportionate” test to make § 316(b) decisions. 22
Until now, no court has ever found fault with that
approach. On the contrary, the courts have
supported it. Seacoast II, 597 F.2d at 311; United
States Steel Corp. v. Train, 556 F.2d 822, 850 (7t»
Cir. 1977) (“we trust that EPA will conduct a limited
cost-benefit analysis” for a steel mill under § 316(b)).
22 See, e.z., In re Dominion Energy Brayton Point, LLC
(formerly USGen New England, Inc.) Brayton Point Station,
NPDES 03-12, 2006 EPA App. LEXIS 9, *87-88, 132-33 (EAB
February 1, 2006); In the Matter of Dynegy Northeast
Generation, Inc. (Danskammer Generating Station), 2006 N.Y.
ENV LEXIS 23, *19 (Deputy Commissioner, NY Dep't Envtl.
Conservation, May 24, 2006) (describing New York’s approach
for selecting BTA, including a determination about whether the
costs of practicable technologies are wholly disproportionate to
the environmental benefits conferred by such measures), appeal
dismissed on procedural grounds, Hudson Riverkeeper Fund uv.
Orange & Rockland Utils., 835 F. Supp. 160, 165-66 (S.D.N_-Y.
1993); Athens Generating Co., 2000 WL 33341184 (N.Y. Dep’t
Envtl. Conservation, June 2, 2000) at *10-11 (applying a
“wholly disproportionate” cost-benefit standard, which is met
where “the relative costs are unreasonable”); see also the cases
cited in UWAG’s Petition for Writ of Certiorari, No. 07-597 at
21-22 (Nov. 2, 2007).
42
IT. EPA Reasonably Concluded that § 316(b)
Permits Site-Specific Cost-Benefit
Consideration
The compliance option authorizing alternative
standards where justified by site-specific costs and
benefits provides for balanced, environmentally
protective decision-making. To obtain an alternative
standard, the applicant must demonstrate that the
costs (which, as noted above, encompass more than
just the facility's out-of-pocket costs) are
“significantly greater’2% than all the benefits that
would occur if the national standards were met.
The rule requires the permittee to submit
qualitative and quantitative information and allows
balancing of both. It requires consideration of the
benefit of reducing impingement mortality ~and
entrainment not only to commercial and recreational
fisheries, but to the ecosystem. And it provides for
independent evaluation of uncertainty, which will
need to be taken into account in reaching a decision.
By its terms, it does not require rigid, mechanistic
decision-making based solely on economics. Instead,
23 EPA chose the phrase “significantly greater” (instead
of the “wholly disproportionate” test EPA has used in the past,
both in guidance and in the Phase I! rule) to signal its
understanding that existing facilities have less flexibility in
selecting locations and technologies, that the rule will affect a
much larger portion of the generating capacity, and that a
slightly less extreme standard will avoid “economically
impracticable impacts on energy prices.” 68 Fed. Reg. 13,541
(Mar. 19, 2003).
43
it allows decision-makers to weigh all the costs
against all the benefits and to choose the best option
based on local resource management priorities. As
the Department of Energy commented, supporting
the concept of site-specific requirements using the
cost-benefit test, State or regional permit writers,
who can appreciate the site-specific nature of any
adverse environmental impact, would have the final
say on site-specific requirements rather than having
the decision-making reside with the federal
government. EPA’s Response to Comment 181.
By allowing for comparison of all costs and all
benefits, the cost-benefit provision affords the rule's
only mechanism for testing EPA’s assumption that
the environmental! benefits of reducing impingement
mortality and entrainment will outweigh other
adverse environmental impacts created by an intake
alternative.
The Second Circuit did not say that § 316(b)
prohibits case-by-case decision-making per se. In
fact, in Riverkeeper I, the court agreed with EPA that
§ 316(b) does not require uniform, categorical
rulemaking. See Riverkeeper I at 203 (finding no
textual bar to case-by-case application of § 316(b)
and upholding rule’ requiring such _ individual!
decisions for some new facilities). As the court
acknowledged, “the Clean Water Act does not forbid
the EPA from addressing certain environmental
problems on a case-by-case basis, ... when it does not
violate the statute’s language and is otherwise
consistent with Congress’s overriding goal of
improving the quality of the nation’s waters.” /d.
