[Federal Register Volume 76, Number 76 (Wednesday, April 20, 2011)]
[Proposed Rules]
[Pages 22174-22288]
[FR Doc No: 2011-8033]

Vol. 76

Wednesday,

No. 76

April 20, 2011

Part II

Environmental Protection Agency

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40 CFR Parts 122 and 125

National Pollutant Discharge Elimination System--Cooling Water Intake
Structures at Existing Facilities and Phase I Facilities; Proposed Rule

Federal Register / Vol. 76 , No. 76 / Wednesday, April 20, 2011 /
Proposed Rules

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 122 and 125

[EPA-HQ-OW-2008-0667, FRL-9289-2]
RIN 2040-AE95

National Pollutant Discharge Elimination System--Cooling Water
Intake Structures at Existing Facilities and Phase I Facilities

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: This proposed rule would establish requirements under section
316(b) of the Clean Water Act (CWA) for all existing power generating
facilities and existing manufacturing and industrial facilities that
withdraw more than 2 million gallons per day (MGD) of water from waters
of the U.S. and use at least twenty-five (25) percent of the water they
withdraw exclusively for cooling purposes. The proposed national
requirements, which would be implemented through National Pollutant
Discharge Elimination System (NPDES) permits, would establish national
requirements applicable to the location, design, construction, and
capacity of cooling water intake structures at these facilities by
setting requirements that reflect the best technology available (BTA)
for minimizing adverse environmental impact. The proposed rule
constitutes EPA's response to the remand of the Phase II existing
facility rule and the remand of the existing facilities portion of the
Phase III rule. In addition, EPA is also responding to the decision in
Riverkeeper I and proposing to remove from the Phase I new facility
rule the restoration-based compliance alternative and the associated
monitoring and demonstration requirements. EPA expects this proposed
regulation would minimize adverse environmental impacts, including
substantially reducing the harmful effects of impingement and
entrainment. As a result, the Agency anticipates this proposed rule
would help protect ecosystems affected by cooling water intake
structures and preserve aquatic organisms and the ecosystems they
inhabit in waters used by cooling water intake structures at existing
facilities.

DATES: Comments must be received on or before July 19, 2011.

ADDRESSES: Submit your comments, identified by Docket No. EPA-HQ-OW-
2008-0667 by one of the following methods:
     http:www.regulations.gov: Follow the on-line instructions
for submitting comments.
     E-mail<EMAIL_ADDRESS>Attention Docket ID No. EPA-HQ-
OW-2008-0667.
     Mail: Water Docket, U.S. Environmental Protection Agency,
Mail Code: 4203M, 1200 Pennsylvania Ave., NW., Washington, DC 20460.
Attention Docket ID No. EPA-HQ-OW-2008-0667. Please include a total of
3 copies. In addition, please mail a copy of your comments on
information collection provisions to the Office of Information and
Regulatory Affairs, Office of Management and Budget (OMB), Attn: Desk
Officer for EPA, 725 17th St., NW., Washington, DC 20503.
     Hand Delivery: Water Docket, EPA Docket Center, EPA West
Building Room 3334, 1301 Constitution Ave., NW., Washington, DC,
Attention Docket ID No. EPA-HQ-OW-2008-0667. Such deliveries are only
accepted during the Docket's normal hours of operation, and special
arrangements should be made for deliveries of boxed information by
calling<PHONE_NUMBER>.
    Instructions: Direct your comments to Docket No. EPA-HQ-OW-2008-
0667. EPA's policy is that all comments received will be included in
the public docket without change and may be made available online at
http://www.regulations.gov, including any personal information
provided, unless the comment includes information claimed to be
Confidential Business Information (CBI) or other information whose
disclosure is restricted by statute. Do not submit information that you
consider to be CBI or otherwise protected through http://www.regulations.gov or e-mail. The http://www.regulations.gov Web site
is an ``anonymous access'' system, which means EPA will not know your
identity or contact information unless you provide it in the body of
your comment. If you send an e-mail comment directly to EPA without
going through http://www.regulations.gov your e-mail address will be
automatically captured and included as part of the comment that is
placed in the public docket and made available on the Internet. If you
submit an electronic comment, EPA recommends that you include your name
and other contact information in the body of your comment and with any
disk or CD-ROM you submit. If EPA cannot read your comment due to
technical difficulties and cannot contact you for clarification, EPA
may not be able to consider your comment. Electronic files should avoid
the use of special characters, any form of encryption, and be free of
any defects or viruses.
    Docket: All documents in the docket are listed in the http://www.regulations.gov index. Although listed in the index, some
information is not publicly available, e.g., CBI or other information
whose disclosure is restricted by statute. Certain other material, such
as copyrighted material, will be publicly available only in hard copy.
Publicly available docket materials are available either electronically
in http://www.regulations.gov or in hard copy at the Water Docket in
the EPA Docket Center, EPA/DC, EPA West, Room 3334, 1301 Constitution
Ave., NW., Washington, DC. The Public Reading Room is open from 8:30
a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The
telephone number for the Public Reading Room is<PHONE_NUMBER>, and the
telephone number for the Water Docket is<PHONE_NUMBER>.

FOR FURTHER INFORMATION CONTACT: For additional technical information,
contact Paul Shriner at<PHONE_NUMBER>; e-mail<EMAIL_ADDRESS>For
additional economic information, contact Erik Helm at<PHONE_NUMBER>; e-
mail<EMAIL_ADDRESS>For additional biological information, contact
Tom Born at<PHONE_NUMBER>; e-mail<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:
    What Entities Are Regulated By This Action? This proposed rule
would apply to existing facilities that use cooling water intake
structures to withdraw water from waters of the U.S. and have or
require a National Pollutant Discharge Elimination System (NPDES)
permit issued under Section 402 of the CWA. Existing facilities subject
to this regulation would include those with a design intake flow
greater than 2 MGD. If a facility meets these conditions, it is subject
to today's proposed regulations. If a facility has or requires a NPDES
permit but does not meet the 2 MGD intake flow threshold, it would be
subject to permit conditions implementing section 316(b), developed by
the NPDES permit director, on a case-by-case basis, using best
professional judgment. This proposal defines the term ``cooling water
intake structure'' to mean the total physical structure and any
associated waterways used to withdraw water from waters of the U.S.,
provided that at least twenty-five percent of the water withdrawn is
used for cooling purposes. The cooling water intake structure extends
from the point at which water is withdrawn from the surface water
source up to, and including, the intake pumps. Generally,

facilities that meet these criteria fall into two major groups: steam
electric generating facilities and manufacturing facilities.
    The following table lists the types of entities that are
potentially subject to this proposed rule. This table is not intended
to be exhaustive, but rather provides a guide for readers regarding
entities likely to be regulated by this action. Other types of entities
not listed in the table could also be regulated.

----------------------------------------------------------------------------------------------------------------
                                  Examples of          Standard Industrial       North American Industry Codes
          Category            regulated entities      Classification Codes                   (NAIC)
----------------------------------------------------------------------------------------------------------------
Federal, State and Local     Operators of steam    4911 and 493..............  221111, 221112, 221113, 221119,
 Government.                  electric generating                               221121, 221122, 221111, 221112,
                              point source                                      221113, 221119, 221121, 221122.
                              dischargers that
                              employ cooling
                              water intake
                              structures..
Industry...................  Operators of          See below.................  See below.
                              industrial point
                              source dischargers
                              that employ cooling
                              water intake
                              structures..
                             Steam electric        4911 and 493..............  221111, 221112, 221113, 221119,
                              generating.                                       221121, 221122, 221111, 221112,
                                                                                221113, 221119, 221121, 221122.
                             Agricultural          0133......................  111991, 11193.
                              production.
                             Metal mining........  1011......................  21221.
                             Oil and gas           1311, 1321................  211111, 211112.
                              extraction
                              (Excluding offshore
                              and coastal
                              subcategories).
                             Mining and quarrying  1474......................  212391.
                              of nonmetallic
                              minerals.
                             Food and kindred      2046, 2061, 2062, 2063,     311221, 311311, 311312, 311313,
                              products.             2075, 2085.                 311222, 311225, 31214.
                             Tobacco products....  2141......................  312229, 31221.
                             Textile mill          2211......................  31321.
                              products.
                             Lumber and wood       2415, 2421, 2436, 2493....  321912, 321113, 321918, 321999,
                              products, except                                  321212, 321219.
                              furniture.
                             Paper and allied      2611, 2621, 2631, 2676....  3221, 322121, 32213, 322121,
                              products.                                         322122, 32213, 322291.
                             Chemical and allied   28 (except 2895, 2893,      325 (except 325182, 32591, 32551,
                              products.             2851, and 2879).            32532).
                             Petroleum refining    2911, 2999................  32411, 324199.
                              and related
                              industries.
                             Rubber and            3011, 3069................  326211, 31332, 326192, 326299.
                              miscellaneous
                              plastics products.
                             Stone, clay, glass,   3241......................  32731.
                              and concrete
                              products.
                             Primary metal         3312, 3313, 3315, 3316,     324199, 331111, 331112, 331492,
                              industries.           3317, 3334, 3339, 3353,     331222, 332618, 331221, 22121,
                                                    3363, 3365, 3366.           331312, 331419, 331315, 331521,
                                                                                331524, 331525.
                             Fabricated metal      3421, 3499................  332211, 337215, 332117, 332439,
                              products, except                                  33251, 332919, 339914, 332999.
                              machinery and
                              transportation
                              equipment.
                             Industrial and        3523, 3531................  333111, 332323, 332212, 333922,
                              commercial                                        22651, 333923, 33312.
                              machinery and
                              computer equipment.
                             Transportation        3724, 3743, 3764..........  336412, 333911, 33651, 336416.
                              equipment.
                             Measuring,            3861......................  333315, 325992.
                              analyzing, and
                              controlling
                              instruments;
                              photographic,
                              medical, and
                              optical goods;
                              watches and clocks.
                             Electric, gas, and    4911, 4931, 4939, 4961....  221111, 221112, 221113, 221119,
                              sanitary services.                                221121, 221122, 22121, 22133.
                             Educational services  8221......................  61131.
                             Engineering,          8731......................  54171.
                              accounting,
                              research,
                              management and
                              related services.
----------------------------------------------------------------------------------------------------------------

    To determine whether your facility could be regulated by this
action, you should carefully examine the applicability criteria in
Sec.  125.91 of the proposed rule. If you have questions regarding the
applicability of this action to a particular entity, consult the person
listed for technical information in the preceding FOR FURTHER
INFORMATION CONTACT section.

Supporting Documentation

1. Docket

    EPA has established an official public docket for this action under
Docket ID No. EPA-HQ-OW-2008-0667. The official public docket consists
of the documents specifically referenced in this action, any public
comments received, and other information related to this action.
Although a part of the official docket, the public docket does not
include information claimed as Confidential Business Information (CBI)
or other information the disclosure of which is restricted by statute.
For information on how to access materials in the docket, refer to the
preceding ADDRESSES section. To view docket materials, please call
ahead to schedule

an appointment. Every user is entitled to copy 266 pages per day before
incurring a charge. The Docket may charge 15 cents for each page over
the 266-page limit plus an administrative fee of $25.00.

2. Electronic Access

    You may access this Federal Register document and the docket
electronically, as well as submit public comments, through the Web site
http://www.regulations.gov by searching for Docket ID No. EPA-HQ-OW-
2008-0667. For additional information about the public docket, visit
the EPA Docket Center homepage at http://www.epa.gov/epahome/dockets.htm.

3. Technical Support Documents

    The proposed regulation is supported by three major documents:
    1. Economic and Benefits Analysis for the Proposed Section 316(b)
Existing Facilities Rule (EPA-821-R-11-003), hereafter referred to as
the Economic and Benefits Analysis (EBA or more simply EA). This
document presents the analysis of compliance costs, closures, energy
supply effects, and a summary of benefits associated with the proposed
rule.
    2. Environmental and Economic Benefits Analysis for the Proposed
Section 316(b) Existing Facilities Rule (EPA-821-R-11-002), hereafter
referred to as the Environmental and Economic Benefits Analysis (EEBA).
This document examines cooling water intake structure impacts and
regulatory benefits at the regional level.
    3. Technical Development Document for the Proposed Section 316(b)
Existing Facilities Rule (EPA-821-R-11-001), hereafter referred to as
the Technical Development Document (TDD). This document presents
detailed information on the methods used to develop unit costs and
describes the set of technologies that may be used to meet the proposed
rule requirements.

