On May 19, the U.S. Environmental Protection Agency (EPA) finalized its long-awaited rule under Section 316(b) of the Clean Water Act (CWA) imposing requirements for cooling water intake structures (CWIS) at power plants and manufacturing facilities in order to protect aquatic life.  The rule, on which EPA received input from the U.S. Fish and Wildlife Service and National Marine Fisheries Service, will become effective 60 days after its publication in the Federal Register.

EPA has stated that the withdrawal of large volumes of water from nearby water bodies by power plants and manufacturing facilities results in the removal of billions of aquatic organisms from these water bodies each year.  The main threats CWIS pose to these organisms are impingement (the entrapment of organisms against the outer part of a CWIS) and entrainment (drawing of the organisms into the cooling water system).

The final rule establishes requirements for the location, design, construction and capacity of CWIS at “existing” power generating facilities and manufacturing facilities that withdraw at least two million gallons of water per day from nearby water bodies and use at least 25 percent of that water exclusively for cooling.  The rule defines an “existing facility” as a facility “that commenced construction as described in 40 CFR 122.29(b)(4) on or before January 17, 2002 (or July 17, 2006 for an offshore oil and gas extraction facility) and any modification of, or any addition of a unit at such a facility.”  Section 122.29(b)(4) states that construction commences when the facility’s owner or operator has (1) begun to place, assemble or install facilities or equipment or has begun to conduct “[s]ite preparation work” (e.g., clearing or excavation activities), or (2) entered into a binding contract (other than option contracts, contracts that may be terminated or modified without substantial loss, and contracts for feasibility engineering or design studies) to purchase facilities or equipment it intends to use for its operations within a reasonable time period.  EPA estimates that the rule covers approximately 1,065 facilities – 544 power plants and 521 factories.

The final rule’s requirements will be implemented through National Pollutant Discharge Elimination System (NPDES) permits, and EPA stated that the requirements are based on the best technology available (BTA) for minimizing environmental impacts.  The rule establishes a baseline for protecting aquatic life from CWIS, but also allows for state permitting authorities to build in additional facility-specific safeguards.  The rule contains three major components:

• Covered facilities must reduce impingement of aquatic life through one of seven options for meeting BTA requirements, including operation of a closed-cycle recirculating system, installation of an offshore velocity cap, or potentially using a modified traveling screen;

• Facilities withdrawing at least 125 million gallons of water per day must conduct studies to assist permitting authorities, through a process involving public input, in determining any site-specific entrainment mortality controls that may be necessary; and

• New units built at an existing facility to increase the facility’s generating capacity must reduce entrainment and impingement by either reducing actual intake flow to a level similar to a closed-cycle recirculating system or demonstrating that the facility has installed controls for each of the new unit’s intakes that reduces entrainment mortality.

Although Congress first mandated that EPA establish standards for cooling water in 1972, EPA did not promulgate any regulations addressing CWIS until 2001, after a 1995 consent decree settling litigation brought by Riverkeeper and several other environmental groups required EPA to issue such regulations.  A subsequent amendment to the consent decree allowed EPA to issue CWIS regulations in three phases:  Phase I, finalized in 2001, applied to new power plants; part of Phase III, finalized in 2006, applied to new offshore and coastal oil rigs; Phase II applied to large existing power plants and was issued in 2004 and the remainder of Phase III applied to small power plants and manufacturing facilities and was issued in 2006, but subsequent litigation remanded these rulemakings to EPA.  The final rule, which EPA initially proposed in April 2011 and which comes after several extensions to a deadline EPA negotiated with the Riverkeeper coalition, serves as EPA’s second attempt to implement Phase II and the remainder of Phase III.  The final rule also removes from the Phase I rule certain restoration-based compliance alternative and associated monitoring and demonstration requirements.

In response to the rule, Riverkeeper issued a statement on behalf of several other environmental groups lamenting that the rule gives too much authority to state environmental agencies and also allows industry members to avoid cooling water recycling requirements.  On the other side, industry groups have noted that the final rule’s predicted compliance costs will be lower than those contained in EPA’s 2011 proposal, and the rule offers a flexible solution to the issue of how to balance protection of aquatic life with the costs of operating a facility with CWIS.  Industry groups have expressed concern, though, that the rule will lead to substantial compliance and operational difficulties and may not give enough flexibility to state agencies to regulate CWIS on a cost-effective basis.

Although the final rule does not set a specific compliance deadline for covered facilities, the rule requires facilities to, upon issuance of a final NPDES permit under the new rule, comply with impingement and entrainment standards “as soon as practicable.”  The rule also gives the NPDES Permit Director the authority to establish interim compliance milestones in facilities’ NPDES permits.  New units must comply with the BTA standards for entrainment and impingement upon commencement of the new unit’s operation.