Entergy Corp. v. Riverkeeper, Inc., 556 U.S. 208 (2009), is a decision by the United States Supreme Court that reviewed the Environmental Protection Agency's (EPA) interpretation of the Clean Water Act regulations with regard to cooling water intakes for power plants. Existing facilities are mandated to use the "Best Technology Available" to "minimize the adverse environmental impact.". The issue was whether the agency may use a cost–benefit analysis (CBA) in choosing the Best Available Technology or (BAT) to meet the National Performance Standards (NPS).
Reversing a lower court opinion, the 5-1-3 ruling upheld the EPA's decision as reasonable to allow CBA to determine the best technology available to maintain national environmental standards.
Parties
Petitioner: Entergy Corporation is an energy company engaged primarily in electric power production and retail electric distribution operations. Entergy owns and operates both nuclear and fossil fuel power plants generating an aggregated 30,000 megawatts of electrical capacity. Indian Point Energy Center is a subsidiary of Entergy Corporation operating a three-unit nuclear power plant in Buchanan, New York, the facility at issue in this case.
Respondent: Riverkeeper is a member-supported environmental protection organization dedicated to defending the Hudson River and its tributaries for New York City and Hudson Valley residents. Over the past four decades Riverkeeper has been successful as the public's watchdog in bringing hundreds of pollution violations to justice and protecting drinking water for local communities. Riverkeeper has an ongoing interest in replacing Indian Point nuclear power plant with renewable energy.
This case is a consolidation of three cases for review by the Supreme Court Entergy Corporation v. Riverkeeper, Inc., et al. PSEG Fossil LLC, et al., v. Riverkeeper, Inc., et al. Utility Water Act Group, v. Riverkeeper, Inc., et al.
Background Among the ten major environmental regulatory statutes enacted from the 1960s through the 1980s only the Toxic Substances Control Act (TSCA) and the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) granted authority to weigh the cost and benefits in determining policy requirements. The remainder of the regulations rely mainly on harm-based or technology-based methodologies that clearly exclude cost–benefit analysis (CBA) or at a minimum do not provide for it. The Clean Water Act statute uses technology based methods to meet its standards. (See Note 1.)
Three pre-Entergy Supreme Court decisions offer historical guidance into the possible crafting of the CBA canon. Each of them address the priority of environmental health and safety concerns with the appropriate level of cost-benefit analysis.
In Tennessee Valley Authority v. Hill the Court interpreted section 7 of the Endangered Species Act as discontinuing the construction of the Tellico Dam after the project was more than 80 percent complete and had spent over $50 million in order to save the snail darter (an unknown species at the time). In American Textile Manufacturers Institute, Inc. v. Donovan the court addressed whether the Occupational Safety and Health Administration (OSHA) could adopt cost–benefit analysis with regards to cotton dust standards for employees. The Court ruled that CBA was not authorized by the statute because feasibility analysis was authorized. In Whitman v. American Trucking Associations, Inc., the Court held that section 109 of the Clean Air Act (CAA) prohibited cost considerations when setting the National Ambient Air Quality Standards (NAAQS) In a unanimous Court, Justice Scalia considered that section 109 requires the public to be protected with "an adequate margin of safety" and that the CAA had specific reference to cost considerations in related provisions but not with setting the NAAQS.
Various States and environmental groups challenged the Bush Administration Environmental Protection Agency's (EPA) interpretation of § 316(b) of the Clean Water Act (CWA), 33 U.S.C. §1326(b), that allowed exceptions to power plants that diverged from national standards. The claim against the EPA was that the agency unreasonably interpreted the regulations of the CWA when it determined that cost–benefit analysis was a method that could be used to determine the BAT when minimizing the adverse effects of cooling water intakes from power plants. This new interpretation of the statute allows for cost to influence the choice of "best technology available" lowering the standard reduction of "adverse environmental impact."
Statute and regulations Section 316(b) of the Clean Water Act requires that permittees under the National Pollutant Discharge Elimination System (NPDES) that operate facilities with cooling water intake structures ensure that the location, design, construction, and capacity of their structures reflect the best technology available to minimize detrimental impacts to the environment. The intake structures remove billions of aquatic organisms each year from United States waterways. Most impacts are in early life stages of fish, crustaceans, and other aquatic life.
