GAO 

United States Government Accountability Office

Report to the Chairman, Committee on 

Science and Technology, House of 

Representatives 

ENERGY-WATER

NEXUS 

Improvements to 

Federal Water Use 

Data Would Increase 

Understanding of 

Trends in Power Plant 

Water Use 

October 2009 

GAO-10-23 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

October 2009

ENERGY-WATER NEXUS

Improvements to Federal Water Use Data Would 

Increase Understanding of Trends in Power Plant 

Highlights of GAO-10-23, a report to the Water Use 

Chairman, Committee on Science and 

Technology, House of Representatives 

In 2000, thermoelectric power 

plants accounted for 39 percent of 

total U.S. freshwater withdrawals. 

Traditionally, power plants have 

withdrawn water from rivers and 

other water sources to cool the 

steam used to produce electricity, 

so that it may be reused to produce 

more electricity. Some of this 

water is consumed, and some is 

discharged back to a water source. 

In the context of growing demands 

for both water and electricity, this 

report discusses (1) approaches to 

reduce freshwater use by power 

plants and their drawbacks, (2) 

states’ consideration of water use 

when reviewing proposals to build 

power plants, and (3) the 

usefulness of federal water data to 

experts and state regulators. GAO 

reviewed federal water data and 

studies on cooling technologies. 

GAO interviewed federal officials, 

as well as officials from seven 

selected states. 

What GAO Recommends

To improve federal data collection 

efforts, GAO is making several 

recommendations, including that 

EIA consider collecting and 

reporting data on power plants’ use 

of advanced cooling technologies 

and alternative water sources, and 

that USGS consider reinstating 

collection of data on power plant 

water consumption and 

distributing data on the use of 

alternative water sources. USGS 

agreed with our recommendations. 

DOE provided technical comments 

that we incorporated, as 

appropriate. 

Advanced cooling technologies that rely on air to cool part or all of the steam 

used in generating electricity and alternative water sources such as treated 

effluent can reduce freshwater use by thermoelectric power plants. Use of 

such approaches may lead to environmental benefits from reduced freshwater 

use, as well as increase developer flexibility in locating a plant. However, 

these approaches also present certain drawbacks. For example, the use of 

advanced cooling technologies may result in energy production penalties and 

higher costs. Similarly, the use of alternative water sources may result in 

adverse effects on cooling equipment or regulatory compliance issues. Power 

plant developers must weigh these drawbacks with the benefits of reduced 

freshwater use when determining which approaches to pursue. 

Consideration of water use by proposed power plants varies in the states GAO 

contacted, but the extent of state oversight is influenced by state water laws, 

related state regulatory policies, and additional layers of state regulatory 

review. For example, California and Arizona—states that historically faced 

constrained water supplies, have taken formal steps aimed at minimizing 

freshwater use at power plants. In contrast, officials in five other states GAO 

contacted said that their states had not developed official policies regarding 

water use by power plants and, in some cases, did not require a state permit 

for water use by new power plants. 

Federal agencies collect national data on water availability and water use; 

however, of these data, state water agencies rely on federal water availability 

data when evaluating power plants’ proposals to use freshwater more than 

federal water use data. Water availability data are collected by the U.S. 

Geological Survey (USGS) through stream flow gauges, groundwater studies, 

and monitoring stations. In contrast, federal data on water use are primarily 

used by experts, federal agencies, and others to identify industry trends. 

However, these data users identified limitations with the federal water use 

data that make them less useful for conducting trend analyses and tracking 

industry changes. For example, the Department of Energy’s (DOE) Energy 

Information Administration (EIA) does not systematically collect information 

on the use of advanced cooling technologies and other data it collects are 

incomplete. Similarly, USGS discontinued distribution of data on water 

consumption by power plants and now only provides information on water 

withdrawals. Finally, neither EIA nor USGS collect data on power plant 

developers’ use of alternative water sources, which some experts believe is a 

growing trend in the industry. Because federal data sources are a primary 

source of national data on water use by various sectors, data users told GAO 

that without improvements to these data, it becomes more difficult for them 

to conduct comprehensive analyses of industry trends and limits 

understanding of changes in the industry. 

View GAO-10-23 or key components.

For more information, contact Anu Mittal or 

Mark Gaffigan at (202) 512-3841 or 

mittala@gao.gov or gaffiganm@gao.gov. 
Page i GAO-10-23 

Contents 

Letter 1

Background 5 

Advanced Cooling Technologies and Alternative Water Sources 

Can Reduce the Use of Freshwater at Power Plants, but Their 

Adoption Poses Certain Drawbacks 19 

States We Contacted Vary in the Extent to Which They Consider 

Water Impacts When Reviewing Power Plant Development 

Proposals 33 

Some Federal Water Data Are Useful for Evaluating Power Plant 

Applications, but Limitations in Other Federal Data Make the 

Identification of Certain Water Use Trends More Difficult 42 

Conclusions 50 

Recommendations for Executive Action 50 

Agency Comments and Our Evaluation 51 

Appendix I Objectives, Scope and Methodology 54 

Appendix II Review of Proposals to Use Water in New Power Plants 

in Arizona 58 

Appendix III Review of Proposals to Use Water in New Power Plants 

in California 62 

Appendix IV Review of Proposals to Use Water in New Power Plants 

in Georgia 66 

Appendix V Limitations to Federal Water Use Data Identified by 

Those GAO Contacted 69 

Appendix VI Comments from the Department of the Interior 71 

 Energy-Water Nexus 
Appendix VII GAO Contacts and Staff Acknowledgments 72

Tables 

Table 1: Estimated Water Withdrawals by Thermoelectric Power 

Plants in the United States in 2000 8 

Table 2: Selected Estimates of Water Withdrawn and Consumed for 

Power Plant Cooling by Cooling Technology and Plant 

Type 20 

Table 3: Percentage Difference in Annual Net Plant Electricity 

Output for Theoretical Combined Cycle Plants with 

Different Cooling Systems at Four Geographic Locations 

in California 28 

Table 4: State Water Laws and Permit Requirements for Water 

Supply in Seven Selected States 34 

Table 5: Water Data Considered in Support of State Water 

Regulators’ Permitting Decisions 43 

Table 6: Power Plants Implemented, Approved or Planned Since 

January 1, 2004, by Cooling Type 65 

Table 7: Thermoelectric Power Plant Applications for Water 

Withdrawal Permits in Georgia Between January 2004 and 

December 2008 68 

Figures 

Figure 1: Diagram of a Boiler Water Loop in a Power Plant 6 

Figure 2: Total Freshwater Withdrawal in 1995 as a Percentage of 

Available Precipitation 7 

Figure 3: Diagram of a Once-through Cooling System 9 

Figure 4: Diagram of a Wet Recirculating System with a Cooling 

Tower 11 

Figure 5: Diagram of a Dry Cooling System 12 

Figure 6: Diagram of a Hybrid Cooling System 14 

Figure 7: Water Based Cooling Systems by Technology and Water 

Source 15 

Figure 8: Cumulative Number of Discontinued U.S. Geological 

Survey Streamflow Gauges with 30 or More Years of 

Record, 1933-2007 44 

Page ii GAO-10-23 Energy-Water Nexus
Abbreviations 

CEC California Energy Commission 

DOE Department of Energy 

EIA Energy Information Administration 

EPA Environmental Protection Agency 

USGS U.S. Geological Survey 

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. The published product may be reproduced and distributed in its entirety 

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Page iii GAO-10-23 Energy-Water Nexus
Page 1 GAO-10-23 

United States Government Accountability Office

Washington, DC 20548 

 

October 16, 2009 

The Honorable Bart Gordon 

Chairman 

Committee on Science and Technology 

House of Representatives 

Water and electricity are inexorably linked and mutually dependent, with 

each affecting the other’s availability. Electricity is required to supply, 

purify, distribute, and treat water and wastewater; water is needed to 

generate electricity and to extract and process fuels used to generate 

electricity. Freshwater and electricity are important to our health, quality 

of life, and economic growth, and demand for both of these resources is 

rising. Freshwater is increasingly in demand to meet the needs of the 

public in growing cities and suburbs, farms, industries, and for recreation 

and wildlife. At the same time, electricity demand is projected to continue 

to grow in the United States, with the Department of Energy (DOE) 

estimating that U.S. electricity consumption will increase by an average of 

about 1 percent each year from 2007 through 2030. Limited availability of 

freshwater may make it more difficult to build new power plants, 

particularly in communities concerned about the adequacy of their water 

supply and maintaining the quality of aquatic environments. Periodic 

water shortages may also make it difficult for existing plants to satisfy 

demand for electricity. In recent years, water shortages and high water 

temperatures have caused reductions in electricity production at power 

plants in the United States and abroad, according to news reports. 

In 2007, around three-fourths of the United States’ electricity generating 

capacity consisted of thermoelectric power plants, which rely heavily on 

water for cooling. Thermoelectric power plants use a fuel source—for 

example, coal, natural gas, nuclear material such as uranium, or the sun—

to boil water (boiler water) to produce steam. The steam turns a turbine 

connected to a generator that produces electricity. The steam is then 

cooled back into boiler water, a process which traditionally involves 

transferring heat from the steam to a separate water source (cooling 

water) and reusing it. Because the cooling water takes on the heat of the 

boiler water, some of it may evaporate, and the amount that evaporates 

varies, depending on the type of cooling technology that is used. In recent 

years, the majority of new thermoelectric power generating units have 

been combined cycle units, which use two processes to produce 

electricity, one of which is thermoelectric. In this type of plant, electricity 

is first generated by a simple cycle turbine that turns a generator directly 

 Energy-Water Nexus 
 

as a result of burning fuel in the turbine—similar to jet engines used in 

aircraft. The heat produced by the simple cycle turbine that would 

otherwise be released to the atmosphere is used to produce steam which 

turns a steam turbine connected to a generator to produce electricity. 

Because some of the electricity is generated via the simple cycle turbine—

a non-thermoelectric process—combined cycle plants use less water for 

cooling than similarly sized plants using only steam to produce electricity. 

Non-thermoelectric power plants, which accounted for the other onequarter of 2007 U.S. electricity generating capacity, do not use water for 

cooling but still require water for other plant purposes, such as water for 

improving turbine performance on non-thermoelectric natural gas plants, 

as well as water for housekeeping activities. 

Water use by thermoelectric power plants can be generally characterized 

as withdrawal, consumption, and discharge. Water withdrawals refer to 

water removed from the ground or diverted from a surface water source—

for example, an ocean, river, or lake—for use by the plant. In 2000, the 

most recent USGS data available, thermoelectric power plants accounted 

for 39 percent of total U.S. freshwater withdrawals. Water consumption 

refers to the portion of the water withdrawn that is no longer available to 

be returned to a water source, such as when it has evaporated. In 1995, the 

most recent USGS data available, thermoelectric power plants accounted 

for 3 percent of freshwater consumption in the United States. Discharge 

refers to the return of water to its original source or a new source and 

represents the difference between withdrawals and consumption. For 

many thermoelectric power plants, much of the water they withdraw is 

later discharged, although often at higher temperatures. The amount of 

water discharged from a thermoelectric power plant depends on a number 

of factors, including the type of cooling technology used, plant economics, 

and environmental regulations. 

Decisions to build a new power plant may be made independently by the 

power plant developer or with the consent of a state public utility 

commission. In either case, power plant developers must obtain approval 

from a number of state and local officials, generally by obtaining 

preconstruction and operating permits, before they can proceed with 

building their plant in a particular location. This process is meant to 

balance any adverse impacts a power plant may have on nearby 

communities and environments with the benefits it provides, such as 

energy supply and jobs. This regulation of the electricity industry’s water 

use is complex and involves both state and federal laws. States are 

primarily responsible for managing the allocation and use of freshwater 

supplies. However, federal laws provide for control over the use of water 

Page 2 GAO-10-23 Energy-Water Nexus
 

in specific cases, such as on federal lands or in interstate commerce. In 

addition to the water power plants may withdraw, for which developers 

have to seek permits or purchase a water right, power plants may have to 

obtain permits to discharge water, since water discharged from a plant is 

regulated by the federal government and the states to ensure that it meets 

certain quality standards and does not harm protected species.1

 In some 

cases, plants may design their operations so they discharge no water into 

sources outside the plant boundaries, known as zero-liquid discharge. 

Two federal agencies—the Department of the Interior’s U.S. Geological 

Survey (USGS) and the Energy Information Administration (EIA), the 

independent statistical and analytical agency within DOE—collect key 

data that address how power plants use water. In addition, Congress 

recently passed the Omnibus Public Land Management Act of 2009, which 

included provisions known as the Secure Water Act.2

 The law authorizes, 

among other things, additional funding for the Department of the Interior 

to report water data to Congress, including thermoelectric power plant 

withdrawal data. Congress is also considering pending legislation related 

to energy and water. The Energy and Water Integration Act of 2009, among 

other things, calls for the National Academy of Sciences to conduct an 

analysis of the impact of energy development and production on U.S. 

water resources, including an assessment of water used in electricity 

production.3

 Similarly, the Energy and Water Research Integration Act 

directs DOE to take such steps as advancing energy and energy efficiency 

technologies that minimize freshwater use, increase water use efficiency, 

and utilize alternative water sources.4

 It also provides for the creation of a 

council to enhance energy and water resource data collection, including 

improving data on trends in power plant water use, among other things. 

Because of the importance of freshwater to the public and society at large, 

the environment, and many industries, information about the country’s 

current and expected use of freshwater and electricity is critical to making 

appropriate decisions about how these resources are managed. In this 

context, you asked us to provide information about the relationship 

 

1

The Environmental Protection Agency announced in a September 15, 2009, press release 

its plans to revise existing standards for water discharges from coal-fired power plants. 

2

Pub. L. No. 111-11, § 9508 (2009). 

3

S. 531, 111th Cong. § 2 (2009). 

4

H.R. 3598, 111th Cong. (2009). 

Page 3 GAO-10-23 Energy-Water Nexus
 

between water and energy, which we will be addressing in several 

reports.5

 This report discusses water use in electricity production. More 

specifically, this report (1) describes technologies and other approaches to 

help reduce freshwater use by power plants and what, if any, drawbacks 

there are to using them, (2) describes the extent to which selected states 

consider water impacts of power plants when reviewing power plant 

development proposals, and (3) evaluates the usefulness of federal water 

data to experts and state regulators who evaluate power plant 

development proposals. We focused our evaluation on thermoelectric 

power plants, such as nuclear, coal, and certain natural gas plants. We did 

not consider the water supply issues associated with hydroelectric power, 

since the process through which hydroelectric plants use water is 

substantially different from that of thermoelectric plants and water is used 

to generate hydroelectric power without being directly consumed. We also 

limited our review to water used during the production of electricity at 

power plants and did not include water issues associated with extracting 

fuels used to produce electricity. 

To understand technologies or other approaches to help reduce 

freshwater use by power plants and what, if any, drawbacks there are to 

using them, we reviewed industry, federal, and academic studies on 

alternative water sources and advanced cooling technologies that 

discussed these alternatives’ benefits, as well as their drawbacks. We 

discussed the trade-offs associated with the use of these alternatives with 

power plant and cooling system manufacturers, U.S. national laboratory 

staff, academics, and other industry experts. To determine the extent to 

which selected states consider water impacts of power plants when 

reviewing power plant development proposals, we conducted case study 

reviews of three states: Arizona, California, and Georgia. We selected these 

states because of their differences in water availability and water law, high 

energy production, and large population centers. For each of these states, 

we met with state water regulators and siting authorities, power plant 

developers, water research institutions, and other subject matter experts. 

We also reviewed state water laws and policies for power plant water use. 

To supplement our case studies, we spoke with water regulators from four 

additional states: Nevada and Alabama, which shared watersheds with the 

 

5

We provided preliminary information from our work on two of these reports—biofuels and 

water use and thermoelectric power plants and water use—in a testimony before the 

Subcommittee on Energy and Environment in July 2009. GAO, Energy and Water: 

Preliminary Observations on the Links between Water and Biofuels and Electricity 

Production. (Washington, D.C.: July 9, 2009). GAO-09-862T. 

Page 4 GAO-10-23 Energy-Water Nexus
 

case study states, and Illinois and Texas, which are large electricity 

producing states with sizable population centers. We did not attempt to 

determine whether states’ efforts were reasonable or effective, rather, we 

only describe what states do to consider water impacts when making 

power plant siting decisions. To understand the usefulness of federal 

water data to experts and state regulators who evaluate power plant 

development proposals, we reviewed data and analysis from USGS and 

DOE’s EIA and National Energy Technology Laboratory. We also 

conducted interviews about the usefulness of federal data with data users, 

including federal agencies; regulators from state departments of water 

resources and public utility commissions; and experts from environmental 

and water organizations, industry, and academia. A more detailed 

description of our scope and methodology is presented in appendix I. 

We conducted this performance audit from October 2008 to October 2009, 

in accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives. 

Power plant developers consider many factors when determining where to 

locate a power plant, including the availability of fuel, water, and land; 

access to electrical transmission lines; electricity demand; and potential 

environmental issues. Often, developers will consider several sites that 

meet their minimum requirements, but narrow their selection based on 

economic considerations such as the cost of accessing fuel, water, or 

transmission lines, or the costs of addressing environmental factors at 

each specific site. 

Background 

One key requirement for thermoelectric power plants is access to water. 

Thermoelectric power plants use a heat source to make steam, which is 

used to turn a turbine connected to a generator that makes electricity. As 

shown in figure 1, the water used to make steam (boiler water) circulates 

in a closed loop. This means the same water used to make steam is also 

converted back to liquid water —referred to as condensing—in a device 

called a condenser and, finally, moved back to the heat source to again 

make steam. In typical thermoelectric plants, water from a separate 

source, known as cooling water, flows through the condenser to cool and 

condense the steam in the closed loop after it has turned the turbine. 

Page 5 GAO-10-23 Energy-Water Nexus
 

Figure 1: Diagram of a Boiler Water Loop in a Power Plant 

Cool cooling water

Condenser

Warm cooling water

Boiler

Turbine

High pressure steam Low pressure steam

Boiler water

Source: GAO analysis of various national laboratory and industry sources.

