Business Roundtable

The withdrawal of cooling water from rivers, lakes or oceans by electric power plants or manufacturing facilities may result in adverse environmental impacts on aquatic life, e.g., fish, shellfish and marine animals.  These impacts include impingement, whereby aquatic life becomes pinned against filtering screens or other components of cooling water intake structures (CWIS), and entrainment, whereby aquatic life is drawn through CWIS and injured or killed.

These impacts are pronounced at facilities with open-loop, or once-through, cooling water systems, which withdraw water from a source, use it to cool (e.g., steam in a power plant with steam turbines), and then discharge it back into the source.  Other facilities use closed-loop cooling water systems, in which cooling water is itself cooled in, e.g., cooling towers and then recycled for further cooling purposes.  Approximately 43% of electric power plants in the U.S. with cooling water systems use an open-loop system.

To minimize these adverse environmental impacts of cooling water systems, Section 316(b) of the Clean Water Act (CWA) requires EPA to ensure that the location, design, construction and capacity of CWIS reflect the best technology available (BTA) to minimize those impacts.  The statute applies to CWIS at point sources of pollutant discharges that require an EPA or state pollutant discharge permits under the National Pollutant Discharge Elimination System (NPDES) of the CWA.

In 1993, EPA was sued in the U.S. District Court for the Southern District of New York (District Court).  The lawsuit alleged that EPA had failed to issue rules to implement Section 316(b).  On October 10, 1995, the District Court approved a consent decree among the EPA and the parties that filed the lawsuit.  Under the consent decree, EPA agreed to issue rules to implement the statute.  On November 21, 2000, the District court approved an amended consent decree among the EPA and the parties.  Under the amended consent decree, EPA agreed to a three-phase rulemaking proceeding to implement Section 316(b).

Under Phase I, EPA would issue rules for new facilities that utilize CWIS.  Under Phase II, EPA would issue rules for existing electric power plants that use at least 50 million gallons per day of cooling water.  Under Phase III, EPA would issue rules for electric power plants that use less than 50 million gallons per day of cooling water and for existing manufacturing facilities. (e.g., pulp and paper manufacturing facilities, chemical and allied products manufacturing facilities, petroleum and coal products manufacturing facilities, and primary metals manufacturing facilities).

EPA issued final rules under Phase I (for new facilities) on November 9, 2001.  Those rules require the use of closed-loop cooling water systems or water intake flows that are commensurate with such systems.

On November 25, 2002, the District Court approved a second amended consent decree among EPA and the parties to the 1993 lawsuit.  The second amended consent decree required EPA to issue final Phase II rules by February 16, 2004, and to issue final Phase III rules by June 1, 2006.

On February 16, 2004, EPA issued final Phase II rules, but those rules were appealed to the U.S. Court of Appeals for the Second Circuit (Second Circuit), which remanded key provisions of the rules.  On April 1, 2009, however, the Supreme Court reversed the Second Circuit.  In particular, the Supreme Court held that EPA could consider the costs and benefits of proposed rules under Section 316(b).  Thereafter, EPA requested, and the Second Circuit granted, a remand of the Phase II rules to EPA.

On June 1, 2006, EPA issued final Phase III rules.  Those rules were applicable to new offshore oil and gas extraction facilities.  EPA advised, however, that it had determined that CWIS requirements for Phase III electric power plants and manufacturing facilities would be fashioned by EPA and the states under the NPDES on a case-by case “best professional judgment” basis.  That determination was appealed to the U.S. Court of Appeals for the Fifth Circuit (“Fifth Circuit”).

On November 17, 2006, EPA was again sued in the District Court.  The lawsuit again alleged that EPA had failed to issue rules to implement Section 316(b) applicable to Phase III electric power plants and manufacturing facilities.  The lawsuit was stayed pending a judgment in the Fifth Circuit Court of Appeals.  On July 23, 2010, however, the Fifth Circuit granted an EPA request for a remand of the Phase III determination to the EPA.

Thus the final Phase II rules as well as the Phase III determination are before EPA on remand.  In addition, the second amended consent decree approved by the District Court is still in effect.  Thus, on October 22, 2010, EPA, the parties to the 1993 lawsuit, and the parties to the 2006 lawsuit concluded a settlement agreement.