Amicus Curiae Brief — Utility Water Water Act Group Group v. Riverkeeper, Inc. (Nos. 07-597, 07-588, 07-589)

lol FILED

(4) (4)

Nos. 07-588, 07-689 & 07-597 JUL 21 2008

CLERK

SUPREME COURT, U-S.

Supreme Court of the United States

ENTERGY CORPORATION

Vv.

ENVIRONMENTAL PROTECTION AGENCY, et al.

PSEG FossiL LLC AND PSEG NUCLEAR LLC

Vv.

RIVERKEEPER, INC., et al.

UTILITY WATER ACT GROUP

v.

RIVERKEEPER, INC., et al.

ON WRITS OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

BRIEF FOR THE

NUCLEAR ENERGY INSTITUTE

AS AMICUS CURIAE SUPPORTING PETITIONERS

ELLEN C. GINSBERG SETH P. WAXMAN

MICHAEL A. BAUSER Counsel of Record

NUCLEAR ENERGY EDWARD C. DUMONT

INSTITUTE BRIAN M. BOYNTON

1776 I Street, N.W. WILMER CUTLER PICKERING

Washington, D.C. 20006 HALE AND DORRLIP

(202) 739-8000 1875 Pennsylvania Ave., N.W.

Washington, D.C. 20006

(202) 663-6000

79a cL

TABLE OF AUTHORITIES

INTEREST OF AMICUS CURIAE

TABLE OF CONTENTS

INTRODUCTION AND SUMMARY OF

ETT PETE ESI et aT are

Fe RE EE an

Il. NUCLEAR PLANTS PROVIDE CRITICAL

BASELOAD POWER WITH IMPORTANT EN-

VIRONMENTAL ADVANTAGEBG.......cccccccssceccceseeeees

Il. SECTION 316(b) PERMITS THE EPA To

CONSIDER THE EFFECT OF IMPLEMENTA-

TION COSTS ON INDIVIDUAL PLANTS IN

DETERMINING BTA

A.

Section 316(b) Permits Consideration

Of All Adverse Environmental Im-

pacts, Not Just Effects On Aquatic

Life, And Of Effects On Energy Sup-

SI cninhesnasaniaitadeiiaiamuniinieenasnnitenieitaesnumets

Adverse Environmental And Energy

Supply Impacts Could Result From

Nuclear Plant Closures Caused By The

High Cost Of Retrofitting Closed-

Cycle Cooling As Well As The Retro-

SN IIIT siceshitisssittninsnsaniaicnmmmaveninadeinninadninnene

Ill. THE EPA IS PERMITrED TO WEIGH COsTs

AGAINST BENEFITS ON A CASE-BY-CASE

AND SITE-By-SITE BASIS

CONCLUSION

SERRE ESHER CREE ee

ii

TABLE OF AUTHORITIES

CASES

Page(s)

Chevron U.S.A. Inc. v. Natural Resources De-

fense Council, Inc., 467 U.S. 837 (1984) ...............08. 10

Massachusetts v. EPA, 1278S. Ct. 1488 (2007)................ 6

Riverkeeper Inc. v. U.S. EPA, 358 F.3d 174 (2d

ADMINISTRATIVE AUTHORITIES

Comments of Department of Energy, Comment

ID 316bEFR.010.028, 316bEFR.010.101,

available at http://)www.epa.gov/water

science/3 16b/phase2/comments/author-ph2.

Comments of Goodwin Procter (submitted on

behalf of Entergy Corp.), Comment ID

316bEFR.029.035, available at http://www.

epa.gov/waterscience/316b/phase2/commen

__! _ Ee 20

Comments of the Nuclear Energy Institute,

Comment ID 316bEFR.020.002, available

at http://www.epa.gov/waterscience/316b/

phase2/comments/author-ph2. pdf .............2.2..cccceeeeeeee 5

Comments of UWAG, Comment ID

316bEFR.041.351, available at http://www.

epa.gov/waterscience/316b/phase2/commen

NN ii eile iad cia cites inaidelialianabbandendeniin 14

iii

TABLE OF AUTHORITIES—Continued

Page(s)

Order Certifying North American Electric Re-

liability Corporation as the Electric Reli-

ability Organization and Ordering Com-

pliance Filing, 116 FERC 4 61,062 (July

SE TED sv cevescescevesnmensensaineennanmnennianninainnqsnnsmnevinmeceneee 4

STATUTES AND REGULATIONS

ie OI csncncntssiinintinensiniicnnsnsiteneastiianitenmmmonnumacnns 4

33 U.S.C.

BF FE erapeutineeitoneseonentinnnencennensnstsanniminannsiammmegnesasaniil 10, 24

Aa aipinseeiccceictninaerielichideniimpncinnnsiteaseambniecviiioneciete 10, 12, 24

BF isidaniccsiconsideacenmnicenmennbionnenieienntunnimasensensiniins 10, 12, 24

BF ic tiscencriccsipniciinmsensianennppneinasememmanseenitie 2, 8, 9, 24

10 C.F.R.

UT Tibininiscspesaicieiiesiincionieinesbbesscsiteoeiialecinpiedlidiisenssbensasiionsigs 17

a acicesesiessstirinncetenctisnesntstneeiiaaniinniaeieiasimsnnataainriinnenitiin 17

ae ake OE R ietectrenttnttenesiniensinennininieneniinnenmenn 23

National Pollutant Discharge Elimination

System—Final Regulations To Establish

Requirements for Cooling Water Intake

Structures at Phase II Existing Facilities,

69 Fed. Reg. 41,576 (July 9, 2004) .............csseeseeeeeeseeee

National Pollutant IMscharge Elimination

System: Regulations Addressing Cooling

Water Intake Structures for New Facili-

ties, Final Rule, 66 Fed. Reg. 65,256 (Dec.