Table of Contents

I. Legal Authority, Purpose, and Background of Today's Proposed
Regulation
    A. Legal Authority
    B. Purpose of Today's Proposed Regulation
    C. Background
II. Proposed Amendments Related to the Phase I Rule
    A. Restoration Provisions Not Authorized
    B. Corrections to Subpart I
III. What new information has EPA obtained or developed in support
of this proposed rule?
    A. Additional Data
    B. Implementation Experience
    C. New or Revised Analyses
IV. Revised Industry Description
    A. Water Use in Power Production and Manufacturing
    B. Overview of Electric Generators
    C. Overview of Manufacturers
    D. Other Existing Facilities
V. Scope and Applicability of the Proposed Section 316(b) Existing
Facility Rule
    A. General Applicability
    B. What is an ``existing facility'' for purposes of the section
316(b) Phase II rule?
    C. What is ``cooling water'' and what is a ``cooling water
intake structure?''
    D. Would my facility be covered if it is a point source
discharger?
    E. Would my facility be covered if it withdraws water from
waters of the U.S.? What if my facility obtains cooling water from
an independent supplier?
    F. What intake flow thresholds result in an existing facility
being subject to this proposed rule?
    G. Offshore Oil and Gas Facilities, Seafood Processing Vessels
or LNG Import Terminals BTA Requirements Under This Proposed Rule
    H. What is a ``new unit'' and how are new units addressed under
this proposed rule?
VI. BTA Consideration
    A. EPA's Approach to BTA
    B. Technologies Considered To Minimize Impingement and
Entrainment
    C. Technology Basis for Today's Proposed Regulation
    D. Options Considered for Today's Proposed Regulation
    E. Option Selection
    F. Four Factors Support EPA's Decision To Establish Site-
Specific BTA Entrainment Controls for Existing Facilities
    G. The Process for Establishing Site-Specific BTA Entrainment
Controls
    H. Implementation
    I. EPA's Costing of the Preferred Option
    J. Consideration of Cost/Benefit on a Site-Specific Basis
VII. Economic Impact of the Proposed Rule
    A. Overview of Costs to Complying Facilities and Federal and
State Governments
    B. Development of Compliance Costs
    C. Social Cost of the Regulatory Options
    D. Economic Impact
VIII. Benefits Analysis
    A. Introduction
    B. Regional Study Design
    C. Physical Impacts of I&E Mortality
    D. National Benefits of Today's Considered Options
    E. Uncertainty and Limitations
IX. Implementation
    A. How would the proposed requirements be applied?
    B. When would affected facilities be required to comply?
    C. What are my requirements?
    D. What information must I submit in my permit application?
    E. When are application studies due?
    F. What are the monitoring requirements in today's proposal for
existing facilities?
    G. What reports would I be required to submit?
    H. What records would I be required to keep?
    I. Are there other federal statutes that could be incorporated
into a facility's permit?
    J. What is the director's role under today's proposal?
X. Related Acts of Congress, Executive Orders, and Agency
Initiatives
    A. Executive Order 12866: Regulatory Planning and Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act (RFA)
    D. Unfunded Mandates Reform Act (UMRA)
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination With
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children From
Environmental Health Risks and Safety Risks
    H. Executive Order 13211: Actions That Significantly Affect
Energy Supply, Distribution, or Use
    I. National Technology Transfer and Advancement Act
    J. Executive Order 12898: Federal Actions To Address
Environmental Justice in Minority Populations and Low-Income
Populations
    K. Executive Order 13158: Marine Protected Areas
XI. Solicitation of Data and Comments
    A. General Solicitation of Comment
    B. Specific Solicitation of Comments and Data

I. Legal Authority, Purpose, and Background of Today's Proposed
Regulation

A. Legal Authority

    Today's proposal is issued under the authority of sections 101,
301, 304, 308, 316, 401, 402, 501, and 510 of the Clean Water Act
(CWA), 33 U.S.C. 1251, 1311, 1314, 1318, 1326, 1341, 1342, 1361, and
1370.

B. Purpose of Today's Proposed Regulation

    The purpose of today's proposed rule is to propose national
requirements for cooling water intake structures at existing facilities
that implement section 316(b) of the CWA. Section 316(b) of the CWA
provides that any standard established pursuant to section 301 or 306
of the CWA and applicable to a point source must require that the
location, design, construction, and capacity of cooling water intake
structures reflect the best technology available (BTA) for minimizing
adverse environmental impact.
    EPA first promulgated regulations to implement section 316(b) in
1976. The U.S. Court of Appeals for the Fourth Circuit remanded these
regulations to EPA which withdrew them, leaving in place a provision
not remanded that directed permitting authorities to determine BTA for
each facility on a case-by-case basis. In 1995, EPA entered into a
consent decree establishing a schedule for taking final action on
regulations to implement section 316(b).

Pursuant to a schedule in the amended decree providing for final action
on regulations in three phases, in 2001, EPA published a Phase I rule
governing new facilities. The U.S. Court of Appeals for the Second
Circuit, while generally upholding the rule, rejected the provisions
allowing restoration to be used to meet the requirements of the rule.
Riverkeeper, Inc. v. U.S. EPA, 358 F. 3d 174, 181 (2d Cir.2004)
(``Riverkeeper I''). Today's proposed rule proposes to delete these
restoration provisions.
    In 2004, EPA published the Phase II rule applicable to existing
power plants with a design intake flow greater than or equal to 50 MGD.
Following challenge, the Second Circuit remanded numerous aspects of
the rule to the Agency, including the Agency's decision to reject
closed-cycle cooling as BTA. The Agency made this determination, in
part, based on a consideration of costs and benefits. The Second
Circuit concluded that a comparison of the costs and benefits of
closed-cycle cooling was not a proper factor to consider in determining
BTA. Riverkeeper, Inc. v. U.S.EPA, 475 F. 3d 83 (2d Cir. 2007)
(``Riverkeeper II''). In 2008, the U.S, Supreme Court agreed to review
the Riverkeeper II decision limited to a single issue: whether section
316(b) authorizes EPA to balance costs and benefits in 316(b)
rulemaking. In April 2009, in Entergy Corp. v. Riverkeeper Inc., 129 S.
Ct. 1498, 68 ERC 1001 (2009) (40 ER 770, 4/3/09), the Supreme Court
ruled that it is permissible under section 316(b) to consider costs and
benefits in determining the best technology available to minimize
adverse environmental impacts. The court left it to EPA's discretion to
decide whether and how to consider costs and benefits in 316(b)
actions, including rulemaking and BPJ determinations. The Supreme Court
remanded the rule to the Second Circuit. Subsequently, EPA asked the
Second Circuit to return the rule to the Agency for further review of
the rule.
    In 2006, EPA published the Phase III rule. The Phase III rule
establishes 316(b) requirements for certain new offshore oil and gas
extraction facilities. In addition, EPA determined that, in the case of
electric generators with a design intake flow of less than 50 MGD and
existing manufacturing facilities, 316(b) requirements should be
established by NPDES permit directors on a case-by-case basis using
their best professional judgment. In July 2010, the U. S. Court of
Appeals for the Fifth Circuit issued a decision upholding EPA's rule
for new offshore oil and gas extraction facilities. Further, the court
granted the request of EPA and environmental petitioners in the case to
remand the existing facility portion of the rule back to the Agency for
further rulemaking. See section C.2 below for a more detailed
discussion of the history of EPA's actions to address standards for
cooling water intake structures.
    In response to the remand in Phase II, the remand of the existing
facility portion of the Phase III rule, and the associated Supreme
Court decision, EPA is today proposing a number of requirements. Most
significantly, EPA is proposing requirements reflecting the best
technology available for minimizing adverse environmental impact,
applicable to the location, design, construction, and capacity of
cooling water intake structures for existing facilities. EPA is
treating existing power generating facilities and existing
manufacturing and industrial facilities in one proceeding. Today's
proposal applies to all existing power generating facilities and
existing manufacturing and industrial facilities that have a design
intake flow of at least two million gallons from waters of the United
States and use at least twenty-five (25) percent of the water they
withdraw exclusively for cooling purposes. In addition, EPA is today
also responding to the decision in Riverkeeper I and proposing minor
changes to the Phase I rule for new facilities. Specifically, EPA
proposes to remove from the Phase I rule the restoration-based
compliance alternative and the associated monitoring and demonstration
requirements.

C. Background

1. The Clean Water Act
    The Federal Water Pollution Control Act, also known as the Clean
Water Act (CWA), 33 U.S.C. 1251 et seq., seeks to restore and maintain
the chemical, physical, and biological integrity of the nation's
waters. 33 U.S.C. 1251(a). Among the goals of the Act is that wherever
attainable, an interim goal of water quality which provides for the
protection and propagation of fish, shellfish, and wildlife and
provides for recreation in and on the water. 33 U.S.C. 1251(a)(2).
    In furtherance of these objectives, the CWA establishes a
comprehensive regulatory program, key elements of which are (1) a
prohibition on the discharge of pollutants from point sources to waters
of the United States, except in compliance with the statute; (2)
authority for EPA or authorized States or Tribes to issue National
Pollutant Discharge Elimination System (NPDES) permits that authorize
and regulate the discharge of pollutants; and (3) requirements for
effluent limitations and other conditions in NPDES permits to implement
applicable technology-based effluent limitations guidelines and
standards and applicable State water quality standards.
    Section 402 of the CWA authorizes EPA (or an authorized State or
Tribe) to issue an NPDES permit to any person discharging any pollutant
or combination of pollutants from a point source into waters of the
United States. Forty-seven States and one U.S. territory are authorized
under section 402(b) to administer the NPDES permitting program. NPDES
permits restrict the types and amounts of pollutants, including heat,
that may be discharged from various industrial, commercial, and other
sources of wastewater. These permits control the discharge of
pollutants by requiring dischargers to meet technology-based effluent
limitations guidelines (ELGs) or new source performance standards
(NSPS) established pursuant to section 301 or section 306. Where such
nationally applicable ELGs or NSPS exist, permit authorities must
incorporate them into permit requirements. Where they do not exist,
permit authorities establish effluent limitations and conditions,
reflecting the appropriate level of control (depending on the type of
pollutant) based on the best professional judgment (BPJ) of the permit
writer. Limitations based on these guidelines, standards, or on best
professional judgment are known as technology-based effluent limits.
Where technology-based effluent limits are inadequate to meet
applicable State water quality standards, section 301(b)(1)(C) of the
Clean Water Act requires permits to include more stringent limits to
meet applicable water quality standards. NPDES permits also routinely
include standard conditions applicable to all permits, special
conditions, and monitoring and reporting requirements. In addition to
these requirements, NPDES permits must contain conditions to implement
the requirements of section 316(b).
    Section 510 of the Clean Water Act provides that, except as
provided in the Clean Water Act, nothing shall preclude or deny the
right of any State (or political subdivision thereof) to adopt or
enforce any requirement respecting control or abatement of pollution;
except that if a limitation, prohibition or standard of performance is
in effect under the Clean Water Act, such State may not adopt any other
limitation, prohibition, or standard of performance which is less
stringent than the limitation, prohibition, or standard of