44
Other courts have consistently agreed that EPA may
implement § 316(b) case by case. See Htdson
Riverkeeper Fund, 835 F. Supp. at 165; Appalachian
Power Co., 566 F.2d at 457 (stating in dicta that “we
do not fault EPA for its point source by point source
application’).
Nevertheless, the Second Circuit invalidated
EPA’s carefully crafted provision authorizing
establishment of site-specific standards based on
cost-benefit comparison. Besides relying on its
conclusion that § 316(b) does not permit cost-benefit
analysis in any case (Pet. App. 57a-58a), the court
gave two other reasons.
First, the court concluded that allowing site-
specific cost-benefit analysis impermissibly
authorizes EPA to consider local water quality
conditions (or, for § 316(b) purposes “wildlife levels”)
— an approach the court said Congress rejected when
it established the technology-based program for
pollutant control. Pet. App. 58a-59a. Second, it
construed the existence of a specific water quality-
based variance for heat in § 316(a), and the absence
from § 316(b) of a comparable provision, as evidence
that Congress intended no consideration of local
water quality factors under § 316(b). Pet. App. 59a
n.27.
45
A. Other Clean Water Act Sections Do
Not Foreclose Site-Specific Cost-
Benefit Analysis Under § 316(b)
By its terms, § 316(b) authorizes, rather than
prohibits, consideration of site-specific
environmental conditions, including “wildlife levels,”
in selecting BTA. This is apparent both from
Congress’s focus on the “location, design,
construction, and capacity” of the cooling water
intake structure (all of which involve inherently local
considerations and_ trade-offs, particularly for
facilities which already exist), and its mandate that
EPA require the best technology available for
“minimizing adverse environmental impact.”
That phrase is indisputably broad enough to
authorize EPA to consider what an intake st: ucture’s
environmental impacts (to the waterbody or any
other parts of the environment) are, to evaluate
whether they are adverse, and to decide at what
point they have been “minimized.” To suggest that
EPA is barred from allowing federal and state permit
writers to make _ site-specific assessments if
necessary -to address these factors 1s_ wholly
implausible.
The Second Circuit did not base its
interpretation on the language of § 316(b). Instead,
the court relied on case law describing Congress's
general dissatisfaction with the purely water quality-
based regulatory scheme in place before 1972 and its
desire to replace that program with technology-based
regulations focused on controlling discharges of
46
pollutants. Pet. App. 58a-60a, citing Riverkeeper I] at
189-190 (citing, inter alia, the Second Circuit’s
statement in Bethlehem Steel Corp. v. EPA, 538 F.2d
513, 515 (2d Cir. 1976), that Congress intended to
“replace or supplement” the water quality standards
program with “effluent limitations” as basis for
setting aside restoration provisions).
Courts generally have agreed that the
language and history of the technology-based
requirements for the reduction of pollutant
discharges indicate that EPA is not required to
consider local water quality conditions when setting
such controls. But until Riverkeeper IJ, no court had
suggested that Congress intended to bar EPA from
considering water quality in setting discharge
controls. To the contrary, in at least one case, Nat7
Wildlife Fed’n v. EPA, 286 F.3d 554 (D.C. Cir. 2002),
the circuit court upheld EPA’s authority to decline to
set categorical limits for color discharged by pulp and
paper mills “because the potential for significant ...
impacts from color discharges is driven by highly
site-specific conditions.” Id. at 556.
Even if §§ 301, 304, and 306 did forbid
consideration of local water quality in setting
technology-based discharge limitations, transferring
that conclusion to § 316(b) would be an error, given
the material differences between § 316(b) and the
other provisions.
One of the most obvious differences is between
the activity regulated by § 316(b) and activity
regulated under the other provisions. Sections 301,
47
304, and 306 focus on _ controlling’ pollutant
discharges in order to reduce or eliminate their
introduction into the environment. In contrast,
§ 316(b) focuses on the effects of structures
specifically designed to interact with the environment.