Fars I -csvhincensenicistenchintstsitsiignlinetiiapeidectasiiniensbiannncitiuniiin 12

iv

TABLE OF AUTHORITIES—Continued

Page(s)

OTHER AUTHORITIES

Climate Change 2007: Mitigation, Contribution

of Working Group III to the Fourth As-

sessment Report of the Intergovernmental

Panel on Climate Change (Cambridge

Univ. Press 2007), available at http://www.

mnp.nl/ipec/pages_media/AR4-chapters.htm ....

North American Electric Reliability Corpora-

tion, 2006 Long Term Reliability Assess-

ment: The Reliability of Bulk Power Sys-

tems in North America (Oct. 2006) , avazl-

able at http://www.nerc.com/~filez/rasrep

| ISR TROT iecriecert Se ie ek nen ae Aton Oe

North American Electric Reliability Corpora-

tion, 2007 Long Term Reliability Assess-

ment: The Reliability of Bulk Power Sys-

tems in North America (Oct. 2007) , avail-

able at http://www.nerc.com/~filez/rasre

TI cicrnsctcsmmnsnntonnmaneenmnnnrininmmuenien

Nuclear Energy Plays Essential Role in Re-

ducing Greenhouse Gas Emissions, avail-

able at http://www.nei.org/resourcesand

stats/documentlibrary/protectingtheenviron

ment/policybrief/nuclearenergyreducinggr

eenhousegaseMiSSiONS/ ...............0:eesseeceeeseeeeeeeeeees

Summary for Policymakers of the Synthesis

Report of the IPCC Fourth Assessment

Report (2007), available at http://www.

ipee.ch/pdf/assessment-report/ar4/syr/ar4_s

Vv

TABLE OF AUTHORITIES—Continued

Page(s)

U.S. Nuclear Power Plants Set Record Highs

For Electricity Production, Efficiency in

2007 (Feb. 6, 2008), available at http://

www.nei.org/newsandevents/newsreleases/

COROT ec cccinsncaceeicinnennieniienmmnnmmmintianaint

Water & Sustainability (Volume 3): U.S. Wa-

ter Consumption for Power Production—

The Next Half Century (Elec. Power Re-

CONC TE.. Bp cccceccsesscseterssesessesmniecinioenmamiatnan

INTEREST OF AMICUS CURIAE

The Nuclear Energy Institute (NEI) represents

the commercial nuclear energy industry on regulatory

matters.' NEI’s members include every entity licensed

by the Nuclear Regulatory Commission (NRC) to gen-

erate electricity at a commercial nuclear power plant in

the United States. Members also include nuclear plant

designers, major architecture and engineering firms,

fuel fabrication facilities, and other organizations and

individuals involved in the nuclear energy industry.

This Court’s interpretation of Section 316(b) of the

Clean Water Act (CWA) in these cases could signifi-

cantly affect most, if not all, of the 38 U.S. nuclear

power plants that do not currently use “closed-cycle”

cooling water systems. NEI can offer the Court an in-

formed perspective on the statutory issue presented

and on the likely practical consequences of an incorrect

interpretation of Section 316(b).

'No counsel for a party authored this brief in whole or in

part, and no party or its counsel made a monetary contribution

intended to fund the preparation or submission of this brief. Peti-

tioners PSEG Nuclear LLC and Entergy Corporation, and certain

members of petitioner Utility Water Act Group with nuclear

plants, are members of NEI and make contributions that support

all of NEI’s activities, including the filing of amicus briefs. No

person other than NEI, its members, or its counsel made a mone-

tary contribution to the preparation or submission of t’is brief.

Letters from all parties either consenting generally to the filing of

amicus curiae briefs in these cases or consenting specifically to the

filing of this brief have been filed with the Court.

2

INTRODUCTION AND

SUMMARY OF ARGUMENT

Nuclear power facilities are an integral part of our

nation’s energy production infrastructure. Nuclear

plants supply one-fifth of the country’s electricity, and

the reliability of nuclear power makes it critical to the

functioning of the electrical grid. Moreover, the low

variability of nuclear power prices and supply has a

stabilizing effect on the market for electricity gener-

ally. Of particular importance in light of concerns about

global climate change, nuclear power plants emit no

greenhouse gases.

Refusing to defer to the longstanding interpreta-

tion by the Environmental Protection Agency (EPA) of

its statutory authority, the court of appeals read Sec-

tion 316(b) of the Clean Water Act to foreclose the

agency from comparing costs to benefits in determining

what is, under particular circumstances, “the best tech-

nology available for minimizing [the] adverse environ-

mental impact” caused by cooling water intake struc-

tures at existing large power plants. 33 U.S.C.

§ 1326(b). The court would have permitted the EPA to

consider the cost of implementing a particular technol-

ogy in only very limited respects—principally, to de-

termine whether it could “reasonably [be] borne” by

the industry as a whole. Pet. App. 24a-26a.’

At a minimum, Section 316(b) permits the EPA to

consider any adverse impact that adoption of a particu-

lar technology would have on the environment gener-

’ Citations to “Pet. App.” refer to the Appendix to the Peti-

tion for a Writ of Certiorari filed by Entergy Corporation in No.

07-588.

3

ally and on the nation’s energy supply. By its terms,

the provision calls for the EPA to require adoption of

the “best” technology available (BTA) to minimize “ad-

verse environmental impact[s]” across the board. This

language readily permits consideration of energy sup-

ply impacts and environmental impacts beyond just

those involving impingement or entrainment of aquatic

life at the intake location.

In the case of nuclear power, this means that the

EPA must be permitted to consider the costs of imple-

menting particular technologies at individual plants in

order to assess how requiring those technologies would

itself affect both the energy supply and the environ-

ment, including by potentially forcing plant closures.