performance under the Act. EPA interprets this to reserve for the
States authority to implement requirements that are more stringent than
the Federal requirements under state law. PUD No. 1 of Jefferson County
v. Washington Dep't of Ecology, 511 U.S. 700, 705 (1994).
    Sections 301, 304, and 306 of the CWA require that EPA develop
technology-based effluent limitations guidelines and new source
performance standards that are used as the basis for discharge
requirements in wastewater discharge permits. EPA develops these
effluent limitations guidelines and standards for categories of
industrial dischargers based on the pollutants of concern discharged by
the industry, the degree of control that can be attained using various
levels of pollution control technology, consideration of various
economic tests appropriate to each level of control, and other factors
identified in sections 304 and 306 of the CWA (such as non-water
quality environmental impacts including energy impacts). EPA has
promulgated regulations setting effluent limitations guidelines and
standards under sections 301, 304, and 306 of the CWA for more than 56
industries. See 40 CFR parts 405 through 471. EPA has established
effluent limitations guidelines and standards that apply to most of the
industry categories that use cooling water intake structures (e.g.,
steam electric power generation, paper and allied products, petroleum
refining, iron and steel manufacturing, and chemicals and allied
products).
    Section 316(b) states that any standard established pursuant to
section 301 or section 306 of [the Clean Water] Act and applicable to a
point source shall require that the location, design, construction, and
capacity of cooling water intake structures reflect the best technology
available for minimizing adverse environmental impact.
    Section 316(b) addresses the adverse environmental impact caused
specifically by the intake of cooling water, rather than discharges of
pollutants, including thermal discharges, into waters of the United
States. Despite this special focus, the requirements of section 316(b)
remain closely linked to several of the core elements of the NPDES
permit program established under section 402 of the CWA to control
discharges of pollutants into navigable waters. Thus, while effluent
limitations apply to the discharge of pollutants by NPDES-permitted
point sources to waters of the United States, section 316(b) applies to
facilities subject to NPDES requirements that also withdraw water from
a water of the United States for cooling and that use a cooling water
intake structure to do so.
    The CWA does not describe the factors to be considered in
establishing section 316(b) substantive performance requirements that
reflect the ``best technology available for minimizing adverse
environmental impact'' nor does it require that EPA develop nationally
applicable performance requirements through rule making. The most
recent guidance in interpreting 316(b) comes from the U.S. Supreme
Court's decision in Entergy Corp. v. Riverkeeper, Inc. As noted, the
decision was limited to the single question of whether Section 316(b)
of the Clean Water Act authorizes EPA to compare costs and benefits of
various technologies when setting national performance standards for
cooling water intake structures under Section 316(b) of the Clean Water
Act. In Riverkeeper II, the Second Circuit rejected EPA's determination
that closed-cycle cooling was not BTA because it could not determine
whether EPA had improperly considered costs and benefits in its 316(b)
rulemaking. The Supreme Court reversed and remanded the Second Circuit
ruling in a 6-3 opinion authored by Justice Scalia. The Court held that
it is reasonable for EPA to conduct a cost-benefit analysis in setting
national performance standards for cooling water intake structures
under Section 316(b). The Court held that EPA has the discretion to
consider costs and benefits under Section 316(b) but is not required to
consider costs and benefits. The Court's discussion of the language of
section 316(b)--section 316(b) is ``unencumbered by specified statutory
factors''--and its critique of the Second Circuit's decision affirms
EPA's broad discretion to consider a number of factors in standard
setting under section 316(b). While the Supreme Court's decision is
limited to whether or not EPA may consider one factor (cost/benefit
analysis) under section 316(b), the language also suggests that EPA has
wide discretion in considering other factors that it deems relevant to
316(b) standard setting. (``It is eminently reasonable to conclude that
Sec.  1326b's silence is meant to convey nothing more than a refusal to
tie the agency's hands as to whether cost-benefit analysis should be
used, and if so to what degree.'' 129 S.Ct. 1498, 1508 (2009).
    Regarding the other factors EPA may consider, section 316(b) cross
references sections 301 and 306 of the CWA by requiring that any
standards established pursuant to those sections also must require that
the location, design, construction and capacity of intake structures
reflect BTA. EPA has interpreted the cross reference as authorizing
consideration of the same factors considered under those provisions
Thus, for example, section 306 directs EPA to establish performance
standards for new sources based on the ``best available demonstrated
control technology'' (BADT). 33 U.S.C. 1316(a)(1). In establishing
BADT, EPA ``shall take into consideration the cost of achieving such
effluent reduction, and any non-water quality environmental impact and
energy requirements.'' 33 U.S.C. 1316(b)(2)(B). The specific cross-
reference in CWA section 316(b) to CWA section 306 ``is an invitation
to look to section 306 for guidance in discerning what factors Congress
intended the EPA to consider in determining the `best technology
available' '' for new sources. See Riverkeeper v. EPA, 358 F. 2d 174,
186 (2nd Cir. 2004).
    Similarly, Section 301 of the CWA requires EPA to establish
standards known as ``effluent limitations'' for existing point source
discharges in two phases. In the first phase, applicable to all
pollutants, EPA must establish effluent limitations based on the ``best
practicable control technology currently available'' (BPT). 33 U.S.C.
1311(b)(1)(A). In establishing BPT, the CWA directs EPA to consider the
total cost of application of technology in relation to the effluent
reduction benefits to be achieved from such application, and to also
take into account the age of the equipment and facilities involved, the
process employed, the engineering aspects of the application of various
types of control techniques, process changes, non-water quality
environmental impact (including energy requirements), and such other
factors as [EPA] deems appropriate. 33 U.S.C. 1314(b)(1)(b).
    In the second phase, EPA must establish effluent limitations for
conventional pollutants based on the ``best conventional pollution
control technology'' (BCT), and for toxic pollutants based on the
``best available technology economically achievable'' (BAT). 33 U.S.C.
1311(b)(2)(A), (E).
    In determining BCT, EPA must consider, among other factors, the
relationship between the costs of attaining a reduction in effluents
and the effluent reduction benefits derived, and the comparison of the
cost and level of reduction of such pollutants from the discharge from
publicly owned treatment works to the cost and level of reduction of
such pollutants from a class or category of industry source * * * and
the age of equipment and

facilities involved, the process employed, the engineering aspects * *
* of various types of control techniques, process changes, the cost of
achieving such effluent reduction, non-water quality environmental
impacts (including energy requirements), and such other factors as
[EPA] deems appropriate. 33 U.S.C. 1314(b)(4)(B).
    In determining BAT, the CWA directs EPA to consider ``the age of
equipment and facilities involved, the process employed, the
engineering aspects * * * of various types of control techniques,
process changes, the cost of achieving such effluent reduction, non-
water quality environmental impacts (including energy requirements),
and such other factors as [EPA] deems appropriate.'' 33 U.S.C.
1314(b)(2)(B).
    Section 316(b) expressly refers to section 301, and the phrase
``best technology available'' is very similar to the phrases ``best
available technology economically achievable'' and ``best practicable
control technology currently available'' in that section. Thus, section
316(b), section 301(b)(1)(A)--the BPT provision--and section
301(b)(1)(B)--the BAT provision--all include the terms ``best,''
``technology,'' and ``available,'' but neither BPT nor BAT goes on to
consider minimizing adverse environmental impacts, as BTA does. See 33
U.S.C. 1311(b)(1)(A) and (2)(A). These facts, coupled with the brevity
of section 316(b) itself, prompt EPA to look to section 301 and,
ultimately, section 304 for further guidance in determining the ``best
technology available to minimize adverse environmental impact'' of
cooling water intake structures for existing facilities.
    By the same token, however, there are significant differences
between section 316(b) and sections 301 and 304. See Riverkeeper, Inc.
v. United States Environmental Protection Agency (2nd Cir. Feb. 3,
2004) (``not every statutory directive contained [in sections 301 and
306] is applicable'' to a section 316(b) rulemaking). Moreover, as the
Supreme Court recognized, while the provisions governing the discharge
of toxic pollutants must require the elimination of discharges if
technically and economically achievable, section 316(b) has the less
ambitious goal of ``minimizing adverse environmental impact.'' 129
S.Ct. 1498, 1506. In contrast to the effluent limitations provisions,
the object of the ``best technology available'' is explicitly
articulated by reference to the receiving water: to minimize adverse
environmental impact in the waters from which cooling water is
withdrawn. This difference is reflected in EPA's past practices in
implementing sections 301, 304, and 316(b). EPA has established BAT
effluent limitations guidelines and NSPS based on the efficacy of one
or more technologies to reduce pollutants in wastewater in relation to
their costs without necessarily considering the impact on the receiving
waters. This contrasts to 316(b) requirements, where EPA has previously
considered the costs of technologies in relation to the benefits of
minimizing adverse environmental impact in establishing 316(b) limits,
which historically has been done on a case-by case basis. In Re Public
Service Co. of New Hampshire, 10 ERC 1257 (June 17, 1977); In Re Public
Service Co. of New Hampshire, 1 EBAD 455 (Aug. 4, 1978); Seacoast Anti-
Pollution League v. Costle, 597 F. 2d 306 (1st Cir. 1979). EPA
concluded that, because both section 301 and 306 are expressly cross-
referenced in section 316(b), EPA reasonably interpreted section 316(b)
as authorizing consideration of the same factors, including costs, as
in those sections. EPA interpreted ``best technology available'' to
mean the best technology available at an ``economically practicable''
cost. This approach squared with the limited legislative history of
section 316(b) which suggested the BTA was to be based on technology
whose costs were ``economically practicable.'' In debate on section
316(b), one legislator explained that ``[t]he reference here to `best
technology available' is intended to be interpreted to mean the best
technology available commercially at an economically practicable
cost.'' 118 Cong. Rec. 33,762 (1972) (statement of Rep. Clausen)
(emphasis added).
    For EPA's initial Phase II rulemaking, as it had during 30 years of
BPJ section 316(b) permitting, EPA therefore interpreted CWA section
316(b) as authorizing EPA to consider not only the costs of
technologies but also their effects on the water from which the cooling
water is withdrawn.
2. History of Actions To Address Cooling Water Intake Structures Under
the NPDES Program
a. 1976 Rulemaking
    In April 1976, EPA promulgated regulations under section 316(b)
that addressed cooling water intake structures. 41 FR 17387 (April 26,
1976), see also the proposed rule at 38 FR 34410 (December 13, 1973).
The rule added a new Sec.  401.14 to 40 CFR Chapter I that reiterated
the requirements of Clean Water Act section 316(b). It also added a new
part 402, which included three sections: (1) Section 402.10
(Applicability), (2) Sec.  402.11 (Specialized definitions), and (3)
Sec.  402.12 (Best technology available for cooling water intake
structures). Section 402.10 stated that the provisions of part 402
applied to ``cooling water intake structures for point sources for
which effluent limitations are established pursuant to section 301 or
standards of performance are established pursuant to section 306 of the
Act.'' Section 402.11 defined the terms ``cooling water intake
structure,'' ``location,'' ``design,'' ``construction,'' ``capacity,''
and ``Development Document.'' Section 402.12 included the following
language: The information contained in the Development Document shall
be considered in determining whether the location, design,
construction, and capacity of a cooling water intake structure of a
point source subject to standards established under section 301 or 306
reflect the best technology available for minimizing adverse
environmental impact.
    In 1977, fifty-eight electric utility companies challenged those
regulations, arguing that EPA had failed to comply with the
requirements of the Administrative Procedure Act (APA) in promulgating
the rule. Specifically, the utilities argued that EPA had neither
published the Development Document in the Federal Register nor properly
incorporated the document into the rule by reference. The U.S. Court of
Appeals for the Fourth Circuit agreed and, without reaching the merits
of the regulations themselves, remanded the rule. Appalachian Power Co.
v. Train, 566 F.2d 451 (4th Cir. 1977). EPA later withdrew part 402. 44
FR 32956 (June 7, 1979). The regulation at Sec.  401.14, which
reiterates the statutory requirement, remains in effect.
    Since the Fourth Circuit remanded EPA's section 316(b) regulations
in 1977, NPDES permit authorities have made decisions implementing
section 316(b) on a case-by-case, site-specific basis. EPA published
draft guidance addressing section 316(b) implementation in 1977. See
Draft Guidance for Evaluating the Adverse Impact of Cooling Water
Intake Structures on the Aquatic Environment: Section 316(b) Pub. L.
92-500 (U.S. EPA, 1977). This draft guidance described the studies
recommended for evaluating the impact of cooling water intake
structures on the aquatic environment and recommended a basis for
determining the best technology available for minimizing adverse
environmental impact. The 1977 section 316(b) draft guidance states,
``[t]he environmental-intake interactions in question are highly site-
specific and the decision as to best technology available for intake
design, location, construction, and capacity must be made on a case-

