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The 2d U.S. Circuit Court of Appeals has said that several aspects of a federal rule governing cooling-water intake structures at power plants throughout the country are inconsistent with the federal Clean Water Act. Riverkeeper Inc. v. United States Environmental Protection Agency, No. 04-6692-ag. The rule was passed by the U.S. Environmental Protection Agency (EPA) pursuant to Section 316(b) of the Clean Water Act, 33 U.S.C. 1326(b). The rule’s intent was 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 2d Circuit dealt with challenges to new power plants. It found that the EPA had impermissibly exceeded its authority by allowing new facilities to use restoration measures to comply with regulations implementing the statute. The current decision dealt instead with existing power plants and facilities, which, under Section 316(b), were required by Congress to use the “best technology available for minimizing adverse environmental impact.” The final version of the rule issued on July 9, 2004, established five different methods of complying with the congressional mandate. Environmentalists claim that the federal rule 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 through overheating the water. Riverkeeper, the Natural Resources Defense Council and a host of other groups challenged the rule, claiming that the EPA had 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. The environmentalists said that the Clean Water Act does not allow compliance by restoration and that the EPA was wrong to allow site-specific determinations of the best technology based on a cost-benefit analysis. Writing on behalf of the court, Judge Sonia Sotomayor said 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.” She said that in Riverkeeper I the court had ruled that “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, the EPA 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. Sotomayor conceded that 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.” However, she said, it “does not permit the EPA to choose [the best technology available] on the basis of cost-benefit analysis.” Because the record was unclear, the 2d Circuit 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 the EPA’s rejection of closed-cycle recirculating system was poorly explained and that 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 said 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 in determining whether a variance is warranted.” The court remanded the rules to the EPA for further consideration.

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