Nuclear power plays a particularly important role in

maintaining the nation’s baseload power supply and is a

key technology for combating global climate change. If

existing nuclear plants are forced to close, either tem-

porarily or permanently, in the near and medium term,

their power output could realistically be replaced, if at

all, only by plants that burn fossil fuels.

Mandating the adoption of closed-cycle cooling by

existing plants likely would lead to the closure of some

nuclear plants. Retrofitting existing nuclear plants to

use closed-cycle cooling would be exceedingly expen-

sive, if feasible at all, and would entail its own environ-

mental costs. Individual nuclear plant owners have es-

timated that retrofitting closed-cycle cooling systems

at particular plants could cost $ 1 billion or more. For

some plants, the high cost of retrofitting closed-cycle

cooling could make shutting down the only economically

feasible option. In order adequately to consider the

impacts on the environment and the supply of energy of

selecting closed-cycle cooling as BTA, the EPA neces-

sarily must be permitted to consider both the environ-

4

mental and fiscal costs of implementing that technol-

ogy.

Because the adverse environmental and energy

supply impacts of closing individual nuclear plants are

so significant, it is also important that the EPA have

the discretion to weigh these costs against the benefits

that might be obtained from adopting a particular tech-

nology at a specific site. The court of appeals foreclosed

any case-by-case or site-by-site cost/benefit analysis.

This Court should reject any such limitation on the

EPA’s implementation of Section 316(b)

ARGUMENT

I. NUCLEAR PLANTS PROVIDE CRITICAL BASELOAD POWER

WITH IMPORTANT ENVIRONMENTAL ADVANTAGES

The supply of power in the United States is under

strain. In some regions, supply at times barely meets

demand. During the summer of 2006, for example, a

heat wave “required utility system operators, custom-

ers, and government agencies to implement emergency

procedures in some areas.” North American Electric

Reliability Corporation (NERC), 2006 Long Term Re-

liability Assessment: The Reliability of Bulk Power

Systems in North America 5 (Oct. 2006), available at

http://www.nerc.com/~filez/rasreports.html.’ Blackouts

> NERC is the entity certified by the Federal Energy Regu-

latory Commission as the single “Electric Reliability Organization”

for the United States under Section 215 of the Federal Power Act,

16 U.S.C. § 8240(c). See FERC, Order Certifying North American

Electric Reliability Corporation as the Electric Reliability Or-

ganization and Ordering Compliance Filing, 116 FERC § 61,062

(July 20, 2006).

5

were avoided principally “because generating capacity

performed extremely well during this period.” /d.

The problem is likely to get worse before it gets

better. Over the next ten years, the utility industry

expects peak demand to increase by over 17%, while

committed generating capacity is expected to increase

by only 8.4%. NERC, 2007 Long Term Reliability As-

sessment: The Reliability of Bulk Power Systems in

North America 10 (Oct. 2007) (2007 NERC Assess-

ment), available at http://www.nerc.com/~filez/rasre

ports.html. In a number of regions, capacity margins

are expected to drop well below target leveis. /d. at 24.

Against this backdrop, nuclear power plants are an

exceedingly important source of power. There are cur-

rently 104 operating units at more than 60 nuclear plant

sites in the United States. These plants generate ap-

proximately 20% of the nation’s electricity.* Along with

coal and natural gas, nuclear energy is a foundational

part of the nation’s power supply.

Nuclear power is a particularly important source of

generation because of its cost stability and output reli-

ability. The supply and cost of nuclear power do not

fluctuate significantly based on weather or climate con-

ditions, fuel costs, or the availability of imported sup-

plies. Nuclear plants are able to operate without inter-

ruption for extended periods—up to 24 months at a

time. As a result, nuclear power is an important com-

ponent of the “baseload” electrical power generation

* See Comments of the Nuclear Energy Institute, Comment

ID 316bEF R.020.002, at 407. The comments cited in this brief

are available in http://www.epa.gov/waterscience/3 i6b/phase2/

comments/author-ph2.pdf. The page citations provided are to this

compilation of the comments arranged by author.

6

that is necessary for the national electric power grid to

function. Indeed, the stability of the grid depends on

nuclear power.

Nuclear energy is also comparatively inexpensive.

Nuclear plants are currently estimated to be the low-

est-cost producers of baseload electricity.” The consis-

tent availability of nuclear power at predictable prices

also has a stabilizing effect on the electricity market as

a whole.

Nuclear power also has important environmental

advantages over other forms of energy production. As

this Court has recognized, the world faces serious

threats from global climate change. See Massachusetts

v. EPA, 127 8S. Ct. 1438, 1455-1456 (2007). The United

Nations Intergovernmental Panel on Climate Change

(IPCC), which in 2007 shared the Nobel Peace Prize for

its work on global warming, has concluded that

“(warming of the climate system is unequivocal, as is

now evident from observations of increases in global

average air and ocean temperatures, widespread melt-

ing of snow and ice and rising global average sea

level.”” “Average Northern Hemisphere temperatures

during the second half of the 20th century were very

likely higher than during any other 50-year period in

> See U.S. Nuclear Power Plants Set Record Highs For Elec-

tricity Production, Efficiency in 2007 (Feb. 6, 2008), available at

http://www.nei.org/newsandevents/newsreleases/setrecordhighs/.

. Summary for Policymakers of the Synthesis Report of the

IPCC Fourth Assessment Report 2 (2007), available at http://

www.ipec.ch/pdf/assessment-reportV/ar4/syr/ar4_syr_spm.pdf.

7

the last 500 years and likely the highest in at least the

past 1300 years.”