Presumably, Congress chose different language to
distinguish between the two programs.
Another obvious difference is between the goal
Congress established for the pollutant discharge
control program and the objective it set in § 316(b).
The former expressly strives to eliminate the
discharge of pollutants, without regard to the
environmental outcome (subject, of course, to the
water quality-based variances for heat and non-
conventional/non-toxic pollutants that Congress
established in §§ 316(a) and 301(g), respectively).
(Section 301(g) is in the appendix to this brief.) By
contrast, §316(b) focuses expressly on _ the
environmental impact of the intake technology,
requiring that it be the best for “minimizing adverse
environmental impact.” That objective is broadly
written — quite unlike the narrowly focused goal of
“eliminating point source discharges.”
Also, the structural choice Congress made in
setting §316(b) apart, along with § 316(a), is
significant. Having acknowledged this structural
difference in Riverkeeper I, the Second Circuit barely
mentions it in Riverkeeper IT. Compare Riverkeeper I
at 186 with Riverkeeper II at 90 (Pet. App. 4a-5a).
48
B. The Relationship Between § 316(a)
and § 316(b) Supports EPA’s Use of
Site-Specific Cost-Benefit Analysis
Under § 316(b)
Contrary to the Second Circuit's reasoning and
for the reasons Entergy and PSEG point out, it is
implausible to believe that Congress, knowing of the
link between thermal discharges and _ intake
structures, would have provided a water quality-
based variance for the discharge while ordering the
Agency to ignore local water quality conditions in
regulating the intake side. See Entergy/PSEG Brief,
Argument § II.B.2.
EPA considered the relationship between the
two provisions and, in the end, concluded that
Congress did not intend to make the Agency's
authority to minimize adverse’ environmental
impacts under § 316(b) co-extensive with the
direction to assure a “balanced, indigenous
population of shellfish, fish, and wildlife in and on”
the waterbody under § 316(a). Pet. App. 59a, n.27.
EPA reasoned that, had Congress intended to compel
that result, it would have used parallel language in
the two provisions. But this interpretation of
§ 316(b) does not preclude the Agency from using
cost-benefit analysis to decide what is necessary to
“minimize adverse environmental impact” in a
particular case, taking site-spécific factors into
account, and the Agency has never suggested it does.
This position is consistent with EPA’s long-
standing interpretation of §316(b) and its
49
relationship to § 316(a). As the Agency’s General
Counsel explained in 1977:
Any cooling water intake
technology may be imposed under
Section 316(b), despite a successful
Section 316(a) demonstration, if the
cost of the technology is not ‘wholly
disproportionate’ to the environmental
gains to be derived’ from _ the
application of the technology. As a
practical matter, though, it would be
more difficult for the Agency to show,
for example, that the imposition of a
$25 million technology under Section
316(b) is not ‘wholly disproportionate’
to the magnitude of the adverse
environmental impact if the
discharger has shown under Section
316(a) that the overall impact of a less
stringent thermal! effluent limitation
does not interfere with the protection
and propagation of the balanced,
indigenous population.
In re Central Hudson, supra at 40, 1977 WL 28250 at
*
9.
EPA's long-standing interpretation
harmonizes §§ 316(a) and (b) and is consistent with
the plain language of both. It followed this
interpretation of the linked provisions in developing
the Phase II rule. As this Court has observed
repeatedly, a long-standing agency interpretation is
50
entitled to substantial deference. See supra
Argument § I.B.
The Second Circuit’s reliance on Russello v.
United States, 464 U.S. 16 (1983), to support its
rejection of EPA’s interpretation of § 316 is wholly
misplaced. Pet. App. 59a n.27. The Russello
presumption — that the presence of a phrase in one
provision and its absence in another reveal
Congress’s design — is only one indication of
meaning. Kapral v. United States, 166 F.3d 565, 579
(3d Cir. 1999) (Alito, J., concurring); United States v.
Ressam, 128 8S. Ct. 1858, 1865 (2008) (Breyer, J.,
dissenting). It grows weaker with each difference in
the statutory provisions being examined. City of
Columbus v. Ours Garage & Wrecker Serv., 536 U.S.
