U.S. Supreme Court Agrees To Hear CWA Case Impacting the Electric Industry

On April 14, 2008, the U.S. Supreme Court granted certiorari in three cases that the Court consolidated for review during its next term beginning October 6, 2008. The specific legal question at issue involves whether Section 316(b) of the Clean Water Act (CWA) authorizes the Environmental Protection Agency (EPA) to compare costs with benefits in determining the best technology available for minimizing environmental impact at cooling water intake structures. The United States Court of Appeals for the Second Circuit ruled that the EPA could not make such a cost-benefit analysis. Section 316(b) requires that the location, design construction and capacity of cooling water intake structures reflect the best technology available for minimizing adverse environmental impact. Presently, more than 1,500 industrial facilities use large volumes of cooling water from lakes, rivers, estuaries or oceans to cool their plants, including steam electric power plants, pulp and paper makers, chemical manufacturers, petroleum refiners and manufacturers of primary metals such as iron, steel and aluminum. Cooling water intake structures can cause adverse environmental impact by pulling large numbers of fish and shellfish or their eggs into a power plant’s or factory’s cooling system. As a result large numbers of them can be killed or injured by heat, physical stress or by chemicals used to clean the cooling system. Others may be killed or injured when they are trapped against screens at the front of an intake structure.

EPA had established three rulemaking phases to address cooling water intakes. The Phase 1 rule, promulgated in 2001, covered new facilities. The Phase 2 rule, promulgated in 2004, covers large existing electric generating structures and has now been suspended pending the outcome of the case. The Phase 2 rule set performance standards for the reduction of impingement mortality and entrainment that EPA determined reflected the best technology available at covered facilities. The regulations, however, were challenged by industry and environmental groups

The electric companies had raised other issues beyond the cost-benefit question – namely, whether EPA could offset environmental harms by restocking the fish supply or improving aquatic habitat in the streams, and whether EPA could impose new technology requirements on existing plants as well as new ones. However, the Court did not agree to hear those claims. Riverkeeper, Inc., et al. v. Environmental Protection Agency, 475 F.3d 83 (2d Cir. 2007), cert. granted, Nos. 07-588, 07-589, 07-597 (U.S. Apr. 14, 2008).