Heat source

Consideration of water availability during the power plant siting process 

can pose different challenges in different parts of the country because 

precipitation and, relatedly, water availability varies substantially across 

the United States. Figure 2 shows the total amount of freshwater 

withdrawn in the United States as a percentage of available precipitation. 

Areas where the percentage is greater than 100—where more water is 

withdrawn than locally renewed through precipitation—are indicative of 

basins using other water sources transported by natural rivers and 

manmade flow structures, or may indicate unsustainable groundwater use. 

Page 6 GAO-10-23 Energy-Water Nexus
 

Figure 2: Total Freshwater Withdrawal in 1995 as a Percentage of Available Precipitation 

Less than 1

1 to less than 5

5 to less than 30

30 to less than 100

100 to less than 500

500 or more

Source: Electric Power Research Institute. A Survey of Water Use and Sustainability in the United States With a Focus on Power 

Generation. (Palo Alto, CA. 2003.) 1005474; Map (Mapinfo).

Note: According to an Electric Power Research Institute official, the organization plans to update this 

analysis once USGS publishes 2005 freshwater withdrawal data. 

Power plants can use various types of water for cooling—such as 

freshwater or saline water—and different water sources, including surface 

water, groundwater, and alternative water sources. An example of 

alternative water sources is reclaimed water such as treated effluent from 

sewage treatment plants. To make siting decisions, power plant 

Page 7 GAO-10-23 Energy-Water Nexus
 

developers typically consider the water sources that are available and lea

costly to use. Fresh surface water is the most

st 

 common water source for 

power plants nationally, as shown in table 1. 

Table 1: Estimated Water Withdrawals by Thermoelectric Power Plants in the United 

States in 2000 

Millions of gallons per day 

Surface Water Groundwater

Saline water 59,500 0

Freshwater 135,000 409 

Source: U.S. Geological Survey, Estimated Use of Water in the United States in 2000, (Reston, Virginia, 2004). 

logies they 

the United States and include 

dry cooling and hybrid cooling. Specifically: 

ke, 

er 

r body is 

 

Power plant developers must also consider what cooling techno

plan to use in the plant. There are four general types of cooling 

technologies. Traditional cooling technologies that have been used for

decades include once-through and wet recirculating cooling systems. 

Advanced cooling technologies that have focused on reducing the amount 

of cooling water used are relatively newer in 

Once-through cooling systems. In once-through cooling systems, large 

amounts of cooling water are withdrawn from a water body such as a la

river, or ocean, and used in the cooling loop. As shown in figure 3, the 

cooling water passes through the tubes of a condenser. As steam in the 

boiler water loop exits the turbine, it passes over the condenser tubes. 

This contact with the condenser tubes cools and condenses the steam 

back into boiler water for reuse. After the cooling water passes through

the condenser tubes, it is discharged back into the water body warm

than it was when it was withdrawn.6

 Once-through cooling systems 

withdraw a significant amount of water but directly consume almost no 

water. However, because the water discharged back into the wate

warmer, experts believe that once-through systems may increase 

evaporation from the receiving water body. Furthermore, because of 

Cooling Technologies 

6

Studies we reviewed indicated a range of temperature increases for water discharged from 

once-through cooling systems. EPA officials we spoke with told us that once-through 

cooling plants often discharge cooling water between 10 and 20 degrees Fahrenheit 

warmer than it was when it was withdrawn, but they explained that there are examples of 

plants above and below this range, as well. 

Page 8 GAO-10-23 Energy-Water Nexus
 

concerns about the harm withdrawal for once-through systems can have 

on aquatic life—when aquatic organisms are pulled into cooling systems, 

trapped against water intake screens, or their habitat is adversely affected 

by warm water discharges—these systems are rarely installed at new 

plants. 

Figure 3: Diagram of a Once-through Cooling System 

Cool cooling water

intake from river

Condenser

Warm cooling water

discharge back to river

River

Boiler

Turbine

Generator

Electricity

High pressure steam Low pressure steam

Boiler water

Source: GAO analysis of various national laboratory and industry sources.

Heat source

Wet recirculating systems. Wet recirculating systems differ from oncethrough cooling systems in that they reuse cooling water multiple times.

The most common type of recirculating system, shown in figure 4, 

cooling towers to dissipate the heat from the cooling water to the 

atmosphere. Similar to the once-through system, steam exiting the turbin

uses 

e 

Page 9 GAO-10-23 Energy-Water Nexus
 

is brought in contact with the tubes of a condenser that contain cooling 

water. The cooling water condenses the steam back into water for reuse in 

the boiler. The cooling water, warmed from the condenser, is then pumped

to a cooling tower where it is exposed to the air. The heat from the wa

cooling water is transferred to air flowing through the cooling tower, 

primarily through evaporation. In this process, some of the warm cooling 

water is consumed as it evaporates from the cooling tower, but most of it 

is returned to the condenser and used again. Over time, the qualit

cooling water is diminished as minerals and other dissolved and 

suspended solids present in the water are concentrated because of the 

water lost to evaporation. A portion of the cooling water containing

minerals and other dissolved solids must be discharged (known as 

blowdown) to prevent accumulation of those minerals and dissolved 

solids in the condenser, which could have adverse effects on conde

and cooling tower performance. For example, the National Energy 

Technology Laboratory estimated that a 520 megawatt wet recirculating 

system with a cooling tower circulates approximately 188,000 gallons of 

cooling water per minute. It withdraws around 5,000 gallons of water 

minute to make up for the nearly 4,000 gallons per minute consum

through evaporation and approximately 1,000 gallons per minute 

discharged in the blowdown process. Some wet recirculating plants d

use a cooling tower but, instead, discharge cooling water to a pond, 

allowing it to cool before it is returned to the plant for reuse. For a w

recirculating system, water is only withdrawn from a water body to 

replace cooling water lost through evaporation and blowdown; thus, 

considerably less water is withdrawn than in a once-through cooling 

system. As a result, plants equipped with wet recirculating systems ha

relatively low water withdrawal but higher direct water consumption 

rm 

y of the 

 the 

nser 

per 

ed 

o not 

et 

ve 

compared to once-through systems. 

Page 10 GAO-10-23 Energy-Water Nexus
 

Figure 4: Diagram of a Wet Recirculating System with a Cooling Tower 

Condenser

Warm

cooling water

Boiler

Turbine

Generator

Electricity

High pressure steam Low pressure steam

Boiler water

Source: GAO analysis of various national laboratory and industry sources.

Small

amount

of makeup

water

Heat source

Lake

Cooling tower

Evaporation

Cool

cooling

water

Ambient

air

Ambient

air

Fan

Dry cooling systems. Dry cooling systems rely primarily on air, rather than 

water, for cooling. In dry cooling systems, steam exiting the turbine flows 

through condenser tubes and is cooled directly by fans blowing air across 

the outside of these tubes to condense the steam back into liquid water. 

The cooled boiler water can then be reheated into steam to turn the 

turbine. In this approach, water is not used for cooling, although water still 

may be used for other plant purposes, such as pollution control 

equipment. As with the other systems, the steam, once cooled back into 

Page 11 GAO-10-23 Energy-Water Nexus
 

liquid water, is returned to the turbine for reuse.7 See figure 5 for an 

illustration of dry cooling. 

for an 

Figure 5: Diagram of a Dry Cooling System 

Boiler

Turbine

Air cooled

condenser

Fan

Generator

Electricity

High pressure steam

Low pressure steam

Heat source

Air in Air in

Air out Air out

Boiler water

Source: GAO analysis of various national laboratory and industry sources.

 

7

Another method of dry cooling, referred to as indirect dry cooling, uses a closed-loop of 

cooling water to condense the steam exiting the turbine—similar to recirculating systems. 

However, instead of dissipating the cooling water’s heat through evaporation, a dry cooling 

tower is used to transfer the heat from the cooling water to the ambient air. 

Page 12 GAO-10-23 Energy-Water Nexus
 

Hybrid cooling systems. Hybrid cooling technology offers a middleground option between wet and dry cooling systems, where wet and dry 

cooling components can be used either separately or simultaneously, as 

shown in figure 6. The system can operate both the wet and dry 

components in unison to increase cooling efficiency or may rely only on 

dry cooling to conserve water as needed.8

 

8

Some experts we spoke with and documents we reviewed described two other types of 

hybrid cooling technology designs. One version is designed to minimize plumes released 

from wet recirculating systems with cooling towers; although, according to one expert, this 

version has very little effect on the plant’s water consumption. The other consists of 

various system configurations designed to improve the efficiency of dry cooling by either 

spraying water on the air-cooled condenser directly or using water to lower the 

temperature of inlet air entering the air-cooled condenser. 

Page 13 GAO-10-23 Energy-Water Nexus
 

Figure 6: Diagram of a Hybrid Cooling System 

Boiler

Boiler water

Turbine

Generator

Electricity

Boiler water

Source: GAO analysis of various national laboratory and industry sources.

Heat source

Air cooled

condenser

Low pressure steam

High

pressure steam

Air in

Fan

Air in

Air out Air out

Low

pressure

steam Small

amount

of makeup

water

Lake

Cooling tower

Evaporation

Cool

cooling

water

Ambient

air

Ambient

air

Fan

Condenser

Warm

cooling water

Steam

valve

In 2008, the National Energy Technology Laboratory—a U.S. DOE 

laboratory that conducts and implements science and technology research 

and development programs in energy—estimated that 42.7 percent of U.S. 

thermoelectric generating capacity uses once-through cooling, 41.9 

percent uses cooling towers, 14.5 percent uses cooling ponds, and 0.9 

percent uses dry cooling.9

 Figure 7 illustrates the prevalence of different 

cooling technologies across the United States. 

 

9

Department of Energy, National Energy Technology Laboratory, Estimating Freshwater 

Needs to Meet Future Thermoelectric Generation Requirements. 2008. This report did not 

include statistics regarding the use of hybrid systems. 

Page 14 GAO-10-23 Energy-Water Nexus
 

Figure 7: Water Based Cooling Systems by Technology and Water Source 

3

3 3

3

Water type Cooling type

Fresh

Saline

Cooling pond

Once through

Recirculating with cooling towers

Source: National Energy Technology Laboratory, based on EIA-collected data; Map (Mapinfo).

Note: The National Energy Technology Laboratory developed this graphic based on 2000 and 2005 

data collected by EIA and, as a result, power plants with a capacity less than 100 megawatts are not 

shown. According to an official from the National Energy Technology Laboratory, it was not possible 

using EIA data to determine the water type of cooling ponds. Additionally, as discussed later in the 

report, it is not possible to use EIA data to comprehensively identify the universe of plants with dry or 

hybrid cooling systems. 

Page 15 GAO-10-23 Energy-Water Nexus
 

Federal Data Collection Although a number of federal agencies collect data on water, two collect 

key data that are used to analyze the impacts of thermoelectric power 

plants and water availability: USGS and EIA. 

• USGS’s mission is to provide reliable scientific information to manage 

water, energy and other resources, among other things. USGS collects 

surface water and groundwater availability data through a national 

network of stream gauges and groundwater monitoring stations. USGS 

currently monitors surface and groundwater availability with 

approximately 7,500 streamflow gauges and 22,000 groundwater 

monitoring stations located throughout the United States. 

• USGS compiles data and distributes a report every 5 years on national 

water use that describes how various sectors, such as irrigation, mining, 

and thermoelectric power plants, use water. USGS data related to 

thermoelectric power plants include (1) water withdrawal data at the 

state and county level organized by cooling technology—once-through and 

wet recirculating; (2) water source—surface or groundwater; and (3) 

whether water used was fresh or saline. USGS compiles water use data 

from multiple sources, including state water regulatory officials, power 

plant operators, and EIA. If data are not available for a particular state or 

use, USGS makes estimates. 

• EIA’s mission is to provide policy-neutral data, forecasts, and analyses to 

promote sound policy making, efficient markets, and public understanding 

regarding energy and its interaction with the economy and the 

environment. In carrying out this mission, EIA collects a variety of energy 

and electricity data nationwide, about topics such as energy supply and 

demand. For certain plants producing 100 megawatts or more of 

electricity, EIA collects data on water withdrawals, consumption, 

discharge, as well as some information on water source and cooling 

technology type. EIA annually collects water use data directly from power 

plants by using a survey. 

State Water Laws The variety of state water laws relating to the allocation and use of surface 

water can generally be traced to two basic doctrines the riparian doctrine, 

often used in the eastern United States, and the prior appropriation 

doctrine, often used in the western United States. 

• Under the riparian doctrine, water rights are linked to land ownership—

owners of land bordering a waterway have a right to use the water that 

flows past the land for any reasonable purpose. In general, water rights in 

riparian states may not be bought or sold. Landowners may, at any time, 

Page 16 GAO-10-23 Energy-Water Nexus
 

use water flowing past the land, even if they have never done so before. All 

landowners have an equal right to use the water, and no one gains a 

greater right through prior use. In some riparian states, water use is 

closely tracked by requiring users to apply for permits to withdraw water. 

In other states, where water has traditionally not been scarce, water use is 

not closely tracked. When there is a water shortage, water users share the 

shortage in proportion to their rights, or the amount they are permitted to 

withdraw, to the extent that it is possible to determine. 

• Under the prior appropriation doctrine, water rights are not linked with 

land ownership. Instead, water rights are property rights that can be 

owned independent of land and are linked to priority and beneficial water 

use. A water right establishes a property right claim to a specific amount 

of water—called an allotment. Because water rights are not tied to land, 

water rights can be bought and sold without any ownership of land, 

although the rights to water may have specific geographic limitations. For 

example, a water right generally provides the ability to use water in a 

specific river basin taken from a specific area of the river. Water rights are 

also prioritized—water rights established first generally have seniority for 

the use of water over water rights established later—commonly described 

as “first in time, first in right.” As a result, once established, water rights 

retain their priority for as long as they remain valid. For example, a water 

right to 100 acre feet of Colorado River water established in 1885 would 

retain that 1885 priority and allotment, even if the right was sold by the 

original party who established it. Water rights also must be exercised in 

order to remain valid, meaning rights holders must put the water to 

beneficial use or their right can be deemed abandoned and terminated—

commonly referred to as “use it or lose it.” When there is a water shortage 

in prior appropriation states, shortages fall on those who last obtained a 

legal right to use the water. As a result, a shortage can result in junior 

water rights holders losing all access to water, while senior rights holders 

have access to their entire allotment. 

For some states, the legal framework for groundwater is similar to that of 

surface water as they use variants of either the riparian or prior 

appropriation doctrine to allocate water rights. However, in other states, 

the allocation of groundwater rights follows other legal doctrines, 

including the rule of capture doctrine and the doctrine of reasonable use. 

Under the rule of capture doctrine, landowners have the right to all the 

water they can capture under their land for any use, regardless of the 

effect on other water users. The doctrine of reasonable use similarly 

affords landowners the right to water underneath their land, provided the 

use is restricted to an amount necessary for reasonable use. In some cases, 

Page 17 GAO-10-23 Energy-Water Nexus
 

permits may be required prior to use and additional regulation may occur 

if a groundwater source is interconnected with surface water. 

Power Plant Applications A number of state agencies may be involved in considering or approving 

applications to build power plants or to use water in power plants. In 

some states, a centralized agency considers applications to build new 

power plants. In other states, applications may be filed with multiple state 

agencies. State water regulators issue water permits for power plants and 

other sectors to regulate water use and ensure compliance with relevant 

state laws and regulations. Public Utility Commissions, or the equivalent, 

may also have a role in authorizing the development of a power plant. In 

many states where retail electricity rates are regulated, these commissions 

are primarily responsible for approving the rates (or prices) electric 

utilities charge their customers and ensuring they are reasonable. As part 

of approving rates, these commissions approve utility investments into 

such things as new power plants and, as a result, may consider whether 

specific power plant design and cooling technologies are reasonable. 

Thermoelectric Power 

Plants and Water 

Availability 

Based on figures from EIA’s 2009 Annual Energy Outlook, thermoelectric 

power plant generating capacity will increase by about 15 percent between 

2006 and 2030. Depending on which cooling approaches are used, such an 

increase could further strain water resources. A variety of additional 

factors may also affect the availability of water for electricity generation 

and other uses, as well as the amount of water used to produce electricity. 

Some studies indicate that climate change will result in changes in local 

temperatures and more seasonal variations, both of which could cause 

increased levels of water consumption from thermoelectric power plant 

generation. Climate change may also result in changes in local 

precipitation and water availability, as well as more and longer droughts in 

some areas of the country. To the extent that this occurs, power plant 

operators may need to reduce the use of water for power plant cooling. In 

addition, some technologies aimed at reducing greenhouse gas emissions, 

such as carbon capture technologies, may require additional water. The 

combination of environmental laws, climate change, and the inclusion of 

new water intensive air emission technologies may impact water 

availability and require power plants operators to reduce water use in the 

future. In addition, since the water inlet structures used at once-through 

cooling plants can either trap or draw in fish and other aquatic life—

referred to as impingement and entrainment—there is increased pressure 

to reduce the use of once-through cooling at existing plants. 

Page 18 GAO-10-23 Energy-Water Nexus
 

Advanced Cooling 

Technologies and 

Alternative Water 

Sources Can Reduce 

the Use of Freshwater 

at Power Plants, but 

Their Adoption Poses 

Certain Drawbacks 

Advanced cooling technologies and alternative water sources can reduce 

freshwater use by thermoelectric power plants, leading to a number of 

benefits for plant developers; however, incorporating each of these 

options for reducing freshwater use into thermoelectric power plants also 

poses certain drawbacks. Benefits of reducing freshwater use may include 

social and environmental benefits, minimizing water-related costs, as well 

as increasing a developer’s flexibility in determining where to locate a new 

plant. On the other hand, drawbacks to using advanced cooling 

technologies may include potentially lower net electricity output, higher 

costs, and other trade-offs. Similarly, the use of alternative water sources, 

such as treated effluent or groundwater unsuitable for drinking or 

irrigation, may have adverse effects on cooling equipment, pose regulatory 

challenges, or be located too far from a proposed plant location to be a 

viable option. Power plant developers must weigh the trade-offs of these 

drawbacks with the benefits of reduced freshwater use when determining 

what approaches to pursue, and must consider both the economic costs 

over a plant’s lifetime and the regulatory climate. For example, in a waterscarce region of the country where water costs are high and there is 

significant regulatory scrutiny of water use, a power plant developer may 

opt for a water-saving technology despite its drawbacks. 