by-case basis.'' (Section 316(b) Draft Guidance, U.S. EPA, 1977, p. 4).
This case-by-case approach was also consistent with the approach
described in the 1976 Development Document referenced in the remanded
regulation. The 1977 section 316(b) draft guidance suggested a general
process for developing information needed to support section 316(b)
decisions and presenting that information to the permitting authority.
The process involved the development of a site specific study of the
environmental effects associated with each facility that uses one or
more cooling water intake structures, as well as consideration of that
study by the permitting authority in determining whether the facility
must make any changes for minimizing adverse environmental impact.
Under this framework, the Director determined whether appropriate
studies have been performed, whether a given facility has minimized
adverse environmental impact, and what, if any, technologies may be
required.
b. Phase I--New Facility Rule
    On November 9, 2001, EPA took final action on regulations governing
cooling water intake structures at new facilities. See 66 FR 65255
(December 18, 2001). On December 26, 2002, EPA made minor changes to
the Phase I regulations. 67 FR 78947. The final Phase I new facility
rule (40 CFR part 125, subpart I) establishes requirements applicable
to the location, design, construction, and capacity of cooling water
intake structures at new facilities that have a design capacity to
withdraw at least two million gallons per day (MGD) and use at least
twenty-five percent of the water they withdraw solely for cooling
purposes.
    In the new facility rule, EPA adopted a two-track approach. Under
Track I, for facilities that withdraw equal to or greater than 10 MGD,
the intake flow of the cooling water intake structure is restricted, at
a minimum, to a level commensurate with that which could be attained by
use of a closed-cycle, recirculating cooling system. For facilities
that withdraw greater than 2 MGD, the design through-screen intake
velocity is restricted to 0.5 feet per second and the total quantity of
intake is restricted to a proportion of the mean annual flow of a
freshwater river or stream, or to a level necessary to maintain the
natural thermal stratification or turnover patterns (where present) of
a lake or reservoir except in cases where the disruption is beneficial,
or to a percentage of the tidal excursions of a tidal river or estuary.
If certain environmental conditions exist, an applicant that withdraws
equal to or greater than 10 MGD must select and implement appropriate
design and construction technologies for further minimizing impingement
mortality and entrainment. Applicants with greater than 2 MGD but less
than 10 MGD flows are not required to reduce intake flow to a level
commensurate with a closed-cycle, recirculating cooling system, but
must still meet specific operational criteria.
    Under Track II, the applicant has the opportunity to demonstrate to
the Director that the technologies he employs will reduce the level of
adverse environmental impact to a comparable level to what would be
achieved by meeting the Track I requirements for restricting intake
flow and velocity. In making this demonstration, the regulations allow
an applicant to rely on a combination of measures in additional to
technology controls for reducing impingement and entrainment to achieve
results equivalent to the Track I intake flow and velocity
requirements. These include measures to restore the affected water body
such as restocking fish and improvement of the surrounding habitat to
offset the adverse effects that would otherwise be caused by the
operation of the intake structures. These restoration measures would
result in increases in fish and shellfish which, in combination with
any technologies employed, would result in a level of fish and
shellfish in the water body comparable to that which would result from
the reductions in impingement mortality and entrainment that would be
achieved under Track I. Note that restoration provisions are no longer
authorized (and EPA is proposing to delete them from the CFR in this
rule making), but they are included in this description of the Phase I
rule for completeness. See Chapter II of this preamble for more
information.
    In addition, under the Phase I rule, the Director (i.e., the
permitting authority) may establish less stringent alternative
requirements for a facility if compliance with the Phase I standards
would result in compliance costs wholly out of proportion to those EPA
considered in establishing the Phase I requirements or would result in
significant adverse impacts on local air quality, water resources, or
local energy markets.
    EPA specifically excluded new offshore oil and gas extraction
facilities from the Phase I new facility rule, but committed to
consider establishing requirements for such facilities in the Phase III
rulemaking. 66 FR 65338 (December 18, 2001).
c. Phase II--Large Flow Existing Power Plants
    On February 16, 2004, EPA took final action on regulations
governing cooling water intake structures at certain existing power
producing facilities. 69 FR 41576 (July 9, 2004). The final Phase II
rule applied to existing facilities that are point sources; that, as
their primary activity, both generate and transmit electric power or
generate electric power for sale or transmission; that use or propose
to use a cooling water intake structure with a total design intake flow
of 50 MGD or more to withdraw water from waters of the United States;
and that use at least 25 percent of the withdrawn water exclusively for
cooling purposes. In addition, power producers fitting the description
above were also subject to the final Phase II rule even if they obtain
their cooling water from one or more independent suppliers of cooling
water. Such facilities were subject to the rule if their supplier
withdraws water from waters of the U.S. even if the supplier was not
itself a Phase II existing facility. EPA included this provision to
prevent circumvention of the Phase II rule requirements by a facility
purchasing cooling water from entities not otherwise subject to Section
316(b).
    The final Phase II rule and preamble also clarified the definition
of an ``existing'' power producing facility. The Phase II rule defined
an ``existing facility'' as ``any facility that commenced construction
as described in Sec.  122.29(b)(4) on or before January 17, 2002; and
any modification of, or addition of a unit at such a facility that does
not meet the definition of a new facility at Sec.  125.83.'' Given that
the definition of the term ``existing facility'' was based in part on
the Phase I definition of the term ``new facility,'' the preamble to
the final Phase II rule also clarified and provided some examples of
how the definition of ``existing facility'' might apply to certain
changes at power producing facilities.
    Under the Phase II rule, EPA established BTA performance standards
for the reduction of impingement mortality and, under certain
circumstances, entrainment (see 69 FR 41590-41593). The performance
standards consisted of ranges of reductions in impingement mortality
and/or entrainment (e.g., reduce impingement mortality by 80 to 95
percent and/or entrainment by 60 to 90 percent) relative to a
``calculation baseline'' that reflected the level of impingement
mortality and entrainment that would occur absent specific controls.
These performance standards

were not based on a single technology but, rather, on consideration of
a combination of technologies that EPA determined were commercially
available and economically achievable for the industries affected as a
whole. (69 FR 41598-41610). EPA based the impingement mortality and
entrainment (I&E) performance standards on a combination of
technologies because it found no single technology to be most effective
at all affected facilities. For impingement standards, these
technologies included: (1) Fine and wide-mesh wedgewire screens, (2)
barrier nets, (3) modified screens and fish return systems, (4) fish
diversion systems, and (5) fine mesh traveling screens and fish return
systems. With regard to entrainment reduction, these technologies
include: (1) Aquatic filter barrier systems, (2) fine mesh wedgewire
screens, and (3) fine mesh traveling screens with fish return systems.
Because EPA based the performance standards on a combination of
technologies and because of the uncertainty inherent in predicting the
efficacy of one or more of these technologies as applied to different
Phase II facilities, EPA promulgated these standards as ranges.
Furthermore, because the site-specific performance was based on a
comparison to a once-through system without any specific controls on
the shoreline near the source waterbody (i.e., calculation baseline,
see section III.A.2 for more details), the rule also allowed facilities
to receive credit towards meeting the performance standards for I&E
reduction associated with alternate locations of their intakes (eg,
deep water where fish and shellfish were less abundant).
    The types of performance standard applicable to a particular
facility (i.e., reductions in impingement mortality only or impingement
mortality and entrainment) were based on several factors, including the
facility's location (i.e., source waterbody), rate of use (capacity
utilization rate), and the proportion of the waterbody withdrawn.
    The Phase II rule identified five compliance alternatives to meet
the performance standards. A facility could demonstrate to the Director
one of the following: (1) That it has already reduced its flow
commensurate with a closed-cycle recirculating system (to meet both
impingement mortality and entrainment), or that it has already reduced
its maximum through-screen velocity to 0.5 feet per second or less (to
meet the impingement performance standard only); (2) that its current
cooling water intake structure configuration meets the applicable
performance standards; (3) that it has selected design and construction
technologies, operational measures, and/or restoration measures that,
in combination with any existing design and construction technologies,
operational measures, and/or restoration measures, meet the applicable
performance standards; (4) that it meets the applicability criteria and
has installed and is properly operating and maintaining a rule-
specified and/or approved State-specified design and construction
technology (i.e., submerged cylindrical wedgewire screens) in
accordance with Sec.  125.99(a) or an alternative technology that meets
the appropriate performance standards and is approved by the Director
in accordance with Sec.  125.99(b); or (5) that its costs of compliance
would be significantly greater either than the costs considered by the
Administrator for a like facility to meet the applicable performance
standards, or than the benefits of meeting the applicable performance
standards at the facility. Under the cost-cost comparison alternative,
a Director could determine that the cost of compliance for a particular
facility would be significantly greater than the costs considered by
EPA in establishing the applicable impingement mortality and
entrainment reduction performance standards. Similarly, under the cost-
benefit comparison alternative, a Director could determine that the
cost of compliance for a particular facility would be significantly
greater than the benefits of complying with the applicable performance
standards. In the event of either of these determinations, the Director
would have to make a site-specific determination of BTA for minimizing
adverse environmental impact that came as close as possible to meeting
the applicable performance standards at a cost that did not
significantly exceed either the costs EPA considered in establishing
these standards or the site-specific benefits of meeting these
standards.
    The final Phase II rule also provided that a facility that chooses
specified compliance alternatives might request that compliance with
the requirements of the rule be determined based on the implementation
of a Technology Installation and Operation Plan (TIOP) that would
indicate how the facility would install and ensure the efficacy, to the
extent practicable, of design and construction technologies, and/or
operational measures, and/or a Restoration Plan. The rule also
established requirements for the development and submittal of a TIOP
(Sec.  125.95(b)(4)(ii)) as well as provisions that specified how
compliance could be determined based on implementation of a TIOP (Sec.
125.94(d)). Under these provisions, a TIOP could be requested in the
first permit term and continued use of a TIOP could be requested where
a facility was in compliance with such plan and/or its Restoration
Plan.
d. Phase III Rulemaking--Low Flow Existing Power Plants, Existing
Manufacturing Facilities, and New Offshore Oil and Gas Facilities
    On June 16, 2006, EPA published a final Phase III rule that
established categorical regulations for new offshore oil and gas
extraction facilities that have a design intake flow threshold of
greater than 2 MGD and that withdraw at least 25 percent of the water
exclusively for cooling purposes. For most such facilities, the rule
establishes requirements virtually identical to the requirements
applicable to new facilities in the Phase I rule. In the Phase III
rule, EPA declined to establish national standards for Phase III
existing facilities. Instead it concluded that CWA section 316(b)
requirements for electric generators with a design intake flow of less
than 50 MGD and all existing manufacturing facilities would continue to
be established on a case-by-case basis under the NPDES permit program
using best professional judgment. (71 FR 35006).
3. Rulings by the U.S. Court of Appeals for the Second Circuit
    Both the Phase I and Phase II 316(b) rules were challenged in the
U.S. Court of Appeals for the Second Circuit. Key aspects of each of
these decisions are discussed below.
a. Phase I Rule
    Various environmental and industry groups challenged the Phase I
316(b) rule. In February 2004, the Second Circuit sustained the entire
rule except for the restoration provision, ruling that restoration was
not a technology as provided for in 316(b). With respect to the other
provisions of the rule, the Court concluded the Phase I rule was based
on a reasonable interpretation of the applicable statute and
sufficiently supported by the record. Restoration provisions of the
rule were remanded to EPA for further rulemaking consistent with the
Court's decision. Riverkeeper, Inc. v. EPA, 358 F.3d 174, 191 (2nd
Cir., 2004). Today's proposal rule would remove the restoration
provisions from the Phase I rule. See Chapter II of this preamble for
more details.

b. Phase II Rule
    Industry, environmental stakeholders, and some States \1\
challenged many aspects of the Phase II regulations. On January 25,
2007, the Second Circuit (Riverkeeper, Inc. v. EPA, 475 F.3d 83, (2d
Cir., 2007)) upheld several provisions of the Phase II rule and
decision and remanded others to EPA for further rulemaking.
---------------------------------------------------------------------------

    \1\ Rhode Island, Connecticut, Delaware, Massachusetts, New
Jersey, and New York.
---------------------------------------------------------------------------