424, 435-36 (2002).
Here, the obvious difference between the two
provisions is that one — § 316(a) — provides for a
wholly water quality-based variance from otherwise
applicable technology and water-based standards,
while § 316(b) requires the use of technology to
accomplish a_= site-specific environmental result.
Because the authorization (indeed, the
responsibility) to consider water quality is embedded
in § 316(b), Congress did not need to provide for a
specific water quality-based variance of the type it
adopted in § 316(a).
In short, there is no support for any of the
rationales offered by the Second Circuit to justify its
conclusion that Congress intended to forbid site-
specific cost-benefit analysis.
51
C. The Record Supports EPA’s
Reading of § 316(b)
To develop the national rule, EPA made a
number of assumptions about the extent and impact
of the aquatic effects of intake structures at power
plants. The Agency understood that some of these
were generalizations that might tend to inflate its
assessment of the risk posed by impingement and
entrainment. The Agency also understood that the
amount and type of impingement mortality and
entrainment that occurs and the environmental
impacts of any losses are strongly influenced by local
conditions. As a result, “EPA’s comparison of
national costs to national benefits may not be
applicable to a specific site due to variations in (1)
the performance of individual technologies and (2)
characteristics of the waterbody in which the
intake(s) are located, including resident aquatic
biota.” Pet. App. 250a (69 Fed. Reg. 41,604).
l. Impingement and
Entrainment Vary Widely
Based on Site-Specific
= Conditions
A power plant withdrawing large quantities of
cooling water may not impinge many fish if its intake
is In an area that is not desirable habitat or where
the resident fish do not dwell in the water column.
See, eg.. DCN:1-3003-BE at 308 (1974-75
impingement sampling at Big Rock Nuclear Station
in Michigan produced only 326 fish weighing 49
pounds total); DCN:1-3021-BE at 207 (1974-75
52
impingement sampling at Ghent Electric Generation
Station recovered only six fish); see also Pet. App.
229a-230a, 249a-25la (69 Fed. Reg. 41,599, 41,603-
04); UWAG Phase I Comments at 109-12. Similarly,
a plant may not entrain many eggs or larvae if the
intake is not near a breeding area or if most of the
eggs and larvae are not free-floating. Pet. App. 229a-
230a (69 Fed. Reg. 41,599).
Impacts vary seasonally as well. For example,
eggs and larvae may be present to be entrained
during species-specific spawning seasons but not the
rest of the year. Pet. App. 293a-294a, 307a (69 Fed.
Reg. 41,613, 41,616). As EPA recognized, “because of
the location of the intake, the characteristics of a
particular waterbody, or the behavioral patterns of
the fish or shellfish in that particular waterbody,
there may be little or no impingement mortality or
entrainment occurring at the site....” Pet. App. 250a-
251a (69 Fed. Reg. 41,604).
Equally important, the mere fact that
impingement or entrainment occurs does not always
signal that the intake has caused “adverse
environmental impact.” 24
— — oe
24 As discussed in this subsection, not all impingement
or entrainment is harmful, even to the affected individual.
Some organisms are intruders which do more harm than good
to the ecosystem. EPA declined to distinguish among species
for purposes of setting the national standards. However, it
recognized the importance of allowing state resource managers,
who may find certain species harmful and thus welcome a
(continued...)
53
First, as EPA recognized, due to the very high
natural mortality to which aquatic organisms are
subject, many organisms arrive at the intake
structure already dead or moribund. See, e.g., Pet.
App. 58la-582a (40 C.F.R. § 125.95(b)(7)(2)))
(requiring that verification monitoring plan for
assessing technology performance account for
naturally moribund fish and shellfish that enter the
structure). The record suggests that this
phenomenon is not uncommon.2> Because special
procedures are required to gauge even an adult
organism's condition prior to impingement (a task
that 1s difficult or impossible for earlier life stages),
EPA's national assessment of intake impacts largely
assumed that all losses are caused by the intake.?6
certain amount of “cropping,” to set their own priorities. See,
e.g., EPA’s Response to Comment 4188, J.A. 355; Pet. App. 269a
(69 Fed. Reg. 41,608) (cost-benefit alternative provides
flexibility comparable to purely site-specific approach); See
UWAG Phase | Comments 85. See also UWAG Phase II
Comments 101-03 (providing support for exclusion of invasive
species from protection under § 316(b)).
