Entergy et al; Retrofitting of Cooling Systems

These three cases have been consolidated, and the attorneys will have one hour of oral argument before the Court on Dec. 2. The cases all relate to the same cluster of issues--which center on the authority of the Environmental Protection Agency to issue what are called Phase II regulations (Feb. 2004 for comment; July 2004 promulgated) which would require the retrofitting of cooling water intake structures that reflect the best technology at numerous power plants across the nation. The implications of this case are enormous. If the Court upholds the lower court decision (the Second Circuit--New York), various power plants would have to expend potentially billions of dollars to make sure that their cooling water intake structures are "up-to-date" in accordance with most modern technology. If the Court reverses the Second Circuit it would be saying that the EPA only has authority to require power plants to comply with the best available technology at the time of construction of the plants.

An analogy might be helpful here, from the sphere of public and private buildings. To what extent does the government have authority to require older buildings to be "brought up to code" with respect to handicap accessibility, cleaning of all potentially harmful chemicals from the site (i.e., lead and asbestos) and otherwise making it "modern" in all respects? And, if the governments can require these things, who has to pay for it? Perhaps a "compromise" of sorts is that if you do substantial upgrades in the course of modernizing the building, you also have to perform these ADA-like or safety upgrades. We have a case before us, then, that gives the environmental equivalent of this real estate problem.

To the Law and the Facts

Section 316(b) of the Clean Water Act ("CWA"), one of the numerous "alphabet soup" of environmental laws passed in the wake of our society's sudden environmental awareness in the early 1970s, requires that the location, design, construction and capacity of cooling water intake structures reflect the best techology available ("BTA") for minimizing adverse environmental impacts. Since the withdrawal of cooling water, necessary to keep the power plants from overheating, has the potential to cause environmental impacts due to "impingement" and mortality of organisms, primarily fish, on screens that protect the intake system, and through "entrainment" and mortality of small organisms, primarily fish eggs and larvae, that pass through the screens and enter into the plant's cooling system, regulations are needed to address these potential damages.

In 2004 the EPA crafted the rule to require "technology that is technically available, economically practicable, and cost-effective while at the same time authorizing a range of technologies that achieve comparable reductions in adverse environmental impact" (69 Federal Register at 41583). In formulating the rule, EPA rejected as BTA a requirement that all existing facilities would replace their cooling systems with certain technology called "closed-cycle cooling," i.e., cooling towers. But, instead of a single technology as BTA for use in all facilities, EPA designated what it called a "suite" of technologies, including, among other things, fine-and widemesh screens, aquatic filer barrier systems, barrier nets, and fish return--in addition to more structural changes to the cooling systems. The rule requires the use of technology to reduce entrainment (capture in screens) by 60-90% from a defined baseline condition, and impingement (filtering through screens) by 80-95% from the same baseline.

The Regulation in the Courts

Entergy Corp., among others, challenged this regulation in court, arguing that Congress didn't intend Sec. 316(b) to apply to existing facilities. In particular Entergy argued that the phrase "location, design, construction, and capacity" limit the section's applicability only to new facilities, i.e., facilities that have not yet been located, designed, constructed or sized with respect to their intake structures. Thus, Entergy argued for a "plain language" reading of the statute--a method which is favored now by the Supreme Court. While finding this plain language approach "superficially appealing," the Second Circuit dismissed it as a "textual hiccup" (they actually used the word) and dismissed Entergy's arguments on another ground--deference to the EPA on the scope of its own authority. That is, and this is another issue in the case, the EPA by issuing the 2004 Phase II regulations was declaring that it had authority or jurisdiction to pass judgment on older plants and whether or not they should be retrofitted. One of the other issues before the Court in considering the case on Dec. 2 will be whether the EPA overreached its authority in determining its own jurisdiction.

Finally, the Second Circuit rejected the EPA's designation of a suite of technologies, rather than the one closed-cycle cooling system. The court held that the plain language of Sec. 316(b), in the context of the CWA, required the EPA to select as BTA one technology most effective at reducing impingement or entrainment. The test to determine which one technology to use was a judicially-designed "cost effectiveness" test.

Conclusion

You can see by the narration of some of the facts and law of the case that three issues are before the Court: (1) whether the EPA can require retrofitting of the cooling systms of the power plants, often at great cost; (2) whether the EPA even has jurisdiction in this area; and (3) whether one BTA rather than a "suite" of options passes statutory muster. I would say that this Court, which already has rejected the claims of environmentalists in a pretty dramatic fashion (the Winter case), will likewise reverse the Second Circuit, giving the power plant operators some "space" to determine if they want to retrofit or not. This isn't, yet, the time for environmental victories before the Court..

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