    As noted above, for the final rule EPA rejected closed-cycle
cooling as BTA. Instead, EPA selected a suite of technologies to
reflect BTA, including e.g., screens, aquatic filter barriers, and
barrier nets. Based on the chosen technologies, EPA established
national performance standards for reducing impingement mortality and
entrainment of fish and fish organisms but did not require the use of
any specific technology. Among the aspects of the rule the Second
Circuit remanded for further clarification was EPA's decision to reject
closed-cycle cooling as BTA and EPA's determination of performance
ranges as BTA. In addition, the Second Circuit found that, consistent
with its Phase I decision, restoration was not a technology for BTA,
and that EPA's cost-benefit site-specific compliance alternative was
not in accord with the Clean Water Act. There are also several issues
for which the court requested additional clarification, and some
instances where the court determined that EPA had failed to provide
adequate notice and opportunity to comment on certain provisions of the
rule.
4. EPA Suspension of the Phase II Rule
    As a result of the decision of the Second Circuit Court of Appeals
in Riverkeeper, Inc. v. EPA, 475 F.3d 83, (2d Cir., 2007), EPA, on July
9, 2007 (72 FR 37107) suspended the requirements for cooling water
intake structures at Phase II existing facilities, pending further
rulemaking. Specifically, EPA suspended the provisions in Sec.
122.21(r)(1)(ii) and (5), and part 125 Subpart J, with the exception of
Sec. 125.90(b). EPA explained that suspending the Phase II requirements
was an appropriate response to the Second Circuit's decision, and that
such action would allow it to consider how to respond to the remand. In
addition, suspending the Phase II rule was responsive to the concerns
of the regulated community and permitting agencies, both of whom sought
guidance regarding how to proceed in light of the approaching deadline
of the remanded rule. EPA's suspension clarified that pending further
rulemaking, permit requirements for cooling water intake structures at
Phase II facilities should be established on a case-by-case, best
professional judgment (BPJ) basis (see 125.90(b)).
5. Ruling by the U.S. Supreme Court
    Following the Phase II decision in the Second Circuit, several
industry group litigants petitioned the U.S. Supreme Court to hear an
appeal regarding several issues in the case. Entergy Corp. et al. v.
EPA, S. Ct. No. 07-588, et al. On April 14, 2008, the Supreme Court
granted the petitions for writs of certiorari submitted by these Phase
II litigants, but limited its review to the issue of whether section
316(b) authorizes EPA to compare costs with benefits in determining BTA
for cooling water intake structures. The Supreme Court held oral
arguments in this case on December 2, 2008, and issued a decision on
April 1, 2009. The Supreme Court held that it is permissible for EPA to
rely on cost-benefit analysis in decision making for setting the Phase
II national performance standards, and in providing for cost-benefit
variances from those standards as part of the Phase II regulations. The
Court indicated that the phrase ``best technology available for
minimizing adverse environmental impact'' does not unambiguously
preclude use of cost-benefit analysis in decision making. The ruling
supports EPA's discretion to consider costs and benefits, but imposes
no obligation on the agency to do so.
6. Ruling by the U.S. Court of Appeals for the Fifth Circuit
    In 2009, EPA petitioned the Fifth Circuit to remand the existing
facility portion of the Phase III rule. Specifically, EPA requested
remand of those provisions in the Phase III rule that establish 316(b)
requirements at electric generators with a design intake flow of less
than 50 MGD, and at existing manufacturing facilities, on a case-by-
case basis using best professional judgment. This request did not
affect the Phase III rule requirements that establish categorical
regulations for new offshore oil and gas extraction facilities that
have a design intake flow threshold of greater than 2 MGD and that
withdraw at least 25 percent of the water exclusively for cooling
purposes.
    On July 23, 2010, the U. S. Court of Appeals for the Fifth Circuit
issued a decision regarding the Phase III rule. The Court granted EPA's
motion to remand the rule with respect to existing facilities. In
addition, the Fifth Circuit affirmed the portion of the rule that
regulated cooling water intake structures for new offshore oil and gas
facilities. In sustaining these requirements, the Fifth Circuit upheld
EPA's decision not to use cost benefit balancing in determining the
requirements for these new facilities. This was in accord with the
discretion afforded by 316(b) and affirmed by the Supreme Court, namely
that EPA properly interpreted section 316(b) as authorizing, but not
requiring, the Agency to consider costs and benefits in its decision
making.
7. Settlement of Litigation in U.S. District Courts
    On January 19, 1993, a group of individuals and environmental
organizations \2\ filed, under section 505(a)(2) of the CWA, 33 U.S.C.
1365(a)(2), a complaint in Cronin, et. al. v. Reilly, 93 Civ. 314
(LTS)(S.D.N.Y.). The plaintiffs alleged that EPA had failed to perform
a non-discretionary duty to issue regulations implementing section
316(b) of the CWA, 33 U.S.C. 1326(b). In 1995, EPA and the plaintiffs
executed a consent decree in the case that provided for EPA to
implement section 316(b) of the CWA by prescribed dates in the three
separate rulemaking proceedings described above. In late 2002, the
district court entered an amended consent decree that modified the
schedule for the Phase II and Phase III rulemakings for existing
facilities.
---------------------------------------------------------------------------

    \2\ There are the following plaintiffs currently: Riverkeeper,
Inc.; Alex Matthiessen, a/k/a The Hudson Riverkeeper; Maya K. Van
Rossum, a/k/a The Delaware Riverkeeper; Terrance E. Backer, a/k/a
The Soundkeeper; John Torgan, a/k/a The Narragansett BayKeeper;
Joseph E. Payne, a/k/a The Casco BayKeeper; Leo O'Brien, a/k/a the
San Francisco BayKeeper; Sue Joerger, a/k/a The Puget Soundkeeper;
Steven E. Fleischli, a/k/a The Santa Monica BayKeeper; Andrew
Willner, a/k/a The New York/New Jersey Baykeeper; The Long Island
Soundkeeper Fund, Inc.; The New York Coastal Fishermen's
Association, Inc.; and The American Littoral Society, Inc.
---------------------------------------------------------------------------

    On November 17, 2006, some of the same environmental organizations
in the Cronin case filed a second complaint, amended on January 19,
2007, in Riverkeeper, et al. v. EPA, 06 Civ. 12987 (S.D.N.Y.). Here,
the plaintiffs alleged that EPA failed to perform a non-discretionary
duty under section 316(b) of the CWA in its final regulation covering
the Phase III facilities, and also had violated sections 706(2)(A) and
706(2)(C) of the Administrative Procedure Act (APA) in the manner in
which it had made that decision.
    Earlier, the same plaintiffs had also petitioned for review of the
Phase III rule in the U.S. Court of Appeals for the Second Circuit.
This and other petitions for review were consolidated for hearing

in the U.S. Court of Appeals for the Fifth Circuit. Conoco Phillips v.
EPA (5th Cir. No. 06-60662). Following the Supreme Court decision in
Entergy, EPA, Riverkeeper and others requested remand of the regulation
to allow EPA to reconsider its decisions regarding Phase III facilities
in light of more recent technical information and recent court
decisions. As noted above, on July 23, 2010, the Fifth Circuit granted
the joint motion of EPA and environmental petitioners for a voluntary
remand. On September 3, 2010, one of the industry petitioners filed a
petition asking the Fifth Circuit panel to rehear its grant of the
motion to remand.
    On August 14, 2008, EPA filed a motion to terminate the Cronin
proceeding because it had discharged its obligations (``to take final
action'') under the decree with respect to the Phase II and III
rulemakings. The plaintiffs in Cronin asserted that EPA had not
discharged its obligations under the second amended decree because the
Second Circuit remanded core provisions of the 316(b) rule for existing
power plants to EPA, and EPA had suspended the Phase II rule. In the
Riverkeeper proceeding, on February 7, 2007, EPA moved to dismiss
arguing that the district court lacked jurisdiction to hear the
challenge to the Phase III rule.
    EPA entered into a settlement with the plaintiffs in both lawsuits.
Under the settlement agreement, EPA agreed to sign a notice of a
proposed rulemaking implementing section 316(b) of the CWA at existing
facilities no later than March 14, 2011 and to sign a notice taking
final action on the proposed rule no later than July 27, 2012.
Plaintiffs agreed to seek dismissal of both their suits, subject to a
request to reopen the Cronin proceeding in the event EPA failed to meet
the agreed deadlines. The district courts have now entered orders of
dismissal. On March 11, 2011, the parties agreed to an amendment to the
settlement agreement to extend the date for proposal to March 28, 2011.

II. Proposed Amendments Related to the Phase I Rule

    EPA is proposing several limited changes to the Phase I rule at 40
CFR subpart I. The changes fall into two categories. The first is
deletion of the provision in the rule that would allow a facility to
demonstrate compliance with the Phase I BTA requirements in whole or in
part through restoration measures. The proposed change responds to the
decision of the U.S. Court of Appeals for the Second Circuit which
remanded these provisions to EPA because it concluded the statute did
not authorize restoration measures to comply with section 316(b)
requirements. The second category of changes reflects technical
corrections or errors that do not change the substance of the current
Phase I rule. EPA is not reopening any other aspects of the Phase I
rule other than the provisions specifically noted here.

A. Restoration Provisions Not Authorized

    As discussed above in Section I.C.2, the Phase I final rule
established two compliance tracks. Track I requires facilities to
restrict intake flow and velocity. Track II gives a facility the option
of demonstrating to the Director that the control measures it employs
will reduce the level of adverse environmental impact to a comparable
level to what would be achieved by meeting the Track I requirements. As
part of this demonstration, Track II allows a facility to make use of
restoration measures. The Comprehensive Demonstration Study allowed a
quantitative or qualitative demonstration that restoration measures
would meet, in whole or in part, the performance levels of Track I.
Similarly, the Verification Monitoring Plan could be tailored to verify
that the restoration measures would maintain the fish and shellfish in
the waterbody at a substantially similar level to that which would be
achieved under Track I. See 65 FR 65280-65281.
    As discussed in Section I.C.3, the Second Circuit concluded that
EPA exceeded its authority by allowing new facilities to comply with
section 316(b) through restoration measures, and remanded that aspect
of the rule to EPA. The Supreme Court did not grant the petitions for
writs of certiorari concerning restoration provisions. Thus in EPA's
view the Agency is bound by the Second Circuit decision. Today's
proposed rule proposes to amend Phase I to remove those provisions in
Sec.  125.84(d) and 125.89(b)(1)(ii) authorizing restoration measures.
This proposed rule also specifically proposes deletion of application
requirements contained in the Comprehensive Demonstration Study at
Sec.  125.86(c)(2)(ii); evaluation of proposed restoration measures at
125.86(c)(2)(iv)(C); and verification monitoring requirements at
125.86(c)(2)(iv)(D)(2)) that are specific to restoration. EPA
acknowledges these changes may reduce the alternatives available to
some Phase I facilities. However, EPA notes that the deletion of
restoration measures does not otherwise alter the availability of Track
II. In any event, EPA's determination of BTA for Phase I did not
presume reliance on the restoration provisions, and the deletion of
restoration measures in no way alters the Agency's BTA determination
for Phase I facilities.

B. Corrections to Subpart I

    Today's proposed rule proposes to change the applicability
statement at 125.81(a)(3) to match the applicability of the technical
requirements at 125.84 and application requirements at 125.86. The
applicability in all three instances should specify design intake flow
or withdrawals ``greater'' than the specified value of 2 MGD. See Basis
for the Final Regulation at 66 FR 65270.
    Today's proposed rule also proposes a correction to the source
waterbody flow information submission requirements. Track I
requirements at 125.84(b)(3) apply to new facilities that withdraw
equal to or greater than 10 MGD. Track I requirements at 125.84(c)(2)
apply to facilities that withdraw less than 10 MGD. The source
waterbody flow information under 125.86(b)(3) requires a facility to
demonstrate it has met the flow requirements of both 125.84(b)(3)
``and'' 125.84(c)(2). However, a facility cannot be subject to both
125.84(b)(3) and 125.84(c)(2) at the same time. Accordingly, the word
``and'' should read as ``or'' in 125.86(b)(3).
    In addition, today's proposed rule proposes corrections to the
application requirement for the Source Water Biological
Characterization at 122.21(r)(4). Accordingly, references to the Source
Water Biological Characterization should read as (r)(4). However, the
references to the Source Water Biological Characterization at
125.86(b)(4)(iii), at 125.87(a), and at 125.87(a)(2) incorrectly refer
to 122.21(r)(3) and are thus being corrected.

III. What New Information Has EPA Obtained or Developed in Support of
This Proposed Rule?

    In developing the Phase I, Phase II, and Phase III rules, EPA
collected and analyzed a substantial amount of information regarding
cooling water intake structures, their biological impacts, available
technologies to reduce those impacts, and other relevant subjects. EPA
considered a sizable volume of material submitted during previous
public comment periods, as well as additional data from stakeholders,
industry groups, technology vendors, and environmental organizations
since those comment periods. Many of the materials are summarized or
discussed in the preambles to these regulations or in the
administrative record for these rules

(see, e.g., docket numbers W-00-03, OW-2002-0049, and EPA-OW-2004-
0002). Today's proposal is based on data and information contained in
the records supporting the Phase I, Phase II, and Phase III
rulemakings, as well as new information. This section summarizes new
data collected since the promulgation of the Phase III rule in June
2006; it will not review or summarize previous data collection efforts
except to frame discussions about the new data. For information on
EPA's historic data collection efforts, refer to the preambles and
records for the three rules (see, e.g., 65 FR 49070, 66 FR 28854, 68 FR
17131, 68 FR 13524, 69 FR 41593, 69 FR 68457, and 70 FR 71059).

