EO12866_Cooling Water Intakes_2040_AE95_Final_Preamble+Rule _20140519
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 122 and 125
[EPA-HQ-OW-2008-0667, FRL  -  9817-3]
RIN 2040 - AE95
National Pollutant Discharge Elimination System -- Final Regulations to Establish Requirements for Cooling Water Intake Structures at Existing Facilities and Amend Requirements at Phase I Facilities
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.
SUMMARY:  The purpose of this action is to reduce impingement and entrainment of fish and other aquatic organisms at cooling water intake structures used by certain existing power generation and manufacturing facilities for the withdrawal of cooling water from waters of the United States. This rule establishes requirements under section 316(b) of the Clean Water Act (CWA) for existing power generating facilities and existing manufacturing and industrial facilities that are designed to withdraw more than 2 million gallons per day (mgd) of water from waters of the United States and use at least 25 percent of the water they withdraw exclusively for cooling purposes. These national requirements, which will be implemented through National Pollutant Discharge Elimination System (NPDES) permits, apply to the location, design, construction, and capacity of cooling water intake structures (CWIS) at regulated facilities and provide requirements that reflect the best technology available (BTA) for minimizing adverse environmental impact. On April 20, 2011, EPA published a proposed rule that included several options for addressing these impacts. Subsequently, EPA published two Notices of Data Availability (NODA), on June 11, 2012 and June 12, 2012, that further clarified EPA's proposed approach. This final rule also responds to judicial remand of aspects of the previously promulgated Phase II and Phase III section 316(b) rules. In addition, EPA is also responding to an earlier judicial decision by removing from the previously promulgated Phase I new facility rule a restoration-based compliance alternative and the associated monitoring and demonstration requirements.

DATES: This regulation is effective [INSERT DATE 60 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER]. For judicial review purposes, this final rule is promulgated as of 1 p.m. EDT (Eastern Daylight Time) on [INSERT DATE 14 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER] as provided in 40 CFR 23.2.
ADDRESSES: EPA has established a docket for this action under Docket ID No. EPA-HQ-OW-2008-0667. All documents in the docket are listed on the www.regulations.gov web site. Although listed in the index, some information is not publicly available, e.g., CBI (confidential business information) or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the internet and will be publicly available only in hardcopy form. Publicly available docket materials are available either electronically through www.regulations.gov or in hardcopy at the Water Docket in the EPA Docket Center, EPA/DC, EPA West, Room 3334, 1301 Constitution Avenue, 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 202 - 566 - 1744, and the telephone number for the Water Docket is 202 - 566 - 2426.
FOR FURTHER INFORMATION CONTACT: For additional biological information, contact Tom Born at<PHONE_NUMBER>; e-mail:  HYPERLINK<EMAIL_ADDRESS><EMAIL_ADDRESS>For additional economic information, contact Wendy Hoffman at 202 - 564 - 8794; e-mail<EMAIL_ADDRESS> For additional technical information, contact Paul Shriner at 202 - 566 - 1076; e-mail<EMAIL_ADDRESS>SUPPLEMENTARY INFORMATION:
What Facilities Are Regulated By This Action?
This final rule applies to existing facilities that use cooling water intake structures to withdraw water from waters of the United States and have or require an NPDES (National Pollutant Discharge Elimination System) permit issued under section 402 of the CWA (Clean Water Act). Existing facilities subject to this regulation include those with a design intake flow (DIF) greater than 2 mgd. If a facility meets these conditions, it is subject to today's final regulations. If a facility has or requires an NPDES permit but does not meet the 2 mgd intake flow threshold, it is subject to permit conditions implementing CWA section 316(b), developed by the NPDES Permit Director on a case-by-case basis using BPJ (best professional judgment) under 40 CFR 125.90(b). This final rule defines the term cooling water intake structure to mean the total physical structure and any associated constructed waterways used to withdraw cooling water from waters of the United States. The cooling water intake structure extends from the point at which water is first withdrawn from waters of the United States 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 final rule also makes limited changes to the requirements for Phase I facilities (i.e., new facilities).
Exhibit 1 lists industry sectors of facilities subject to this final rule. This table is not intended to be exhaustive; facilities in other industries not listed in Exhibit 1 could also be regulated. The 4-digit NAICS industry sectors may include 6-digit NAICS industry sub-sectors with operations that are not dependent on cooling water.

