Thu Mar 13 14:52:58 EDT 2014 Yuhas.Darlene@epamail.epa.gov FW: CWA 316(b) Rulemaking To: CMS.OEX@epamail.epa.gov; Gaines.Cynthia@epamail.epa.gov; Moritz.Brigette@epamail.epa.gov

_____________________________________________________________________________________________________

For CMS ... thanks

From: Reed Super [mailto:reed@superlawgroup.com]

Sent: Thursday, March 13, 2014 1:49 PM

To: Mccarthy, Gina; feedback@ios.doi.gov; TheSec@doc.gov

Cc: Perciasepe.bob@epa.gov; Garbow, Avi; daniel_ashe@fws.gov; gary_frazer@fws.gov; eileen.sobeck@noaa.gov; donna.wieting@noaa.gov; HShelanski@omb.eop.gov; agreenawalt@omb.eop.gov; chair@ceq.eop.gov; oecc@who.eop.gov; webcontentmgr.enrd@usdoj.gov; Wood, Robert; Hewitt, Julie; Shriner, Paul; Southerland, Elizabeth; Stoner, Nancy; Kopocis, Ken; Gilinsky, Ellen; Neugeboren, Steven; Levine, MaryEllen; Witt, Richard; Shapiro, Mike; Sayers, Rick; pamela.lawrence@noaa.gov; Jennifer.Schultz@noaa.gov; Drew Crane; Laity, Jim; Higgins, Cortney; Mancini, Dominic J. Subject: CWA ? 316(b) Rulemaking

Hello,

Please see attached.

Best, Reed Super

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March	13,	2014

The	Honorable	Regina	A.	McCarthy,	Administrator U.S.	Environmental	Protection	Agency William	Jefferson	Clinton	Federal	Building 1200	Pennsylvania	Avenue,	N.W. Washington,	DC	20460

The	Honorable	Sally	Jewell,	Secretary U.S.	Department	of	the	Interior
1849	C	Street,	N.W. Washington,	D.C.	20240

The	Honorable	Penny	Pritzker,	Secretary U.S.	Department	of	Commerce
1401	Constitution	Avenue,	N.W. Washington,	D.C.	20230

Re:	 CWA	§	316(b)	–	Cooling	Wa ter	Intake	Structure	Rule

Dear	Administrator	McCarthy,	Sec retary	Jewell	and	Secretary	Pri tzker:

As	attorneys	representing	some	of	the	largest	national	and	regi onal	environmental organizations	in	the	United	Stat es,	with	millions	of	members	ke enly	interested	in protection	of	our	nation’s	air,	water	and	other	natural	resourc es,	we	write	with	respect	to the	Clean	Water	Act	§	316(b)	cool ing	water	rule	for	existing	fa cilities,	which	the Environmental	Protection	Agenc y	(EPA)	has	committed	to	issue	by April	17,	2014.

In	particular,	we	wish	to	respon d	to	certain	requests,	recommen dations	and	legal

assertions	made	in	letters	from the	Edison	Electric	Institute	a nd	the	heads	of	several	utility and	energy	companies	(collectivel y,	“EEI”)	in	September	and	Dec ember	2013,	the	Utility Water	Act	Group	(UWAG)	in	Octobe r	2013,	and	Senator	David	Vitte r	and	other	Senators	in July	2013	and	February	2014.

As	explained	below,	what	EEI,	UW AG	and	the	Senators	ask	of	EPA, the	National Marine	Fisheries	Service	(NMFS)	and	the	U.S.	Fish	and	Wildlife Service	(USFWS) (collectively,	the	“Services”)	w ould	plainly	violate	the	Clean Water	Act	(CWA)	and	the Endangered	Species	Act	(ESA).EPA,	USFWS	and	NMFS
March 13, 2014 Page 2 of 12

2 I.

Endangered Species Act Consultation and

ESA

‐ Related Requirements in 316(b) Rule

Cooling	water	intakes	cause	wide spread	and	substantial	harm	to federally‐listed threatened	and	endangered	(T&E) species.		In	initiating	formal consultation	under	the	ESA, EPA	acknowledged	that	“after	promulgation	and	implementation	of the	316(b)	rule,	the rule	may	allow	as	many	as	215	T& E	species	and	30	habitats	of	T& E	species	to	continue	to

be	affected.” 1 We	wish	to	make	six	points	in	this	regard:

 First,	in	light	of	the	acknowled ged	effects	on	T&E	species,	if EPA	were	to	issue

the	final	rule	in	the	absence	of a	final	Biological	Opinion	fro m	each	Service,	the agency	would	be	in	clear	violati on	of	ESA	§	7(a)(2)	and	50	C.F. R.	§	402.14. Contrary	to	EEI	and	UWAG’s	assert ions,	the	law	is	crystal	clear that	all	future	fish kills	and	thermal	discharges	at	r egulated	facilities	are	legall y	attributable	to EPA’s	upcoming	rule.		There	is	no such	thing	as	“baseline	impin gement	and

entrainment”	or	“baseline	therma l	discharges”;	to	the	contrary, the ESA baseline

assumes that the plants and their intake structures have been built, but are

not operating

. 2 Consequently,	there	is	no	legal or	factual	basis	on	which	the

Services	could	“vacate	the	consu ltation”	as	requested	by	Senato r	Vitter, et al .,	or conclude	the	consultation	with	a “not	likely	to	adversely	affec t”	concurrence,	as requested	by	EEI	and	UWAG.

