Entergy Corp. v. Riverkeeper, Inc.

2009-04-01

Headline: Court allows EPA to weigh costs and benefits when setting cooling-water intake rules, limiting immediate mandates on power plants and making costly closed-cycle conversions less likely for many existing facilities.

Holding: The Court ruled that the Clean Water Act provision requiring the “best technology available” for cooling water intake structures permits the EPA to consider costs and compare costs and benefits when setting Phase II national standards and variances.

Real World Impact:

Lets EPA weigh costs and benefits when setting intake standards.
Reduces likelihood of mandatory closed-cycle conversions for many existing plants.
Allows site-specific variances when compliance costs far exceed benefits.

Topics: power plant cooling rules, water pollution protection, EPA cost-benefit analysis, aquatic life impacts

Summary

Background

Power plant operators use large cooling-water intake structures to draw water and cool equipment. Environmental groups and several States challenged the EPA’s Phase II rules for existing large plants (those withdrawing over 50 million gallons per day, with at least 25% used for cooling). The EPA said Phase II covers about 500 facilities (roughly 53% of national generating capacity), which remove on average 214 billion gallons per day and cause impingement and entrainment of over 3.4 billion aquatic organisms each year. The rules set national targets to reduce impingement mortality by 80–95% and entrainment by 60–90% and allow site-specific variances when costs are “significantly greater than” benefits or the costs considered in setting the standards. The EPA declined to require closed-cycle cooling for existing plants because conversion costs (about $3.5 billion per year) greatly exceeded the EPA’s Phase II compliance estimate ($389 million per year), even though closed-cycle systems can reduce mortality up to 98%.

Reasoning

The central question was whether the Clean Water Act phrase “best technology available for minimizing adverse environmental impact” permits the EPA to consider costs and compare costs and benefits. The Court held that the phrase is not unambiguous and that it is reasonable for the EPA to weigh costs against environmental benefits. The majority relied on the ordinary meaning of “minimize,” comparisons to other Clean Water Act provisions, the agency’s decades-long practice, and the Phase II rule’s limited variance standard. The Court reversed the Second Circuit’s ruling that had barred cost-benefit analysis.

Real world impact

The decision lets the EPA set national performance standards while avoiding requirements that would force widespread, costly retrofits to closed-cycle cooling at many existing plants. Hundreds of facilities remain subject to standards, but more variances may be granted when compliance costs greatly outweigh benefits. The Court left other legal issues from the lower court’s remand for further proceedings.

Dissents or concurrances

Justice Breyer agreed that cost-benefit comparison can be used but would remand to let the EPA explain changing its variance test from “wholly disproportionate” to “significantly greater.” Justice Stevens, joined by Justices Souter and Ginsburg, dissented, arguing the statute forbids cost-benefit balancing.