A. Additional Data

    EPA has supplemented the existing documents with additional
information as summarized below.
1. Site Visits
    As documented in the suspended 2004 Phase II rule, EPA conducted
site visits to 22 power plants in developing the 2004 rule. See 67 FR
17134. Since 2007, EPA has conducted over 50 site visits to power
plants and manufacturing sites. The purpose of these additional visits
was to: Gather information on the intake technologies and cooling water
systems in place at a wide variety of existing facilities; better
understand how the site-specific characteristics of each facility
affect the selection and performance of these systems; gather
performance data for technologies and affected biological resources;
and solicit perspectives from industry representatives. EPA used a
number of criteria in selecting the sites to visit, including those
sites representing a variety of geographical locations and different
types of intakes, and sites that already had an impingement or
entrainment technology in place for which the facility had collected
performance data. EPA also asked trade associations to recommend sites
facing unique circumstances that may affect the adoption of certain
control technologies. EPA also collected information on 7 additional
facilities that staff did not physically visit; usually, these were
other facilities owned by the parent company of a site visited by EPA.
EPA also held conference calls or met with representatives of other
sites at EPA's Washington, DC location.
    Copies of the site visit reports (which provide an overall facility
description as well as detailed information such as electricity
generation, the facility's cooling water intake structure and
associated fish protection and/or flow reduction technologies,
impingement and/or entrainment sampling and associated data, and a
discussion of the possible application of cooling towers) for each site
are provided in the docket for the proposed rule. In addition, in
response to stakeholder inquiries, EPA made these site reports publicly
available well before publication of the proposed rule. A list of the
facilities visited by EPA is provided in the TDD.
2. Data Provided to EPA by Industrial, Trade, Consulting, Scientific or
Environmental Organizations or by the General Public
    EPA has continued to exchange information with various stakeholders
in the development of today's proposal. EPA met several times with
Electric Power Research Institute (EPRI), Edison Electric Institute,
Nuclear Energy Institute, and Utility Water Act Group, along with other
representatives from facilities and affected industries on topics
including the latest advancements in fish protection technologies,
permit experience, and the feasibility and cost of installing
technologies at certain types of facilities.
    In 2010, the North American Electric Reliability Corporation (NERC)
issued a reliability study and found potentially substantial
reliability effects under a 316(b) rule scenario that would require
closed-cycle cooling of all large power plants. See Potential Resource
Adequacy Impacts of U.S. Environmental Regulations. October 2010. The
scenario assumes all existing steam units with a capacity utilization
factor of less than 35% would close,\3\ and assumes all in-scope
electric generators would be required to install cooling towers within
a 5-year window. While the report's focus was on energy reliability and
reflects a regulatory scenario that is not directly comparable to any
of the options explored for today's proposed rule, the report
nevertheless serves as a useful upper bound estimate of (1) the
potential for premature generating unit retirements to avoid the costs
of retrofitting existing cooling water intake systems and (2) increased
power needs as a result of a capacity derating (i.e., the energy
penalty \4\).
---------------------------------------------------------------------------

    \3\ IPM analyses do not predict all units with capacity
utilization rates of less than 35% would close as a result of a
closed-cycle cooling retrofit. Thus the total loss in capacity under
EPA's Option 2 would be 14,418 MW or 1.3% of existing capacity.
    \4\ The report assumes the total energy penalty of 4 percent is
a constant; EPA believes the energy penalty is reduced over time as
units replace, repower, or make other modifications such as
condenser replacement that would eliminate the turbine backpressure.
---------------------------------------------------------------------------

    The Edison Electric Institute published a study of the combined
impact of EPA's upcoming air, water (316(b)), and solid waste
rulemakings on the coal fired fleet of power plants. See Potential
Impacts of Environmental Regulation on the U.S. Generation Fleet Final
Report. January 2011. As with the NERC study, conservative assumptions
were made about EPA rules yet to be proposed or promulgated. The report
summarizes reductions in capacity, but does not distinguish how much of
that capacity was unused in the baseline scenario. Conservative costing
assumptions such as 21 percent higher average costs,\5\ and application
of full retrofit costs to new capacity (instead of incremental costs
for installing required technology at new construction) gives results
that are not comparable to any of the options explored for today's
proposed rule. While this study analyzed multiple scenarios, each
scenario combines the effects of multiple rules so that the impact of
the section 316(b) rule alone could not be determined. Even so, the
report provides useful insight on the potential impact of multiple
rulemakings if each EPA rule was promulgated at the level of stringency
assumed in the study.
---------------------------------------------------------------------------

    \5\ EPRI's site-specific evaluation of 82 facilities provides an
average capital cost of $275 per GPM, but the EEI report uses $319
per GPM.
---------------------------------------------------------------------------

    EPA met with Riverkeeper and other environmental groups to discuss
the progress of the revisions to the rule, advances in fish protection
technologies, state programs, environmental issues associated with
cooling water withdrawals, and the feasibility of closed-cycle cooling.
Through these interactions, EPA has received additional data and
information including, but not limited to: Efficacy data, operating
information, cost information, feasibility studies, environmental
impacts, and non-water quality related impact information for various
candidate BTA technologies.
3. Other Resources
    EPA also collected information on cooling water intake structure-
related topics from a variety of other sources, such as state and
international policies. For example, the California Office of
Administrative Law approved the ``Policy on the Use of Coastal and
Estuarine Waters for Power Plant Cooling'' on September 27, 2010, which
requires that all coastal power plants reduce their intake flow to a
level commensurate with closed-cycle cooling. The Delaware state
legislature passed a resolution that urges the Delaware Department of
Natural

Resources and Environmental Control (DNREC) to consider closed-cycle
cooling as BTA and to require closed-cycle cooling at all facilities.
The New York Department of Environmental Conservation (DEC) released a
draft policy in March 2010 that would require flow reduction equivalent
to closed-cycle cooling at all existing facilities that withdraw more
than 20 MGD as part of the state's plan to restore the Hudson River.
Additional examples of state programs are discussed further in the TDD.
    In addition to state-wide cooling water policies, some recent
individual NPDES permits have incorporated requirements for significant
reductions in cooling water flow. For example, EPA Region I (which
develops NPDES permits for several non-delegated New England states)
issued a final NPDES permit in October 2003 that required Brayton Point
in Somerset, Massachusetts to reduce cooling water intake flow and
thermal discharges approximately 95 percent.\6\ Brayton is currently
constructing two natural draft cooling towers at the facility. New
Jersey, as part of its policy for protecting marine life from the
adverse impacts created by power plants, issued a draft permit for
Oyster Creek that would require closed-cycle cooling, and is studying
closed-cycle cooling for two units at Salem Generating Station. Other
examples are documented in site visit reports found in the record for
today's proposed action.
---------------------------------------------------------------------------

    \6\ See http://www.epa.gov/ne/braytonpoint/index.html.
---------------------------------------------------------------------------

    Electric generators are the subject of several rulemaking efforts
that either are or will soon be underway. In addition to this
rulemaking proposal, this includes regulation under section
110(a)(2)(D) of the Clean Air Act (CAA) addressing the interstate
transport of emissions contributing to ozone and PM air quality
problems, coal combustion wastes, hazardous air pollutants under CAA
section 112, and criteria pollutant NSPS standards under CAA section
111. They will also soon be the subject of a rulemaking under CAA
section 111 concerning emissions of greenhouse gases. EPA recognizes
that it is important that each and all of these efforts achieve their
intended environmental objectives in a common-sense manner that allows
the industry to comply with its obligations under these rules as
efficiently as possible and to do so by making coordinated investment
decisions and, to the greatest extent possible, by adopting integrated
compliance strategies. In addition, EO 13563 states that ``[i]n
developing regulatory actions and identifying appropriate approaches,
each agency shall attempt to promote such coordination, simplification,
and harmonization. Each agency shall also seek to identify, as
appropriate, means to achieve regulatory goals that are designed to
promote innovation.'' Thus, EPA recognizes that it needs to approach
these rulemakings, to the extent that its legal obligations permit, in
ways that allow the industry to make practical investment decisions
that minimize costs in complying with all of the final rules, while
still achieving the fundamentally important environmental and public
health benefits that the rulemakings must achieve. The Agency expects
to have ample latitude to set requirements and guidelines in ways that
can support the states' and industry's efforts in pursuing practical,
cost-effective and coordinated compliance strategies encompassing a
broad suite of its pollution-control obligations.

B. Implementation Experience

    Following promulgation of the 2004 Phase II rule, states and EPA
Regions began to implement the rule. During that time, EPA worked to
assist states in understanding the rule requirements, develop guidance
materials, and support review of the documentation of the new
requirements. As a result, EPA became aware of certain elements of the
2004 rule that were particularly challenging or time-consuming to
implement. In developing today's proposed rule, EPA has considered
these challenges and crafted a revised regulatory framework that the
Agency believes is easier for all stakeholders to understand and
implement. Some of the key changes are described below.
1. Calculation Baseline
    The 2004 Phase II rule required that facilities reduce impingement
mortality and entrainment from the calculation baseline. The
calculation baseline was intended to represent a ``typical'' Phase II
facility and outlined a configuration for a typical CWIS. (See 69 FR
41590.) EPA defined the calculation baseline as follows:

an estimate of impingement mortality and entrainment that would
occur at your site assuming that: the cooling water system has been
designed as a once-through system; the opening of the cooling water
intake structure is located at, and the face of the standard \3/8\
inch mesh traveling screen is oriented parallel to, the shoreline
near the surface of the source waterbody; and the baseline
practices, procedures, and structural configuration are those that
[a] facility would maintain in the absence of any structural or
operational controls, including flow or velocity reductions,
implemented in whole or in part for the purposes or reducing
impingement mortality and entrainment.

    Under this approach, a facility that had undertaken efforts to
reduce impingement and entrainment impacts (e.g., by installing a fine
mesh screen or reducing intake flow) would be able to ``take credit''
for its past efforts and only be required to incrementally reduce
impingement mortality or entrainment to meet the performance standards.
    In practice, both permittees and regulatory agencies encountered
difficulty with the calculation baseline, specifically how a facility
should determine what the baseline represented and how a particular
facility's site-specific configuration or operations compared to the
calculation baseline. For facilities whose site configuration conforms
to the calculation baseline, it was relatively easy to determine
impingement mortality and entrainment at the conditions representing
the calculation baseline. However, for facilities that have a different
configuration, estimating a hypothetical calculation baseline could be
difficult. For example, facilities with intake configuration that
differed significantly from the calculation baseline (e.g., a submerged
offshore intake) were unsure as to how to translate their biological
and technological data to represent the calculation baseline (a
shoreline CWIS). Oftentimes facilities encountered difficulty in
determining the appropriate location for monitoring to take place.
Other facilities were unsure as to how to take credit for retired
generating units and other flow reductions practices. In site visits,
EPA learned that facilities with little or no historical biological
data encountered a particularly difficult and time-intensive task of
collecting appropriate data and developing the calculation baseline.
For example, EPA found that for some sites impingement was very
difficult to convert into a baseline, as facilities needed to predict
which fish would be impinged and then further estimate which of those
impinged organisms survived. As a result, EPA has developed a new
approach to the technology-based requirements proposed today that does
not use a calculation baseline.
2. Entrainment Exclusion Versus Entrainment Survival
    As EPA worked towards revising the existing facility rules, EPA
discovered a nuance to the performance based requirements of the 2004
Phase II rule: Entrainment exclusion versus entrainment survival. As
discussed in section III.C below, EPA re-reviewed the

data on the performance of intake technologies and conducted
statistical analysis of the data. From this analysis, it became
apparent that the 2004 Phase II rule did not fully consider the true
performance of intake technologies in affecting ``entrainable''
organisms.
    By definition, entrainment is the incorporation of aquatic
organisms into the intake flow, which passes through the facility and
is then discharged. In order to pass through the technologies located
at the CWIS (e.g., intake screens, nets, etc.), the organisms must be
smaller than the smallest mesh size.\7\ For coarse mesh screens (3/8''
mesh size), most ``entrainables'' simply pass through the mesh (and
through the facility) with only some contact with the screen.\8\ In
this situation the mortality of organisms passing through the facility
was assumed to be 100 percent. However, as mesh sizes are reduced,\9\
more and more entrainables will actually become impinged on the screens
(i.e., ``converted'' from entrainable to impingeable) and would then be
subjected to spray washes and returned along with larger impinged
organisms as well as debris from the screens. Under the 2004 Phase II
rule, these ``converts'' would be classified as a reduction in
entrainment, since the entrainment performance standard simply required
a reduction in the number (or mass) of entrained organisms entering the
cooling system. However, for some facilities the low survival rate of
converts resulted in the facility having difficulty complying with the
impingement mortality limitations. By comparison, the performance
standard for impingement was measured as impingement mortality.
Organisms that were impinged (i.e., excluded) from the CWIS were
typically washed into a return system and sent back to the source
water. In this case, impingement mortality is an appropriate measure of
the biological performance of the technology.
---------------------------------------------------------------------------