 Second,	EPA	should	make	clear	in the	316(b)	rule	that	nothing	i n	the	Section	7 consultation	process	can	eliminat e	the	duties	of	state	agencies ,	federal	agencies and	plant	operators	to	comply	wi th	the	ESA	Section	9	prohibitio n	against	taking listed	species	or	modifying	th eir	critical	habitat.		EPA	recogn izes	that	“any	take of	listed	species	without	an	inci dental	take	statement	or	ESA	S ection	10	take permit	is	in	violation	of	ESA	regulations.” 3 As	previously	explained,	the	record provided	by	EPA	to	the	Services	precludes	issuance	of	an	Incide ntal	Take Statement	(ITS)	that	would	insul ate	future	take	or	habitat	modi fication	from	ESA protections. 4

1 Letter	from	Robert	K.	Wood,	Director,	Engineering	and	Analysis Division,	EPA	Office	of	Water,	to	Donna Wieting,	Director,	Officer	of	Pr otection	Resources,	NMFS,	and	G ary	Frazer,	Assistant	Director,	Endangered Species,	USFWS,	June	18,	2013,	at	2.

2 See Comments	of	Riverkeeper, et al .	regarding	ESA	Biological	Eva luation	for	CWA Section	316(b) Rulemaking,	October	31,	2013,	(“R K	Comments”)	at	9‐17	(citing Nat’l Wildlife Fed’n v. Nat’l Marine Fisheries

Serv. ,	524	F.3d	917,	929	(9th	Cir. 2008)	and	other	authority).

3 ESA	Biological	Evaluation	for	C WA	Section	316(b)	Rulemaking,	J une	18,	2013,	(“BE”)	at	65.

4 RK	Comments	at	44‐45.EPA,	USFWS	and	NMFS
March 13, 2014 Page 3 of 12

3  Third,	the	record	is	also	insuff icient	to	support	a	“no	jeopard y”	finding, particularly	in	light	of	harm	to a	number	of	salmonid	and	sturg eon	Distinct Population	Segments	and	various	species	of	freshwater	mussel. 5 Closed‐cycle cooling	(CCC)	technology	must	be the	focus	of	any	Reasonable	an d	Prudent Alternative	(RPA)	analysis	or	Re asonable	and	Prudent	Measures	( RPM)	analysis because	it	reduces	fish	kills	and	thermal	discharges	by	approxi mately	98	percent and	no	other	technology	comes	anywhere	close. 6

 Fourth,	if	the	316(b)	rule	direct s	permit	writers	to	make	any	B est	Technology Available	(BTA)	determinations	o n	a	case‐by‐case	basis,	the	rul e	must	require

that	EPA	and	the	Services	remain involved	in	permitting,	in	bot h	delegated	and non‐delegated	states,	to	identif y	the	appropriate	control	requi rements	to	be included	in	NPDES	permits	to	protect	listed	species.		Contrary to	EEI’s	assertion, the	ESA	and	CWA	provide	for	thos e	agencies’	continuing	involvem ent.		For example,	an	ITS	must	establish	c lear	triggers	for	subsequent	co nsultation	if	there is	a	risk	of	jeopardizing	the	species. 7 Further,	as	the	action	agency,	EPA	must report	on	“the	progress	of	the	a ction	and	its	impact	on	the	spe cies	to	the Service[s].” 8 Indeed,	EPA	and	the	Services agreed	in	their	2001	MOA	to coordinate	with	State	and	Tribal	permitting	agencies	to	remove or	reduce detrimental	impacts	of	any	NPDES	permit	on	listed	species,	incl uding,	in appropriate	cases,	by	EPA	“objec ting	to	and	Federalizing	the	pe rmit...” 9

 Fifth,	to	implement	that	process, the	316(b)	rule	must	require permittees	to undertake	robust	monitoring,	inc luding	the	use	of	environmental metagenomic sampling	to	detect	the	presence of	listed	species	near	an	intak e.		Because	T&E species	are,	by	definition,	rare,	they	may	not	be	collected	or observed	in	limited, traditional	sampling	events	despite	being	impinged	and	entraine d.

 Sixth,	the	rule	must	require	the submittal	of	comprehensive	inf ormation	on	the potential	for direct and indirect impacts to	listed	species,	including	impacts	to listed	species’	prey.		EEI’s	oppo sition	to	collecting	informati on	regarding	the taking	of	prey	or	other	indirect impacts	to	T&E	species	has	no statutory	basis. Avoiding	“jeopardy”	and	avoiding “adverse	modification	of	criti cal	habitat”	are separate	and	independent	requirements. 10 Further,	the	taking	of	prey	may

5 RK	Comments	at	44‐45.

6 RK	Comments	at	35‐38,	39‐42.

7 See Miccosukee Tribe of Indians v. United States ,	566	F.3d	1257,	1271‐72	(11th	Ci r.	2009)	(citing	50	C.F.R.	§ 402.14(i)(4)).

