Energy-Water Nexus: Improvements to Federal Water Use Data Would Increase Understanding of Trends in Power Plant Water Use
Published: 2009-10-16T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: 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 Traditionally, power plants have withdrawn water from rivers and other water sources to cool the steam used to produce electricity, so that it may be reused to produce more electricity.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.
section_title: What GAO Found
paragraphs: 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.

section_title: Letter
paragraphs: 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  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 one- quarter 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  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. 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. 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. 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. 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  between water and energy, which we will be addressing in several  reports. 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  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.
subsections: section_title: Background
paragraphs: 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.
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.
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.
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  developers typically consider the water sources that are available and lea costly to use. Fresh surface water is the most common water source for  power plants nationally, as shown in table 1.
subsections: section_title: Cooling Technologies
paragraphs: Power plant developers must also consider what cooling technologies they  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 the United States and include  dry cooling and hybrid cooling. Specifically:  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 warmer  than it was when it was withdrawn. 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  r body is  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.
section_title: Federal Data Collection
paragraphs: 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.
section_title: State Water Laws
paragraphs: 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,  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,  permits may be required prior to use and additional regulation may occur  if a groundwater source is interconnected with surface water.
section_title: Power Plant Applications
paragraphs: 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.
section_title: Thermoelectric Power Plants and Water Availability
paragraphs: 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.
section_title: Advanced Cooling Technologies and Alternative Water Sources Can Reduce the Use of Freshwater at Power Plants, but Their Adoption Poses Certain Drawbacks
paragraphs: 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 water- scarce 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.
subsections: section_title: Advanced Cooling Technologies and Alternative Water Sources Can Reduce Freshwater Use, Leading to a Number of Benefits
paragraphs: 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.
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.
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. 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.
subsections: section_title: Social and Environmental Benefits
paragraphs: 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  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.
section_title: Water-Related Cost Savings
paragraphs: 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.
section_title: Siting Flexibility and Other Benefits
paragraphs: 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.
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.
section_title: Adoption of Advanced Cooling Technologies May Reduce Electricity Production, Increase Costs, and Pose Other Drawbacks
paragraphs: 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.
subsections: section_title: Energy Production Penalties
paragraphs: 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 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  region. 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).
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  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. 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. 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 gas- fueled power plant. This is because additional fuel is burned to produce  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. 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. 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  towers. 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.
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.
section_title: Higher Costs
paragraphs: 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  of capital costs. 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. 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  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. 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.
section_title: Space, Noise, and Suitability Issues
paragraphs: 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.
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.
section_title: Use of Alternative Water Sources May Also Pose Certain Drawbacks
paragraphs: 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.
subsections: section_title: Adverse Effects to Cooling Equipment
paragraphs: 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.
section_title: Regulatory Compliance Issues
paragraphs: 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.
section_title: Access to Alternative Water Sources
paragraphs: 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.
section_title: Power Plant Developers Must Weigh Trade-offs When Evaluating Options to Reduce Freshwater Use
paragraphs: 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  considerably depending on its location and that high water costs could  make dry cooling less expensive annually than wet cooling.
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.
section_title: States We Contacted Vary in the Extent to Which They Consider Water Impacts When Reviewing Power Plant Development Proposals
paragraphs: 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.
subsections: section_title: States We Contacted Have Differences in Water Laws that Influence Their Oversight of Water Use by Proposed Power Plants
paragraphs: 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.
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  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. 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  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. 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. 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. 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  restrictions on the amount of water used or location of groundwater wells  for landowners.
section_title: States We Contacted Have Other Regulatory Policies That Influence the Extent of Water Use Oversight for Proposed Power Plants
paragraphs: 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. 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.  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  as reclaimed water; and 2 that will use freshwater purchased from a water  supplier, such as a municipal water district, for power plant cooling. 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. 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. 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. 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  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.
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.
section_title: States We Contacted May Require Additional Levels of Review That Affect Oversight
paragraphs: 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. 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.
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  cooling technologies. 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.
section_title: 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
paragraphs: 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.
subsections: section_title: State Water Regulators and Others Rely on Federal Data on Water Availability to Evaluate Power Plant Proposals
paragraphs: 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  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.
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  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 cooperatively- funded 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.
section_title: Water Experts, Federal Agencies, and Others Value Federal Data on Water Use for Analyzing Industry Trends but Identified Limitations In These Data
paragraphs: 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:    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. 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.
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  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  becoming increasingly common. 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,  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. 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  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. 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.
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. 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  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.
section_title: Conclusions
paragraphs: 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 cost- effective way.
section_title: Recommendations for Executive Action
paragraphs: 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:    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.
section_title: Agency Comments and Our Evaluation
paragraphs: 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  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.
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.
section_title: Appendix I: Objectives, Scope and Methodology
paragraphs: 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  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  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  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.
section_title: Appendix II: Review of Proposals to Use Water in New Power Plants in Arizona
subsections: section_title: Background
paragraphs: 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.
section_title: Arizona Water Law and Policy
paragraphs: 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. 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,  which provides several permitting options for power plants. 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. 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.
section_title: Certification and Water Permitting for New Power Plants
paragraphs: 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 two- step certification process and a permitting process, as follows:    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. 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  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.
section_title: Recent State Decisions about Power Plant Water Use
paragraphs: 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. 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.
section_title: Appendix III: Review of Proposals to Use Water in New Power Plants in California
subsections: section_title: Background
paragraphs: 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.
section_title: California Water Law and Policy
paragraphs: 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.
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  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 once- through 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.
section_title: Certification and Water Permitting for New Power Plants
paragraphs: 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. 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  plant’s impact on the proposed water source and the state’s water supply  overall.  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  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.
section_title: Recent State Decisions and Current Proposals about Power Plant Water Use
paragraphs: 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.
section_title: Appendix IV: Review of Proposals to Use Water in New Power Plants in Georgia
subsections: section_title: Background
paragraphs: 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.
section_title: Georgia Water Law and Policy
paragraphs: 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.
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.
section_title: Certification and Water Permitting for New Power Plants
paragraphs: 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  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.
section_title: Recent State Decisions about Power Plant Water Use
paragraphs: 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  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.
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.
section_title: Appendix V: Limitations to Federal Water Use Data Identified by Those GAO Contacted
subsections: section_title: Advanced cooling technologies: Data users cannot comprehensively identify plants making use of advanced cooling technologies, such as dry and hybrid cooling.
paragraphs: 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.
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.
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.
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.
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.
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.
section_title: Appendix VI: Comments from the Department of the Interior
section_title: Appendix VII: GAO Contacts and Staff Acknowledgments
subsections: section_title: GAO Contacts
section_title: Staff Acknowledgments
paragraphs: 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.