LegiStorm

Summary:

Thermoelectric generating plants and manufacturing facilities withdraw large volumes of water for production and, especially, to absorb heat from their industrial processes. Water withdrawals by power producers and manufacturers represent more than one-half of water withdrawn daily for various uses in the United States. Although water withdrawal is a necessity for these facilities, it also presents special problems for aquatic resources. In particular, the process of drawing surface water into the plant through cooling water intake structures (CWIS) can simultaneously pull in fish, shellfish, and tiny organisms, injuring or killing them. Congress enacted Section 316(b) of the Clean Water Act (CWA) specifically to address CWIS. Regulatory efforts by the Environmental Protection Agency (EPA) to implement Section 316(b) have a long and complicated history over more than 35 years, including legal challenges at every step by industry groups and environmental advocates. Currently most new facilities are regulated under a rule issued in 2001, while a rule for existing facilities was challenged and remanded to EPA for revisions. In response, in 2011 EPA proposed national requirements affecting approximately 1,150 existing electric power plants and manufacturing facilities. Even before release, the proposed regulations were highly controversial among stakeholders and some Members of Congress. The issue for Congress has been whether a stringent and costly environmental mandate could jeopardize reliability of electricity supply in the United States. Many in industry feared, while environmental groups hoped, that EPA would require installation of technology called closed-cycle cooling that most effectively minimizes the adverse environmental impacts of CWIS, but also is the most costly technology option. The EPA proposal declined to mandate closed-cycle cooling universally and instead favored a less costly, more flexible regulatory option. EPA's recommended approach in the 2011 proposal would essentially codify current CWIS permitting procedures for existing facilities, which are based on site-specific determinations and have been in place administratively for some time because of legal challenges to previous rules. EPA acknowledges that closed-cycle systems reduce the adverse effects of CWIS to a greater extent than other technologies, but in the proposed rule it rejected closed-cycle cooling as a uniform requirement to minimize entrainment at existing facilities. The agency based that conclusion on four factors: additional energy needed by electricity and manufacturing facilities to operate cooling equipment (i.e., energy penalty), additional air pollutants that would be emitted because fossil-fueled facilities would need to burn more fuel as compensation for the energy penalty, land availability concerns in some locations, and limited remaining useful life of some facilities that would not justify retrofit costs. Not surprisingly, stakeholder groups viewed the proposal differently. Environmental groups endorsed the parts of the rule that would establish nationally uniform requirements, but criticized those allowing for site-specific determinations. Industry groups urged EPA to provide greater flexibility that would be more cost-effective. State permitting authorities were divided on modifying the rule to be more flexible. The final rule was delayed several times, largely due to EPA's consultation with federal wildlife services on potential impact of the rule on threatened and endangered species. The final rule was published in the Federal Register on August 15, 2014, with an October 14 effective date. EPA again declined to mandate closed-cycle cooling as a uniform requirement and provided several compliance options that are more flexible and less costly than the 2011 proposal. EPA estimates the annual compliance costs of the final rule to be $275 million and the annualized benefits to be $33 million. Projected costs do not reflect any site-specific requirements that permitting authorities may establish. Stakeholder groups differ in evaluating the final rule, and their views diverge from those on the 2011 proposal. Environmental groups, who had advocated that EPA include closed-cycle cooling as a uniform requirement at existing facilities, said that they were extremely disappointed with the final rule, and they have already filed several challenges to it in federal court. The petroleum industry also has filed a legal challenge, as did representatives of the electric power industry, even though the latter indicated overall approval of the final rule. Some Members of Congress have criticized the final rule's cost as a threat to affordability and reliability of the nation's electricity supply.