Many believe that climate change is caused in sig-

nificant part by the emission of greenhouse gases, in-

cluding carbon dioxide.* It has been estimated that in

2004 about one-quarter of global greenhouse gas emis-

sions were from energy production.” Nuclear power

plants, however, emit no greenhouse gases. Nuclear

plants—not other alternative sources—generate more

than 70% of all carbon-free electricity in America.’ By

contrast, hydropower and solar, wind, and geothermal

sources together account for less than 30%. Increased

electricity production by nuclear power plants was re-

sponsible for over one-third of all voluntary greenhouse

gas reductions reported by the electric power sector in

2005. It is estimated that using nuclear power instead

of fossil-fuel-burning power plants prevented 681 mil-

lion metric tons of carbon dioxide emissions in 2006.

The volume of greenhouse gas emissions avoided by the

use of nuclear power in the United States is equivalent

to taking more than 95% of all passenger cars off the

Id.

® Id. at 5 (“Most of the observed increase in global average

temperatures since the mid-20th century is very likely due to the

observed increase in anthropogenic [greenhouse gas] concentra-

tions.”’).

9 Id.

‘The factual points in the remainder of this paragraph are

drawn from a more detailed discussion, Nuclear Energy Plays

Essential Role in Reducing Greenhouse Gas Emissions, available

on NEI’s website at http://www.nei.org/resourcesandstats/docu-

mentlibrary/protectingtheenvironment/policy brief/nuclearenergy

reducinggreenhousegasemissions/.

8

nation’s roadways. Globally, the use of nuclear energy

prevents the emission of more than 2.6 billion metric

tons of carbon dioxide each year."'

For these reasons, the United Nations IPCC in its

Fourth Assessment Report listed “nuclear power” as a

“key” technology for mitigating greenhouse gas emis-

sions—a technology, importantly, that is “currently

commercially available.”'* It has also concluded that

“(njuclear power is ... an effective [greenhouse gas]

mitigation option.”"*

0. SECTION 316(b) PERMITS THE EPA To CONSIDER THE

EFFECT OF IMPLEMENTATION COSTS ON INDIVIDUAL

PLANTS IN DETERMINING BTA

Section 316(b) of the Clean Water Act directs the

EPA to “require that the location, design, construction,

and capacity of cooling water intake structures reflect

the best technology available for minimizing adverse

environmental impact.” 33 U.S.C. § 1326(b). As ex-

plained by petitioners and the government, this provi-

sion permits the EPA to conduct cost-benefit analysis

i a

Even when greenhouse gas emissions are analyzed for the

entire life cycle of a nuclear power plant—from uranium mining to

electricity production to used fuel management—nuclear energy is

comparable to solar, wind, and hydropower sources.

™ Summary for Policymakers of the Synthesis Report of the

IPCC Fourth Assessment Report 17.

'S Climate Change 2007: Mitigation, Contribution of Working

Group Ill to the Fourth Assessment Report of the Intergovern-

mental Panel on Climate Change 269 (Cambridge Univ. Press

2007), available at http://www.mnp.nl/ipec/pages_media/AR4-

chapters.html; see also id. (“Total life-cycle [greenhouse gas] emis-

sions per unit of electricity produced from nuclear power are .. .

similar to those for renewable energy sources. ”’).

9

in determining BTA. The language, structure, and leg-

islative history of Section 316(b) unambiguously au-

thorize such an analysis. See Br. for Petitioners En-

tergy Corp., PSEG Fossil LLC, and PSEG Nuclear

LLC 31-52.'* Moreover, as explained in detail below, at

a minimum, Section 316(b) allows the EPA to consider

the environmental and energy costs of retrofitting a

proposed technology, including those that would result

if the high cost of retrofitting led to nuclear plant clo-

sures.

A. Section 316(b) Permits Consideration Of All Ad-

verse Environmental Impacts, Not Just Effects

On Aquatic Life, And Of Effects On Energy Sup-

ply

1. Section 316(b) instructs the EPA to determine

“the best technology available for minimizing adverse

environmental impact.” 33 U.S.C. § 13826(b) (emphasis

added). The term “adverse environmental impact” is

not separately defined. Its plain meaning is not limited

to impacts on aquatic life. Rather, the term encom-

passes the whole range of potential adverse environ-

mental impacts related to the adoption of a particular

technology.

Section 316(b)’s reference to Sections 301 and 306

of the CWA reinforces this conclusion. The provisions

relied upon by the court of appeals, which address the

“best available technology” (BAT) and “best available

demonstrated control technology” (BADT) standards,

'* Even if the provision were deemed not to unambiguously

permit cost-benefit analysis, it surely does not unambiguously

foreclose such an analysis. See Br. of Petitioner Utility Water Act

Group 31-37; Br. for the Federal Parties as Respondents Support-

ing Petitioners 15-26.

10

expressly permit the EPA to consider “non-water qual-

ity environmental impact” in determining the relevant

effluent reduction technologies. See 33 U.S.C.

§$§ 1311(b)(2)(A) (referencing § 1314(b)(2)),

1314(b)(2)(B), 1316(B)(1)(b).

The EPA’s interpretation of “adverse environ-

mental impact” is consistent with its plain meaning. In

the rulemaking at issue here, the EPA concluded that,

although it was focusing primarily on impingement and

entrainment of aquatic life, it could consider air quality

impacts in setting BTA:

[T]he net effect [of the energy penalty] would

be more consumption of fossil fuel, which in

turn increases the emission of sulfur dioxide,

NO,, particulate matter, mercury, and carbon

dioxide. Increasing fuel consumption at exist-

ing coal power plants yields the largest in-

crease in air emissions because existing sys-

tems are less efficient at producing power (and

therefore burn more coal) and because they

generally have less air pollution control equip-

ment in place. EPA believes that it is reason-

able to consider these non-water quality envi-

ronmental impacts ...in making today’s deci-

sion.