25 In one analysis of 40 impingement surveys, 70% of
the organisms collected were dead before they were impinged.
Cherry et al., Effects of Impingement/Entrainment at the
Kanawha River Plant, DCN:1-3007-BE at 6. See also Potter,
Assessment of the Effects of Impingement and Entrainment on
the Fish Community of the New River, Virginia, DCN:1-3056.
BE at 20 (March 1978) (93.9% of 842 fish collected were dead
pnor to impingement).
26 For the very early life stages subject to entrainment,
EPA made an effort to factor in the extremely high natural
mortality rates those life stages typically expenence’ by
(continued...)
54
But EPA knew that requiring application of the
technology most capable of reducing impingement
and entrainment would do nothing to re-animate
organisms already dead or dying from natural
causes.
Second, the Agency understood that many
organisms survive impingement and entrainment
unscathed. That is why EPA developed national
standards for “impingement mortality” rather than
impingement per se. Although EPA chose not to do
the same for entrainment, it did allow facilities to
gauge entrainment survival if they apply for site.
specific limits based on cost-benefit balancing. See
supra n.16.
2. The Availability,
Effectiveness, and Cost of
Intake ‘Technologies Vary
Widely By Site
The availability, effectiveness, and cost of
intake technologies that reduce impingement or
entrainment, or improve organism survival, also
vary with existing site and facility constraints and
the biological and hydrological conditions at the site,
calculating the number of “equivalent adults” represented by
entrainment losses. See, e.g., Pet. App. 17la-172a (69 Fed. Reg
41,586). EPA assumed, however, that the actual organisms
entrained were alive upon arrival) and thus would have
contributed in some fashion to equivalent adult production but
for the intake structure.
55
as EPA recognized. See Pet. App. 247a-252a, 289a-
295a (69 Fed. Reg. 41,603-04, 41,612-13). For
example, cylindrical wedgewire screens can reduce
impingement mortality by 80-95% for fish and
shellfish and, if required, reduce entrainment by 60-
90% under certain conditions. Pet. App. 245a-246a
(69 Fed. Reg. 41,602). However, such screens work
best where in-stream flow conditions are sufficient to
carry away organisms removed from the screen, so
they do not become re-impinged. Pet. App. 529a (40
C.F.R. § 125.99(a)(ii)); see also EPA’s Response to
Comment 979. And barrier nets, which are
successful at reducing impingement mortality by 80-
90%, are susceptible to damage by strong currents,
debris, and icing and thus may be unsuitable for
certain sites but very effective at others. EPA,
Technical Development Document for the Final
Section 316(b) Phase II Existing Facilities Rule (EPA
821-R-04-007) (DCN:6-0004) (Feb. 12, 2004) (“EPA
TDD”) 4-14.
Even where site conditions allow a technology
to reduce impingement and entrainment, it may
create other environmental and social problems. For
example, large in-stream screens or nets may create
hazards to navigation. Pet. App. 447a-449a (69 Fed.
Reg. 41,649-50). Enlarging intake structures to
reduce velocity may require construction in shoreline
habitat. /d. As we have already pointed out,
changes to the cooling system often create significant
adverse side-effects, most notably energy penalties
and increased air emissions. Pet App. 256a-261la (69
Fed. Reg. 41,605-06). In some cases, the thermal
discharge from the facility provides unique habitat
56
for an important species. Curtailing that discharge
with a closed-cycle system can have disastrous
results for the species in question.2?
As the environmental impacts of intake
technologies vary from site to site, so do the costs.