    \7\ In the case of many soft-bodied organisms such as eggs and
larvae, the force of the intake flow can be sufficient to bend
organisms that are actually larger than the screen mesh and pull
them into the cooling system.
    \8\ Eggs are generally smaller than 2 millimeters in diameter,
while larvae head capsids are much more variable in size, increasing
as they mature to the juvenile stage.
    \9\ Fine mesh screens were considered to be one technology that
could be used to meet the entrainment performance standards under
the 2004 Phase II rule. EPA also reviewed performance data for
screens with mesh sizes as small as 0.5 mm, as described in section
III.C.
---------------------------------------------------------------------------

    Through EPA's review of control technologies, the Agency found that
the survival of ``converts'' on fine mesh screens was very poor, and in
some extreme cases comparable to the extremely low survival of
entrained organisms that are allowed to pass entirely through the
facility.\10\ More specifically, EPA found that nearly 100 percent of
eggs were entrained unless the mesh slot size was less than 2 mm, and
mortality of eggs ``converted'' to impingement ranged from 20 to 30
percent. Further, the mortality of larvae collected from a fine mesh
screen was usually greater than 80 percent. As a result, a facility
with entrainment exclusion technologies such as fine mesh screens could
approach 90 percent performance, but the subsequent survival of eggs
and larvae combined ranged from 0 to 52 percent (mean value of 12
percent survival) depending on life stage and species, and the
facility's impingement mortality rates increased. In other words, a
facility that simply excluded entrainable organisms (with no attention
being paid to whether they survive or not) could be deemed to have met
its entrainment requirements under the 2004 Phase II rule, when in fact
it may be causing the same level of mortality as a facility with no
entrainment controls at all. EPA's current review of entrainment and
entrainment mortality shows the same trends identified in the research
reviews by EPRI (2003), namely that entrainment decreases with
increasing larval length, increased sweeping flow, decreasing slot
(intake) velocity, and decreasing slot width. In other words, by using
screens with finer mesh, entrainment mortality can be converted to
impingement mortality without necessarily protecting any more aquatic
organisms.
---------------------------------------------------------------------------

    \10\ Through-plant entrainment survival has been studied
extensively, with EPRI's Review of Entrainment Survival Studies
being amongst the most comprehensive. See DCN 2-017A-R7 from the
Phase I docket.
---------------------------------------------------------------------------

3. Cost-Cost Test
    In the 2004 Phase II rule, EPA developed facility-specific cost
estimates, and published those costs in Appendix A (69 FR 41669). The
2004 Phase II rule also included a cost-cost test (see 69 FR 41644)
where a facility could demonstrate that its costs to comply with the
2004 rule were significantly greater than those that EPA had
considered. Since initial implementation of the July 9, 2004 316(b)
Phase II rule, EPA has identified several concerns with the facility-
specific costs listed in Appendix A and their use in the cost-cost
test. First, EPA has identified numerous inconsistencies between
facility permit applications, responses in the facility's 316(b)
survey, and overall plant capacity as reported in the most recent EIA
database. These inconsistencies resulted in Appendix A costs that were
different from the facility's own compliance cost estimates due to
inconsistencies in the underlying parameters used to estimate these
costs. In addition, as described more fully in Chapter 2 of this
proposal's Technical Development Document, EPA does not have available
technical data for all existing facilities. EPA obtained the technical
data for facilities through industry questionnaires. In order to
decrease burden associated with these questionnaires, EPA requested
detailed information from a sample, rather than a census, of
facilities. EPA has thus concluded that the costs provided in Appendix
A are not appropriate for use in a facility-level cost-cost test.
Moreover, for most of the national requirements EPA is proposing here,
a cost-cost variance is not necessary for the reasons described below.
As a result, EPA is not providing a framework similar to Appendix A in
today's proposed rule.\11\ (See section III.C below and VII for more
information about how EPA developed compliance costs.)
---------------------------------------------------------------------------

    \11\ There is a form of ``cost-cost variance'' for new units at
existing facilities, comparable to the provision in Phase I for new
facilities. See further discussion below.
---------------------------------------------------------------------------

    First, the impingement mortality requirements of today's proposed
rule are economically achievable,\12\ and the low variability in the
costs of impingement mortality controls at a facility makes such a
provision unnecessary. Second, a cost-cost variance is not necessary
for entrainment mortality requirements because the costs of various
requirements are a factor considered in each site-specific
determination. Under the national rule, entrainment requirements would
be established on a facility specific basis, except in the case of new
units at an existing facility, which are subject to standards based on
closed-cycle cooling or its equivalent. In the facility-specific
process proposed today for entrainment mortality, a facility would be
required to submit facility-specific compliance cost estimates. The
determination of whether the cost of specific entrainment mortality
technologies is too high is made by the Director on a case-by-case
basis and accordingly a cost-cost provision is unnecessary for these
facilities. However, consistent with the Phase I rule, EPA has included
a

provision for new units at existing facilities that the Director may
establish less stringent alternative requirements for a facility if
compliance with the Phase I standards would result in compliance costs
wholly out of proportion to those EPA considered in establishing the
Phase I requirements or would result in significant adverse impacts on
local air quality, water resources other than impingement or
entrainment, or local energy markets.
---------------------------------------------------------------------------

    \12\ The Phase II rule found impingement mortality (plus
entrainment exclusion on certain waterbodies) was economically
achievable; EPA has not identified any reason for revising this
conclusion. See 69 FR 41603.
---------------------------------------------------------------------------

C. New or Revised Analyses

    In addition to collecting new information, EPA has re-evaluated
some existing data and analyses that underlay its earlier decisions.
The standards of the 2004 Phase II regulation required impingement
mortality reduction for all life stages of fish and shellfish of 80 to
95 percent from the calculation baseline (for all Phase II facilities)
and entrainment reduction requirements of 60 to 90 percent (for certain
Phase II facilities). EPA based these performance requirements on a
suite of technologies and compliance alternatives. For today's
proposal, EPA has reanalyzed various candidate technologies as the
basis for EPA's BTA decision. This reanalysis includes, but is not
limited to, a reanalysis of candidate BTA technologies, their
effectiveness, their costs, and their application. This section
highlights some of the results from this reanalysis. See Section VI for
a thorough discussion of EPA's updated BTA analysis and determination.
Based on this reanalysis, EPA has reached several conclusions. The
first is that closed-cycle cooling reduces impingement and entrainment
mortality to the greatest extent. The second is that screen
technologies are significantly less effective, particularly in
comparison with closed-cycle cooling, in reducing entrainment mortality
than EPA had concluded in 2004. Finally, EPA determined that while none
of the reviewed technologies cause unacceptable energy reliability
concerns, particulate emission increases, or adverse economic impacts
at the national level, the performance and availability of some
technologies varies widely depending on local factors, and these issues
could be a significant concern at individual sites.
1. Revised Performance Database
    In its Section 316(b) rule development efforts to date, EPA has
gathered industry documents and research publications with information
from studies which evaluated the performance of a range of technologies
for minimizing impingement or entrainment. As explained in 68 FR 13538-
13539, EPA previously developed a Technology Efficacy Database in an
effort to document and assess the performance of various technologies
and operational measures designed to minimize the impacts of cooling
water withdrawals (see DCN 6-5000 in the docket for the 2004 Phase II
rule). In support of today's proposal, EPA has updated that performance
database. In updating the database, EPA's objective was to review the
methods used to generate data in these studies and to combine relevant
data across studies in order to produce statistical estimates of the
overall performance of each of the technologies.
    In developing the updated database, EPA considered data from over
150 documents. This includes documents previously contained in all
three phases of EPA's 316(b) rulemaking records as well as new
documents obtained during development of today's proposal. These
documents contain information on the operation and/or performance of
various forms and applications of these technologies, typically at a
specific facility or in a controlled setting such as a research
laboratory. The studies presented in these documents were performed by
owners of facilities with cooling water intake structures,
organizations that represent utilities and the electric power industry,
and other research organizations. EPA established two general criteria
for using data from the documents: (1) The data must be associated with
technologies for minimizing impingement mortality or entrainment \13\
that are currently viable (as recognized by EPA) for use by industries
with cooling water intake structures that are (or will be) subject to
Section 316(b) regulation; and (2) the data must represent a
quantitative measure (e.g., counts, densities, or percentages) that is
related to the impingement mortality or entrainment of some life form
of aquatic organisms within cooling water intake structures under the
given technology.
---------------------------------------------------------------------------

    \13\ There were insufficient numbers of studies specifically
looking at entrainment mortality or entrainment survival, therefore
EPA broadened the review to include any measure of entrainment.
---------------------------------------------------------------------------

    For studies meeting the above criteria, EPA populated a new
database. This performance study database consisted of two primary data
tables. The first table contains specific information on a particular
study, such as the document and study IDs, facility name, water body,
data classification (e.g., impingement mortality, entrainment),
technology category, and other test conditions when specified (e.g.,
mesh size, intake velocity, flow rate, water temperature, conditions
when the technology is in place, control conditions). The second table
contains the reported performance data for a given study. Each row of
this table contains one or more performance measures for a particular
species along with other factors when they were specified (e.g., age
category, dates or seasons of data collection, water temperature,
velocity, elapsed time to mortality). For one option considered for
today's proposed rule, EPA used this database in an attempt to revise
the impingement mortality and entrainment limits developed for the
Phase II rule. However, as described in section VI, the performance
data for screens and other intake technologies indicates that those
technologies were not very effective at minimizing entrainment
mortality in comparison to closed-cycle cooling. As a result, EPA has
not included this option in today's proposed rule package.
2. Impingement Mortality and Entrainment Technology Performance
Estimates
    To evaluate the effectiveness of different control technologies and
the extent to which the various regulatory options considered for
today's proposal minimize adverse environmental impacts associated with
cooling water intake structures, EPA used the data collected in the
revised performance database to develop impingement mortality and
entrainment reduction estimates associated with each technology. For
some technologies, this proposal reflects updated information or a
different methodology for estimating effectiveness. For impingement
mortality, EPA focused on 14 studies of 31 species for traveling
screens with post-Fletcher modifications and with a 48 hour \14\ or
less holding time, and found the monthly impingement mortality
corresponding to the 95th percentile was 31 percent mortality. EPA's
full analysis of impingement mortality limitations may be found in
Chapter XI of the TDD. EPA found the best performance of entrainment
exclusion for fine mesh screens was 73 to 82 percent for eggs and 46 to
52 percent for larvae at 0.5 mm slot sizes. The best performance of
fine mesh screens for entrainment survival (and not just exclusion) was
29 to 34 percent, with zero survival of eggs and larvae under certain
conditions. The next section further discusses the distinction