National Pollutant Discharge Elimination System—

Final Regulations To Establish Requirements for

Cooling Water Intake Structures at Phase II Existing

Facilities, 69 Fed. Reg. 41,576, 41,605 (July 9, 2004)

(Phase 11 Rulemaking) (emphasis added). This inter-

pretation of the Act extends to other non-water quality

impacts, and it is entitled to deference, see Chevron

U.S.A. Inc. v. Natural Res. Def. Council, Inc., 467 U.S.

837, 842-843 (1984).

11

The court of appeals itself recognized that, at least

in some circumstances, “the EPA could rely on factors

other than impingement and entrainment in establish-

ing BTA, such as negative environmental impacts.”

Pet. App. 37a; see also id. at 26a n.12 (permitting con-

sideration of “energy efficiency or environmental im-

pact”).'° But as explained below, in order to consider

other adverse environmental impacts, the EPA must

consider the costs of implementing different technolo-

gies—an inquiry the court of appeals seemingly has

forbidden except in very narrow circumstances. Thus,

although the court of appeals correctly interpreted Sec-

tion 316(b) to permit the EPA to undertake a broad in-

quiry into potential adverse environmental effects, its

insistence that the agency forego cost-benefit analysis

threatens to preclude that very inquiry.

2. Section 316(b) also permits the EPA to con-

sider the impact that selection of a particular technol-

ogy would have on the nation’s supply of energy. The

provision does not directly address effects on energy

supply, but its mandate that the EPA select the “best”

technology for “minimizing adverse environmental im-

pact” readily permits consideration of energy supply

impacts. Considerations of energy supply are inher-

ently linked to considerations of environmental impact,

since most means of generating energy and certainly

those that can replace short-term energy shortfalls—

affect the environment. Moreover, given the extreme

'> Likewise, in Riverkeeper, Inc. v. EPA, 358 F.3d 174 (2d

Cir. 2004) (Riverkeeper 1), the court held that “the Clean Water

Act allows the EPA to make a choice among alternatives based on

more than impingement and entrainment,” id. at 196, and affirmed

the EPA’s consideration of, among other things, “undesirable air

emissions,” id. at 194-195.

12

importance of maintaining an adequate, stable supply of

electricity, the effect of a given technology on the na-

tion’s electricity supply is an important consideration

when determining the “best” technology.

This conclusion is further buttressed by Sections

301 and 306 of the Act. Although the provisions gov-

erning BAT and BADT do not expressly address

cost/benefit weighing, they do expressly permit the

EPA to consider “energy requirements” in adopting

effluent reduction technologies. See 33 U.S.C.

§§ 1314(b)(2)(B), 1316(B)(1)(b).

The EPA has interpreted Section 316(b) to permit

consideration of impacts on energy supply in selecting

the BTA for existing plants. In rejecting mandatory

retrofitting of closed-cycle cooling, the EPA stated:

Another issue concerns the energy impacts of

cooling towers. EPA examined the information

it received after publication of the proposed

rule and [Notice of Data Availability], and

agrees that the energy penalty associated with

cooling towers, together with other factors, in-

dicates that this technology is not the best

technology available for existing facilities for

minimizing adverse environmental impacts as-

sociated with cooling water intake structures.

69 Fed. Reg. at 41,605 (emphasis added); compare Na-

tional Pollutant Discharge Elimination System: Regu-

lations Addressing Cooling Water Intake Structures

for New Facilities, Final Rule, 66 Fed. Reg. 65,256,

65,259-65,260 (Dec. 18, 2001) (requiring closed-cycle

cooling or its equivalent at new facilities). Again, this

interpretation is subject to deference under Chevron.

13

The court of appeals acknowledged that Section

316(b) permits consideration, at least in some circum-

stances, of impacts on energy supply. Pet. App. 37a.'°

But, as illustrated below, the court of appeals’ limita-

tion on the EPA’s ability to consider the costs of im-

plementing different cooling water intake structure

technologies calls into question the agency’s ability

adequately to consider energy supply impacts.

B. Adverse Environmental And Energy Supply Im-

pacts Could Result From Nuclear Plant Closures

Caused By The High Cost Of Retrofitting Closed-

Cycle Cooling As Well As The Retrofitting Itself

As NEI noted in its brief in support of certiorari,

retrofitting existing nuclear plants to use closed-cycle

cooling is at best a complicated, costly, and time-

consuming process, which might not be economically

feasible at some plants.'’ Mandating the use of closed-

'© See also id. at 26a n.12 (“([TJhe Agency may also depart

from this performance benchmark because of other permissible

considerations aside from cost, for instance, energy effi-

ciency ....”); Riverkeeper I, 358 F.3d at 194-196 (upholding selec-

tion of BTA in part based on consideration of energy efficiency).

'” If the EPA is foreclosed from considering the costs of im-

plementing proposed technologies except in the limited respects

permitted by the court of appeals, respondents will almost cer-

tainly contend that the agency must mandate adoption of closed-

eycle cooling. The EPA has already determined that retrofitting

plants to use closed-cycle cooling generally will reduce impinge-

ment and entrainment to a greater degree than upgrading the de-

sign and construction of water intake structures at once-through

plants. See 69 Fed Reg. at 41,606. While the reductions achievable

using other technologies “approach[]” those from closed-cycle cvol-

ing, respondents will surely argue that they are not “essentially

the same” in the only sense that the court of appeals would recog-

nize as allowing selection of the lower-cost alternative. See Pet.

14

cycle cooling at all existing nuclear plants would have

its own environmental costs—due in part to decreased

plant efficiency and extended plant closures—and could

further decrease the nation’s supply of energy and

harm the environment by forcing some nuclear plants

to shut down permanently.