See, e.g. EPA TDD, 1-1 to 1-13 (cost estimates for
retrofitting wedgewire screens at fossil-fueled plants
show 36-fold difference in cost depending on site-
specific factors); EPA TDD, Table 2-21 and 2-22
(showing 115-fold difference in cost of retrofitting
fine mesh traveling screens with fish returns,
depending on site-specific factors). The capital,
energy, and operating and maintenance costs of
retrofitting closed-cycle cooling, which is particularly
costly and difficult for existing facilities, is highly
dependent on site-specific factors. Pet. App. 256a (69
Fed. Reg. 41,605) (capital costs for cooling towers
even for new plants would range from about
$170,000 to $12.6 million per plant annualized,
depending on flow); 68 Fed. Reg. 13,527 (Mar. 9,
2003) (citing DOE study showing site-specificity of
retrofit costs). Moreover, EPA was concerned that
the small sample of plants it used to estimate retrofit
27 See, e.g., Fla. Dept. Industrial Wastewater Comments
on Phase II Rule 2 (Aug. 7, 2002), J.A. 262-63 (describing
adverse impacts of thermal discharge curtailment = on
endangered manatees, which seek out thermally enriched
waters as habitat); see also FPL Comments on the Proposed
316(b) Rule for Existing Sources, Public Comment 1.051 (Aug.
7, 2002) 6.
o7
costs was unlikely to capture the full cost. Pet. App.
259a (69 Fed. Reg. 41,605-06).
In sum, faced with the Herculean task of
developing national standards to address the
complex, interlocking, and _ inherently local
environmental and technical issues presented by
§ 316(b), the Agency considered a number of
approaches. It chose the approach that offered some
measure of uniformity, while also providing to
facilities and regulators the safety valve of
considering the site-specific factors that drive both
the “adverse environmental impact” likely to occur
and the availability, performance, and cost of intake
technologies for reducing that impact.
CONCLUSION
In the broadest sense, cost-benefit balancing is
a fundamental tool of logical decision-making. It
allows the decisionmaker to use all the available
information to make the most reasonable choice for
achieving an_ objective. Courts, governments,
markets, industries, and ordinary people rely on it
constantly, whether explicitly or implicitly, to make
rational decisions.
Now, for the first time, the Second Circuit has
held that cost-benefit analysis is forbidden even
where it is consistent with achieving a statutory
objective and the statute does not expressly prohibit
it. This is folly. The court was wrong to substitute
its own highly selective interpretation for EPA's
eminently reasonable one.
08
This Court should hold. that EPA’s
consideration of costs and benefits in deciding what
is “best technology available” on a national basis and
establishing performance standards based thereon
was within its statutory authority. Likewise, this
Court should hold that EPA was within its authority
in permitting site-specific determinations of “best
technology available” when the cost of meeting
national standards would be significantly greater
than the benefits.
The portions of the Second Circuit’s judgment
remanding the national performance standards and
site-specific cost-benefit provisions of the Phase II
Rule (which are described in greater detail in Section
IV of the Entergy/PSEG Brief) should be reversed.
Respectfully submitted,
KRISTY A. N. BULLEIT
Counsel of Record
HUNTON & WILLIAMS LLP
1900 K STREET, N.W.
WASHINGTON, DC 20006-1109
(202) 955-1547
Counsel for Petitioner
JULY 14, 2008
UWAG APPENDIX
Al
33 U.S.C. § 1311(g) (Clean Water Act § 301(g¢)
(g)Modifications for certain nonconventional
pollutants
(1) General authority
The Administrator, with the concurrence of
the State, may modify the requirements of
subsection (b)(2)(A) of this section with respect
to the discharge from any point source of
ammonia, chlorine, color, iron, and total
phenols (4AAP) (when determined by the
Administrator to be a pollutant covered by
subsection (b)(2)(F) of this section) and anv
other pollutant which the Administrator lists
under paragraph (4) of this subsection.
(2) Requirements for granting modifications
A modification under this subsection shall be
granted only upon a showing by the owner or
operator of a point source satisfactory to the
Administrator that—
(A) such modified requirements will result
at a minimum in compliance with the
requirements of subsection (b){1)(A) or (C)
of this section, whichever is applicable;
(B) such modified requirements will not
result in any additional requirements on
any other point or nonpoint source; and
A2
(C) such modification will not interfere
with the attainment or maintenance of that
water quality which shall assure protection
of public water supplies, and the protection
and propagation of a balanced population
of shellfish, fish, and wildlife, and allow
recreational activities, in and on the water
and such modification will not result in the
discharge of pollutants in quantities which
may reasonably be anticipated to pose an
unacceptable risk to human health or the
environment because of bioaccumulation,
persistency in the environment, acute
toxicity, chronic’ toxicity (including
carcinogenicity, mutagenicity or
teratogenicity), or synergistic propensities.
