EPA Issues Proposed Rule for Cooling Water Intake Structures at Existing Facilities

EPA recently released proposed regulations governing cooling water intake structures (“CWIS”) for existing power plants and manufacturing facilities under the Clean Water Act (“CWA”).[1] The proposed rule is available here. The proposed rule impacts an estimated 1,200 facilities nation-wide, or “over half the water withdrawals in the entire nation.”[2] EPA is accepting comments on the proposal through July 19, 2011.

The new EPA proposal supersedes two earlier CWIS-rulemaking efforts for existing facilities, known as Phases II and III, which EPA withdrew in the face of court challenges.[3] Like earlier versions, this newest proposal is designed to reduce the number of aquatic creatures that are killed by impingement or entrainment. EPA’s current proposal sets a maximum threshold for impingement mortality and provides two options for meeting the threshold – either through the use of fish screen technology or by reducing intake velocity. The proposal does not contain nationwide standards for entrainment, instead relying on local permitting agencies to determine entrainment controls on a site-specific basis. In addition, the rule requires new units added to existing facilities to implement the equivalent of “closed cycle cooling technology,” similar to EPA’s current requirements for CWIS at new facilities.

Background on EPA’s CWIS Regulations

Industrial facilities use cooling water to absorb heat in a variety of processes, from manufacturing to power generation. In the process of withdrawing the cooling water from nearby rivers and lakes, these facilities “impinge” and “entrain” fish and other aquatic creatures against the screens covering the intake structures or within the facilities’ cooling mechanisms. Section 316(b) of the CWA specifies that standards governing the “location, design, construction, and capacity” of cooling water intake structures must “reflect the best technology available” for “minimizing [the] adverse environmental impact[s]” of CWIS.[4] EPA first promulgated CWIS regulations in 1976; however, it withdrew a majority of the rules following a court challenge.[5] Under the rules that remained, each NPDES permitting authority was left to use its “best professional judgment” to determine the “best technology available,” or “BTA,” for CWIS at each facility, taking into account site-specific conditions.[6]

In 1995, EPA entered into a consent decree under which it agreed to divide the § 316(b) rulemaking into three phases. The Phase I rule, which EPA published in 2001, governs all new facilities above a certain intake volume threshold, with the exception of new offshore oil rigs (which were reserved for Phase III of the rulemaking).[7] The Phase II rule, which was finalized in 2004, set standards for CWIS at large, existing power plants;[8] while the Phase III rule - issued in 2006 - set standards for new offshore oil and gas rigs and all other existing facilities.[9]

EPA’s Phase I, II, and III rules were all challenged in court. The Phase I rule, with limited exceptions, was upheld in 2004 by the Second Circuit Court of Appeals.[10] In 2007, however, the Second Circuit rejected EPA’s Phase II rule, holding that EPA lacked the statutory authority to consider a “cost-benefit analysis” when setting CWIS standards under § 316(b).[11] In response, EPA suspended the Phase II rule while the Second Circuit’s decision was appealed to the U.S. Supreme Court.[12] In a 2009 decision, Entergy Corp. v. Riverkeeper, Inc.,[13] the U.S. Supreme Court reversed the Second Circuit, holding that while EPA was not required to employ a cost-benefit analysis under § 316(b), nothing in the statutory language prohibited EPA from doing so.[14]

Environmental and industry groups challenged the Phase III rule, and the Fifth Circuit considered the challenges in the consolidated case ConocoPhillips v. EPA.[15] Before the Fifth Circuit could hear oral argument, however, the case was stayed pending the Supreme Court’s review in Entergy Corp. v. Riverkeeper, Inc. Following the Entergy decision, EPA sought voluntary remand of the existing facilities portion of the Phase III rule in order to combine it with a new Phase II proposal. In July 2010, the Fifth Circuit remanded the existing facilities portion of the Phase III rule to EPA and rejected the industry challenges to the oil and gas portion of the Phase III rule.[16] EPA’s current proposal represents the combined Phase II/III rulemaking for CWIS at existing facilities.

EPA’s Proposed Rule

The proposed rule covers CWIS at existing[17] power-generating, manufacturing, and industrial facilities that: (1) withdraw more that 2 million gallons of water per day; (2) use at least 25% of that water exclusively for cooling purposes; and (3) have a National Pollution Elimination Discharge System (“NPDES”) permit or are required to apply for one.[18] The proposal has three major components: (1) impingement requirements; (2) entrainment requirements; and (3) new units at existing facilities.

Impingement Requirements

The rule imposes a mortality threshold for impingement – i.e., an upper limit on how many aquatic creatures may be killed by being pinned against a facility’s CWIS screens.[19] The proposal designates “traveling fish screens,” combined with a system to return fish captured from the screens, as the best performing technology that will allow facilities to achieve the mortality threshold.[20] Traveling screens continually rotate like a conveyor belt, bringing the impinged creatures out of the water. The return system uses water sprayers and conveyance systems to return the impinged creatures from the travelling screens to the water body. A facility may determine which type of traveling screen it will employ, as long as it achieves the impingement limit. As an alternative to employing this impingement technology, facilities may chose to lower their water intake velocity to a level at which the organisms will be able to escape impingement.[21] EPA’s proposal also requires facilities to conduct monitoring to demonstrate compliance with the mortality threshold.[22]

Entrainment Requirements

EPA’s proposal does not designate a specific BTA technology to control entrainment – i.e., death resulting from being sucked into the cooling mechanisms; rather, the rule preserves the status quo by allowing the permitting authority to establish entrainment controls for each facility on a site-specific basis.[23] EPA rejected suggestions to designate “closed cycle cooling technology” as the BTA under § 316(b), even though EPA concluded that closed cycle technology would result in the greatest reduction of entrainment mortality.[24] “Closed cycle” cooling systems re-circulate cooling water after allowing the excess heat to dissipate in a reservoir or cooling tower and only add water to the system to compensate for what is lost through evaporation.[25] In contrast, “once-through” cooling systems “take water in, use it to absorb heat, and return the water to its source at a higher temperature.”[26] EPA’s analysis determined that closed cycle technology was not “practically feasible in a number of circumstances” nationwide – in part because of the cost/benefit analysis regarding facilities with CWIS that are reaching the end of their useful lives. Therefore, EPA’s proposal relies on the NPDES permitting authority to use their professional judgment to determine BTA for entrainment. The proposal specifically allows the permitting authority to consider a cost/benefit analysis when determining site specific BTA for entrainment.[27] To aid the permitting agencies in determining what types of site-specific entrainment controls will be necessary at large facilities, EPA’s proposal requires facilities that use large amounts of water – over 125 million gallons per day – to conduct a site-specific Entrainment Characterization Study.[28]

New Units at Existing Facilities

EPA’s proposal also includes provisions for new units installed at existing facilities. In Phase I of the CWIS rulemaking, EPA imposed regulations that essentially required new facilities to implement closed cycle cooling technology as the BTA for CWIS.[29] EPA has utilized the same approach for new units at existing facilities, requiring technology that is equivalent to closed-cycle cooling technology.[30]

Conclusion

As currently proposed, EPA’s CWIS rule would become effective sixty days following promulgation of the final rule. The proposal would require covered facilities to comply with the impingement requirements “as soon as possible,” or (with EPA’s permission) within at least eight years after EPA publishes the final rule. EPA is accepting public comment on the proposed rule until July 19, 2011, and is required under a court settlement to publish the final rule by July 27, 2012.

For more information regarding EPA’s CWIS rulemaking under § 316(b), or water quality issues in general, please contact Russell Prugh or any member of Marten Law’s Water Quality practice group.