1. Retrofitting large existing plants to use closed-

cycle cooling would pose significant fiscal and engineer-

ing challenges. Among other things, closed-cycle cool-

ing requires an extensive network of pipes to circulate

water to and from the plant’s condensers. For example,

it is estimated that retrofitting the Salem Generating

Station to use closed-cycle cooling would require the

demolition or abandonment of over three miles of exist-

ing 7-foot and 10-foot diameter circulating water pipe

and the installation of over 4 miles of new 7-foot pipe.

See, eg. Comments of UWAG, Comment ID

316bEFR.041.351, at 1830. Additionally, many plants

would need to reinforce their condensers to withstand

the increased pressure resulting from closed-cycle cool-

ing and otherwise modify them for use with the retro-

fitted system.

In addition, in order to make the changes necessary

to convert to closed-cycle cooling, plants would need to

shut down for what could be prolonged periods of time.

The EPA estimated that plants would be unavailable

for as long as 10 months. See 69 Fed. Reg. at 41,605.

Private estimates suggest that retrofitting the Diablo

App. 26a, 25a, 34a n.16, 36a. If that is correct, the court of appeals’

decision, if affirmed, would require the EPA to mandate retrofit-

ting of all existing plants to use closed-cycle cooling, so long as the

billions of dollars that retrofitting would cost could theoretically be

borne by the industry as a whole.

15

Canyon and San Onofre nuclear power plants would

render them unavailable for 12 months or more, that

the Indian Point nuclear power plant would be closed

for approximately 10 months, and that the Oyster

Creek nuclear power plant would have to be shut down

for more than four months. Extended outages would

also be anticipated at the Salem nuclear power plant.

See PSEG Pet. 34 (estimating that a closed-cycle retro-

fit “would require partially suspending operations for

at least 14 months, causing a net loss of 1150 megawatts

... during that period”). Shutdowns of this sort impose

substantial costs on plant owners.

Even once returned to operation, retrofitted plants

would inevitably produce less usable power than they

did before they were converted to use closed-cycle cool-

ing. A steam power plant’s condenser “operates under

vacuum conditions (i.e. a pressure below normal atmos-

pheric pressure).” Comments of Department of En-

ergy, Comment ID 316bEFR.010.101, at 239. Because

cooling water in once-through systems has on average a

lower temperature than water in closed-cycle cooling

systems, the vacuum created in once-through systems

is greater than in closed-cycle systems, which increases

efficiency. /d. In addition, plants using closed-cycle

cooling require more power to run the cooling system

itself, leaving less for consumers.

In its Phase II Rulemaking, the EPA relied on an

estimate by the Department of Energy (DOE) that the

“energy penalty” resulting from converting existing

once-through plants to closed-cycle cooling would gen-

erally amount to a 2.4% to 4.0% decline in energy pro-

duction capacity. 69 Fed. Reg. at 41,605. The EPA

noted a 5.3% energy penalty associated with the use of

closed-cycle cooling for one nuclear plant that provides

78% of the electricity for Vermont. See id. Using the

16

same DOE figures relied upon by the EPA, it has been

estimated that retrofitting all existing nuclear plants to

use closed-cycle cooling would reduce overall capacity

by 2,117 megawatts. As the EPA explained with re-

spect to both nuclear and non-nuclear plants, “on aver-

age 20 additional 400-MW plants might have to be built

to replace the generating capacity lost by replacing

once-through cooling systems with wet cooling towers

if such towers were required by all Phase II facilities.”

Id. The energy penalty imposed by closed-cycle cooling

is yet another cost that would have to be borne if plants

were required to retrofit closed-cycle cooling.

Additionally, in order to retrofit closed-cycle cool-

ing, some plants would need to acquire land on which

water cooling towers could be built. In rejecting man-

datory closed-cycle retrofits, the EPA noted that “31

out of 56 plants surveyed said that they would need to

acquire additional property to accommodate cooling

towers.” 69 Fed. Reg. at 41,605. For some plants, find-

ing and using land for cooling towers would present

daunting challenges—both fiscal and environmental.

For example, retrofitting the Diablo Canyon plant on

the central California coast, if it could be done at all,

would require excavating a 1600-foot by 600-foot sec-

tion of the Las Canadas coastal hills adjacent to the

plant to make room for the construction of 132 60-foot-

tall water tower cells.'* Retrofitting the San Onofre

plant, on the coast between San Diego and Los Ange-

les, likely would require construction of cooling water

tanks at the top of 100-foot bluffs overlooking the beach

adjacent to the plant. Acquiring or developing land for

'* Unless otherwise indicated, examples in this brief are

drawn from information provided by plant operators.

17

water cooling towers thus could impose significant

costs.

Finally, some existing plant owners likely would

need to acquire federal, state, and possibly local per-

mits to proceed with retrofitting. Some retrofits, for

instance, would require a license amendment from the

NRC, which requires a formal approval process gener-

ally involving public hearings. See 10 C.F.R. § 50.91.'°

Obtaining such amendments would consume substantial

NRC and private resources. Efforts to obtain the per-

mits necessary to address what the court of appeals

viewed as the fish-protection requirements of the Clean

Water Act could well be hampered by adverse envi-

ronmental impacts of other sorts that might result from

retrofitting plants to use closed-cycle cooling. For ex-

ample, salt-water cooling towers produce large plumes

of salt water vapor that can contribute to salt contami-

nation, fogging, and icing in the surrounding area and

affect nearby electrical equipment. It is also antici-

pated that mandating construction of cooling towers

would generate concern about increased noise. The

prospect of extensive construction in sensitive areas,

such as around the coastal Diablo Canyon and San On-

ofre plants, would raise substantial additional concerns

that could delay or even preclude obtaining necessary

approvals. As the EPA noted, expanding some plants

might require displacement of ecologically valuable

lands. 69 Fed. Reg. at 41,605. The San Onofre plant,

Pe ; ,

A license amendment is required if a proposed change to a

nuclear plant involves, among other things, a modification to tech-

nical specifications. See id. § 50.59(c)(1)(i). Whether retrofitting to

use closed-cycle cooling would require a license amendment would

be a plant-specific determination.