Advanced Cooling 

Technologies and 

Alternative Water Sources 

Can Reduce Freshwater 

Use, Leading to a Number 

of Benefits 

Advanced cooling technologies under development and in limited 

commercial use and alternative water sources can reduce the amount of 

freshwater needed by plants, resulting in a number of benefits to both the 

environment and plant developers. As shown in table 2, dry cooling can 

eliminate nearly all the water withdrawn and consumed for power plant 

cooling. 

Page 19 GAO-10-23 Energy-Water Nexus
 

Table 2: Selected Estimates of Water Withdrawn and Consumed for Power Plant Cooling by Cooling Technology and Plant 

Typea

Once-through 

Wet recirculating 

with cooling tower Dry cooling 

Gallons per 

megawatt hour by 

type of plant Withdrawal Consumptionb

Withdrawal Consumption Withdrawal Consumption

Coal 20,000 – 50,000 300 500-600 480 0 0

Combined cycle 7,500-20,000 100 230 180 0 0

Nuclear 25,000 – 60,000 400 800-1,100 720 c c 

Solar thermal (trough) — — 600-850d d 0 0

Sources: Coal, natural gas and nuclear estimates: Electric Power Research Institute, Water and Sustainability (Volume 3): U.S. Water 

Consumption for Power Production—The Next Half Century. (Palo Alto, CA, 2002). 1006786. Dry cooling and solar thermal: Electric 

Power Research Institute, Water Use for Electric Power Generation, (Palo Alto, CA, 2008). 1014026. 

Note: We did not include water use estimates for hybrid cooling in this table, because these systems’ 

water use is very dependent on their design and operation, including the proportion of wet versus dry 

cooling. Additionally, for wet recirculating systems, we provided water use estimates only for those 

systems with cooling towers, since according to work conducted by the National Energy Technology 

Laboratory, they are more common than wet recirculating systems with cooling ponds. 

a

In addition to cooling water, water may be used for other plant purposes, such as environmental 

controls; make-up boiler water; and water for cleaning, drinking, and sanitation. As a result, while dry 

and hybrid systems may eliminate or minimize water needs for cooling, total plant water use will not 

be eliminated entirely. Furthermore, some plants, such as natural gas simple cycle, solar 

photovoltaic, and wind, are not considered thermoelectric and do not use water for cooling but may 

use water for other plant purposes. 

b

Once-through cooling systems discharge water at a warm temperature; therefore, water consumption 

in these systems occurs via evaporation downstream of the plant. 

c

Representatives from one engineering firm and some power plant developers we spoke to explained 

that the large size of dry cooling systems needed for plants that derive all of their electricity 

production from the steam cycle, for example, nuclear and coal plants, may introduce challenges. 

Furthermore, according to another expert, one type of dry cooled technology may not be approved for 

use with certain nuclear reactors because of safety concerns. 

d

This estimate for solar thermal (trough) water withdrawals is from the Electric Power Research 

Institute’s 2008 report. This report did not identify a comparable range for water consumption. Other 

sources we reviewed estimated water consumption rates for solar trough plants ranging from 740 

gallons to 920 gallons per megawatt hour. 

Hybrid cooling systems, depending on design, can reduce water use—

generally to a level between that of a wet recirculating system with cooling 

towers and a dry cooling system. According to the Electric Power 

Research Institute, hybrid systems are typically designed to use 20-80 

percent of the water used for a wet recirculating system with cooling 

towers.10

 

10Electric Power Research Institute, Water Use for Electric Power Generation, (Palo Alto, 

CA, 2008). 1014026. 

Page 20 GAO-10-23 Energy-Water Nexus
 

In addition to using advanced cooling technologies, power plant operators 

can reduce freshwater use by utilizing water sources other than 

freshwater. Alternative water sources include treated effluent from 

sewage treatment plants; groundwater that is unsuitable for drinking or 

irrigation because it is high in salts or other impurities; sea water; 

industrial water and water generated when extracting minerals like oil, 

gas, and coal. For example, the oil and gas production process can 

generate wastewater, which is the subject of research as a possible source 

of cooling water for power plants. 

Use of alternative water sources by power plants is increasing in some 

areas, and two power plant developers we spoke with said they routinely 

consider alternative water sources when planning new power plants, 

particularly in areas where water has become scarce, tightly regulated, or 

both. A 2007 report by the DOE’s Argonne National Laboratory identified 

at least 50 power plants in the United States that use reclaimed water for 

cooling and other purposes, with Florida and California having the largest 

number of plants using reclaimed water.11 According to the report, the use 

of reclaimed water at power plants has become more common, with 38 

percent of the plants using reclaimed water doing so after 2000. One 

example of a power plant using an alternative to freshwater is Palo Verde, 

located near Phoenix, Arizona—the largest U.S. nuclear power plant, with 

a capacity of around 4,000 megawatts. Palo Verde uses approximately 20 

billion gallons of treated effluent annually from treatment plants that serve 

several area municipalities, comprising over 1.5 million people. 

Reducing the amount of freshwater needed for cooling leads to a number 

of social and environmental benefits and may benefit developers by 

lowering water-related costs and providing more flexibility in choosing a 

location for a new plant, among other things. 

Reducing the amount of freshwater used by power plants through the use 

of advanced cooling technologies and alternative water sources has the 

potential to produce a number of social and environmental benefits. For 

example, limiting freshwater use may reduce the impact to the 

environment associated with withdrawals, consumption, and discharge. 

Freshwater is in high demand across the United States. Reducing 

freshwater withdrawals and consumption by the electricity sector makes 

Social and Environmental 

Benefits 

 

11Argonne National Laboratory, Use of Reclaimed Water for Power Plant Cooling, 

(Argonne, IL., 2007). 

Page 21 GAO-10-23 Energy-Water Nexus
 

this limited resource more available for additional electricity production 

or competing uses, such as public water supplies or wildlife habitat. 

Furthermore, eliminating water use for cooling entirely, such as by using 

dry cooling, could minimize or eliminate the water discharges from power 

plants, a possible source of heat and pollutants to receiving water bodies, 

although regulations limit the amount of heat and certain pollutants that 

may be discharged into water bodies. 

By eliminating or minimizing the use of freshwater for cooling, power 

plant developers may reduce some water-related costs, including the costs 

associated with acquiring, transporting, treating, and disposing of water. 

Depending on state water laws, a number of costs may be associated with 

acquiring water—purchasing a right to use water, buying land with a water 

source on or underneath it, or buying a quantity of freshwater from a 

municipal or other source. Eliminating the need to purchase water for 

cooling by using dry cooling could reduce these water-related expenses. 

Using an alternative water source, if less expensive than freshwater, could 

reduce the costs of acquiring water, although treatment costs may be 

higher. Power plant developers and an expert from a national laboratory 

told us the costs of acquiring an alternative water source are sometimes 

less than freshwater, but vary widely depending on its quality and location. 

In addition to lowering the costs associated with acquiring water, if water 

use for cooling is eliminated entirely, plant developers may eliminate the 

need for a pipeline to transport the water, as well as minimize costs 

associated with treating the water. Water-related costs are one of several 

costs that power plant developers will consider when evaluating 

alternatives to freshwater. Since the cost of freshwater may rise as 

demand for freshwater increases, a developer’s ability to minimize power 

plant freshwater use could become increasingly valuable over time. 

Water-Related Cost Savings 

Minimizing or eliminating the use of freshwater may offer a plant 

developer increased flexibility in determining where to locate a power 

plant. According to power plant developers we spoke with, siting a power 

plant involves balancing factors such as access to fuel, including natural 

gas pipelines, and access to large transmission lines that carry the 

electricity produced to areas of customer demand. Some explained that 

finding a site that meets these factors and also has access to freshwater 

can be challenging. Power plant developers we spoke with said options 

such as dry cooling and alternative water sources have offered their 

companies the flexibility to choose sites without freshwater, but with good 

access to fuel and transmission. 

Siting Flexibility and Other 

Benefits 

Page 22 GAO-10-23 Energy-Water Nexus
 

According to power plant developers and an expert from a national 

laboratory we spoke with, eliminating or lowering freshwater use can lead 

to other benefits, such as minimizing regulatory hurdles like the need to 

acquire certain water permits. Furthermore, using a nonfreshwater source 

may be advantageous in areas with more regulatory scrutiny of or public 

opposition to freshwater use. 

Adoption of Advanced 

Cooling Technologies May 

Reduce Electricity 

Production, Increase 

Costs, and Pose Other 

Drawbacks 

Despite the benefits associated with the lower freshwater requirements of 

advanced cooling technologies, these technologies have a number of 

drawbacks related to electricity production and costs that power plant 

developers will have to consider during their decisionmaking process. 

Despite the many benefits advanced cooling technologies offer, both dry 

cooling and hybrid cooling technologies may reduce a plant’s net energy 

production to a greater extent than traditional cooling systems—referred 

to as an “energy penalty.” Energy penalties result in less electricity 

available outside the plant, which can affect plant revenues, and making 

up for the loss of this electricity by generating it elsewhere can result in 

increases in water use, fuel consumption, and air emissions. Energy 

penalties result from (1) energy consumed to run cooling system 

equipment, such as fans and pumps, and (2) lower plant operating 

efficiency—measured as electricity production per unit of fuel—in hot 

weather due to lower cooling system performance. Specifically, energy 

penalties include: 

Energy Production Penalties 

• Energy needed for cooling system equipment. Cooling systems, like many 

systems in a power plant, use electricity produced at the plant to operate, 

which results in less electricity available for sale. According to experts we 

spoke with, because dry cooling systems and hybrid cooling systems rely 

on air flowing through a condenser, energy is needed to run fans that 

provide air flow, and the amount of energy needed to run cooling 

equipment will depend on such factors as system design, season, and 

Page 23 GAO-10-23 Energy-Water Nexus
 

region.12 A 2001 EPA study estimated that for a combined cycle plant, 

energy requirements to operate a once-through system (pumps) are 0.15 

percent of plant output, 0.39 percent of plant output for a wet recirculating 

system with cooling towers (pumps and fans), and 0.81 percent of plant 

output for a dry cooled system (fans).13

• Plant operating efficiency and cooling system performance. Plants using 

a dry cooling component, whether entirely dry cooled or in a hybrid 

cooled configuration, may face reduced operating efficiency under certain 

conditions. A power plant’s operating efficiency is affected by the 

performance of the cooling system, among other things, and power plants 

with systems that cool more effectively produce electricity more 

efficiently. A cooling system’s effectiveness is influenced both by the 

design of the cooling system and ambient conditions that determine the 

temperature of that system’s cooling medium—water in once-through and 

wet recirculating systems and air in dry cooling systems. In general, the 

effectiveness of a cooling system decreases as the temperature of the 

cooling medium increases, since a warmer medium can absorb less heat 

from the steam. Once-through systems cool steam using water being 

withdrawn from the river, lake, or ocean. Wet recirculating systems with 

cooling towers, on the other hand, use the process of evaporation to cool 

the steam to a temperature that approaches the “wet-bulb temperature”—

an alternate measure of temperature that incorporates both the ambient 

air temperature and relative humidity. In contrast, dry cooled systems 

transfer heat only to the ambient air, without evaporation. As a result, dry 

cooled systems can cool steam only to a temperature that approaches the 

“dry-bulb temperature”—the measure of ambient air temperature 

measured by a standard thermometer and with which most people are 

familiar. In general, once-through systems tend to cool most effectively 

 

12Energy is also needed in wet recirculating systems with fan-forced cooling towers, as well 

as to operate water pumps in both once-through and wet recirculating systems with cooling 

towers. Wet recirculating systems with cooling towers can also be constructed with a type 

of cooling tower that relies on a chimney effect, rather than fans, to naturally produce 

airflow. These natural draft cooling towers are large concrete structures that are 

significantly more expensive to build than cooling towers with fans, although they would 

eliminate the energy costs associated with fan operation. 

13Environmental Protection Agency, Technical Development Document for the Final 

Regulations Addressing Cooling Water Intake Structures for New Facilities, 

(Washington, D.C., Nov. 2001). These figures were higher for a full steam fossil fueled 

plant, such as a coal plant. Representatives from EPA explained that energy penalty and 

cost comparisons between dry cooled systems and wet recirculating systems with cooling 

towers may have changed since EPA’s 2001 report was issued. The agency is in the process 

of updating its estimates of energy penalties and cooling system costs. 

Page 24 GAO-10-23 Energy-Water Nexus
 

because the temperature of the body of water from which cooling water is 

drawn is, on average, lower than the wet- or dry-bulb temperature. 

Moreover, wet-bulb temperatures are generally lower than dry-bulb 

temperatures, often making recirculating systems more effective at 

cooling than dry cooled systems. Further, according to one report that we 

reviewed, greater fluctuations in dry-bulb temperatures seasonally and 

throughout the day can make dry cooled systems harder to design.14 Dry 

bulb temperatures can be especially high in hot, dry parts of the country, 

such as the Southwest, leading to significant plant efficiency losses during 

periods of high temperatures, particularly during the summer. According 

to experts and power plant developers we spoke with, plant efficiencies 

may witness smaller reductions during other parts of the year when 

temperatures are lower or in cooler climates.15 Nevertheless, in practice, 

lower cooling system performance can result in reduced plant net 

electricity output or greater fuel use if more fuel is burned to produce 

electricity to offset efficiency losses. Plant developers can take steps to 

reduce efficiency losses such as by installing a larger dry cooling system 

with additional cooling capability, but such a system will result in higher 

capital costs. 

A plant’s total energy penalty will be a combination of both effects 

described—energy needed for cooling system equipment and the impact of 

cooling system performance on plant operating efficiency. Energy 

penalties may result in lost revenue for the plant due to the net loss in 

electricity produced for a given unit of fuel, especially during the summer 

when electricity demand and prices are often the highest. Energy penalties 

may also affect the price consumers pay for electricity in a regulated 

market, if the cost of the additional fuel needed to produce lost electricity 

is passed on to consumers by regulators. Finally, energy penalties may 

affect emissions of pollutants and carbon dioxide if lost output is made up 

for by an emissions producing power plant, such as a coal- or natural gasfueled power plant. This is because additional fuel is burned to produce 

 

14Burns, John M. and Wayne Micheletti, Emerging Issues and Needs in Power Plant 

Cooling Systems. (Presented at DOE’s Workshop on Electric Utilities and Water: Emerging 

Issues and Needs, Pittsburgh, PA, July 23-24, 2002). 

15Plants with once-through systems and wet recirculating systems with cooling towers also 

face efficiency losses as water and wet-bulb temperatures rise. As noted, dry cooled plants 

tend to be less efficient than plants with both of these wet cooling systems, but the 

efficiency of dry cooled plants will approach that of wet cooled plants at certain times of 

the year and in certain climatic conditions. For example, according to experts we spoke 

with, there will be a smaller difference in efficiency between a plant with a wet 

recirculating system with cooling towers and a dry cooled plant in cool, humid climates. 

Page 25 GAO-10-23 Energy-Water Nexus
 

electricity that offsets what was lost as a result of the energy penalty, and, 

thus, additional carbon dioxide and other pollutants are released. 

Recent studies comparing total energy penalties between cooling systems 

have used differing methodologies to estimate energy penalties and have 

reached varying conclusions.16 For example, a 2001 EPA study estimates 

the national average, mean annual energy penalties—lower electricity 

output—for plants operating at two-thirds capacity with dry cooling to be 

larger than those with wet recirculating systems with cooling towers. In 

this study, EPA estimated penalties of 1.7 percent lower output for a 

combined cycle plant with a dry system compared to a wet recirculating 

system with a cooling tower, and 6.9 percent lower output for a fossil 

fueled plant run fully on steam, such as a coal plant.17 Similarly, a separate 

study conducted by two DOE national labs in 2002 estimated larger annual 

energy penalties for hypothetical 400 megawatt coal plants in multiple 

regions of the country retrofitted to dry cooling—these penalties ranged 

between 3 to 7 percent lower output on average for a plant retrofitted with 

a dry cooled system compared to a plant retrofitted with a wet 

recirculating system with a cooling tower. On the hottest 1 percent of 

temperature conditions during the year, this energy penalty rose to 

between 6 and 10 percent lower output for plants retrofitted to dry cooling 

compared with those retrofitted to a wet recirculating system with cooling 

 

16We include examples from these studies to provide context about the magnitude of 

estimated energy penalties. We have not validated the methodology or results of these 

studies. Estimates are subject to study assumptions and methodology, and actual energy 

penalties depend highly on plant design, location, and decisions made by plant developers 

about how to optimize total plant costs. 

17Environmental Protection Agency, Technical Development Document for the Final 

Regulations Addressing Cooling Water Intake Structures for New Facilities, 

(Washington, D.C., Nov. 2001). EPA estimated energy penalties at peak summer conditions 

when plants operate at 100 percent capacity to be higher. For example, the study estimates 

national average energy penalties at peak summer conditions (100 percent capacity) to 

result in 2.4 percent lower output for combined cycle plants with dry cooling systems 

compared to those with wet recirculated systems with a cooling tower. EPA estimated 

national average energy penalties at peak summer conditions (100 percent capacity) to 

result in 8.4 percent lower output for full steam fossil fueled plants, such as coal plants, 

with dry cooling systems, compared to those with wet recirculated systems with a cooling 

tower. Representatives from EPA explained that energy penalty and cost comparisons 

between dry cooled systems and wet recirculating systems with cooling towers may have 

changed since EPA’s 2001 report was issued. The agency is in the process of updating its 

estimates of energy penalties and cooling system costs. 