8 50	C.F.R.	§	402.14(i)(3).

9 Memorandum	of	Agreement	Between	t he	Environmental	Protection	A gency,	Fish	and	Wildlife	Service	and

National	Marine	Fisheries	Servic e	Regarding	Enhanced	Coordinati on	Under	the	Clean	Water	Act	and Endangered	Species	Act,	January	2001,	at	20.

10 Sierra Club v. U.S. Fish and Wildlife Service ,	245	F.3d	434,	441‐ 43	(5th	Cir.	2001).EPA,	USFWS	and	NMFS
March 13, 2014 Page 4 of 12

4 constitute	either	a	take	of	listed	species	or	adverse	modificat ion	of	critical habitat, 11 and	both	must	be	avoided.

II.

Definition of New Units at Existing Facilities

In	promulgating	the	Phase	I	Sect ion	316(b)	rule	in	2001,	EPA	es tablished	Best Technology	Available	(BTA)	standards	for	cooling	water	intake	s tructures	at	new	facilities based	on	closed‐cycle	cooling	(C CC),	a	0.5	foot‐per‐second	maxi mum	intake	velocity,	and	a prohibition	against	withdrawals	that	are	disproportionate	to	th e	size	of	the	waterbody. 12 Throughout	the	administrative	and	judicial	review	processes,	in dustry	argued	that	CCC	and

the	other	standards	should	not	b e	considered	BTA	or	that	BTA	fo r	new	facilities	should	be determined	case‐by‐case.		Those	a rguments	were	fully	considered and	rejected,	first	by EPA	and	then	by	the	court	when	i t	upheld	the	Phase	I	rule	in	20 04. 13

In	the	context	of	the	current	e xisting	facility	rulemaking,	a decade	later,	EPA	is not reconsidering	BTA	for	new	facilities	or	comparing	the	merits	of CCC	with	once‐through cooling	–	an	antiquated	technology	rarely	installed	in	plants	b uilt	since	the	1980s.		That debate	was	settled	at	the	federal	level	long	ago,	in	the	first term	of	the	Bush	administration.

The only remaining question concerns the retrofitting of	CCC	on	existin g	facilities	and whether	those	facilities	can	meet	the	velocity	limits	and	propo rtional	flow	requirements.

The	Phase	I	rule	did	not	establish	standards	for	new	units	buil t	at	existing	facilities.

Nor	did	EPA	determine	that	such units	were	to	be	treated	as	exi sting	facilities.		Rather,	EPA deferred	regulation	of	those	unit s	until	it	had	completed	analy sis	of	data	on	existing

facilities. 14 Having	completed	that	analysis, the	draft	proposed	rule	EPA	s ent	to	OMB shortly	before	proposal	in	2011 required	that	“[n]ew	units	cons tructed	at	an	existing facility	...	comply	with	provision s	for	impingement	and	entrainme nt	mortality	based	on closed‐cycle	[cooling]	that	are	similar	to	those	required	in	th e	Phase	I	new	facility	rule.” 15 That	was	appropriate	because	new	units	–	including	rebuilt,	rep owered	and	replaced	units –	are	like	new	facilities;	they do	not	encounter	retrofitting	i ssues.

Accordingly,	the	draft	proposed rule	defined	new	unit	at	an	exi sting	facility	to

11 See, e.g., 64	Fed.	Reg.	60727,	60730	(Nov.	8, 1999)	(NMFS	adopting	USFWS’s definition	of	harm,	and	noting that	“[r]emoving	...fish	...	or	other biota	required	by	the	listed species	for	feeding”	can	constitute	a	take).

12 See 40	C.F.R.	§	125.84; see also generally 66	Fed.	Reg.	65256	‐	65 345	(Dec.	18,	2001).

13 Riverkeeper, Inc. v. EPA ,	358	F.3d	174,	197 (2d	Cir.	2004)	(“ Riverkeeper I ”)	(“The	EPA	considered	all	of	the factors	that	UWAG	now	raises...”).

14 66	Fed.	Reg.	at	65286.

15 See EPA‐HQ‐OW‐2008‐0667‐1295.2	(redli ne‐strikeout	version	document ing	changes	made	during Executive	Order	12866	review)	(her einafter,	“Redlined	Version	o f	Proposed	Rule”)	at	2.EPA,	USFWS	and	NMFS
March 13, 2014 Page 5 of 12

5 include	“rebuilt,	repowered,	or	replaced	unit[s].” 16 EPA	further	defined	“rebuilt”	with reference	to	“major	modification s	affecting	operation	of	the	co oling	water	intake	structure such	as	replacement	of	the	turbine,	boiler,	or	condensers”	and defined	“repowering”	to mean	rebuilding	and	replacing	ma jor	components	of	a	power	plant instead	of	building	a

new	one.” 17 After	many	years	of	careful	ana lysis	by	its	engineers	and	eco nomists,	EPA explained	why	installing	CCC	at	r ebuilt,	repowered	and	replaced units	is	unlike	a	retrofit:

As	 [older]	 units	 are	 retired	 and	 replaced	 based	 on	 individual	 f acility circumstances,	 facilities	 have	 the	ideal	 opportunity	 to	 design and	 construct the	 new	 units	 without	 many	 of	 th e	 additional	 expenses	 associate d	 with retrofitting	 an	 existing	 unit	 to	 closed‐cycle.	 	 ...	 	 [D]owntime	 ... may	 be avoided	 or	minimized	 [,]	 	...	 condensers	 can	 be	 configured	 for	 cl osed‐cycle, reducing	 energy	 requirements,	 an d	 high	 efficiency	 cooling	 tower s	 can	 be designed	as	part	of	the	unit	replacement,	allowing	for	installa tion	of	smaller cooling	towers. 18

In	 summary,	 ...	 repowering,	 replac ement,	 and	 additional	 unit	 inst allation decisions	can	be	accomplished	feasibly	and	with	lower	costs	tha n	retrofitting an	entire	existing	facility...		New	units	are	similar	to	new	faci lities,	regardless of	 whether	 that	 unit	 is	 a	 green	 field	 construction,	 an	 addition al	 unit,	 a replacement	 unit,	 or	 a	 repowered	 unit.	 	 ...	 	 [N]ew	 units	 [also]	 w ould	 be similar	to	new	facilities	in	terms	of	the	useful	expected	plant life... 19

...	 EPA	 considered	 whether	 such	 requirements	 ...	 would	 serve	 as	 a disincentive	to	replace	older	un its	and	determined	that	this	wo uld	not	be	the case	 given	 closed‐cycle	 cooling’ s	 comparable	 cost	 relative	 to	 o nce	 through cooling	and	its	small	cost	as	a	percentage	of	overall	costs	at the	new	unit.		... Furthermore,	the	costs	usually	comprise	less	than	1	percent	of the	total	costs of	a	new	unit.		Recent	experience	indicates	that	the	Phase	I	re quirements	are not	a	disincentive	for	new	facility	construction... 20

Shortly	before	proposal	in	the	F ederal	Register,	however,	for	r easons	unknown	and wholly	unexplained,	OMB	changed	the	definition	of	new	units	at existing	facilities	to exclude	rebuilt,	repowered	or	replacement	units. 21 That	change	should	not	have	been made	and,	indeed,	EPA	has	recons idered	it.		According	to	EEI’s recent	letters,	EPA’s	current approach	more	closely	aligns	with	the	February	2011	draft	propo sal	in	that	the	definition

16 Id .	at	423	(proposed	40	C. F.R.	§	125.92(r)).

17 Id .	at	423	(40	C.F.R.	§§	125. 92(r)	and	125.92(t)).

18 Id .	at	92‐93.

19 Id .	at	147.

20 Id .	at	147‐148.

21 Proposed 40	C.F.R.	§	125.92(r).EPA,	USFWS	and	NMFS
March 13, 2014 Page 6 of 12

6 of	new	unit	at	existing	facility includes	repowered,	replaced	o r	rebuilt	units,	so	long	as	the turbine	and	condenser	are	replac ed	(and	the	location	of	the	coo ling	water	intake	structure or	design	intake	flow	is	changed). 22

There	is	no	factual	or	legal	bas is	for	EEI’s	request	that	repow ered,	replaced	or

rebuilt	units	be	excluded	from	t he	definition	of	new	unit	at	an existing	facility.		As	noted, EPA	has	considered	and	rejected	EEI’s	argument	that	a	CCC	requi rement	would	be	a disincentive	to	upgrade	or	rep ower	facilities.		EEI	also	rehash es	its	argument	that	“EPA’s authority	under	§	316(b)	extends	only	to	the cooling water intake structure. ” 23 But	for nearly	four	decades	EPA	has	recognized	that	Section	316(b)	auth orizes	it	to	regulate	the volume	and	velocity	of	water	wit hdrawn	through	a	cooling	water intake	structure	as	a means	of	addressing	capacity. 24 That	authority	is	no	different for	new	units	than	for	new	or existing	facilities	and	does	not	depend	on	whether	the	intake	s tructure	or	anything	else	has been	modified.		Moreover,	given	t hat	existing	facilities	can	be subjected	to	stricter requirements	during	permit	renew al	in	the	absence	of	any	change to	the	facility, 25 there	is obviously	no	legal	impediment	to regulating	modified	units	in	t he	absence	of	changes	to	the intake	or	design	flow.

For those reasons, EPA should not define new unit based on whether the location of the intake structure or design intake flow will change. Using	turbine	and	condenser replacement	as	the	sole	touchsto ne	for	rebuilt,	repowered	and	r eplaced	units	is	consistent with	EPA’s	statutory	authority,	a nd	properly	recognizes	that	su ch	units	are,	for	all	intents and	purposes,	new	facilities.

If	the	electric	power	industry	were	given	authority	to	repower the	nation’s	existing fleet	of	antiquated,	destructive once‐through‐cooled	power	plan ts	by	installing	new	boilers,

new	condensers	and	new	turbines without	also	replacing	their	19 50s	cooling	systems,	EPA would	create	an	enormous	loophole that	would	swallow	not	only	t he	existing	facility	rule,

but	also	the	Phase	I	rule	fo r	new	facilities	as	well.