18

for example, is surrounded by federal and state lands

that support species protected by state and federal

laws.

In addition to possible adverse effects on the land

and air surrounding plants, retrofitting could adversely

affect the very water resources protected by the Clean

Water Act. Although a closed-cycle cooling system at a

nuclear plant does not take in as much water from the

natural source day-to-day as a once-through system, it

actually consumes (that is, permanently removes from

the source water body) up to 80% more water overall.

See Water & Sustainability (Volume 3): U.S. Water

Consumption for Power Production-—The Next Half

Century viii (Elec. Power Research Inst. 2002). More-

over, efforts to obtain permits for retrofits—despite

these environmental impacts—would occur at a time

when the NRC and industry are concentrating on ap-

plications to renew operating licenses at existing nu-

clear plants and on licensing and constructing new

plants that are necessary to meet the expanding de-

mand for power.

In the face of these substantial potential obstacles,

the EPA recognized that, in some instances, retrofit-

ting nuclear plants to use closed-cycle cooling would be

prohibitively expensive:

[A} national requirement to retrofit existing

systems is not the most cost-effective approach

and at many existing facilities, retrofits may be

impossible or not economically practicable.

EPA estimates that the total capital costs for

individual! high-flow plants (i.e., greater than 2

billion gallons per day) to convert to wet tow-

ers generally ranged from $130 to $200 million,

19

with annual operating costs in the range of $4

to $20 million... .

69 Fed. Reg. at 41,605.

Moreover, the EPA acknowledged that, for a vari-

ety of reasons, even its substantial cost estimates might

“not fully reflect the costs of the option.” 69 Fed. Reg.

at 41,605. Indeed, forecasts by individual plant opera-

tors run higher than the EPA’s estimates. The Edison

Electric Institute, the association of U.S. shareholder-

owned electric companies, has estimated that retrofit-

ting the 38 existing nuclear plants that do not use

closed-cycle cooling would cost between $10 billion and

$19 billion.”” Estimates of the cost of retrofitting all ex-

isting once-through plants with closed-cycle cooling

submitted to the EPA by petitioner Utility Water Act

Group ranged from $40 to $66 billion. See UWAG Pet.

37. Using the high end of the EEI range, the average

cost per nuclear plant would be $500 million. For each

of four plants—-Diablo Canyon, Salem Generating Sta-

tion, San Onofre, and Indian Point—EEI or plant own-

ers estimate that the cost of retrofitting could total $1

billion or more. At Diablo Canyon alone, retrofitting

could cost in the range of $2.4 billion.

In light of the significant cost of retrofitting closed-

cycle cooling, if the EPA mandates such retrofitting at

all existing nuclear power plants, some of those plants

could well find it economically impossible to continue

operation.

— — ——

:

*° This range is derived from cost estimates submitted to the

EPA adjusted with some site-specific cost estimates provided by

individual operators.

20

2. Any closures of nuclear plants due to the high

cost of retrofitting closed-cycle cooling would have ad-

verse effects on the nation’s energy supply and on the

environment.

First, the loss of generating capacity from nuclear

plants that are forced to close would have a significant

adverse impact on the nation’s overall supply of power.

While the lost capacity might eventually be replaced, in

the short term, air quality limitations would likely pre-

vent fossil-fuel plants from attempting to meet the en-

tire shortfall, and existing nuclear plants lack additional

capacity. In areas of the country already facing energy

constraints, such as California and the _ mid-

Atlantic/Northeast corridor, the near-term reduction in

capacity would increase the likelihood of brownouts and

blackouts during the summer months. Thus, in its

comments to the EPA, petitioner Entergy estimated

that if its Indian Point nuclear plant were to close, tar-

get reserve margins in New York could not be met and

“the calculated number of days where emergency

measures would be taken to prevent blackouts, etc.,

would rise by 800%.” Comments of Goodwin Procter

(submitted on behalf of Entergy Corp.), Comment ID

316bEFR.029.035, at 619.”'

NERC has recognized that mandating closed-cycle

cooling could adversely affect the nation’s power capac-

ity margins In its 2007 reliability report, NERC ex-

plained:

7! Even temporary plant closures to allow retrofitting would

have a significant impact. Because of their length, the anticipated

closures would likely overlap with the winter or summer peak

electricity demand seasons, threatening the reliability of the

power grid.

21

While plant specific outcomes will vary, retro-

fitting existing power plants with cooling tow-

ers can reduce the capacity of those plants,

which will exacerbate the supply concerns

identified in ... this assessment. In some

cases, retrofits may prove so costly that plants

are retired earlier than projected, with the con-

sequent loss of the plant’s entire capacity. Ata

time when additional electricity generating re-

sources are needed, the loss of existing gener-

ating capacity would undermine U.S. efforts to

meet the growing demand for electricity.

2007 NERC Assessment 12.”* For this reason, during

the Phase II Rulemaking the DOE “strongly” recom-

mended that the EPA not require all existing plants to

be retrofitted to use closed-cycle cooling. Comments of

Department of Energy, Comment ID

316bEFR.010.028, at 185.

Second, the closure of nuclear plants required to

retrofit closed-cycle cooling would have significant ad-

verse environmental effects. Over the short and me-

dium term, new nuclear plants cannot realistically re-

place power lost due to closures of nuclear plants. De-

signing a new nuclear plant, obtaining necessary per-

mits, and building the plant takes years. New nuclear

projects already in early stages of development are not

expected to begin production until 2015 to 2020. Thus,

as a practical matter, for at least several years, gener-

ating capacity lost from existing nuclear plants would

22 See also id. at 97 (“Besides the de-rating of existing units,

the costs of retro-fitting cooling towers for many older plants may

be prohibitive and some may be retired potentially jeopardizing

resource adequacy in many regions of the U.S.”).