Page 26 GAO-10-23 Energy-Water Nexus
 

towers.18 However, some experts we spoke with told us energy penalties 

are higher in retrofitted plants than when a dry cooled system is designed 

according to the unique specifications of a newly built plant. 

A 2006 study conducted for the California Energy Commission estimated 

electricity output and other characteristics for new, theoretical combined 

cycle natural gas plants in four climatic zones of California using different 

cooling systems. The study found that dry cooling systems result in 

significant water savings, but that plants using wet cooling systems 

generally experience higher annual net electricity output, as shown in 

table 3, and lower fuel consumption. Furthermore, while the study 

estimates that plant capacity to produce electricity is limited on hot days 

for both types of cooling systems, the hot day capacity of the dry cooled 

plant to produce electricity is up to 6 percent lower than the wet 

recirculating plant with cooling tower.19

 

18Department of Energy, Office of Fossil Energy, National Energy Technology Laboratory 

and Argonne National Laboratory, Energy Penalty Analysis of Possible Cooling Water 

Intake Structure Requirements on Existing Coal-Fired Power Plants. (2002). These 

estimates refer to a dry cooling tower with a 20 degree Fahrenheit approach, the difference 

between the air temperature and the temperature of cold water discharged from the 

condenser. Energy penalty estimates for a dry tower with a 40 degree Fahrenheit approach 

were higher. The 1 percent hottest day estimate is for plants with a range of 15 degrees 

Fahrenheit, where the range refers to the difference between the temperature of the water 

entering and leaving the condenser. This study focused on existing plants retrofitted with 

indirect dry cooled systems, which are considered less efficient than direct dry systems. 

Experts we spoke with told us energy penalties are higher in retrofitted plants than when a 

dry cooled system is designed according to the unique specifications of a newly built plant 

because indirect dry cooling systems are more likely to be used; plant components, like the 

turbine, have not been designed to work most effectively with a dry cooled system; and 

because of size constraints placed on the dry cooled system. 

19Hot day performance is estimated to be the 1 percent highest dry bulb temperature and 

the corresponding wet bulb temperature for that condition. 

Page 27 GAO-10-23 Energy-Water Nexus
 

Table 3: Percentage Difference in Annual Net Plant Electricity Output for Theoretical 

Combined Cycle Plants with Different Cooling Systems at Four Geographic 

Locations in California 

Geographic locations 

Percentage difference in annual net plant electricity 

output for a wet recirculating system with cooling 

towers compared to a dry cooled system

Desert (hot, arid) 1.07

Valley (hot, humid) 1.46

Coast (cool, humid) 0.37

Mountain (variable, elevated) 1.87

Source: Maulbetsch, J. S. and M.N. DiFilippo, Cost and Value of Water Use at Combined-Cycle Power Plants, California Energy 

Commission, PIER Energy-Related Environmental Research, CEC-500-2006-034. April 2006. 

Power plant developers can take steps to address the energy penalties 

associated with dry cooling technology by designing their plants with 

larger dry cooled systems capable of performing better during periods of 

high ambient temperatures. Alternatively, they can use a hybrid 

technology that supplements the dry system with a wet recirculating 

system with a cooling tower during the hottest times of the year. However, 

in making this decision, developers must weigh the trade-offs between the 

costs associated with building and operating a larger dry cooled system or 

a hybrid system and the benefits of lowering their energy penalties. 

According to some power plant developers and experts we spoke with, 

another drawback to using dry and hybrid cooling technologies is that 

these technologies typically have higher capital costs. Experts, power 

plant developers, and studies indicated that while capital costs for each 

system can vary significantly, as a general rule, capital costs are lowest for 

once-through systems, higher for wet recirculating systems, and highest 

for dry cooling. Some told us the capital costs of hybrid systems—as a 

combination of wet recirculating and dry cooling systems—generally fall 

in between these two systems. Furthermore, according to some of the 

experts we spoke with and studies we reviewed, the capital costs of a 

plant’s cooling system vary based on the specific characteristics of a given 

plant, such as the costs of the cooling towers, the circulating water lines to 

transport water to and around the plant, pumps, fans, as well as the extent 

to which a dry cooled system is sized larger to offset energy penalties. As 

with energy penalties, studies estimating capital costs for dry and hybrid 

systems have used differing methodologies and provide varying estimates 

Higher Costs 

Page 28 GAO-10-23 Energy-Water Nexus
 

of capital costs.20 One study by the Electric Power Research Institute 

estimated dry cooling system capital costs for theoretical 500 megawatt 

combined cycle plants in 5 climatic locations to be 3.6 to 4.0 times that of 

wet recirculating systems with cooling towers.21 Experts from an 

engineering firm we spoke with also explained that capital costs for dry 

and hybrid cooled systems can be many times that of a wet recirculating 

system with cooling towers. They estimated that, in general, installing a 

dry system on a 500 megawatt combined cycle plant instead of a wet 

recirculating system with a cooling tower could increase baseline capital 

costs by $9 to $24 million, depending on location—an increase in baseline 

capital costs that is 2.0 to 5.1 times higher than if a wet recirculating 

system with a cooling tower were used. They estimated dry cooling to be 

more costly on a 500 megawatt coal plant, with dry cooling resulting in an 

increase in baseline capital costs that was 2.6 to 7.0 times higher than if a 

wet recirculating system with a cooling tower were used. 

With respect to annual costs, according to experts we spoke with and 

studies we reviewed, annual cost differences between alternative cooling 

technologies and traditional cooling technologies are variable and may 

depend on such factors as the costliness of obtaining and treating water, 

the extent to which cooling water is reused within the system, the need for 

maintenance, the extent to which energy penalties result in lost revenue, 

and the extent to which a cooling system is sized larger to offset energy 

penalties. Estimates from four reports we reviewed calculated varying 

cooling system annual costs for a range of plant types and locations using 

different methodologies, and found annual costs of dry systems to 

generally range from one and a half to four times those of wet 

recirculating systems with cooling towers. One of these studies, however, 

in examining the potential for higher water costs, found that dry cooling 

 

20We include examples of cost estimates from selected studies and expert interviews in this 

section to provide context about the magnitude of estimated capital and operating costs of 

dry cooling systems compared to wet cooling systems. We have not validated the 

methodology or results of these estimates. Estimates are subject to each study’s 

assumptions and methodology, and actual costs depend highly on plant design, locational 

factors such as water costs, and decisions made by plant developers about how to optimize 

total costs. Furthermore, it should be noted that cooling system costs are but one 

component of total plant costs. 

21Electric Power Research Institute, Comparison of Alternate Cooling Technologies for 

U.S. Power Plants. Economic, Environmental, and Other Trade-offs, (Palo Alto, CA., 

2004). 1005358. Similarly, capital costs for a dry cooled system on theoretical 350 megawatt 

coal plants ranged between $43 and $47 million for 5 climatic locations—3.2 to 3.6 times 

that of a wet recirculating system with cooling tower. 

Page 29 GAO-10-23 Energy-Water Nexus
 

could be more economical on an annual basis in some areas of the country 

with expensive water or become more economical in the future if water 

costs were to rise.22 Furthermore, an expert from an engineering firm we 

spoke with explained that cooling system costs are only one component of 

total plant costs, and that while one cooling system may be expensive 

relative to another, its impact on total plant costs may not be as significant 

in a relative sense if the plant’s total costs are high. 

There may be other drawbacks to dry cooled technology, including space 

and noise considerations. Towers, pumps, and piping for both dry cooled 

and wet cooled systems with cooling towers require substantial space, but 

according to experts we spoke with, dry cooled systems tend to be larger. 

For example, according to one expert we spoke with, a dry cooled system 

for a natural gas combined cycle plant that derives one-third of its 

electricity from the steam cycle could be almost as large as two football 

fields. Moreover, according to others, the large size of dry cooling systems 

needed for plants that derive all of their electricity production from the 

steam cycle—for example, nuclear and coal plants—may make the use of 

dry cooling systems less suitable for these kinds of power plants. Experts 

we spoke with explained that because full steam plants produce all of 

their electricity by heating water to make steam, they require larger 

cooling systems to condense the steam back into usable liquid water. As a 

result, the size of a dry cooling system for a full steam plant could be three 

times that of a dry cooling system for a similarly-sized combined cycle 

plant that only produces one-third of its electricity from the steam cycle. 

Space, Noise, and Suitability 

Issues 

Furthermore, according to one expert we spoke with, the most efficient 

type of dry cooled technology may not be approved for use with certain 

nuclear reactors, because of safety concerns. Finally, the motors, fans, and 

water of both dry cooled and wet recirculating systems with cooling 

towers may create noise that disturbs plant employees, nearby residents, 

and wildlife. Noise-reduction systems may be used to address this 

concern, although they introduce another cost trade-off that plant 

developers must consider. 

 

22Electric Power Research Institute, Comparison of Alternate Cooling Technologies for 

U.S. Power Plants. Economic, Environmental, and Other Trade-offs, (Palo Alto, CA., 

2004). 1005358. 

Page 30 GAO-10-23 Energy-Water Nexus
 

Use of Alternative Water 

Sources May Also Pose 

Certain Drawbacks 

Despite the growth in plants using alternative water sources, there are a 

number of drawbacks to using this water source instead of freshwater. 

While some of these drawbacks are similar to those faced by power plants 

that use freshwater, they may be exacerbated by the lower quality of 

alternative water sources. These drawbacks include adverse effects to 

cooling equipment, regulatory compliance issues, and access to alternative 

water sources, as follows. 

Water used in power plants must meet certain quality standards in order to 

avoid adverse effects to cooling equipment, such as corrosion, scaling, and 

the accumulation of micro or macrobiological organisms. While 

freshwater can also cause adverse effects, the generally lower quality of 

alternative water sources make them more likely to result in these effects. 

For example, effluent from a sewage treatment plant may be higher in 

ammonia than freshwater, which can cause damage to copper alloys and 

other metals. High levels of ammonia and phosphates can also lead to 

excessive biological growth on certain cooling tower structures. Chemical 

treatment is used to mitigate such adverse effects of alternative water 

sources when they occur, but this treatment results in additional costs. 

According to one power plant operator we spoke with, alternative water 

sources often require more extensive and expensive treatment than 

freshwater sources, and it can be a challenging process to determine the 

precise makeup of chemicals needed to minimize the adverse effects. 

Adverse Effects to Cooling 

Equipment 

Power plant developers using alternative water sources may face 

additional regulatory challenges. Depending on their design, power plants 

may discharge water directly to a water source, such as a surface water 

body, or release water into the air through cooling towers. As a result, 

power plants must comply with a number of water quality and air 

regulations, and the presence of certain pollutants in alternative water 

sources can make compliance more challenging. For example, reclaimed 

water from sewage treatment plants is treated to eliminate bacteria and 

other contaminants that can be harmful to humans. Similarly, water 

associated with minerals extraction may contain higher total dissolved and 

suspended solids and other constituents, which could adversely affect the 

environment if discharged. Addressing these issues through the following 

actions entail additional costs to the power plant operators: (1) chemical 

treatment prior to discharging water to another water source, (2) 

discharging water to a holding pond unconnected to another water source 

for evaporation, or (3) eliminating all liquid discharges by, for example, 

evaporating all the water used at the plant and disposing of the resulting 

solid waste into a facility such as a landfill. 

Regulatory Compliance Issues 

Page 31 GAO-10-23 Energy-Water Nexus
 

As with freshwater sources, the proximity of an alternative water source 

may be a drawback that power plant developers have to consider when 

pursuing this option. Power plant developers wishing to use an alternative 

water source must either build the plant near that source—which can be 

challenging if that water source is not also near fuel and transmission 

lines—or pay the costs of transporting the water to the power plant’s 

location, such as through a pipeline. Furthermore, two power plant 

developers we spoke with told us that certain alternative water sources, 

like treated effluent, are in increasing demand in some parts of the 

country, making it more challenging or costly to obtain than in the past. 

Access to Alternative Water 

Sources 

Power Plant Developers 

Must Weigh Trade-offs 

When Evaluating Options 

to Reduce Freshwater Use 

A power plant developer may want to reduce the use of freshwater for a 

number of reasons, such as when freshwater is unavailable or costly to 

obtain, to comply with regulatory requirements, or to address public 

concern. However, power plant developers we spoke with told us that 

when considering the viability of an advanced cooling technology or 

alternative water source, they must weigh the trade-offs between the 

water savings and other benefits these alternatives offer with the 

drawbacks to their use. For example, in a water-scarce region of the 

country where water costs are high and there is much regulatory scrutiny 

of water use, a power plant developer may determine that, despite the 

drawbacks associated with the use of advanced cooling technologies or 

alternative water sources, these alternatives still offer the best option for 

getting a potentially profitable plant built in a specific area. Furthermore, 

according to power plant developers we spoke with, these decisions have 

to be made on a project by project basis because the magnitude of benefits 

and drawbacks will vary depending on a plant’s type, location, and the 

related climate. For example, dry cooling has been installed in regions of 

the country where water is relatively plentiful, such as the Northeast, to 

help shorten regulatory approval times and avoid concerns about the 

adverse impacts that other cooling technologies might have on aquatic life. 

In making a determination about what cooling technology to use, power 

plant developers evaluate the net economic costs of alternatives like dry 

cooling or an alternative water source—its savings compared to its costs—

over the life of a proposed plant, as well as the regulatory climate. Experts 

we spoke with told us this involves consideration of both capital and 

annual costs, including how expected water savings compare to costs 

related to energy penalties and other factors. Anticipated future increases 

in water-related costs could prompt a developer to use a water-saving 

alternative. For example, a recent report by the Electric Power Research 

Institute estimates that a power plant’s economic trade-offs vary 

Page 32 GAO-10-23 Energy-Water Nexus
 

considerably depending on its location and that high water costs could 

make dry cooling less expensive annually than wet cooling.23

The National Energy Technology Laboratory is funding research and 

development projects aimed at minimizing the drawbacks of advanced 

cooling technologies and alternative water sources. In 2008, the laboratory 

awarded close to $9 million to support research and development of 

projects that, among other things, could improve the performance of dry 

cooled technologies, recover water used to reduce emissions at coal plants 

for reuse, and facilitate the use of alternative water sources in cooling 

towers. Such research endeavors, if successful and deemed economical, 

could alter the trade-off analysis power plant developers conduct in favor 

of nontraditional alternatives to cooling. 

The seven states that we contacted––Alabama, Arizona, California, 

Georgia, Illinois, Nevada, and Texas––vary in the extent to which they 

consider the impacts that power plants will have on water when they 

review power plant water use proposals. Specifically, these states have 

differences in water laws that may influence their oversight of power plant 

water use. Some also have other regulatory policies and requirements 

specific to power plants and water use. Still other states require additional 

levels of review that may affect their states’ oversight of how power plants 

use water. 

States We Contacted 

Vary in the Extent to 

Which They Consider 

Water Impacts When 

Reviewing Power 

Plant Development 

Proposals 

States We Contacted Have 

Differences in Water Laws 

that Influence Their 

Oversight of Water Use by 

Proposed Power Plants 

Differences in water laws in the seven states we contacted––Alabama, 

Arizona, California, Georgia, Illinois, Nevada, and Texas––influence the 

steps that power plant developers need to take to obtain approval to use 

surface or groundwater, and provide for varying levels of regulatory 

oversight of power plant water use. Table 4 shows the differences in water 

laws and water permitting for the seven states we contacted. 

 

23Electric Power Research Institute, Water Use for Electric Power Generation. 

Page 33 GAO-10-23 Energy-Water Nexus
 

Table 4: State Water Laws and Permit Requirements for Water Supply in Seven Selected States 

Type of state water laws State water permit required 

State Surface water Groundwater Surface water Groundwater 

Alabama Riparian Reasonable use NoaNoa 

Arizona Prior appropriation Reasonable useb Yes Yesb

California Riparian and prior 

appropriation 

Reasonable use and 

prior appropriation 

Yes No 

Georgia Riparian Reasonable use YescYesc

Illinois Other doctrinedReasonable use YeseNo 

Nevada Prior appropriationf Prior appropriationf Yes Yes 

Texas Prior appropriation Rule of capture Yes Nog

Source: GAO analysis of state laws, documents, and discussions with state officials. 

a

Alabama issues a certificate of use upon registration to users with a capacity to withdraw 100,000 

gallons of water per day or more. 

b

Arizona issues state permits for groundwater in areas of severe water overdraft where water 

shortages could occur, known as Active Management Areas, established under Arizona law. 

Reasonable use would not apply in these areas. 

c

Georgia issues water permits for users withdrawing more than 100,000 gallons a day. 

d

Illinois surface water law is based on various state statutes. 

e

Illinois issues surface permits only for public water bodies, which excludes some surface water. 

f

In Nevada, water appropriated from either surface or underground sources is limited to that which is 

reasonably required for beneficial use. 

g

Water use permits can be required locally in Texas through Groundwater Conservation Districts. 

With regard to surface water—the source of water most often used for 

power plant cooling nationally—of the seven states we contacted, all but 

Alabama required power plant developers to obtain water permits through 

the state agency that regulates the water supply. However, the states 

requiring permits varied in how the permits were obtained and under what 

circumstances. For example, in general, under Illinois law, water supply 

permits are only necessary if the surface water is defined as a public water 

body, which covers most major navigable lakes, rivers, streams, and 

waterways as defined by the Illinois Office of Water Resources. However, 

for any other surface water body, such as smaller rivers and streams, no 

such permit is required. To obtain a permit to use water in a power plant 

in Illinois, developers must file an application with the Illinois Office of 

Water Resources. In determining whether to issue a permit, the Office of 

Water Resources requires the applicant to address public comments and 

evaluates USGS streamflow data to determine whether restrictions on 

water use are needed. In some instances, such as to support fish and other 

wildlife, the state may designate a minimum level of flow required for a 

river or stream and restrict the amount of water that can be used by a 

Page 34 GAO-10-23 Energy-Water Nexus
 

power plant or other water user when that minimum level is reached. The 

Director of the Office of Water Resources told us that the office has 

sometimes encouraged power plant operators to establish backup water 

sources, such as onsite reservoirs, for use when minimum streamflow 

levels are reached and water use is restricted. In contrast, under Georgia 

and Alabama riparian law, landowners have the right to the water on and 

adjacent to their land, and both states require users who have the capacity 

to withdraw (Alabama) or actually withdraw (Georgia) an average of more 

than 100,000 gallons per day to provide information to the state 

concerning their usage and legal rights to the water. However, this 

requirement is applied differently in the two states. Alabama requires that 

water users register their planned water use for informational purposes 

with the Alabama Office of Water Resources but does not require users to 

obtain a permit for the water withdrawal or conduct analysis of the impact 

of the proposed water use.24 In contrast, Georgia requires water users to 

apply for and receive a water permit from the Georgia Environmental 

Protection Division. In determining whether to issue a permit for water 

use, this Georgia agency analyzes the potential effect of the water use on 

downstream users and others in the watershed. State water regulators in 

Georgia told us they have never denied an application for water use in a 

power plant due to water supply issues since there has historically been 

adequate available water in the state. For more details on Georgia’s 

process for approving water use in power plants, see appendix IV. 