(3) Limitation on authority to apply for
subsection (c) modification
If an owner or operator of a point source
apphes for a modification under this
subsection with respect to the discharge of any
pollutant, such owner or operator shall be
eligible to apply for modification under
subsection (c) of this section with respect to
such pollutant only during the same time
period as he is eligible to apply for a
modification under this subsection.
(4) Procedures’ for listing additional
pollutants
A3
(A) General authority
Upon petition of any person, the
Administrator may add any pollutant to
the list of pollutants’ for which
modification under this. section is
authorized (except for pollutants
identified pursuant to section 1314 (a)(4)
of this title, toxic pollutants subject to
section 1317 (a) of this title, and the
thermal component of discharges) in
accordance with the provisions of this
paragraph.
(B) Requirements for listing
(i) Sufficient information The person
petitioning for listing of an additional
pollutant under this subsection shall
submit to the Administrator sufficient
information to make the determinations
required by this subparagraph.
(ii) Toxic criteria determination The
Administrator shall determine whether or
not the pollutant meets the criteria for
listing as a toxic pollutant under section
1317 (a) of this title.
(iii) Listing as toxic pollutant If the
Administrator determines’ that the
pollutant meets the criteria for listing as a
toxic pollutant under section 1317 (a) of
this title, the Administrator shall list the
A4
pollutant as a toxic pollutant under
section 1317 (a) of this title.
(iv) Nonconventional criteria
determination If the Administrator
determines that the pollutant does not
meet the criteria for listing as a toxic
pollutant under such _ section’ and
determines that adequate test methods
and sufficient data are available to make
the determinations required by paragraph
(2) of this subsection with respect to the
pollutant, the Administrator shall add the
pollutant to the list of pollutants specified
in paragraph (1) of this subsection for
which modifications are authorized under
this subsection.
(C) Requirements for filing of petitions
A petition for listing of a pollutant under
this paragraph—
(i) must be filed not later than 270
days after the date of promulgation of
an applicable effluent guideline under
section 1314 of this title;
(ii) may be filed before promulgation of
such guideline; and
(iii) may be filed with an application
for a modification under paragraph (1)
A5
with respect to the discharge of such
pollutant.
(D) Deadline for approval of petition
A decision to add a pollutant to the list of
pollutants for which modifications under
this subsection are authorized must be
made within 270 davs after the date of
promulgation of an applicable effluent
guideline under section 1314 of this title.
(E) Burden of proof
The burden of proof for making the
determinations under subparagraph (B)
shall be on the petitioner.
33 U.S.C. § 1371(c) (Clean Water Act § 511(c))
(c) Action of the Administrator deemed major
Federal action; construction of the National
Environmental Policy Act of 1969
(1) Except for the provision of Federal financial
assistance for the purpose of assisting the
construction of publicly owned treatment
works as authorized by section 1281 of this
title, and the issuance of a permit under
section 1342 of this title for the discharge of
any pollutant by a new source as defined in
section 1316 of this title, no action of the
Administrator taken pursuant to this chapter
shall be deemed a major Federal action
A6
significantly affecting the quality of the
human environment within the meaning of
the National Environmental Policy Act of 1969
(83 Stat. 852) [42 U.S.C. 4321 et.seq.]; and
(2) Nothing in the National Environmental Policy
Act of 1969 (83 Stat. 852) shall be deemed to—
(A) authorize any Federal agency authorized to
license or permit the conduct of any activity
which may result in the discharge of a
pollutant into the navigable waters to review
any effluent limitation or other requirement
established pursuant to this chapter or the
adequacy of any certification under section
1341 of this title; or
(B) authorize any such agency to impose, as a
condition precedent to the issuance of any
license or permit, any effluent limitation other
than any such limitation established pursuant
to this chapter.
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.