22

have to be replaced—to the extent it can be replaced at

all given constraints on existing plants—largely by

power generated using fossil fuels.

The EPA understood that requiring retrofitting

would result in increased reliance on fossil fuels. See,

e.g., 69 Fed. Reg. at 41,605. That, in turn, would in-

crease “the emission of sulfur dioxide, NO_, particulate

matter, mercury and carbon dioxide.” Jd. It is esti-

mated that using fossil fuels to replace the nuclear

power lost due to the retrofitting energy penalty alone

could add 37,000 tons of sulfur dioxide, 13,900 tons of

nitrogen oxide, and 14 million metric tons of carbon di-

oxide to the nation’s atmosphere annually.” To the ex-

tent power from fossil-fuel plants also replaces capacity

lost as a result of nuclear plant closures, the increase in

greenhouse gas emissions would be even more severe.

Il. THE EPA IS PERMITTED TO WEIGH COSTS AGAINST

BENEFTTS ON A CASE-BY-CASE AND SITE-BY-SITE BASIS

Because of the substantial negative effects that

closing nuclear plants would have on the environment

and the nation’s energy supply, it is important that the

EPA be permitted not only to weigh costs against

benefits generally but also to do so on a case-by-case

and site-by-site basis. “EPA and State permitting au-

thorities have been implementing CWA section 316(b)

on a case by case basis for over 25 years.” 69 Fed. Reg.

at 41,626. The Phase II rules continue this practice in

part by permitting a facility to obtain a site-specific as-

sessment of BTA by demonstrating “that its costs

would be significantly greater than the benefits of com-

23 os , : ; : :

Carbon dioxide typically is measured in metric tons, which

are equivalent to approximately 2205 Ibs.

23

plying with such performance standards at the facility.”

Id. at 41,603; see also 40 C.F.R. § 125.94(a)(5).

The court of appeals rejected the agency’s site-

specific cost-benefit provision primarily for two rea-

sons: (1) because it concluded that any cost-benefit

comparison was improper, and (2) because the provi-

sion supposedly “impermissibly authorizes the EPA to

consider the degraded quality of waterways in selecting

a site-specific BTA.” Pet. App. 58a. This Court should

make clear thsi, to the contrary, the EPA may weigh

costs against henefits on a case-by-case basis.

The text ef Section 316(b) provides no indication

that the agency was acting contrary to its authority for

almost 30 years when it made determinations of BTA

solely on a case-by-case basis. At most, Section 316(b)

is silent as to whether the EPA should promulgate uni-

form national standards or make case-by-case determi-

nations. In fact, the provision’s instruction that the

EPA determine the optimal “location” of cooling water

intake structures—which is almost certain to vary from

place to place—supports the EPA’s position that case-

by-case and site-by-site determinations of BTA are per-

mitted.

The court of appeals believed that case-by-case de-

terminations of BTA are not permitted because in 1972

Congress “changed its approach” to regulating efflu-

ents under the CWA. The court noted that the provi-

sions of the CWA addressing effluents “now regulate[]

discharges from point sources rather than water qual-

ity.” Pet. App. 58a. But that observation is beside the

point. In contrast to the effluent reduction provisions,

Section 316(b) requires the EPA to mandate use of the

best technology available to minimize “adverse envi-

24

ronmental impact.” 33 U.S.C. § 1326(b) (emphasis

added).”*

Foreclosing the EPA from considering the amount

and nature of aquatic life in the water bodies from

which cooling water is drawn makes no sense under

Section 316(b). As the EPA explained, “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 lit-

tle or no impingement mortality or entrainment occur-

ring at the site.” 69 Fed. Reg. at 41,604. For example,

at a nuclear power plant that draws cooling water from

(as the EPA posited) a “highly degraded ship channel

with few fish and shellfish,” id. at 41,627, intake struc-

ture screens might be just as effective as cooling tow-

ers at minimizing adverse impacts on the virtually non-

existent aquatic life.

There is also no reason why the EPA should not be

permitted to determine whether energy supply, other

environmental, or monetary costs from using a particu-

lar technology outweigh the benefits to aquatic life at a

particular location. The adverse impacts caused by ret-

rofitting closed-cycle cooling at some nuclear plants—

let alone forcing the closure of plants where retrofitting

is impossible or infeasible—might well unambiguously

outweigh benefits to aquatic life, particularly where

those benefits would be unusually small. Such deci-

** The effluent limitation provisions call for the EPA to set

standards based on the “degree of effluent reduction” attainable.

See, eg, 338 USC. §§& 12314(b)(2) A), 1316(a)(1); see also id.

§ 1311(b)(2)(A) (requiring EPA to set standards that “will result in

reasonable further progress toward the national goal of eliminat-

ing the discharge of all pollutants”).

25

sions, applying general policies in light of the specific

circumstances of particular sites or situations, are clas-

sically ones best made by expert agencies in the imple-

mentation of their statutory mandate. This Court

should reaffirm the EPA’s ability to take the same ap-

proach under Section 316(b).

CONCLUSION

The judgment of the court of appeals should be re-

versed in relevant part.

Respectfully submitted.

ELLEN C. GINSBERG SETH P. WAXMAN

MICHAEL A. BAUSER Counsel of Record

NUCLEAR ENERGY EDWARD C. DUMONT

INSTITUTE BRIAN M. BOYNTON

1776 I Street, N.W. WILMER CUTLER PICKERING

Washington, D.C. 20006 HALE AND DORR LLP

(202) 739-8000 1875 Pennsylvania Ave., N.W.

Washington, D.C. 20006

(202) 663-6000

JULY 2008