Groundwater laws in the selected states we reviewed also varied and 

affected the extent to which state regulators provided oversight over 

power plant water use. In four of the seven states––Alabama, California, 

Illinois, and Texas––groundwater is largely unregulated at the state level, 

and landowners may generally freely drill new wells and use groundwater 

as they wish unless restricted by local entities, such as groundwater 

conservation districts. However, in three of the seven states we 

contacted—Arizona, Georgia, and Nevada—state-issued water permits are 

required for water withdrawals for some or all regions of the state. For 

example, in Nevada, which has 256 separate groundwater basins, and in 

which most of the in-state power generation uses groundwater for cooling, 

state water law follows the doctrine of prior appropriation. A power plant 

developer or other entity wanting to acquire a new water right for 

 

24These users are issued a Certificate of Use, indicating the use has been registered with the 

State of Alabama. All Certificate of Use holders are required to annually report their water 

usage to the Alabama Office of Water Resources. 

Page 35 GAO-10-23 Energy-Water Nexus
 

groundwater must apply for a water permit with the Nevada Division of 

Water Resources. In evaluating the application for a water permit, the 

Division determines if water is available—referred to as unappropriated; 

whether the proposed use will conflict with existing water rights or 

domestic wells; and whether the use of the water is in the public interest. 

In determining whether groundwater is available, if the Division of Water 

Resources determines that the amount of water that replenishes the 

groundwater basin annually is greater than the existing committed ground 

water rights in a given basin, unappropriated water may be available for 

appropriation.25 In two cases where groundwater was being considered for 

possible power plants, the State Engineer, the official in the Division of 

Water Resources who approves permits, either denied the application or 

expressed reservations over the use of groundwater for cooling.26 For 

example, in one case, the State Engineer noted that large amounts of water 

should not be used in a dry state like Nevada when an alternative, like dry 

cooling, that is less water intensive was available. 

In contrast, in Texas, where 8 percent of in state electricity capacity uses 

groundwater for cooling, state regulators do not issue groundwater use 

permits or routinely review a power plant or other users’ proposed use of 

the groundwater. Texas groundwater law is based on the “rule of capture,” 

meaning landowners, including developers of power plants that own land, 

have the right to the water beneath their property. Landowners can pump 

any amount of water from their land, subject to certain restrictions, 

regardless of the effect on other wells located on adjacent or other 

property.27 Although Texas state water regulators do not issue water 

permits for the use of groundwater, in more than half the counties in 

Texas, groundwater is managed locally through groundwater conservation 

districts which are generally authorized by the Texas Legislature and 

ratified at the local level to protect groundwater. These districts can 

impose their own requirements on landowners to protect water resources. 

This includes requiring a water use permit and, in some districts, placing 

 

25If a prospective water user is unable to acquire a new water right, he or she may choose 

to purchase or lease an existing water right. 

26In the two cases we identified, an official from the Public Utilities Commission of Nevada 

told us the power plants in question were never built. He also noted that as many as six 

power plants have been sited in Nevada with dry cooling due to lack of available water. 

27Examples of restrictions include 1) to not maliciously injure a neighbor, 2) to not willfully 

waste water, 3) to not drill a well slanting under a neighbor’s property or 4) to assume 

liability for damages for negligent pumping that causes subsidence of a neighboring land. 

Page 36 GAO-10-23 Energy-Water Nexus
 

restrictions on the amount of water used or location of groundwater wells 

for landowners.28

States We Contacted Have 

Other Regulatory Policies 

That Influence the Extent 

of Water Use Oversight for 

Proposed Power Plants 

Oversight of water use by proposed power plants in the selected states 

may be influenced by regulatory policies and requirements that formally 

emphasize minimizing freshwater use by power plants and other new 

industrial users. With respect to regulatory policies, of the 7 states, 

California and Arizona have established formal policies or requirements to 

encourage power plant developers to consider alternative cooling methods 

and reduce the amount of freshwater used in a proposed power plant. 

Specifically: 

• California, a state that has faced constrained water supplies for many 

years, established a formal policy in 1975 that requires applicants seeking 

to use water in power plants to consider alternative water sources before 

proposing the use of freshwater.29 More recently, the California Energy 

Commission, the state agency that is to review and approve power plant 

developer applications, reiterated in its 2003 Integrated Energy Policy 

Report, the 1975 policy that the commission would only approve power 

plants using freshwater for cooling in limited circumstances.30

Furthermore, state regulators at the Commission told us that in discussing 

potential new power plant developer applications, commission staff 

encourage power plant developers to consider using advanced cooling 

technologies, such as dry cooling or alternative water sources, such as 

effluent from sewage treatment plants. Between January 2004 and April 

2009, California regulators approved 10 thermoelectric power plants—3 

that will use dry cooling; 6 that will use an alternative water source, such 

 

28California also has local districts, known as Adjudicated Groundwater Basins, that may 

impose similar requirements. 

29In 1975, the State Water Resources Control Board established a policy that inland 

freshwater should be considered the water type of last resort for power plants and 

encouraged utilities to study the feasibility of effluent from sewage treatment plants for 

power plant cooling. The policy states the use of fresh inland waters for power plant 

cooling will only be approved when it is demonstrated that the use of other water supply 

sources or other methods of cooling would be environmentally undesirable or 

economically unsound. 

30The California Energy Commission reiterated the 1975 policy in the December 2003 

Integrated Energy Policy Report that, consistent with that 1975 State Water Resources 

Control Board policy, it would only approve the use of freshwater where alternative 

cooling technologies were shown to be “environmentally undesirable” or “economically 

unsound.” 

Page 37 GAO-10-23 Energy-Water Nexus
 

as reclaimed water; and 2 that will use freshwater purchased from a water 

supplier, such as a municipal water district, for power plant cooling.31 Of 

20 additional thermoelectric power plant applications pending California 

Energy Commission approval, developers have proposed 11 plants that 

plan to use dry cooling, 8 plants that plan to use an alternative water 

source, and 1 that plans to use freshwater for cooling.32 For more details 

on California’s process for approving water use in power plants, see 

appendix III. 

• In Arizona, where there is limited available surface water and where 

groundwater is commonly used for power plant cooling, the state has 

requirements to minimize how much water may be used by power plants. 

Specifically, in Active Management Areas—areas the state has determined 

require regulatory oversight over the use of groundwater—the state 

requires that developers of new power plants 25 megawatts or larger using 

groundwater in a wet recirculating system with a cooling tower, design the 

plants to reuse the cooling water to a greater extent than what is common 

in the industry. Plants must cycle water through the cooling loop at least 

15 times before discharging it, whereas, according to an Arizona public 

utility official, outside of Active Management Areas plants would generally 

cycle water 3 to 7 times.33 These additional cycles result in water savings, 

since less water must be withdrawn from ground or surface water sources 

to replace discharges, but can require plant operators to undertake more 

costly and extensive treatment of the cooling water and to more carefully 

manage the plant cooling equipment to avoid mineral buildup.34 Arizona 

officials also told us they encourage the use of alternative water sources 

for cooling and have informally encouraged developers to consider dry 

cooling. According to Arizona state officials, no plants with dry cooling 

have been approved to date in the state and, due mostly to climatic 

conditions, dry cooling is probably too inefficient and costly to currently 

 

31One of these power plants uses a hybrid cooling system and is counted as having a water 

source and as using dry cooling. 

32Simple cycle natural gas plants are excluded from these statistics since they do not have a 

steam cycle and, therefore, do not need water for cooling. 

33There are variations for different plants in the number of cycles required and exemptions 

for the first full year of operation. 

34The most significant loss of water in a wet recirculating system with cooling towers is 

through evaporation from cooling towers. However, studies conducted by the Electric 

Power Research Institute indicate that increasing the cycles of concentration can result in 

water savings, though with diminishing returns after a certain number of cycles. 

Page 38 GAO-10-23 Energy-Water Nexus
 

be a viable option. For details on Arizona’s process for approving water 

use in power plants, see appendix II. 

In contrast to California and Arizona, water supply and public utility 

commission officials in the other 5 selected states told us their states had 

not developed official state policies regarding water use by power plants. 

For example, Alabama, a state where water has traditionally been 

plentiful, has not developed a specific policy related to power plant water 

use or required the use of advanced cooling technologies or alternative 

water sources. Additionally, the state does not require that power plant 

developers and other proposed water users seek a water use permit; rather 

power plant operators are only required to register their maximum and 

average expected water use with the state and report annual usage. State 

officials told us that they require this information so that they can know 

how much water is being used but that their review of power plant water 

use is limited. Officials from the state’s Public Service Commission, 

responsible for certifying the development of power plants, said their 

office does not have authority to regulate a utility’s water use and, 

therefore, generally does not analyze how a proposed power plant will 

affect the water supply. Rather, their office focuses on the reasonableness 

of power plant costs.35

Similarly, Illinois, where most power plants use surface water for cooling 

and water is relatively plentiful, has not developed a policy on water use 

by thermoelectric power plants or required the use of advanced cooling 

technologies or alternative water sources, according to an official at the 

Office of Water Resources. However, the Illinois Office of Water 

Resources does require power plant operators, like other proposed water 

users, to apply for water permits for use of surface water from the major 

public water bodies. 

 

35Commission officials noted that their review may indirectly affect a power plant’s water 

use since consideration of cooling systems can be one component in their consideration of 

a power plant’s feasibility, reliability and cost. In general, the Commission will favor the 

least-cost cooling option that ensures electric reliability and defers to state water agencies 

to address issues related to a plant’s potential impact on water quality and quantity. 

However, officials also explained there may be circumstances where cooling or water 

issues are raised in a public hearing that may need to be considered by the Commission. 

Page 39 GAO-10-23 Energy-Water Nexus
 

Three of the states we selected––Arizona, Nevada, and California––

conduct regulatory proceedings that consider water availability, in 

addition to determining whether to issue a water permit, while the other 

states do not. In Arizona, water use for power plants is subject to three 

reviews: (1) the process for a prospective water user to obtain a water 

permit, if required; (2) review by a committee of the Arizona Corporation 

Commission, known as the Arizona Power Plant and Transmission Line 

Siting Committee; and (3) review by the Commission as part of an overall 

evaluation of the plant’s feasibility and its potential environmental and 

economic impacts. Both the Committee and Commission evaluate water 

supply concerns, along with other environmental issues, and determine 

whether to recommend (Committee) or issue (Commission) a Certificate 

of Environmental Compatibility, which is necessary for the plant to be 

approved.36 Water supply concerns have been a factor in denying such a 

certificate for a proposed power plant. For example, in 2001, the 

Commission denied an application to build a new plant over concerns that 

groundwater withdrawals for cooling water would not be naturally 

replenished and, thereby, would reduce surface water availability which 

could adversely affect the habitat for an endangered species. For more 

details on Arizona’s processes for approving water use in power plants see 

appendix II. 

States We Contacted May 

Require Additional Levels 

of Review That Affect 

Oversight 

Similarly, in Nevada and California, several state agencies may play a role 

in the approval of water use and the type of cooling technology used by 

power plants. In Nevada, although water permits for groundwater and 

surface water are issued by the State Engineer, the Public Utilities 

Commission oversees final power plant approval under the Utility 

Environmental Protection Act. Even if the power plant developer has 

obtained a water permit, water use could play a role in the review process 

if the plant’s use of the cooling water or technologies has environmental 

effects that need to be mitigated. Additionally, as in a number of states 

where electricity rates are regulated, the Public Utilities Commission 

could consider the effect of dry cooling on electricity rates. In California, 

the California Energy Commission reviews all aspects of power plant 

certifications, including issuing any water permits and approvals for 

 

36The Line Siting Committee makes a recommendation to the Arizona Corporation 

Commission about whether to issue a Certificate of Environmental Compatibility. The 

Arizona Corporation Commission is responsible for the final approval, modification, or 

denial of the certificate. 

Page 40 GAO-10-23 Energy-Water Nexus
 

cooling technologies.37 According to a California Energy Commission 

official, during this process the Commission works with other state and 

local agencies to ensure their requirements are met. 

The other four states we contacted do not conduct reviews of how power 

plants will affect water availability beyond issuing a water use permit or 

certificate of registration. Public utility regulators in Illinois, Texas, 

Alabama, and Georgia told us they had no direct role in regulating water 

use or cooling technologies in power plants. Officials from the Public 

Utility Commission of Texas noted that since they do not regulate 

electricity rates in most of the state, the Commission plays no role in the 

approval of power plants in most areas. In other areas, they told us water 

use and cooling technologies were not reviewed by the Commission. 

Similarly, in Illinois—a state that does not regulate electricity rates—an 

official from the Illinois Commerce Commission stated that the agency had 

no role in reviewing water use or cooling technologies for power plants. 

While Georgia and Alabama are states that regulate electricity rates, 

officials from their Public Service Commissions—the state agencies 

regulating electricity rates—noted that they focus on economic 

considerations of power generation and not the impact that a power plant 

might have on the state’s water supply. 

 

37Power plants planning to use surface water must have surface water rights approved by 

the State Water Resources Control Board. Board officials told us that recent power plant 

applications for surface water rights were rare. According to an official at the California 

Energy Commission, power plants planning to use surface water often obtain their supply 

through a retail water agency, rather than obtaining surface water rights directly. 

Page 41 GAO-10-23 Energy-Water Nexus
 

Some Federal Water 

Data Are Useful for 

Evaluating Power 

Plant Applications, 

but Limitations in 

Other Federal Data 

Make the 

Identification of 

Certain Water Use 

Trends More Difficult 

State water regulators rely on data on water availability collected by 

USGS’s streamflow gauges and groundwater studies and monitoring 

stations when they are evaluating developers’ proposals for new power 

plants. In contrast, state water regulators do not routinely rely on federal 

data on water use when evaluating power plant applications, although 

these data are used by water and industry experts, federal agencies, and 

others to analyze trends in the industry. However, these users of federal 

data on water use identified a number of limitations with the data that they 

believe limits its usefulness. 

State Water Regulators and 

Others Rely on Federal 

Data on Water Availability 

to Evaluate Power Plant 

Proposals 

State water regulators, federal agency officials, and water experts we 

spoke with agreed that federal data on water availability are important for 

multiple purposes, including for deciding whether to approve power plant 

developer proposals for water permits and water rights. Most state water 

regulators we contacted explained that they rely upon federal data on 

water availability, particularly streamflow and groundwater data collected 

by USGS, for permitting decisions and said these data helped promote 

more informed water planning. For example, water regulatory officials 

from the Texas Commission on Environmental Quality—the agency that 

evaluates surface water rights applications from prospective water users 

in Texas—told us that streamflow data collected by USGS are a primary 

data source for their water model that predicts how water use by power 

plants and others applying for water rights will impact state water supplies 

and existing rights holders. 

USGS’s network of streamflow gauges and groundwater monitoring 

stations provide the only national data of their kind on water availability 

over long periods. As a result, state officials told us that these data are 

instrumental in predicting how much water is likely to be available in a 

river under a variety of weather conditions, such as droughts. For 

example, state regulators in Georgia and Illinois told us that they rely on 

USGS streamflow data to determine whether or not to establish special 

conditions on water withdrawal permits, such as minimum river flow 

requirements that affect the amount of cooling water a power plant can 

withdraw during periods when water levels in the river are low. State 

water regulators in Nevada also told us they rely on a number of data 

Page 42 GAO-10-23 Energy-Water Nexus
 

sources, including USGS groundwater studies, to determine the amount of 

time necessary for water to naturally refill a groundwater basin. This 

information helps them ensure that water withdrawals for power plants 

and others are sustainable and do not risk depleting a groundwater basin. 

State regulators told us that while federal water availability data is a key 

input into their decisionmaking process for power plant permits, they also 

rely on a number of other sources of data, as shown in table 5. These 

include data that they themselves collect and data collected by 

universities; private industry, such as power plant developers; and various 

other water experts. 

Table 5: Water Data Considered in Support of State Water Regulators’ Permitting 

Decisions 

USGS data on water availability 

Groundwater Streamflow 

State, industry, academic, 

or other data 

Alabama a a a 

Arizona b b b 

California c Yes Yes 

Georgia Yes Yes Yes 

Illinois c Yes Yes 

Nevada Yes Yes Yes 

Texas c Yes Yes 

Source: GAO analysis of information provided by state regulators. 

a

Alabama officials told us they are not authorized to issue water withdrawal permits and, thus, do not 

rely on USGS water availability data for this purpose. However they rely on these data for a variety of 

other purposes. 

b

Arizona officials told us that, in practice, they do not often rely on USGS streamflow data for 

permitting because surface water is fully allocated throughout the state. Similarly, groundwater 

availability data is not routinely relied upon for permits for groundwater rights in Active Management 

Areas, since most power plant developers purchase existing rights, rather than apply for a new right. 

Outside of Active Management Areas, water users only seek drilling permits, which requires limited 

review. However, surface and groundwater availability data may be relied on to support the Line 

Siting Committee and the Arizona Corporation Commission’s decision to issue a Certificate of 

Environmental Compatibility. 

c

These states do not issue permits for groundwater at the state level. However, in California, any 

groundwater use for a power plant would be permitted, if necessary, through the California Energy 

Commission, which regulates the licensing of power plants. 