Prior case The case preceding this Supreme Court case was decided in the Second Circuit Court of Appeals. This court heard Riverkeeper, Inc. v. EPA, in 2006 and decided the case in 2007. Then-Circuit Judge Sotomayor wrote the opinion for the court. In this decision the court stated that in order to meet the statute facilities could not use restoration enhancements (restocking fish, restoring habitat, etc.) to meet the National Performance Standard (NPS). Additionally, the court remanded the case to the EPA for clarification of EPA rules regarding NPS determination by CBA and the use of a variance for facilities claiming excessive costs to implement mandated technology. And most importantly to this case, the court decided that a CBA is not consistent with the requirement of using the best technology available for minimizing adverse environmental impact. The statutory language requires the EPA's selection of BAT be driven by technology. Cost can only be used to determine if remediation can be reasonably borne by the industry and determining the specific technology that meets the standards at the lowest cost. Thus suspending this aspect of Phase II as stated above.
This case
The petitioner's power plants had cooling water intake structures that threatened freshwater aquatic life by compression against intake screens (impingement) or by suctioning organisms into the cooling system (entrainment). They challenged the Second Circuit decision that cost benefit analysis cannot be used in the interpretation of the Clean Water Act in determination of the national performance standard and best available technology for existing power plants.
The respondents supported the Second Circuit's finding that the EPA's decision of site-specific cost–benefit variance provision and the use of CBA to determine national performance standard and best available technology for existing facilities is not within the statute and remand the regulations to the agency for clarification.
Adverse environmental impact
The process of pulling water into a facility from a natural body of water for use in industrial cooling can have a significant effect on living organisms in that body of water. Estimates for 2004 show that in just one day industry can pull as much as of water into facilities for cooling purposes. The pressure and flow of this large volume of water can impinge large organisms like fish against intake points or entrain small organisms like plankton, eggs and larvae into the cooling system killing or injuring them. A single power plant can impinge a million adult fish in just three weeks. One plant can entrain some 3 - 4 billion smaller fish and shellfish in a year. This can have a destabilizing effect on local ecosystems. Nationwide, "the impingement and entrainment reduction benefits range from $73 million to $83 million per year. These benefits are primarily from improvements to commercial and recreational fishing." There are likely other benefits externalized in this equation such as higher functioning ecosystems, intrinsic value of non-fisheries species to name two. In light of these findings, when congress amended the Clean Water Act in 1972, it directed the EPA to regulate these systems so as to "minimize adverse environmental impact". As of 2014, there were 1065 existing facilities in the US that draw at least a day. EPA estimated that 521 are manufacturing facilities and 544 are power plants.
EPA rule making
Three Phases (rules) have been created over the years by the EPA in response from industry, environmental groups and judicial review to clarify exactly what is needed to meet the statute. Promulgated 1326(b) regulations making the best technology available determination on a case-by-case basis for both Phase I and Phase II facilities.
Phase I regulations (created in 2001) govern new cooling water intake structures and mandate closed-cycle cooling systems as BAT. Phase II (2004) regulations apply generally to large existing facilities and outlines alternatives to closed-cycle cooling to meet reduction standards. Phase III (2006) addresses certain existing facilities and new coastal and offshore facilities, not an issue in this case.
The National Performance Standard (NPS), set by the EPA for new facilities is closed-cycle cooling systems, which can reduce impingement and entrainment by up to 98%. For existing facilities NPS in Phase II is "to reduce impingement mortality for all life stages of fish and shellfish by 80 to 95 percent from the calculation baseline; a subset of facilities must also reduce entrainment of such aquatic organisms by 60 to 90 percent from the calculation baseline."
In Phase II the EPA declined to specifically mandate closed-cycle cooling systems as BAT for existing facilities due to the compliant cost, which could be nine times the amount of other methods of reduction approaching the same standard. A cost–benefit analysis is incorporated to determine the standard. Existing facilities have alternatives to meet these reduction standards including existing technologies, additional fish protection technologies, and restoration measures. Phase II rules outline these alternatives and also permit site-specific variances from the NPS and if the permitting agency imposes restrictions that render results "as close to practical to the applicable performance standards", using "Best Professional Judgement".
Phase II update: In 2007 "EPA suspended the Cooling Water Intake Structure Regulations for existing large power plants as an unreasonable interpretation of the statute. This suspension was in response to the 2nd Circuit Court of Appeals decision in Riverkeeper, Inc., v. EPA. (2007)" (see below for details). In 2011 the Supreme Court ruling stated that Phase II was a reasonable interpretation of the statute reversing the lower court ruling allowing the use of Phase II.
Main issue - Best Available Technology - BAT The main issue for the court was to decide if the Clean Water Act statute language is unambiguous or not and whether the EPA interpretations (rules - see below) were reasonable. At the heart of the issue is if the EPA is authorized to consider CBA in determining BAT when meeting the NPS to "minimize adverse environmental impact."