between entrainment exclusion and entrainment survival.
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    \14\ Holding times beyond 48 hours often result in mortality due
to holding conditions rather than mortality due to impingement.
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3. Exclusion Technologies
    As discussed in section III.B above, screens and other technologies
operate using a principle of excluding organisms from entering the
cooling system. For technologies other than cooling towers, EPA
generally calculated their efficacy as the mean percent efficacy of the
available data. Because EPA has sufficient data to evaluate impingement
mortality, its impingement mortality technology efficacy calculation
accounts for mortality. However, because EPA has data on entrainment
exclusion but lacks sufficient entrainment mortality data to calculate
exclusion technology entrainment mortality efficacy, EPA's calculated
mean entrainment percent efficacy does not account for mortality.
Available data on today's proposed technology basis demonstrate that
entrainment reductions associated with fine mesh technologies vary
depending on life stage and mesh size. See Section VIII and the TDD for
additional information on EPA's estimate of entrainment reductions for
today's proposal.
    In reality, excluding an organism from the cooling water intake
does not minimize entrainment-related adverse environmental impacts
unless the excluded organisms survive and ultimately return back to the
waterbody. In the 2004 Phase II rule, EPA made the assumption that any
entrainable organism which was entrained died (i.e., 100 percent
mortality for organisms passing through the facility) and any organism
not entrained survived. In other words, if a technology reduced
entrainment by 60 percent, then EPA estimated 40 percent of the
organisms present in the intake water would die in comparison to 100
percent in the absence of any entrainment reduction. As explained in
Section VI, while it has been conjectured that certain species of eggs
have been shown to survive entrainment under certain conditions, EPA
has not received any new data for either the most common species or the
most frequently identified species of concern described in available
studies and, as such, has not altered its decision that for purposes of
national rulemaking, entrainment should be presumed to lead to 100
percent mortality. Today's proposed rule would allow facilities to
demonstrate, on a site-specific basis, that entrainment mortality of
one or more species of concern is not 100 percent.
    For today's proposal, EPA analyzed the limited data on the
survivability of organisms that are ``converted'' from entrained to
impinged on fine mesh screens. These data show that under most
operational conditions, many larvae die as a result of the impact and
impingement on fine mesh screens. In the case of eggs, the data
indicate that some species may die, but some do survive. The data also
demonstrate that if the organisms can withstand the initial impingement
on the fine mesh screen, the majority of entrainable organisms survive
after passing through a fish return and returning to the source water.
Finally, the data indicate that survival increases as the body length
and age of the larvae increases.\15\ EPA seeks additional data on the
survivability (or mortality) of organisms that are converted from
entrained to impinged on fine mesh screens.
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    \15\ EPA found this is a very important distinction when
reviewing technology efficacy, as some studies do not include the
smaller, more fragile, and often non-motile stages of larvae. Older
stages of larvae have started to develop avoidance responses, and
generally have already started developing scales and skeletal
structures.
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4. Application of Requirements Based on Capacity Utilization Rate (CUR)
and Waterbody Type
    In the 2004 Phase II rule, the type of performance standard
applicable to a particular facility (i.e., reductions in impingement
mortality only or impingement mortality and entrainment) depended on
several factors, including the facility's location (i.e., source
waterbody), capacity utilization rate (CUR) (as an indicator of the
rate of use), and the proportion of the source waterbody withdrawn.
EPA's reanalysis of impingement and entrainment data does not support
the premise that the difference in the density of organisms between
marine and fresh waters justifies different standards. More
specifically, the average density of organisms in fresh waters may be
less than that found in marine waters, but the actual density of
aquatic organisms in some specific fresh water systems exceeds that
found in some marine waters. In other words, there is considerable
overlap in the range of densities found in marine waters and in fresh
waters. EPA also believes the different reproduction strategies of
freshwater versus marine species makes broad characterizations
regarding the density less valid a rationale for establishing different
standards for minimizing adverse environmental impact.
    In re-considering the applicability of requirements based on CUR,
EPA found that even infrequently used facilities may still withdraw
significant volumes of water when not generating electricity. EPA also
found that load-following and peaking plants operate at or near 100
percent capacity (and therefore 100 percent design intake flow) when
they are operating, and these operations occur frequently during peak
summer electricity demand, coinciding with some of the most
biologically sensitive portions of the year.\16\ Accordingly, today's
proposed requirements are not based on waterbody type or CUR. See
further discussion in Section VI.
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    \16\ Some facilities continue to withdraw cooling water even
when not generating for a variety of reasons: to discourage
biofouling or mechanical seizures, to promote continued water flow,
or to maintain a state of readiness. Peaking facilities (those with
a CUR of less than 15percent, as defined in the 2004 Phase II rule)
may withdraw relatively small volumes on an annual basis, but if
they operate during biologically important periods such as spawning
seasons or migrations, then they may have nearly the same adverse
impact as a facility that operates year round.
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IV. Revised Industry Description

    Today's proposed rule applies to all existing electric generating
and manufacturing facilities, except for certain water going vessels as
described in section V. EPA has earlier fully described the electricity
industry in the 2002 Phase II proposed rule (see, for example, 67 FR
17135) and the manufacturing industries in the 2004 Phase III proposed
rule (see, for example, 69 FR 68459).\17\ While these general
descriptions continue to broadly reflect the current state of these
industries, EPA has revised some of its estimates of numbers of
facilities, intakes, flows, and other pertinent information. In
particular, this section describes those facilities with a cooling
water intake structure having a DIF of greater than 2 MGD, related
cooling water use in power production and manufacturing activities, and
an overview of the industry sectors in scope for today's proposed rule.
See the TDD and EA for today's proposed rule for more detailed
information including industry profiles.
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    \17\ EPA also addressed both electric generators and
manufacturers in the 2000 Phase I proposed rule (see, for example,
65 FR 49070). The support documents for all three rule phases also
provide information characterizing the affected industry sectors.
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A. Water Use in Power Production and Manufacturing

    Water is used for a wide variety of application in the United
States. The U.S. Geologic Survey (USGS) publishes a comprehensive
review of water use across industry sectors every 5 years. The 2005
report indicated that 410 billion gallons per day (BGD) of water are
withdrawn for various uses. (See

DCN 10-6872.) Of that amount, approximately 201 BGD is withdrawn by
electric generators, primarily for non-contact cooling,\18\ plus water
withdrawals by other industrial sites of 18.2 BGD for a total of 219
BGD. This total flow represents the universe of flow potentially
subject to regulation under 316(b), therefore today's proposed rule may
address over half of the water withdrawals in the entire nation.\19\
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    \18\ Irrigation was the next highest user of water at 31% of the
total withdrawn.
    \19\ In the Phase I rule, EPA also presented data indicating
that the combined 316(b) rules for electric generators and the
largest manufacturing sectors would address approximately 99% of all
cooling water withdrawals in the U.S. See 65 FR 49071 and the Phase
I Economic and Engineering Analyses of the Proposed Sec.  316(b) New
Facility Rule.
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    Industrial water use (broadly defined as water used by power plants
and manufacturers) falls generally into one of four categories: non-
contact cooling water, contact cooling water, process water, and other
water uses. A more detailed description of each category and how it
relates to 316(b) is provided below.
1. Non-Contact Cooling Water
    Power plants and manufacturers frequently generate large amounts of
heat in their industrial processes. Non-contact cooling systems are one
of the most common techniques used to dissipate this heat. In a non-
contact cooling system, water is pumped through a heat exchanger or
other equipment where it comes into indirect contact with heated
materials in the industrial process. The water absorbs heat and is
subsequently discharged (in a once-through cooling system) or
recirculated (in a closed-cycle system). In these systems, the cooling
water does not come into contact with any industrial materials,
equipment or processes; the cooling water is contained within the
cooling system for heat absorption and generally requires very little
treatment (except heat removal) before discharge.
    At power generators, non-contact cooling is by far the largest
water use. Approximately three quarters of the total annual electricity
output in the United States results from steam powered turbines. Power
plants heat water inside a boiler. The water is turned to steam, at
which point the temperature of the steam can be increased with further
heating, allowing additional energy to be stored in the steam. The
steam is then used to spin a turbine, producing electricity. The steam
must then be condensed and returned to the boiler.\20\ Non-contact
cooling water is used to extract heat and return the steam to water in
a condenser. The water can then be pumped back to the boiler for
heating to repeat the cycle. Consistent with engineering theory, there
are limits to the maximum efficiency of a thermal plant. Thermal power
plants are actually not very efficient at converting fuel to
electricity; only 30 to 60 percent of the fuel is captured as
electricity, with the higher efficiency units relying on further use of
the steam for further heating (usually referred to as cogeneration) or
energy purposes (such as combined cycle power generators or other
process warming). Depending on the type of generating unit, roughly
one-third to two-thirds of the total energy generated is lost in the
form of heat that must be subsequently dissipated.
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    \20\ The thermodynamic laws governing the Rankine cycle in power
plants requires a heat source and a heat sink. The difference in
temperature and pressure is a major factor in maintaining efficiency
of the thermal engine. Additional reasons for condensing the steam
include: handling pressure drops in the system, the need to remove
non-condensable gases before they damage equipment, to allow make-up
water to be added to the system, and to safely allow pumping of the
water back to the boiler.
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    At manufacturers, non-contact cooling is also a significant
component of water use. Some manufacturers have electric generating
units which generally operate in the same manner as summarized above.
In some cases, virtually all of the manufacturing facility's cooling
water withdraws are for power production. In contrast to power
generators, some manufacturing facilities also need a reliable source
of high pressure steam for manufacturing processes. Other manufacturers
may need to condense steam generated from other processes, or may need
to extract heat from a raw or processed material (e.g., to reduce the
temperature of an intermediate petroleum or chemical product before it
enters a subsequent processing stream). Some facilities engage in
testing or research, and have cooling needs for these activities.
2. Contact Cooling Water
    Contact cooling water differs from non-contact cooling in that
contact cooling systems use cooling water in direct contact with the
hot equipment or heated materials. As a result, contact cooling water
may intermingle with industrial products or equipment and often will
take up pollutants other than heat, such as oil and grease or metals.
Contact cooling water often requires treatment for these pollutants
before it may be discharged.
    In power plants, cooling water may be used for contact cooling of
pumping equipment, such as the cooling water pump bearings. Contact
cooling water is more frequently needed by manufacturing processes,
such as quench water (e.g., water into which bars of hot metal are
dipped for rapid cooling or control of the formed metal temperature),
mechanical pulping, forming and molding processes, food and
agricultural products, and petrochemical gas quenching.
3. Process Water
    Process water is water that is used directly in an industrial
process. While steam electric plants do have some process water,
process water is more typically associated with manufacturers, as the
primary industrial process at power plants (electricity generation) is
usually cooled with non-contact cooling water. Examples of process
water include water used to break down wood pulp in a paper mill, water
that is used in creating consumer products such as beverages or
personal care products, water added to facilitate transportation of
materials within a manufacturing process, water needed as a raw
material, and water used in numerous chemical separations processes.
Process water may be used as an ingredient in the intermediate
products, consumed by the products, lost to evaporation, extracted
later in the process line for treatment and discharge, or further
reused.
    EPA has found through site visits, extensive experience with
manufacturing water use in the development of previous effluent
guidelines, and a general review of water uses by manufacturing
processes that a significant amount of reduction, reuse, and recycling
has already occurred in most manufacturing processes, in part due to
pretreatment standards and NPDES permit conditions. Beyond these
reductions, today's proposed rule recognizes that many industrial
facilities have worked to reduce the volume of process water usage at
their sites and to increase the reuse of process water for other
purposes within the facility. A leading facility or an entire industry
may have evolved to use less process water in its industrial process.
For example, EPA has found some facilities have undergone plant wide
energy audits to reduce their energy needs by up to 25 percent,
providing a roughly 25 percent reduction in cooling water needs. One
analysis of paper mills estimates that over 39 billion gallons daily of
water is recycled and not used solely for cooling purposes by a typical
mill. Further, there has been a 69 percent reduction in

the average volume of treated effluent at pulp and paper mills (see DCN
10-6902). In response to effluent guidelines discharge limitations,
some facilities have reduced their compliance costs by reducing the
volume of wastewater they must treat. Some effluent limitation
guidelines have also established explicit requirements for flow
reduction. In the case of iron and steel facilities, effluent
limitations require no discharge of process wastewater pollutants (for
example, see 40 CFR part 420 subpart D Steelmaking). As another
observed example of the recycling of process water, a facility might
use non-contact cooling water for condensing steam, but then reuse the
heated water for washing raw materials instead of discharging the
water.
    See section V for more information on how water reuse and
conservation efforts are considered in compliance alternatives for
today's proposed rule.
4. Other Uses
    Given the diversity of industrial processes across the U.S., there
are many other industrial uses of water not intended to be addressed by
today's proposed rule. Emergency water withdrawals, such as fire
control systems and nuclear safety systems, are not considered as part
of a facility's design intake flow. Warming water at liquefied natural
gas terminals, and hydro-electric plant withdrawals for electricity
generation are not cooling water uses and are not addressed by today's
proposal. Other water uses might include service water and dilution
water. Service water is a generic term that often refers to uses other
than non-contact cooling (i.e., it may include contact cooling), but
can also include specialty water uses such as makeup water for
radiation waste systems at nuclear power plants. Examples of dilution
water are using water to reduce the concentration of a pollutant for
biological treatment purposes, or to reduce the temperature of an
effluent.

B. Overview of Electric Generators

    In the Phase I proposal, EPA described its rationale for setting
the threshold for section 316(b) national requirements at 2 MGD. As
described in that proposed rule, EPA selected 2 MGD to ensure that
almost all cooling water withdrawn from waters of the U.S. is covered
by a national regulation. The Agency recognized that there was
relatively little information currently available regarding the lower
bound of withdrawals at which significant levels of impingement and
entrainment and, therefore, adverse environmental impact, was likely to
occur. At the time, most case studies available to the agency
documenting impingement and entrainment from cooling water withdrawals
focused on facilities withdrawing very large amounts of water (in most
cases greater than 100 MGD). After soliciting comment and data on
several different thresholds, the Agency adopted 2 MGD in the final
rule. 66 FR 65288.
    While the overview of the electric generating facilities in the
previous Phase II and III proposed and final rules has not changed