Some state regulators and water experts we spoke with expressed concern 

about streamflow gauges being discontinued, which they said may make 

evaluating trends in water availability and water planning more difficult in 

the future. Without accurate data on water availability, decisions about 

water planning and allocation of water resources—including power plant 

Page 43 GAO-10-23 Energy-Water Nexus
 

permitting decisions—may be less informed, according to regulators and 

experts. For example, an official from Arizona told us that a reduction in 

streamflow gauges would adversely impact the quality of the states’ water 

programs and that state budget constraints have made it increasingly 

difficult to allocate the necessary state funds to ensure cooperativelyfunded streamflow gauges remain operational. Similarly, an official from 

the Texas Commission on Environmental Quality told us that if particular 

streamflow gauges were discontinued, water availability records would be 

unavailable to update existing data for their water availability models—

which are relied upon for water planning and permitting decisions—and 

alternative data would be needed to replace these missing data. USGS 

officials told us that the cumulative number of streamflow gauges with 30 

or more years of record that have been discontinued has increased, as 

seen in figure 8, due to budget constraints. 

Figure 8: Cumulative Number of Discontinued U.S. Geological Survey Streamflow Gauges with 30 or More Years of Record, 

1933-2007 

Source: U.S. Geological Survey.

Year

Number of Discontinued Streamflow Gauges

0

500

1,000

1,500

2,000

2,500

3,000

3,500

1933 1938 1943 1948 1953 1958 1963 1968 1973 1978 1983 1988 1993 1998 2003 2007

Page 44 GAO-10-23 Energy-Water Nexus
 

Unlike federal data on water availability, federal data on water use is not 

routinely relied upon by state officials we spoke with to make regulatory 

decisions; but, instead is used by a variety of data users to identify trends 

in the industry. Specifically, data users we spoke with, including water 

experts, representatives of an environmental group, and federal agency 

officials, identified the following benefits of the water use data collected 

by USGS and EIA: 

Water Experts, Federal 

Agencies, and Others Value 

Federal Data on Water Use 

for Analyzing Industry 

Trends but Identified 

Limitations In These Data 

• USGS Data on Water Use. A number of users of federal water data we 

spoke with told us that USGS’s 5-year data on thermoelectric power plant 

water use are the only centralized source of long-term, national data for 

comparing water use trends across sectors, including for thermoelectric 

power plants. As a result, they are valuable data for informing 

policymakers and the public about the state of water resources, including 

changes to water use among power plants and other sectors. For example, 

one utility representative we spoke with said that USGS data are important 

for educating the public about how power plants use water and the fact 

that while thermoelectric power plants withdraw large amounts of water 

overall—39 percent of U.S. freshwater withdrawals in 2000––their water 

consumption as an industry has been low—3 percent of U.S. freshwater 

consumption in 1995. Furthermore, some state water regulators told us 

that USGS’s water use data allow them to compare their state’s water use 

to that of other states and better evaluate and plan around their state’s 

water conditions.38 An Arizona Department of Water Resources official, for 

example, told us that USGS’s water use data are essential for 

understanding how water is used in certain parts of the state where the 

Department has no ability to collect such data.39

• EIA Data on Water Use. EIA’s annual data are the only federally-collected, 

national data available on water use and cooling technologies at individual 

power plants; and data users noted that EIA’s national data were useful for 

 

38Unlike federal data on water availability, federal data on water use developed by USGS 

and EIA is not routinely relied upon by representatives from most of the state water 

regulators we spoke with, who evaluate applications for water use permits and water rights 

for new power plants. Some said they, instead, used data their offices had developed 

internally, including water use data reported to them by water permit and rights holders. 

39The Arizona Department of Water Resources collects water use data from water users in 

Active Management Areas, which are statutorily designated areas of constrained water 

supply. However, according to one official, the Department does not generally have the 

ability to collect these data outside of Active Management Areas and Irrigation Nonexpansion Areas. Instead, the Department has entered into a cooperative agreement with 

USGS to collect these data. 

Page 45 GAO-10-23 Energy-Water Nexus
 

analyzing the water use characteristics of individual plants, as well as for 

comparing water use across different cooling technologies. For example, 

officials at USGS and the National Energy Technology Laboratory told us 

that they use EIA data to research trends in current and future 

thermoelectric power plant and other categories of water use. Specifically, 

USGS utilizes EIA’s data on individual plant water use, in addition to data 

from state water regulators and individual power plants, to develop county 

and national estimates of thermoelectric power plant water use. USGS 

officials explained that in some of their state offices, such as California 

and Texas, agency staff primarily use EIA and other federal data to 

develop USGS’s 5-year thermoelectric power plant water use estimates. 

Officials from USGS also explained that other USGS state offices use EIA 

data on water use to corroborate their estimates of thermoelectric power 

plant water withdrawals and to identify the cooling technology utilized by 

power plants. Similarly, officials at the National Energy Technology 

Laboratory have extensively used EIA’s data on individual power plant 

water withdrawals and consumption to develop estimates of how 

freshwater use by thermoelectric power plants will change from 2005 to 

2030. 

However, data users we spoke with also identified a number of 

shortcomings in the federal data on water use, collected by USGS and EIA, 

that limits their ability to conduct certain types of industry analyses and 

understanding of industry trends. Specifically, they identified the following 

issues, along with others that are detailed in appendix V. 

• Lack of comprehensive data on the use of advanced cooling technologies.

Currently, EIA does not systematically collect information on power 

plants’ use of advanced cooling technologies. In the EIA database, for 

example, data on power plants’ use of advanced cooling technologies is 

incomplete and inconsistent—not all power plants report information on 

their use of advanced cooling technologies or do so in a consistent way. 

Lacking these national data, it is not possible without significant additional 

work to comprehensively identify how many power plants are using 

advanced cooling technologies, where they are located, and to what extent 

the use of these technologies has reduced the use of freshwater. According 

to a study by the Electric Power Research Institute, although the total 

number of dry cooled plants is still small relative to plants using 

traditional cooling systems, the use of advanced cooling technologies is 

Page 46 GAO-10-23 Energy-Water Nexus
 

becoming increasingly common.40 As these technologies become more 

prevalent, we believe that information about their adoption would help 

policymakers better understand the extent to which advanced cooling 

technologies have been successful in reducing freshwater use by power 

plants and identify those areas of the country where further adoption of 

these technologies could be encouraged. EIA officials told us they formally 

coordinate with a group of selected stakeholders every 3 years to 

determine what changes are needed to EIA data collection forms. They 

told us they have not previously collected data on advanced cooling 

technologies because EIA’s stakeholder consultation process had not 

identified these as needed data. However, these officials acknowledged 

that EIA has not included USGS as a stakeholder during this consultation 

process and were unaware of USGS’ extensive use of their data. In 

discussing these concerns, EIA officials also said that they did not expect 

that collecting this information would be too difficult and agreed that such 

data could benefit various environmental and efficiency analyses 

conducted by other federal agencies and water and industry experts. 

Furthermore, in discussing our preliminary findings, EIA officials also said 

they believed that EIA could collect these data during its triennial review 

process by, for example, adding a reporting code for these types of cooling 

systems. However, they noted that they would have to begin the process 

soon to incorporate it into their ongoing review. 

• Lack of comprehensive data on the use of alternative water sources. Our 

review of federal data sources indicates that they cannot be used to 

comprehensively identify plants using alternative water sources. EIA 

routinely reports data on individual plant water sources, but we found that 

these data do not always identify whether the source of water is an 

alternative source or not. Similarly, while the USGS data identify 

thermoelectric power plants using ground, surface, fresh, and saline water, 

they do not identify those using alternative water sources, such as 

reclaimed water. While a goal of USGS’s water use program is to 

document trends in U.S. water use and provide information needed to 

understand the nation’s water resources, USGS officials said budget 

constraints have limited the water use data the agency can provide, and 

has led to USGS discontinuing distribution of data on one alternative 

water source—reclaimed water. According to two studies we reviewed, 

use of some alternative water sources is becoming more common and, 

based on our discussions with regulators and power plant developers, 

 

40Electric Power Research Institute, Comparison of Alternate Cooling Technologies for 

California Power Plants: Economic, Environmental and Other Tradeoffs, (Palo Alto, CA., 

2002). 

Page 47 GAO-10-23 Energy-Water Nexus
 

there is much interest in this nonfreshwater option, particularly in areas 

where freshwater is constrained. As use of these alternative water sources 

becomes more prevalent, we believe that information about how many 

plants are using these resources and in what locations, could help 

policymakers better understand how the use of alternative water sources 

by power plants can replace freshwater use and help identify those areas 

of the country where such substitution could be further encouraged. 

• Incomplete water and cooling system data. Though part of EIA’s mission 

is to provide data that promote public understanding of energy’s 

interaction with the environment, EIA does not collect data on the water 

use and cooling systems of two significant components of the 

thermoelectric power plant sector. First, in 2002, EIA discontinued its 

reporting of water use and cooling technology information for nuclear 

plants. According to data users we spoke with, this is a significant 

limitation in the federal data on water use and makes it more difficult for 

them to monitor trends in the industry. For example, USGS officials said 

that the lack of these data make developing their estimates for 

thermoelectric power plant water use more difficult because they either 

have to use older data or call plants directly for this information, which is 

resource intensive. EIA officials told us they discontinued collection of 

data from nuclear plants due to priorities stemming from budget 

limitations.41 Second, EIA does not collect water use and cooling system 

data from operators of some combined cycle thermoelectric power plants. 

Combined cycle plants represented about 25 percent of thermoelectric 

capacity in 2007, and constituted the majority of thermoelectric generating 

units built from 2000 to 2007. According to EIA officials, water use and 

cooling technology data are not collected from operators of combined 

cycle plants that are not equipped with duct burning technology—a 

technology that injects fuel into the exhaust stream from the combustion 

turbine to provide supplemental heat to the steam component of the plant. 

However, these plants use a cooling system and water, as do other 

combined cycle and thermoelectric power plants whose operators are 

required to report to the agency. As a result, data EIA currently collects on 

water use and cooling systems for thermoelectric power plants is 

incomplete. EIA officials acknowledged that not collecting these data 

results in an incomplete understanding of water use by these 

 

41EIA officials noted that the agency collects environmental information from all U.S. plants 

with an existing or planned organic-fueled or combustible renewable stream-electric unit 

with a generator nameplate rating of 10 megawatts or larger. Form 767 instructions require 

cooling system and water information to be reported by plants with a nameplate capacity 

of 100 megawatts or greater. 

Page 48 GAO-10-23 Energy-Water Nexus
 

thermoelectric power plants; however, budget limitations have thus far 

precluded collection of such data. According to a senior EIA staff in the 

Electric Power Division, since speaking with GAO, the agency has begun 

exploring options for collecting these data as part of its current data 

review process. 

• Discontinued distribution of thermoelectric power plant water 

consumption data. One of the stated goals of USGS’s water use program 

is to document trends in U.S. water use, but officials told us that a lack of 

funding has prompted the agency to discontinue distribution of data on 

water consumption for thermoelectric power plants and other water 

users.42 These USGS officials told us they would like to restart distribution 

of the data on water consumption by thermoelectric power plants and 

other water users if additional funding were made available, because such 

data can be used to determine the amount of water available for reuse by 

others. Similarly, some users of federal water data told us that not having 

USGS data on consumption limits their and the public’s understanding of 

how power plant water consumption is changing over time, in comparison 

to other sectors. They said that the increased use of wet recirculating 

technologies, which directly consume more water but withdraw 

significantly less than once-through cooling systems, has changed 

thermoelectric power plant water use patterns.43

In a 2002 report, the National Research Council recommended that USGS’s 

water use program be elevated from one of water use accounting to water 

science––research and analysis to improve understanding of how human 

behavior affects patterns of water use.44 Furthermore, the council’s report 

concluded that statistical analysis of explanatory variables, like cooling 

system type or water law, is a promising technique for helping determine 

patterns in thermoelectric power plant water use. The report suggested 

 

42EIA reports water consumption data for plants 100 megawatts in size or larger, but has 

not published aggregated data in such a way that allows them to be readily used to identify 

overall trends in thermoelectric power plant water consumption compared to withdrawal. 

However, these and other environmental data collected by EIA from 1996 to 2005 for 

individual plants are available on EIA’s Web site and can be assessed by all users at 

http://www.eia.doe.gov/cneaf/electricity/page/eia767.html. 

43Warm water discharged back into a water body from a once-through system may increase 

evaporation—water consumption—from the receiving water body. One expert we spoke 

with suggested that including this indirect form of water consumption in plant estimates 

would improve the federal data. 

44National Research Council, Estimating Water Use in the United States (Washington, 

D.C., 2002). 

Page 49 GAO-10-23 Energy-Water Nexus
 

these and other approaches could help USGS improve the quality of its 

water use estimates and the value of the water data it reports. USGS has 

proposed a national water assessment with the goal of, among other 

things, addressing some of the recommendations made by the National 

Research Council report. USGS officials also told us such an initiative 

would make addressing some of the limitations in USGS water use data 

identified by water experts and others possible, such as reporting data on 

water consumption and by hydrologic code. 

While much of the authority for regulating water use resides at the state 

level, the federal government plays an important role in collecting and 

distributing information about water availability and water use across the 

country that can help promote more effective management of water 

resources. However, the lack of collection and reporting of some key data 

related to power plant water use limits the ability of federal agencies and 

industry analysts to assess important trends in water use by power plants, 

compare them to other sectors, and identify the adoption of new 

technologies that can reduce freshwater use. Without this comprehensive 

information, policymakers have an incomplete picture of the impact that 

thermoelectric power plants will have on water resources in different 

regions of the country and will be less able to determine what additional 

activities they should encourage for water conservation in these areas. 

Moreover, although both EIA and USGS seek to provide timely and 

accurate information about the electricity sector’s water use, they have 

not routinely coordinated their efforts in a consistent and formal way. As a 

result, key water data collected by EIA and used by USGS have been 

discontinued or omitted and important trends in the electricity sector have 

been overlooked. EIA’s ongoing triennial review of the data it collects 

about power plants and the recent passage of the Secure Water Act, that 

authorizes funding for USGS to report data on water use to Congress, 

provide a timely opportunity to address gaps in federal data collection and 

reporting and improve coordination between USGS and EIA in a costeffective way. 

We are making seven recommendations. Specifically, to improve the 

usefulness of the data collected by EIA and better inform the nation’s 

understanding of power plant water use and how it affects water 

availability, we recommend that the Administrator of EIA consider taking 

the following four actions as part of its ongoing review of the data it 

collects about power plants: 

Conclusions 

Recommendations for 

Executive Action 

Page 50 GAO-10-23 Energy-Water Nexus
 

• add cooling technology reporting codes for alternative cooling 

technologies, such as dry and hybrid cooling, or take equivalent steps 

to ensure these cooling technologies can be identified in EIA’s 

database; 

• expand reporting of water use and cooling technology data to include 

all significant types of thermoelectric power plants, particularly by 

reinstating data collection for nuclear plants and initiating collection of 

data for all combined cycle natural gas plants; 

• collect and report data on the use of alternative water sources, such as 

treated effluent and groundwater that is not suitable for drinking or 

irrigation, by individual power plants; and 

• include USGS and other key users of power plant water use and 

cooling system data as part of EIA’s triennial review process. 

To improve the usefulness of the data collected by USGS and better inform 

the nation’s understanding of power plant water use and how it affects 

water availability, we recommend that the Secretary of the Interior 

consider: 

• expanding efforts to disseminate available data on the use of 

alternative water sources, such as treated effluent and groundwater 

that is not suitable for drinking or irrigation, by thermoelectric power 

plants, to the extent that this information becomes available from EIA; 

and 

• reinstating collection and distribution of water consumption data at 

thermoelectric power plants. 

To improve the overall quality of data collected on water use from power 

plants, we recommend that EIA and USGS establish a process for regularly 

coordinating with each other, water and electricity industry experts, 

environmental groups, academics, and other federal agencies, to identify 

and implement steps to improve data collection and dissemination. 

We provided a draft of this report to the Secretary of the Interior and to 

the Secretary of Energy for review and comment. 

The Department of the Interior, in a letter dated September 29, 2009, 

provided written comments from the Assistant Secretary for Water and 

Agency Comments 

and Our Evaluation 

Page 51 GAO-10-23 Energy-Water Nexus
 

Science. These comments are reprinted in appendix VI. In her letter, the 

Assistant Secretary agreed with GAO’s recommendations and noted the 

importance of improving water use data, including data on water 

consumption at thermoelectric power plants. The letter noted that USGS 

plans to reinstate data collection on water consumption as future 

resources allow and will expand efforts to disseminate data on alternative 

water use as information becomes available from EIA. In addition, USGS 

plans to coordinate with EIA to establish a process to identify and 

implement steps to improve and expand water use data collection and 

dissemination by the two agencies. 

In response to our request for comments from the Department of Energy, 

we received emails from the audit liaisons at the National Energy 

Technology Laboratory and the EIA. The laboratory’s comments note that 

the report accurately described the energy-water nexus as it relates to 

power plants and accurately documented the current state of power plant 

cooling technologies. These comments expressed the importance of 

completing a full assessment of the energy-water relationship in the future, 

especially in light of climate change regulations. The laboratory also 

provided technical comments, which we incorporated as appropriate. EIA 

provided technical comments, which we incorporated as appropriate. 

We are sending copies of this report to interested congressional 

committees; the Administrator of the Energy Information Administration; 

the Secretaries of Energy and the Interior; and other interested parties. In 

addition, the report will be available at no charge on the GAO Web site at 

http://www.gao.gov. 

Page 52 GAO-10-23 Energy-Water Nexus
 

If you or your staff have any questions about this report, please contact us 

at (202) 512-3841 or mittala@gao.gov or gaffiganm@gao.gov. Contact 

points for our Offices of Congressional Relations and Public Affairs may 

be found on the last page of this report. GAO staff who made major 

contributions to this report are listed in appendix VII. 

