Appeals court upholds water intake rule

A federal appeals court has upheld an Environmental Protection Agency rule designed to protect aquatic life from power plant and industrial cooling water intake structures.

The U.S. Court of Appeals for the Second Circuit on Monday found that the rule and a related “biological opinion” were based on reasonable interpretations of statutes and adequately supported by the record.

The court also said the EPA followed proper procedures when it developed the rule.

At issue are challenges by environmental and industry groups to the EPA’s cooling water intake rule, published in August 2014, that was crafted under the Clean Water Act's Section 316(b).

The rule covers about 1,065 existing facilities, including 544 power plants.

Power plants and manufacturing facilities use about 75 trillion gallons a year to cool their facilities, according to the court decision. The force of inflowing water can trap organisms against the intake structure and draw them into the cooling system, processes called impingement and entrainment.

The rule offers a range of options power plants can use to comply with the measure, depending on how much water a plant uses.

Under the rule, facilities that withdraw more than 125 million gallons per day must conduct studies to help permitting authorities determine what site-specific measures, if any, can be taken to avoid trapping aquatic animals.

New units at existing plants are required to limit the intake flow to a level similar to a closed-cycle recirculation system.

Environmental groups challenging the rule argued that the EPA should have set a single, national standard based on a closed-cycle cooling system instead of adopting a site-specific approach. The court ruled that the EPA has the authority to adopt site-specific rules.

"The EPA found that a 'one-size-fits-all' approach to entrainment was infeasible," the court said. "In light of this finding and our precedent, we conclude that the EPA acted both reasonably and within its authority in adopting a case-by-case approach to entrainment standards."

The court also rejected the groups’ argument that the EPA should have required closed-cycle cooling. The EPA declined to adopt closed-cycle cooling as its standard, saying that about 25 percent of affected facilities didn’t have enough land for it, retrofitting would increase energy-related emissions and facilities nearing the end of their lifespan wouldn’t see a net benefit from adding a closed-cycle system.

The groups failed to convince the court the EPA had given state permitting agencies too much discretion when setting limits on cooling water intake structures. The rule lists 11 factors a state agency may consider when drafting a permit for an intake structure, including five factors that must be considered, the court said, adding that a state must explain its decisions to the EPA if a better-performing technology isn’t selected in the permitting process.

The court upheld the EPA’ decision to only require closed-cycle cooling for new units. The environmental groups argued that the standard should also have applied to rebuilt, repowered and replacement units at existing facilities.

The EPA had decided that holding rebuilt units to the same standard for new units could discourage power plant owners and manufacturers from improving their facilities.

The court rejected several Endangered Species Act-related challenges to the rule. The court, for example, said the U.S. Fish and Wildlife Service and the National Marine Fisheries Service properly reviewed how the rule would affect endangered species.

The court took a high-level approach to the ESA issues, generally deferring to the agencies rather than engaging in in-depth analysis of claims. 

At the same time, the court emphasizes that the states and EPA retain independent discretion and are not obligated to accept the services’ recommendations.

Of concern, the court states that “[i]f the Services fail to honor the obligations specified in the Rule’s technical assistance provisions, the Environmental Petitioners may challenge individual permits pursuant to the ESA’s citizen suit provisions once those permits issue.” In this and other ways, the court largely kicked the section 316(b) ESA issues down the road to the implementation stage, effectively inviting ESA-based challenges to the permits at that stage.  

The services found that although cooling water intake systems could harm threatened and endangered species, the rule’s procedures ensured that it wouldn’t jeopardize their continued existence or harm their critical habitat.

The court also rejected challenges to the rule brought by the American Petroleum Institute, Entergy, the Utility Water Act Group and the Cooling Water Intake Structure Coalition.

The court upheld the EPA’s decision to give the FWS and NMFS an advisory role in reviewing permits for intake structures.

The Utility Water Act Group argued that the EPA lacked the authority to bring the two other agencies into the permitting process and also objected to the EPA being able to veto a permit based on recommendations from the agencies.

“Nothing in the rule itself suggests that the EPA will ‘rubber-stamp’ the services’ conclusions,” the court said. “Rather, the rule contemplates that the EPA will independently determine, with the benefit of the services’ expertise, whether the terms of a permit comply with section 316(b) of the CWA.”