Notably,	the	last	time	EPA	(or OMB)	attempted	an	Orwellian	re‐ write	of	the

definitions	of	“new”	a nd	“existing,”	that	aspect	of	the	Phase	I I	rule	was	remanded	by	the Second	Circuit,	with	the	court	n oting	that	no	deference	is	owed to	an	agency	interpretation that	is	“plainly	erroneous.” 26

22 EEI	Dec.	20,	2013	letter	at	3.

23 EEI	Sept.	17,	2013	letter	at	3 (emphasis	in	original).

24 See 66	Fed.	Reg.		at	65313	(citing In re Brunswick Steam Electric Plant ,	Decision	of	the	General	Counsel	No. 41	(June	1,	1976)).

25 Entergy’s	argument	that	Sec tion	316(b)	imp oses	only	a pre ‐construction	requirement	and	does	not	allow EPA	to	later	revisit	the	design, location,	capacity	or	construc tion	of	an	existing	plant’s	cooling	water	intake structure	was	rejected	by	the	Second	Circuit	in Riverkeeper II

. See Riverkeeper, Inc. v. EPA ,	475	F.3d	83,	121‐ 23	(2d	Cir.	2007)

26 Riverkeeper II ,	475	F.3d	at	117‐20	(citing Fowlkes v. Adamec, 432	F.3d	90,	97	(2d	Cir.	2005)).EPA,	USFWS	and	NMFS
March 13, 2014 Page 7 of 12

7 III.

Permit Application Requirements & Deadlines

EEI	has	asked	EPA	to	“[p]rovide	a minimum	of	five	years	for	all facilities	to	complete the	permit	application	requirement.” 27 Allowing	five	years	to	complete	an	application	for	a five‐year	permit	would	be	patently	excessive,	particularly	sinc e	it	has	long	been	clear	to industry	what	information	it	will	need	to	submit.		As	EPA	noted in	the	proposal,	many	of the	regulated	facilities	were	previously	subject	to	the	withdra wn	Phase	II	rule	and	should have	already	compiled	much	of	the	proposed	application	data,	wh ich	can	be	used	to	meet many	of	the	information	submittal	requirements. 28 For	newly	covered	facilities,	the	2011 proposal	gave	them	advance	notice	as	to	what	the	agency’s	expec tations	are	regarding application	requirements. 29 Once	the	final	316(b)	rule	has been	issued,	plant	operators	c an hit	the	ground	running	with	thei r	application	materials	and	sho uld	be	kept	to	a	tight	time frame.		In	light	of	this,	the	inf ormation	submittal	time	period s	are	entirely	too	long; the

schedule set forth in the proposal should be cut in half. 30

Apart	from	the	length	of	the	sch edule,	the	proposed	rule’s	phas ed	approach	for information	submittal	is	a	signi ficant	improvement	over	prior	3 16(b)	rules	because	it requires	facilities	to	submit	application	materials	at	interval s	triggered	by	promulgation	of

the	final	rule. 31 This	is	critical	because	certain	components	of	an	application take	less	time to	complete	than	others,	regulat ors	can	evaluate	only	so	much	i nformation	at	any	one	time and	may	not	request	information expeditiously,	and	certain	item s	may	need	to	be supplemented.		Tying	the	schedule to	the	rule’s	promulgation	da te	provides	far	greater efficiency,	uniformity	and	transparency	than	if	50	permitting	a gencies	were	directed	to	set

information	submittal	schedules for	the	1,200	covered	facilitie s.

Many	facilities	operate	under	lon g‐expired,	administratively‐co ntinued	NPDES permits	even	though	their	renewal	applications	do	not	yet	inclu de	the	information	needed by	permit	writers.		As EPA	is	well	aware,	t he	CWA	authorizes	st ates	to	issue	NPDES	permits “for	fixed	terms,	not	exceeding	five	years.” 32 The	five‐year,	time‐limited	nature	of	the permit	is	central	to	Congress’s plan	to	press	new	technologies –	and	incrementally	stricter

27 EEI	Dec.	20,	2013	letter	at	4.

28 See 76	Fed.	Reg.	at	22254.

29 See 76	Fed.	Reg.	at	22248	(similar	st atement	in	context	of	complia nce	schedules).

30 In	addition,	the	Clean	Water	Ac t	mandates	compliance	with	the 316(b)	rule	no	later	than	three	years	from promulgation.		CWA	S ections	301(b)(2)(C),	( D),	(E)	&	(F)	and	30 1(b)(3)(A)	&	(B)	require	compliance	“as expeditiously	as	practicable,	bu t	in	no	case	later	than	three	y ears	after	the	date	such	limitations	are promulgated....”		As	the	courts	have	explained,	“the	time	limits in	sections	301	and	306	go vern	EPA's	duty	to take	action	under	section	316(b).	“ Cronin v. Browner ,	898	F.	Supp.	1052,	1059	(S.D .N.Y.	1995).		The	same	is true	with	respect	to	permittees’	duty	to	comply.

31 76	Fed.	Reg.	at	22254.