Sincerely yours, 

Anu Mittal 

Director, Natural Resources and 

 Environment 

Mark Gaffigan 

Director, Natural Resources and 

 Environment 

Page 53 GAO-10-23 Energy-Water Nexus
Appendix I: Objectives, Scope and 

Methodology 

Page 54 GAO-10-23 

Appendix I: Objectives, Scope and 

Methodology 

At the request of the Chairman of the House Committee on Science and 

Technology, we reviewed (1) technologies and other approaches that can 

help reduce freshwater use by power plants and what, if any, drawbacks 

there are to implementation; (2) the extent to which selected states 

consider water impacts of power plants when reviewing power plant 

development proposals; and (3) the usefulness of federal water data to 

experts and state regulators who evaluate power plant development 

proposals. We focused our evaluation on thermoelectric power plants, 

such as nuclear, coal, and natural gas plants using a steam cycle. We did 

not consider the water supply issues associated with hydroelectric power, 

since the process through which these plants use water is substantially 

different from that of thermoelectric plants (e.g., water is used as it passes 

through a dam but is not directly consumed in the process). We also 

focused the review on water used during the production of electricity at 

power plants, and did not include water issues associated with extracting 

fuels used to produce electricity. 

To understand technologies and other approaches that can help reduce 

freshwater use by power plants and their drawbacks, we reviewed 

industry, federal, and academic studies on advanced cooling technologies 

and alternative water sources that discussed their benefits, such as 

reduced freshwater use, and what, if any, drawbacks their implementation 

entails. These included studies with information on power plants’ use of 

water and the drawbacks of nonfreshwater alternatives conducted by the 

Electric Power Research Institute, the Department of Energy’s National 

Energy Technology Laboratory, and others. We discussed these trade-offs 

with various experts, including power plant and cooling system 

manufacturers, such as GEA Power Cooling Inc., General Electric, 

Siemens, and SPX Cooling Technologies; other industry groups and 

consultants, such as the Electric Power Research Institute, Maulbetsch 

Consulting, Nalco, and Tetra Tech; an engineering firm, Black & Veatch; 

and federal, national laboratory, and academic sources. To get a user 

perspective on these different technologies and alternative water sources, 

we met with power plant operators, including Arizona Public Service 

Company, Calpine, Georgia Power Company, and Sempra Generation. We 

also spoke with representatives from and reviewed reports prepared by 

other National Laboratories, such as the Department of Energy’s Argonne 

National Laboratory, to understand related research activities concerning 

water and electricity. To better understand how the differences in cooling 

technologies and heat sources used by power plants affect power plant 

configuration and design, we toured three power plant facilities in Texas—

Comanche Peak (nuclear, once-through cooling), Limestone (coal, wet 

 Energy-Water Nexus
Appendix I: Objectives, Scope and 

Methodology 

recirculating with cooling towers), and Midlothian (natural gas combined 

cycle, dry cooling). 

To determine the extent to which selected states consider water impacts 

of power plants when reviewing power plant development proposals, we 

conducted case study reviews of three states Arizona, California, and 

Georgia. These states were selected because of their historic differences in 

water availability, differences in water law, high energy production, and 

large population centers. We did not attempt to determine whether states’ 

efforts were reasonable or effective, rather we only described what states 

do to consider water impacts when making power plant siting decisions. 

For each of these case study states, we met with state water regulators 

and power plant developers to understand how water planning and 

permitting decisions are approached from both a regulatory and private 

industry perspective. We also met with water research institutions and 

other subject matter experts to understand current and future research 

related to water impacts of power plants and the extent to which these 

research endeavors help inform power plant development proposals and 

regulatory water permitting decisions. Specifically, in California we met 

with the California Department of Water Resources; the California Energy 

Commission; the California State Water Resources Control Board; the San 

Francisco Bay Regional Water Quality Control Board; and the U.S. 

Geological Survey’s (USGS) California Water Science Center. In Georgia 

we met with the Georgia Environmental Protection Division; the Georgia 

Public Service Commission; the Georgia Water Resources Institute; the 

Metropolitan North Georgia Water Planning District; the U.S. Army Corps 

of Engineers, South Atlantic Division; and the USGS Georgia Water 

Science Center. In Arizona we met with the Arizona Corporation 

Commission; the Arizona Department of Environmental Quality; the 

Arizona Department of Water Resources; the Arizona Power Plant and 

Transmission Line Siting Committee; the Arizona Office of Energy, 

Department of Commerce; the Arizona Water Institute, and the USGS 

Arizona Water Science Center. In addition, we reviewed state water laws 

and policies for thermoelectric power plant water use, selected power 

plant operator proposals to use water, and state water regulators’ water 

permitting decisions. We also reviewed selected public utility commission 

dockets and testimonies describing various power plant siting decisions to 

understand what, if any, water issues were addressed. To broaden our 

understanding of how states consider the water impacts of power plants 

when reviewing power plant development proposals, we supplemented 

our case studies by conducting interviews and reviewing documents from 

four additional states Nevada and Alabama—which shared watersheds 

with the case study states—and Illinois and Texas, which are large 

Page 55 GAO-10-23 Energy-Water Nexus
Appendix I: Objectives, Scope and 

Methodology 

electricity producing states with sizable population centers. For each of 

these four states, we spoke with the primary state water regulatory 

agencies—the Alabama Office of Water Resources, the Illinois Office of 

Water Resources, the Nevada Division of Water Resources, and the Texas 

Commission on Environmental Quality—to understand how state water 

regulators consider the impacts of power plant operators’ proposals to use 

water. In Texas, additional discussions were held with the Public Utility 

Commission of Texas; the Texas Water Development Board; the University 

of Texas; and the USGS Texas Water Science Center to further understand 

how water supply issues and energy demand are managed in Texas. In 

Alabama, we held additional discussions with officials from the Alabama 

Public Service Commission and the Alabama Department of 

Environmental Management to learn more about how Alabama’s state 

water regulators and power plant operators manage water supply and 

energy demand. In Nevada, we held a discussion with an official from the 

Public Utilities Commission of Nevada to determine how they evaluate 

cooling technologies and water issues in plant siting certification 

proceedings. We also contacted the Illinois Commerce Commission. 

Finally, to determine how useful federal water data are to experts and 

state regulators who evaluate power plant development proposals, we 

reviewed data and analysis from the Energy Information Administration 

(EIA), USGS, and the Department of Energy’s National Energy Technology 

Laboratory and analyzed how the data were being used. We also 

conducted interviews with federal agencies, including the Bureau of 

Reclamation; EIA; Environmental Protection Agency; Tennessee Valley 

Authority; U.S. Army Corps of Engineers; and USGS to understand 

whether each organization also collected water data and their opinions 

about the strengths and limitations of EIA and USGS data. We spoke with 

several regional offices for the Bureau of Reclamation, including the 

Lower Colorado and Mid-Pacific offices to understand federal water issues 

in California, Arizona, and Nevada. In addition, to understand how 

valuable federal water data are to experts and state regulators who 

evaluate power plant development proposals to use water, we conducted 

interviews and reviewed documents from state water regulators and 

public utility commissions, as well as water and electricity experts at 

environmental and water organizations, such as the Pacific Institute and 

Environmental Defense Fund; at universities such as the Georgia Institute 

of Technology; Southern Illinois University, Carbondale; and the 

University of Maryland, Baltimore County; and experts from industry, 

national laboratories, and other organizations and universities previously 

mentioned. We also contacted other electricity groups, including the North 

American Electric Reliability Corporation and the National Association of 

Page 56 GAO-10-23 Energy-Water Nexus
Appendix I: Objectives, Scope and 

Methodology 

Regulatory Utility Commissioners, to get a broader understanding of how 

the electricity industry addresses water supply issues. 

We conducted this performance audit from October 2008 through October 

2009, in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives. 

Page 57 GAO-10-23 Energy-Water Nexus
Appendix II: Re

Water

view of Proposals to Use 

 in New Power Plants in Arizona 

Page 58 GAO-10-23 

Appendix II: Review of Proposals to Use 

Water in New Power Plants in Arizona 

Arizona, with a population of 6.5 million, was the 16th most populous state 

in the country in 2008 and was one of the fastest growing states, growing 

at a rate of 2.3 percent from 2007 to 2008. Most of the land in Arizona is 

relatively dry, therefore, water for electricity production is limited. For 

2007, Arizona accounted for 2.7 percent of U.S. net electricity generation, 

ranking it 13th, with most generation coming from coal (36 percent); 

natural gas (34 percent); nuclear (24 percent); and renewable sources, 

such as hydroelectric (6 percent), although the state has a strong interest 

in developing solar and other renewable sources. 

Background 

Arizona Water Law and 

Policy 

Arizona relies on three water sources for electricity production: (1) 

surface water, including the Colorado River; (2) groundwater; and (3) 

effluent. Arizona water law varies depending on the source and the user’s 

location, specifically: 

• Surface water. The use of surface water in Arizona is determined by the 

doctrine of prior appropriation. The Arizona Department of Water 

Resources issues permits to use surface water statewide, with the 

exception of water from the Colorado River.1

 The federal government 

developed water storage and distribution via a series of canals to divert 

water from the Colorado River to southern Arizona, and the Bureau of 

Reclamation issues contracts for any new water entitlements related to 

Colorado River water, in consultation with the Arizona Department of 

Water Resources. 

• Groundwater. The use of groundwater depends on its location. Because 

some areas receive seasonal rain and snow, average annual precipitation 

can vary by location, from 3 to over 36 inches of moisture. The state 

established five regions where groundwater is most limited known as 

Active Management Areas. Permits to use groundwater in these five areas 

are coordinated through the Arizona Department of Water Resources, 

 

1

According to an Arizona Department of Water Resources official, it issues a Certificate of 

Water Right once the water is put to beneficial use. Several areas of decreed rights exist, 

for example, Globe Equity Decree on the Upper Gila River. 

 Energy-Water Nexus 
Appendix II: Review of Proposals to Use 

Water in New Power Plants in Arizona 

which provides several permitting options for power plants.2 Outside 

Active Management Areas, the state subjects groundwater to little 

regulation or monitoring and generally only requires users to submit a well 

application to the Department of Water Resources. 

• Effluent. Effluent is owned by the entity that generates it until it is 

discharged into a surface water channel. The owner has the right to put 

effluent to beneficial use or convey it to another entity, such as a power 

plant, that will put it to beneficial use. However, once it is discharged from 

the pipe, generally into a surface water body, such as a river, it is 

considered abandoned and subject to laws governing surface water. 

Arizona has no overall statewide policy on the use of water in 

thermoelectric power plants. However, in Active Management Areas, the 

state requires developers of newer power plants with a generating capacity 

of 25 megawatts or larger to use groundwater in a wet recirculating system 

with a cooling tower and to cycle water through the cooling loop at least 

15 times before discharging it.3

 An official of an Arizona public utility 

noted that it was more common to cycle water 3 to 7 times outside of 

Active Management Areas. 

Certification and Water 

Permitting for New Power 

Plants 

Before a power plant developer can begin constructing a power plant with 

a generating capacity of 100 megawatts or larger, it must go through a twostep certification process and a permitting process, as follows:4

 

2

According to Arizona Department of Water Resources officials, options for obtaining 

groundwater rights include the following: (1) an existing Irrigation Grandfathered 

Groundwater Right that can be legally retired to a Type 1 Non-Irrigation Grandfathered 

Groundwater Right (A.R.S. § 45-469); (2) an existing Type 1 Non-Irrigation Grandfathered 

Groundwater Right (A.R.S. §§ 45-470, 45-472, 45-473, 45-542)); (3) a Type 2 Non-Irrigation 

Grandfathered Groundwater Right, which can be purchased or leased from another owner 

within the same Active Management Area (A.R.S. § 45-471); or (4) a General Industrial Use 

Permit, a permit to pump groundwater from a point outside of the exterior boundaries of 

the service area of a city, town, or private water company for non-irrigation purposes 

(A.R.S. § 45-515). Inside the Harquahala Irrigation Non-Expansion Area, there are some 

limitations to pumping groundwater for industrial uses, pursuant to A.R.S. § 45-440. 

3

There are variations for different plants in the number of cycles required and exemptions 

for the first full year of operation. 

4

Plants smaller that 100 megawatts do not need state siting approval. However, they must 

still comply with any and all local ordinances or state ordinances such as zoning, water 

quality, air quality, etc. 

Page 59 GAO-10-23 Energy-Water Nexus
Appendix II: Review of Proposals to Use 

Water in New Power Plants in Arizona 

• The first step of the certification process involves public hearings before the 

Arizona Power Plant and Transmission Line Siting Committee, made up of 

representatives from five state agencies and six additional members 

appointed by the Arizona Corporation Commission.5

 Although the Line Siting 

Committee is not required to evaluate water use unless the plant will be 

located within an Active Management Area, it typically considers water rights, 

water availability for the life of the power plant, and the environmental effects 

of groundwater pumping around the plant. Committee members told us they 

often ask about the planned water sources and whether alternative water 

sources and cooling technologies are available. If the plant will be located 

within an Active Management Area, a representative of the Department of 

Water Resources serving on the Committee takes the lead in evaluating the 

plant’s potential adverse impacts on the water source, including reviewing 

state data or U.S. Geological Survey (USGS) studies that document the status 

and health of the proposed water source. A representative from the Arizona 

Department of Environmental Quality serving on the Committee considers 

the plant’s potential adverse effects on water quality. Based on this 

information, as well as the proposed plant’s feasibility and its potential 

environmental and economic impacts, the Committee issues a recommended 

Certificate of Environmental Compatibility, if appropriate. 

• In the second step of the certification process, the Arizona Corporation 

Commission reviews the power plant developer’s application to ensure 

there is a balance between the state’s need for energy and the plant’s cost 

and potential environmental impacts, including water quality, water 

supply, ecological, and wetlands impacts. The Commission can accept, 

deny, or modify the Certificate of Environmental Compatibility that was 

recommended by the Line Siting Committee and has denied some 

certificates. The Commission places the burden on the applicant to 

demonstrate that the proposed water supply is sustainable and how any 

water quality impacts will be mitigated. The Commission does not collect 

or review additional water data or conduct quality checks on the data 

provided by the power plant developers. 

• The permitting process applies to both water supply and water quality. 

With respect to water supply, when required, power plant developers who 

plan to use surface water in most areas of the state or groundwater in an 

Active Management Area must obtain a water use permit from the 

 

5

The Committee is chaired by a representative from the Office of the Arizona Attorney 

General. Other agencies represented include the Department of Environmental Quality, 

Department of Water Resources, the Office of Energy in the Department of Commerce, and 

the Arizona Corporation Commission. 

Page 60 GAO-10-23 Energy-Water Nexus
Appendix II: Review of Proposals to Use 

Water in New Power Plants in Arizona 

Page 61 GAO-10-23 Energy-Water Nexus 

Department of Water Resources. When applying for a permit, power plant 

developers are required to provide information on the amount of water 

they will use, the source, points of diversion and release, and how the 

power they generate will be used. For groundwater in an Active 

Management Area, users are strictly limited to a total volume of water 

permitted for withdrawal and are subject to annual reporting and an 

analysis of the impact on other wells. According to an official at the 

Department of Water Resources, the Department has extensive data on 

available groundwater for each Active Management Area to assist in 

determining the effects of groundwater use. With respect to water quality, 

power plant developers must obtain permits which regulate water quality 

through the Department of Environmental Quality. Further, power plants 

discharging into federally-regulated waters also need a National Pollutant 

Discharge Elimination System permit that covers effluent limitations and 

sets discharge requirements. This program is intended to ensure that 

discharges to surface waters do not adversely affect the quality and 

beneficial uses of such water. 

Between January 2004 and July 2009, Arizona has approved three new 

power plants, two of which are simple cycle natural gas plants that do not 

need water for cooling. The third plant is a concentrating solar thermal 

plant using a wet recirculating system with cooling towers. According to 

an official from the Arizona Department or Water Resources, once the 

plant begins operating, it will use 3,000 acre feet of water annually from 

groundwater and surface water, under contract from an Irrigation District. 

Between 1999 and 2002, a large number of applications for power plants in 

Arizona were filed, most of which were approved.6

 However, at least one 

plant was denied a Certificate of Environmental Compatibility due to a 

water supply concern—the potential loss of habitat for an endangered 

species from possible groundwater depletion. Approved plants used a 

variety of water sources for cooling, including recycled wastewater, 

surface water through arrangements with the Central Arizona Project, and 

groundwater––both directly used or from conversion of agricultural land. 

No dry cooled power plants have been approved in Arizona, according to 

state officials. State officials told us dry cooling is too inefficient and 

costly, but that it may be considered in the future if water shortages 

become more acute. 

 

6

Due to declining electricity prices, some of the approved plants were never constructed 

and others were sold to new owners. 

Recent State Decisions 

about Power Plant Water 

Use 
Appendix III: Rev

Water

iew of Proposals to Use 

 in New Power Plants in California 

Page 62 GAO-10-23 

Appendix III: Review of Proposals to Use 

Water in New Power Plants in California 

As of January 2009, California had the nation’s largest population—an 

estimated 38.3 million people—and grew at a rate of 1.1 percent annually 

from 2008 to 2009. California has significant variations in water 

availability, with a long coastline; several large rivers, particularly in the 

north; mountainous areas that receive substantial snowfall; and arid 

regions, particularly the Mojave Desert in southeastern California. 

Statewide, California averages 21.4 inches of rain annually, but has 

suffered significant droughts for the past three years. For 2007, California 

accounted for 5.1 percent of U.S. net electricity generation, ranking it 4th 

nationally. California generates electricity primarily from natural gas (55 

percent); nuclear (17 percent); and renewable energy sources––primarily 

hydroelectric, wind, solar, and geothermal (25 percent). California imports 

27 percent of its electricity from other states. 

