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Page Number: 9

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ENTERGY CORP. v. RIVERKEEPER, INC. 

Opinion of the Court 

The  regulations  permit  the  issuance  of  site-specific 
variances  from  the  national  performance  standards  if  a
facility  can  demonstrate  either  that  the  costs  of  compli-
ance  are  “significantly  greater  than”  the  costs  considered 
by  the  agency 
in  setting  the  standards,  40  CFR 
§125.94(a)(5)(i),  or  that  the  costs  of  compliance  “would  be
significantly  greater  than  the  benefits  of  complying  with 
the  applicable  performance  standards,”  §125.94(a)(5)(ii).
Where a variance is warranted, the permit-issuing author-
ity  must  impose  remedial  measures  that  yield  results  “as
close  as  practicable  to  the  applicable  performance  stan-
dards.”  §125.94(a)(5)(i), (ii). 

Respondents challenged the EPA’s Phase II regulations, 
and  the  Second  Circuit  granted  their  petition  for  review 
and  remanded  the  regulations  to  the  EPA.   The  Second 
Circuit  identified  two  ways  in  which  the  EPA  could  per-
missibly  consider  costs  under  33  U. S. C.  §1326(b):  (1)  in
determining  whether  the  costs  of  remediation  “can  be
‘reasonably borne’ by the industry,” and (2) in determining 
which  remedial  technologies  are  the  most  cost-effective,
that  is,  the  technologies  that  reach  a  specified  level  of 
benefit at the lowest cost.  475 F. 3d, at 99–100.  See also 
id.,  at  98,  and  n. 10.    It  concluded,  however,  that  cost-
benefit analysis, which “compares the costs and benefits of 
various ends, and chooses the end with the best net bene-
fits,”  id.,  at  98,  is  impermissible  under  §1326(b),  id.,  at 
100. 

The  Court  of  Appeals  held  the  site-specific  cost-benefit
variance provision to be unlawful.  Id., at 114.  Finding it 
unclear whether the EPA had relied on cost-benefit analy-
sis  in  setting  the  national  performance  standards,  or  had 
only  used  cost-effectiveness  analysis,  it  remanded  to  the 
agency  for  clarification  of  that  point. 
Id.,  at  104–105. 
(The  remand  was  also  based  on  other  grounds  which  are 
not  at  issue  here.)    The  EPA  suspended  operation  of  the 
Phase  II  rules  pending  further  rulemaking.   72  Fed.  Reg.