32 33	U.S.C.	§	1342(b)(1)(B).EPA,	USFWS	and	NMFS
March 13, 2014 Page 8 of 12

8 effluent	limits	–	onto	dischargers	at	regular	five‐year	interva ls. 33 Once	a	five‐year	NPDES permit	expires,	the	Administrati ve	Procedure	Act	(APA)	allows	l icensees	who	have	made “timely	and	sufficient	applicatio n	for	a	renewal	or	new	license in accordance with agency rules ,”	to	conduct	“an	activity	of	a	continuing	nature	...	until	the	a pplication	has	been	finally determined	by	the	agency.” 34

As	a	result	of	the	administrative	continuance	of	their	permits, some	power	plants are	currently	operating	under	per mits	that	were	issued	in	the	l ate	1980s	or	early	1990s and	expired	approximately	20	year s	ago.		These	plants	are	typic ally	inefficient	and	highly polluting	facilities	still	using	antiquated	technologies	from	t hat	era	or	earlier	and	badly	in need	of	technology	upgrades.		Th e	generational	delay	in	repermi tting	them	is	unacceptable and	plainly	contrary	to	the	inte nt	of	Congress.		Consequences	s hould	be	attached	to	the failure	of	a	permit	applicant	to	complete	its	renewal	applicati on	on	a	timely	basis.		That failure	can	affect	the	administrative	continuance	of	an	expired permit	or	the	opportunity	to contend	that	the	putative	best	t echnology	for	minimizing	advers e	environmental	impact	is not	available	at	a	particular	plant. Such a “backstop” provision is necessary to prevent dilatory plant owners from continuing to operate under 1980s and 1990s permits in

the 2020s and beyond. EPA	must	do	its	utmost	to	ensure that	long	overdue	permits	are reviewed,	renewed	and	modified	as	needed.		EPA’s	final	rule	sho uld	address	this	issue,	in delegated	and	non‐delegated	states.

IV.

Cost

‐ Benefit Analysis and EPA’s Stated Preference Survey

EPA	is	most	assuredly not required	to	base	its	Section	316(b)	determinations	on cost‐benefit	analysis	or	to	dire ct	permit	writers	to	do	so.		In EPA’s	very	first	316(b)	rule, the	agency	stated:	“No	compariso n	of	monetary	costs	with	the	so cial	benefits	of	minimizing adverse	environmental	impacts,	m uch	less	a	formal,	quantified	‘ cost/benefit’	assessment	is required	by	the	terms of	[§	316]	of	the	Act.” 35 More	recently,	“[i]n Entergy Corp. v. Riverkeeper ,	the	Supreme	Court	has	now	made	pellucid	that	the	EPA	may	but is	not required	to	engage	in	cost‐benef it	analyses	for	CWIS	rule	makin g.” 36

Furthermore,	as	Justice	Breyer	noted	in Entergy ,	Congress	“intended	the	law’s	text

to	be	read	as restricting

... the use of cost

‐ benefit comparisons. ...		[because]	the	Act’s sponsors	...	feared	that	such	anal yses	would	emphasize	easily	qua ntifiable	factors	over more	qualitative	factors	(partic ularly	environmental	factors,	f or	example,	the	value	of preserving	nonmarketable	species	of	fish).” 37 Justice	Breyer	was	particularly	concerned

33 See NRDC v. EPA ,	822	F.2d	104,	123	(D.C.	Cir.	1987).

34 5	U.S.C.	§	558(c)	( emphasis	added).

35 41	Fed.	Reg.	17387,	17388	(Apr.	26,	1976).

36 ConocoPhillips Co. v. EPA ,	612	F.3d	822,	837 (5th	Cir.	2010).

37 Entergy Corp. v. Riverkeeper, Inc. ,	556	U.S.	208,	232	(2009)	(Jus tice	Breyer,	concurring).EPA,	USFWS	and	NMFS
March 13, 2014 Page 9 of 12

9 about	“futile	attempts	at	comprehensive	monetization.” 38 Justice	Scalia’s	majority	opinion similarly	acknowledged	that	“arguments	may	be	available	to	prec lude	such	a	rigorous	form of	cost‐benefit	analysis	as	that which	was	prescribed	under	the statute’s	former	BPT standard,	which	required	weighing	‘the	total	cost	of	applicatio n	of	technology’	against	‘the

...	benefits	to	be	achieved.’” 39

Notably,	EPA	chose	not	to	rely	on cost‐benefit	considerations	i n	developing	its	Phase III	rule	for	new	oil	rigs,	and	n either	that	rule	nor	the	Phase I	rule	include	a	cost‐benefit variance.		Both	were	upheld	in	court. 40 EPA’s	reason	to	eschew	c ost‐benefit	analysis	in Phase	III	was	plain:		“it	did	not have	enough	information	to	pe rform	a meaningful cost‐ benefit	analysis.” 41 The	Fifth	Circuit	agreed,	expla ining	that	“[t]he	agency’s	dec ision	to regulate	on	the	basis	of	economi c	achievability	was	borne	out	b y	the	existence	of	cost