Background 

California Water Law and 

Policy 

California water law depends on whether the water is surface water or 

groundwater, specifically: 

• Surface water. The use of surface water is subject to both the riparian and 

appropriative rights doctrines. No permit is needed to act upon riparian 

surface water rights, which result from ownership of land bordering a 

water source, and are senior to most appropriative rights. Appropriative 

rights, on the other hand, must be acquired through the State Water 

Resources Control Board. Applicants for appropriative rights must show, 

among other things, that the water will be put to beneficial use. 

• Groundwater. The majority of California’s groundwater is unregulated.1

Additionally, California does not have a comprehensive groundwater 

permit process in place, except for groundwater that flows through 

subterranean streams, which is permitted by the State Water Resources 

Control Board. 

California has several policies that directly and indirectly address how 

thermoelectric power plants can use water. Specifically: 

• California’s State Water Resources Control Board, as the designated state 

water pollution control agency and issuer of surface water rights, 

established a policy in 1975 that states that the use of fresh inland waters 

for power plant cooling will only be approved when it is demonstrated that 

 

1

In some areas of California, groundwater is managed locally through Adjudicated 

Groundwater Basins that can regulate the amount of groundwater extracted. 

 Energy-Water Nexus 
Appendix III: Review of Proposals to Use 

Water in New Power Plants in California 

the use of other water supply sources or other methods of cooling would 

be environmentally undesirable or economically unsound. Freshwater 

should be considered the last resort for power plant cooling in California. 

Since that time, according to officials we spoke with, the Board has 

encouraged the use of alternative sources of cooling water and alternative 

cooling technologies. 

• The California Energy Commission (CEC), the state’s principal energy 

policy and planning organization, in 2003, reiterated the 1975 policy and 

further required developers to consider whether zero-liquid discharge 

technologies should be used to reduce water use unless it can be shown 

that the use of these technologies would be environmentally undesirable 

or economically unsound. Under these policies, dry cooling and use of 

alternative water for cooling would be the preferred alternatives. 

• The State Water Resources Control Board discourages the use of oncethrough cooling in power plants due to potential harm to aquatic 

organisms. The agency is considering a state policy to require power 

plants using this technology to begin using other cooling technologies or 

retire from service. 

Certification and Water 

Permitting for New Power 

Plants 

California has a centralized permitting process for new large power plants, 

including thermoelectric power plants. Developers constructing new 

power plants with a generating capacity of 50 megawatts or larger must 

apply for certification with the CEC, the lead state agency for ensuring 

proposed plants meet requirements of the California Environmental 

Quality Act and generally overseeing the siting of new power plants.2

 The 

CEC coordinates review of other state environmental agencies, such as the 

State Water Resources Control Board and issues all required state permits 

(air permits, water permits, etc.). Prior to issuing the permits needed to 

construct a new power plant, the CEC conducts an independent 

assessment, with public participation, of each proposed plant’s 

environmental impacts; public health and safety impacts; and compliance 

with federal, state, and local laws, ordinances, and regulations. As part of 

its review, CEC staff analyze the effect on other water users of power 

plant developers’ proposed use of water for cooling and other purposes, 

access to needed water supplies throughout the life of the plant, and the 

 

2

California’s local air pollution control and air quality management districts have the 

authority to issue construction permits for the operation of power plants with less than 50 

megawatts of generating capacity. 

Page 63 GAO-10-23 Energy-Water Nexus
Appendix III: Review of Proposals to Use 

Water in New Power Plants in California 

plant’s impact on the proposed water source and the state’s water supply 

overall.3

 The CEC also ensures power plant developers have obtained the 

required water supply agreements; analyzed the feasibility of alternative 

water sources and cooling technologies; and addressed water supply, 

water quality, and wastewater disposal impacts. The CEC may require 

implementation of various measures to mitigate the impacts of water use, 

if it identifies problems. The CEC’s goal is to complete the entire 

certification process in 12 months, but public objections, incomplete 

application submittals, staff shortages, and limited budgets sometimes 

delay the process. 

The CEC evaluates several sources of water data before certifying plant 

applicants’ water use. These include: 

• the developer’s proposals; 

• data from the Department of Water Resources’ groundwater database on 

water availability and water quality; 

• U.S. Geological Survey data on water availability through its streamflow 

and groundwater monitoring programs and any specific basin studies; 

• the State Water Resources Control Board’s information on surface and 

groundwater quality; and 

• computer groundwater models that analyze the long-term yield of the 

basin. 

With respect to water quality, the CEC coordinates the issuance of permits 

relating to water quality for new power plants, but the State Water 

Resources Control Board sets overall state policy. The Board operates 

under authority delegated to it by the U.S. Environmental Protection 

Agency to implement certain federal laws, including the Clean Water Act, 

as well as authority provided under state laws designed to protect water 

quality and ensure that the state’s water is put to beneficial uses. Nine 

Regional Water Boards are delegated responsibility for implementing the 

 

3

Though not common, if a power plant developer plans to make use of surface water in 

California, it may be required to apply for a water right from the State Water Resources 

Control Board. In evaluating the permit application, the State Water Resources Control 

Board would conduct its own analysis using a combination of state and federal data 

sources. 

Page 64 GAO-10-23 Energy-Water Nexus
Appendix III: Review of Proposals to Use 

Water in New Power Plants in California 

statewide water quality control plans and policies, including setting 

discharge requirements for permits for the National Pollutant Discharge 

Elimination System Program and issuing the permits. 

Recent State Decisions and 

Current Proposals about 

Power Plant Water Use 

Since 2004, most power plants the CEC has approved or is currently 

reviewing plan to use dry cooling or a wet recirculating system that uses 

an alternative water source, as shown in table 6. According to a state 

official we spoke with, no plants approved to be built in the last 25 years 

have used once-through cooling technology. Over the last 7 years, the CEC 

has also commissioned, or been involved in, substantial research into the 

use and possible effects of using alternative cooling technologies. 

Table 6: Power Plants Implemented, Approved or Planned Since January 1, 2004, by 

Cooling Type 

Wet recirculating cooling system 

Categorya

Number 

of plants 

Dry 

cooled Freshwater 

Reclaimed 

water

Impaired 

groundwater

Operational 

Plantb,c,d,g

7 0 3 4 1

Approved by 

the CEC but 

not yet 

operationalc,e,g

10 3 2 4 2

Currently 

under CEC 

reviewf

20 11 1 7 1

Totald,e,g 37 14 6 15 4

Source: GAO analysis of data from the California Energy Commission for plants sited, approved, or currently under review between 

January 1, 2004, and April 30, 2009. 

a

Excludes simple cycle gas plants with no steam cycle. 

b

Plants that started operating after 1/1/2004. These plants may have been approved by the CEC 

earlier. 

c

Includes one geothermal plant. 

d

One plant uses both recycled and impaired groundwater. 

e

Includes one hybrid plant that combines dry and wet cooling. 

f

Includes 7 solar thermal plants. 

g

Totals do not equal due to several plants using multiple water or cooling sources. See notes d and e. 

Page 65 GAO-10-23 Energy-Water Nexus
Appendix IV: R

Wat

eview of Proposals to Use 

er in New Power Plants in Georgia 

Page 66 GAO-10-23 

Appendix IV: Review of Proposals to Use 

Water in New Power Plants in Georgia 

In 2008, Georgia ranked 9th in population among states, with 9.7 million 

people, and had the 4th fastest growing population in the U.S. between the 

years 2000 and 2007. Georgia is historically water rich, receiving 

approximately 51 inches of precipitation annually, but recent droughts and 

growing population have prompted additional focus on water supply and 

management strategies. Georgia ranked 8th in total net electricity 

generation in 2007, accounting for approximately 3.5 percent of net 

electricity generation in the United States. Coal and nuclear power are the 

primary fuel sources for electricity in Georgia, with coal-fired power 

plants providing more than 60 percent of electricity output. 

Background 

Georgia Water Law and 

Policy 

Georgia is a regulated riparian state, meaning that the owners of land 

adjacent to a water body can choose when, where, and how to use the 

water. The use must be considered reasonable relative to a competing 

user, with the courts responsible for resolving disputes about reasonable 

use. Since the late 1970s, Georgia law has required any water user who 

withdraws more than an average of 100,000 gallons per day to obtain a 

withdrawal permit from the Georgia Environmental Protection Division.1

Georgia does not have a policy or guidance specifically addressing 

thermoelectric power plants’ water use. However, in response to recent 

droughts and population growth, the state adopted its first statewide water 

management plan in 2008. State water regulators we spoke with said they 

expect the new state water plan to consider how future power generation 

siting decisions align with state water supplies. 

Certification and Water 

Permitting for New Power 

Plants 

Before power plant developers can begin construction, they may be 

required to obtain certification from the Georgia Public Service 

Commission and relevant permits from offices such as the Georgia 

Environmental Protection Division, as follows: 

• Georgia Public Service Commission. Georgia Power Company, the state’s 

investor-owned utility, is fully regulated by the Public Service Commission 

and must obtain a certificate of public convenience and necessity prior to 

constructing new power plants. Other power plant developers, including 

municipality- and cooperatively-owned power plants and others, are not 

 

1

Any entity that withdraws more than 100,000 gallons a day (monthly average) of surface 

water or 100,000 gallons a day (daily average) of groundwater requires a water permit from 

the Division. 

 Energy-Water Nexus 
Appendix IV: Review of Proposals to Use 

Water in New Power Plants in Georgia 

subject to certification. Public Service Commission officials explained that 

during the certification process, they balance the need for the new plant 

and its costs, but they do not consider the impact a plant will have on 

Georgia’s water supply. However, these officials explained that, in their 

capacity to ensure utilities charge just and reasonable rates, they could 

consider the economic impact of using an alternative water source or 

advanced cooling technology, should a plant propose to use one. 

• Georgia Environmental Protection Division. Any entity seeking to use 

more than 100,000 gallons of water per day, including power plant 

developers, must obtain a permit from the Georgia Environmental 

Protection Division. The Division analyzes the proposed quantity of 

withdrawals and the water source and determines whether the withdrawal 

amounts and potential effects for downstream water users are acceptable. 

In some instances, the Division may place special conditions on power 

plants to ensure adequate water availability, such as requiring on-site 

reservoirs or groundwater withdrawals for water use during droughts. In 

making their decisions, the Georgia Environmental Protection Division 

reviews the plant’s application and hydrologic data from a number of 

sources. Water withdrawal applications include many factors, in addition 

to withdrawal amounts and sources, such as water conservation and 

drought contingency plans; documentation of growth in water demand, 

location, and purpose of water withdrawn or diverted; and annual 

consumption estimates. Other data sources include their own and U.S. 

Geological Survey (USGS) groundwater data, USGS streamflow data, and 

existing water use permits. In some instances, the Environmental 

Protection Division may also use water withdrawal and water quality data 

collected by the U.S. Army Corps of Engineers if an applicant is 

downstream of federally-regulated waters. In addition to permitting water 

use, the Division is also responsible for issuing and enforcing all state 

permits involving water quality impacts. It is authorized by the 

Environmental Protection Agency to issue National Pollutant Discharge 

Elimination System permits that address discharge limits and reporting 

requirements. 

Recent State Decisions 

about Power Plant Water 

Use 

According to Division officials, the Division has never denied a water 

withdrawal permit to a power plant developer on the basis of insufficient 

water, which they attributed partly to the fact that the staff meets with 

applicants numerous times before they submit the application to identify 

and mitigate concerns about water availability. Moreover, they told us that 

thermoelectric power plant developers have submitted few applications 

for water withdrawal permits. For example, as shown in table 7, between 

January 1, 2004, and December 31, 2008, the Division received only 6 water 

Page 67 GAO-10-23 Energy-Water Nexus
Appendix IV: Review of Proposals to Use 

Water in New Power Plants in Georgia 

withdrawal applications from thermoelectric power plant developers; of 

these, it approved 5. An official from the Public Service Commission was 

unaware of any regulated power plant developers proposing the use of 

advanced cooling technologies, such as dry cooling or hybrid cooling, over 

this time period. 

Table 7: Thermoelectric Power Plant Applications for Water Withdrawal Permits in 

Georgia Between January 2004 and December 2008 

Recirculating 

Category 

Number 

of Plants

Oncethrough

Groundwater 

(Freshwater) 

Surface water 

(Freshwater)

Reclaimed 

water

Applied 6 0 4 2 1

Permitteda5 0 3 1 1

Source: GAO analysis of data provided by the Georgia Environmental Protection Division. 

Note: Totals do not equal due to one power plant developer submitting both a groundwater and 

surface water withdrawal application. 

a

As of August 12, 2009, one plant’s application is still pending a decision by the Georgia 

Environmental Protection Division. 

Georgia Environmental Protection Division officials told us they do not 

advocate or refuse the use of particular cooling technologies. However, 

officials said they do not expect to receive applications for once-through 

cooling plants because federal environmental regulations make the 

permitting process difficult. 

Page 68 GAO-10-23 Energy-Water Nexus
Appendix V: Limitations to Federal Water Use 

Data Identified by Those GAO Contacted 

Data source Limitation Cause Effect 

EIA Advanced cooling technologies: 

Data users cannot comprehensively 

identify plants making use of 

advanced cooling technologies, such 

as dry and hybrid cooling. 

EIA forms are not designed to collect 

information on advanced cooling 

technologies. 

Understanding of trends in the 

adoption of advanced cooling 

technologies cannot be 

systematically determined using only 

EIA data. 

EIA Cooling system codes: Codes used 

to classify plant cooling systems may 

be incomplete, lack explanation, 

overlap, or contain errors. 

Cooling system codes are not 

defined in detail and plants may be 

uncertain about what cooling system 

code to use. 

Inconsistent use of cooling tower 

codes could potentially make EIA 

data less valuable and lead to 

inaccurate or inconsistent data and 

analysis. 

EIA Nuclear water data: Water use data 

(withdrawal, consumption and 

discharge) and cooling information 

were discontinued for nuclear plants 

in 2002. 

EIA discontinued reporting nuclear 

water use data and cooling system 

information due to priorities stemming 

from budget limitations. 

Data users must use noncurrent data 

or seek out an alternate source. If 

this limitation persists, water data will 

not be available for any new nuclear 

plants constructed. 

EIA and USGS Alternative water sources: It is not 

possible to comprehensively identify 

power plants using alternative water 

sources. 

EIA forms are not designed to collect 

information on alternative water 

sources. According to USGS, budget 

constraints have limited the amount 

of water use information the agency 

can provide. 

Understanding trends in power plant 

adoption of alternative water sources 

is limited. 

EIA and USGS Frequency: EIA reports data on 

annual water use, rather than data on 

water use over shorter time periods, 

such as monthly. USGS reports 5-

year data. 

EIA’s form 767, used to collect 

cooling system and water data, was 

developed and revised in the 1980s, 

and EIA officials we spoke with were 

not aware of why an annual time 

period was originally chosen. 

According to USGS, budget 

constraints have limited the amount 

of water use information the agency 

can provide. 

Seasonal trends in water use by 

power plants are not evident from 

annual EIA or 5-year USGS data. 

EIA and USGS Quality: Reporting of some EIA data 

elements may be inaccurate or 

inconsistent. USGS data are 

compiled from many different data 

sources, and the accuracy and 

methodology of these sources may 

vary. Furthermore, USGS state 

offices have different methods for 

developing water use estimates, 

potentially contributing to data 

inconsistency. 

Respondents may use different 

methods to measure or estimate data 

and instructions may be limited or 

unclear. Respondents may make 

mistakes or have nontechnical staff 

fill out surveys, since EIA’s form for 

collecting this data does not require 

technical staff to complete the 

survey. According to USGS, budget 

constraints in its water use program 

kept the agency from implementing 

improvements it would like to make to 

its quality control of water use data. 

Inaccurate and inconsistent data are 

more challenging to analyze and less 

relevant for policymakers, water 

experts and the public seeking to 

understand water use patterns. 

Appendix V: Limitations to Federal Water Use 

Data Identified by Those GAO Contacted 

Page 69 GAO-10-23 Energy-Water Nexus
Appendix V: Limitations to Federal Water Use 

Data Identified by Those GAO Contacted 

Data source Limitation Cause Effect 

USGS Consumption: USGS discontinued 

reporting of thermoelectric power 

plant and other water consumption 

data. 

According to USGS, budget 

constraints have caused the agency 

to make cuts in data reporting. 

Understanding of trends in power 

plant water consumption compared to 

other industries is limited. Analysis to 

compare thermoelectric power plant 

withdrawals to consumption is more 

complicated. 

USGS Hydrologic code: USGS 

discontinued reporting thermoelectric 

power plant and other water use by 

hydrologic code. It now only reports 

data by county. 

According to USGS, budget 

constraints have caused the agency 

to make cuts in data reporting. 

According to some data users, not 

having data by hydrologic code 

complicates water analysis, which is 

often performed by watershed rather 

than county. 

USGS Timeliness: Data are reported many 

years late. For example, data on 

2005 water use have not yet been 

made available to the public. 

According to USGS, budget 

constraints have led to limited staff 

availability for water use data 

collection and analysis, resulting in 

reporting delays. 

Data are outdated and may be less 

relevant for analysis. 

Source: GAO analysis of comments gathered during interviews with water and electricity experts, environmental groups, and federal 

agencies. 

Page 70 GAO-10-23 Energy-Water Nexus
Appendix VI: Comments from the Department Appendix VI: Comments from the of the Interior 

Department of the Interior 

Page 71 GAO-10-23 Energy-Water Nexus
Appendix VII: GAO Contacts and Staff Appendix VII: GAO Contacts and Staff Acknowledgments 

Acknowledgments 

Anu Mittal, (202) 512-3841, Mittala@gao.gov

Mark Gaffigan, (202) 512-3841, Gaffiganm@gao.gov

In addition to the individuals named above, Jon Ludwigson (Assistant 

Director), Scott Clayton, Philip Farah, Paige Gilbreath, Randy Jones, 

Alison O’Neill, Timothy Persons, Kim Raheb, Barbara Timmerman, Walter 

Vance, and Jimi Yerokun made key contributions to this report. 

Page 72 GAO-10-23 Energy-Water Nexus

GAO Contacts 

Staff 

Acknowledgments 

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