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NEW YORK � Several aspects of a federal rule governing cooling water intake structures at power plants throughout the country are inconsistent with the Clean Water Act, the Second Circuit U.S. Court of Appeals has ruled. The circuit handed environmentalists nearly a complete victory last week as it also found that aspects of the rule were “not supported by sufficient evidence” nor were subject to adequate notice and comment. Thus, it remanded the rules to the Environmental Protection Agency for further consideration. The ruling in Riverkeeper Inc. v. United States Environmental Protection Agency, lead docket 04-6692-ag, dealt with several challenges to the federal rule, which environmentalists say does far too little to protect aquatic life around power plants. They argue that the use of enormous amounts of water to cool the plants leads to the demise of aquatic wildlife either through trapping and killing or overheating the water. Excerpts from the decision will be published Thursday. The decision was issued by Judges Chester Straub, Sonia Sotomayor and Peter Hall, with Judge Sotomayor writing for the court. Riverkeeper, the Natural Resources Defense Council and a host of other groups challenged the rule that was passed by the Environmental Protection Agency pursuant to �316(b) of the Clean Water Act, 33 U.S.C. �1326(b). The rule was intended to protect fish, shellfish and other fresh and saltwater organisms from being harmed or killed in cooling water intake structures. In what is now called Riverkeeper I, ( Riverkeeper, Inc. v. EPA), 358 F.3d 174 (2004), the circuit dealt with challenges to new power plants. It found that the EPA impermissibly exceeded its authority by allowing new facilities to use restoration measures to comply with regulations implementing the statute. Thursday’s decision dealt instead with existing power plants and facilities, which under �316(b) Congress required to use the “best technology available for minimizing adverse environmental impact.” The final version of the rule issued July 9, 2004, established five different methods of complying with the congressional mandate. The environmentalists claimed the EPA exceeded its authority by rejecting “closed-cycle cooling” as the best technology available and by setting ranges of acceptable performance instead of a single numeric standard. Among other arguments, they said the Clean Water Act does not allow compliance by restoration and was wrong to allow site-specific determinations of the best technology based on a cost-benefit analysis. The EPA also was challenged from the other side of the issue as three “industry” petitioners, including Entergy Corp., made several objections, including arguing that �316(b) does not apply to existing facilities and that the EPA’s definition of “adverse environmental impact” is unsupported by the record. ‘BEST TECHNOLOGY AVAILABLE’ The most significant challenge, Judge Sotomayor said, was the environmentalists’ claim that the “EPA exceeded its authority in rejecting closed-cycle cooling and selecting instead a suite of technologies, as the ‘best technology available’ as required by 316(b), in large part because the agency engaged in improper cost considerations.”
The court was persuaded by the environmentalists’ position that restoring damage already done to wildlife was an unacceptable form of compliance with the statute.

Peter Zeughauser

She said that in Riverkeeper I the court ruled “the EPA can consider cost in establishing the (best technology available) but only in a limited fashion and not as a primary consideration” � in other words it can determine what technology can be “reasonably borne” by the industry and it can “engage in cost-effectiveness analysis in determining” the best technology available. So the statute “permits cost-effectiveness considerations to influence the choice among technologies whose performance does not essentially differ from the performance of the best-performing technology whose costs the industry reasonably can bear,” but the statute “does not permit the EPA to choose (the best technology available) on the basis of cost-benefit analysis,” she said. Because the record was unclear, the court remanded for “clarification of the basis for the agency’s decision and potentially for a reassessment” of the best technology available. The judge also said that EPA’s rejection of the closed-cycle recirculating system and its decision to adopt a suite of technologies was poorly explained and this failure “frustrated effective judicial review.” The court was persuaded by the environmentalists’ position that restoring damage already done to wildlife was an unacceptable form of compliance with the statute. It found that the “EPA should have afforded notice and an opportunity to challenge the cost estimates of specific facilities and not simply an opportunity to comment on the EPA’s methodology and general cost data.” And, it said, “the EPA exceeded its authority under �316(b) by permitting (1) cost-benefit analysis and (2) assessment of the quality of the receiving water (i.e., the receiving water’s wildlife levels) in determining whether a variance is warranted.” On one of the industry petitioners’ arguments, the court said the EPA was correct in finding that �316(b) applies to existing facilities. It also rejected a challenge to the EPA’s interpretation of its mandate to minimize “adverse environmental impact.” One industry petitioner, PSEG Fossil, had argued that the EPA had changed course and now viewed any loss or harm to aquatic organisms as amounting to an adverse impact. But Judge Sotomayor said the court made clear in Riverkeeper I that “the EPA’s focus on the number of organisms killed or injured by cooling water intake structures is eminently reasonable.” Reed Super of the Environmental Law Clinic at Columbia Law School, who argued for the environmental petitioners, said the rejection of cost-benefit analysis was critical. Cost-benefit analysis was only allowed on a phase-in basis after the passage of the Clean Water Act, he said, but has been off the table since 1989. “It is enormously difficult to put a dollar value on protecting … the environment,” Super said. “Congress was well aware of that and also aware of the difficulty of even trying to quantify that and fully understand the effects of pollution on killing wildlife and otherwise upsetting aquatic eco-systems.” Tricia Jedele, special assistant attorney general of Rhode Island, argued for Rhode Island, New York and four other states during three hours of argument before the panel on June 8, 2006. Kristy Bulleit of Hunton & Williams, Karl Lytz of Watham & Watkins, and Chuck Barlow and Elise Zoli of Goodwin Procter argued for the industry petitioners. David Gualtieri, Cynthia Morris and Jessica O’Donnell argued for the EPA. Mark Hamblett is a reporter with the New York Law Journal, a Recorder affiliate.

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