information	but	not	benefit	information.” 42

EEI	now	asks	EPA	to require permit	writers	to	rely	on	quantified,	monetized	cost‐ benefit	analysis	but	to prevent them	from	using	stated	pref erence	methods	for	valuing ecological	benefits. 43 EPA	must	decline	that	request	be cause	doing	so	would	guarante e	the development	of	meaningless	and	fu tile	analyses	of	the	kind	that Justice	Breyer	warned against	in	Phase	II.		The	lack	of meaningful	benefits	informati on	is	exactly	the	reason	EPA did	not	employ	cost‐benefit	anal ysis	in	Phase	III,	and	it	would also	violate	the	Clean	Water Act	in	ways	that	Justices	Breyer and	Scalia	foreshadowed.		Stat es	have	informed	EPA	of	the enormous	difficulties	in	placing an	accurate	dollar	value	on	aq uatic	resource	impacts.		And EPA	itself	recently	noted	that	t he	“difficult,	time‐consuming	a nd	expensive”	process	of	cost‐ benefit	analysis	“will	rarely	be sustainable	for	individual	per mits.” 44 Accordingly, EPA

should not mandate cost

‐ benefit analysis as a part of the permit issuance process because	it	would	result	in	1,200 meaningless	cost‐benefit	analy ses.

Furthermore,	to	the	extent	that	cost‐benefit	analysis	is	allowe d	as	a voluntary component	of	permitting,	the	ana lysis	must	fully	value	all	bene fits	by	using	the	data	from EPA’s	regional	and	national	stat ed	preference	survey.			EEI	and the	Senators’	attempt	to malign	stated	preference	methods	as	“controversial”	or	“inappro priate”	is	belied	by	EPA and	OMB’s	guidelines	for	regulatory	analysis.		Those	guidelines have	long	recognized	that such	methods	are	not	only	appropriate	and	well‐established	econ omic	tools,	but	also	that they	are necessary to	a	complete	benefits	analysis:

38 Id. at	235.

39 Entergy ,	556	U.S.	at	223.

40 ConocoPhillips at	833‐42; see also Riverkeeper I ,	358	F.3d	174.

41 ConocoPhillips ,	612	F.3d	at	838	(emphasis	added).

42 Id .	at	842.

43 EEI	Sept.	17,	2013	letter	at	2‐3 ;	EEI	Dec.	20,	2013	letter	at 2‐3.

44 EPA - New England, Clean Water Act NPDES Permitting De terminations for the Thermal Discharge and Cooling Water Intake Structures at Merrimack Station in Bow, New Hampshire NPDES Permit No. NH 0001465 at 327.EPA,	USFWS	and	NMFS
March 13, 2014 Page 10 of 12

10 Stated	Preference	Methods	(SPM)	have	been	developed	and	used	in the	peer‐

reviewed	literature	to	estimate	both	“use”	and	“non‐use”	values of	goods	and services.		They	have	also	been	widely	used	in	regulatory	analys es	by	Federal agencies...	 	 	 	 A	 stated‐preference	 study	 may	 be	 the only way	 to	 obtain quantitative	information about	non‐use	values... 45

Because	biological	diversity	an d	other	non‐use	values	are	inva riably	significant	in this	context	–	typically	they	account	for	98	percent	of	the	tot al	benefits 46 –	conducting	cost‐ benefit	analyses	without	stated preference	methods	would	result in	virtually	all	of	the benefits	being	zeroed	out,	there by	guaranteeing	a	completely	us eless	analysis.		The national	and	regional	cost‐benefit	study	EPA	conducted	in	the	c ontext	of	the	rulemaking represents	the	most	comprehensive	and	rigorous	effort	yet	to	mo netize	all	of	the	benefits of	reducing	impingement	and	entrainment.		States	have	neither	t he	time	nor	resources	to conduct	their	own	stated	preferen ce	surveys.		EPA’s	survey	show ed	that	the	economic benefits	of	minimizing	impingeme nt	and	entrainment	dramatically exceed	the	costs. 47 The use	of	those	data	in	the	plant‐s pecific	context	would	be	manife stly	more	reliable	than placing	a	zero	value	on	benefits that	are	known	to	exist	and	th at	in	the	aggregate	vastly outweigh	the	costs.

Accordingly,	if	permit	writers	a re	permitted	to	undertake	cost‐ benefit	on	a voluntary	basis,	or	to	accept	suc h	analyses	prepared	by	permit applicants,	they	should	be prohibited	from	using	any	such	analysis	that	does	not	take	full account	of	all	benefits, including	ecological	benefits,	o n	equal	footing	with	all	other benefits	and	costs.

V.

Low Capacity Utilization Units (“Peakers”)

EEI	also	asks	EPA	to	“specify	a	capacity	factor	or	flow	rate	be low	which	the	final rule’s	requirements	will	not	appl y,”	based	on	its	unsupported	a ssertion	that	low	capacity utilization	units	( i.e. ,	“peakers”)	have	“little	risk”	of	adverse	environmental	impact

. 48

45 OMB	Circular	A‐4	at	§	4	(emphasis	added); see also EPA,	Guidelines	for	Preparing	Economic	Analyses.

46 As	EPA	has	explained,	98.2	perc ent	of	the	aquatic	organisms	af fected	by	intake	structures	are	not	harvested and	thus	do	not	go	to	market. 69	Fed.	Reg.	41576,	41661		(July 9,	2004).

47 See Comments	on	EPA’s	Section	316(b) Stated	Preference	Survey,	Dr. Frank	Ackerman,	Stockholm
Environment	Institute‐US	Center, Tufts	University,	July	10,	201 2.		Notably,	the	Senators	cite	a	NERA Consulting	report	prepared	for	U WAG	and	EEI	for	the	proposition that	the	stated	prefere nce	survey	estimates benefits	to	be	$2.275	billion	annually	for	EPA’s	preferred	opti on	and	five	times	the	value	of	the	costs. See July 22,	2013	letter	from	Senator	Vi tter,	et	al.,	to	EPA	at	2.

48 EEI	Sept	17,	2013	letter	at	4‐5; see also EEI	Dec.	20,	2013	letter	at	4.EPA,	USFWS	and	NMFS
March 13, 2014 Page 11 of 12

11 In	fact,	as	state	regulators	hav e	found,	there	is	“no	predictab le	relationship” between	capacity	factor and	cooling	water	use. 49 There	are	several	reasons	for	this, including	that	cooling	water	syst ems	at	non‐baseload	facilities may	be	operated	more	than is	necessary	to	condense	steam. 50 Further,	“non‐targeted	redu ctions”	in	cooling	water	use may	have	little	effect	on	reduci ng	adverse	environmental	impact because	the	“driving factors”	influencing	entrainment	and	impingement	at	a	facility are	the	“seasonal	dimension of	both	energy	demand	and	fish	r eproductive	and	migratory	life history.” 51 In	other	words, peaking	and	load‐following	facil ities	can	have	a	disproportiona tely	large	adverse environmental	impact	on	aquatic resources	if	they	operate	when biological	activity	is	high. In	addition,	many	facilities	th at	now	operate	as	peakers	or	loa d‐following	units	were originally	designed	as	baseload units	but	are	no	longer	efficie nt	enough	to	be	operated regularly.		This	means	that	they also	have	a	disproportionately large	adverse	impact	on	air quality	and	climate	relative	to	more	efficient	baseload	facilit ies.

Moreover,	a	plant’s	past	operatio nal	history	does	not	guarantee that	it	will	run infrequently	in	the	future,	due to	changes	in	demand	and	fuel	c osts.		Facilities	should	not	be exempted	from	certain	requirements	based	on	prior	capacity	util ization	and	given	free	rein to	ramp	up	operation s	in	the	future.

Consequently,	if	capacity	factor or	average	flow	rate	is	to	be a	component	of	BTA	for certain	facilities,	the	NPDES	pe rmit	must	contain	mandatory	lim its	on	future	capacity	and flow.		In	addition,	those	limits must	be	expressed	as	targeted, seasonal	reductions	and/or be	accompanied	by	additional	requ irements	specifying	the	minimu m	reductions	in impingement	and	entrainment	to	b e	achieved	as	a	result	of	reduc ed	operation,	as	has	been done	in	some	recent	state‐issued	permits	for	peakers.

Thank	you	for	considering	these legal	issues	as	the	rulemaking is	completed

Very	Truly	Yours,

Reed	Super Legal	Director,	Waterkeeper	Alliance Principal,	Super	Law	Group Phillip	Musegaas Hudson	River	Program	Director Riverkeeper,	Inc.

49 See generally New York State Department of Environmental Conservation, The Relationship between Cooling Water Capacity Utilization, Electric Generating Capacity Utilization, and Impingement and Entrainment at New York State Steam Electric Generating Facilities, Technical Document, July 2010, at 2.

50 Id .		For	example,	plants	may	withd raw	water	when	not	generating	e lectricity,	or	may	withdraw	a disproportionately	high	volume	o f	water	relative	to	kilowatt	ho urs,	in	order	to	prevent	condenser	fouling;	to dilute	discharges;	because	they have	single‐speed	intake	pumps that	do	not	allow	withdrawals	to	be	scaled down;	or	to	cool	the	plant	durin g	the	start‐up	and	cool‐down	pe riods	before	and	after	operation.

51 Id

.EPA,	USFWS	and	NMFS
March 13, 2014 Page 12 of 12

12 Steve	Fleischli Senior	Attorney

Natural	Resources	Defense	Council Joshua	Berman Staff	Attorney

Sierra Club

Ann	Brewster	Weeks Senior	Counsel,	Legal	Director

Clean	Air	Task	Force Thomas	Cmar Coal	Program	Attorney Earthjustice

John	Rumpler Senior	Attorney

Environment	America Charles	C.	Caldart Director	of	Litigation

National	Environmental	Law	Center

Angela	T.	Howe Legal	Director

Surfrider	Foundation

cc:	 Bob	Perciasepe,	EPA	D eputy	Administrator Avi	Garbow,	EPA	General	Counsel Daniel	Ashe,	Director,	U.S.	Fish	and	Wildlife	Service Gary	Frazer,	Assistant	Director,	Endangered	Species,	USFWS Eileen	Sobeck,	Assistant	Admini strator	for	NOAA	Fisheries Donna	Wieting,	Director,	Office of	Protected	Resources,	NMFS Howard	Shelanski,	OIRA	Administrator Andrei	Greenawalt,	OIRA	Associate	Administrator Nancy	Sutley,	Chair,	Council on	Environmental	Quality

Dan Utech,	Director	for	Energy	and	Climate	Change,	Domestic	Policy Council Robert	Dreher,	Acting	Asst.	Atto rney	General,	Environment	&	Nat .	Resources	Div.