Exhibit 1. Industry Sectors with Facilities Subject to the Final Rule

Category

4-Digit NAICS Industry Sectors
NAICS Definition
Federal, State and Local Government
Electric Power Industry

2211
Electric Power Generation, Transmission and Distribution
Industry
Electric Power Industry

2211
Electric Power Generation, Transmission and Distribution

Industry
Primary Manufacturing Industries

3112
Grain and Oilseed Milling

3113
Sugar and Confectionery Product Manufacturing

3121
Beverage Manufacturing

3221
Pulp, Paper, and Paperboard Mills

3222
Converted Paper Product Manufacturing

2211

3241
Petroleum and Coal Products Manufacturing

3251
Basic Chemical Manufacturing

3252
Resin, Synthetic Rubber, and Artificial Synthetic Fibers and Filaments Manufacturing

3221

3253
Pesticide, Fertilizer, and Other Agricultural Chemical Manufacturing

3254
Pharmaceutical and Medicine Manufacturing

3256
Soap, Cleaning Compound, and Toilet Preparation Manufacturing

3259
Other Chemical Product and Preparation Manufacturing
3241

33123313

3311
Iron and Steel Mills and Ferroalloy Manufacturing

3312
Steel Product Manufacturing from Purchased Steel

3313
Alumina and Aluminum Production and Processing

Industry
Other Industries

1119
Other Crop Farming

2122
Metal Ore Mining

3133
Textile and Fabric Finishing and Fabric Coating Mills

3211
Sawmills and Wood Preservation

3314
Nonferrous Metal (except Aluminum) Production and Processing

3322
Cutlery and Handtool Manufacturing

3329
Other Fabricated Metal Product Manufacturing

3364
Aerospace Product and Parts Manufacturing

3391
Medical Equipment and Supplies Manufacturing

To determine whether a facility could be regulated by this action, one should carefully examine the applicability criteria in § 125.91 of the final rule. For information regarding the applicability of this action to an entity, consult the persons listed for technical information in FOR FURTHER INFORMATION CONTACT.

Supporting Documentation
1.	Docket
      EPA has established an official public docket for this action under Docket ID 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, see ADDRESSES above. To view docket materials, call ahead to schedule an appointment. Every user is entitled to copy 266 pages per day before incurring a charge. The Docket Center may charge $0.15 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 through the Web site http://www.regulations.gov by searching for Docket ID EPA-HQ-OW-2008-0667. For additional information about the public docket, visit the EPA Docket Center home page at http://www.epa.gov/epahome/dockets.htm.

3.	Technical Support Documents
      The final regulation is supported by three major documents:
   * Economic Analysis for the Final Section 316(b) Existing Facilities Rule (EPA-821-R-14-001), referred to as the EA throughout. This document presents the analysis of compliance costs, economic impacts, energy supply effects, and a summary of benefits associated with the final rule.
   * Benefits Analysis for the Final Section 316(b) Existing Facilities Rule (EPA-821-R-14-005), referred to as the BA throughout. This document examines cooling water intake structure impacts and regulatory benefits at the regional and national levels.
   * Technical Development Document for the Final Section 316(b) Existing Facilities Rule (EPA-821-R-14-002), referred to as the TDD  throughout. 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 final rule requirements.

Table of Contents
I.	Executive Summary and Scope of Today's Rulemaking
A.	Executive Summary
B.	Scope of Today's Rulemaking
C.	General Applicability
D.	What is an "Existing Facility" for Purposes of the Final Rule?
E.	What is "Cooling Water" and What is a "Cooling Water Intake Structure?"
F.	Would My Facility Be Covered Only If It Is a Point Source Discharger?
G.	Would My Facility Be Covered If It Withdraws Water from Waters of the United States? What If My Facility Obtains Cooling Water from an Independent Supplier?
 H.	What Intake Flow Thresholds Result in an Existing Facility Being Subject to the Final Rule?
	I.	What are the Requirements for Existing Offshore Oil and Gas Facilities, Offshore Seafood Processing Facilities or LNG Terminals BTA Requirements under the Final Rule?
J.	What is a "New Unit" and How Are New Units Addressed Under the Final Rule?
K.	Amendments Related to the Phase I Rule

II.	Legal Authority for and Background of the Final Regulation
A.	Legal Authority
B.	Purpose of the Regulation
C.	Background

III.	Environmental Effects Associated with Cooling Water Intake Structures
A.	Introduction
B.	Major Anthropogenic Stressors in Aquatic Ecosystems
C.	Effects of CWIS on Aquatic Ecosystems
D. 	Community - level or Indirect Effects of CWIS
E.	Cumulative Effects of Multiple Facilities

IV.	Summary Description of the Final Rule
A.	BTA Standard for Impingement Mortality for Existing Units at Existing Facilities
B.	BTA Standard for Entrainment for Existing Units at Existing Facilities
C.	BTA Standard for Impingement Mortality and Entrainment for New Units at Existing Facilities
D.	Other Provisions

V.	Summary of Data Updates and Revisions to the Proposed Rule
A.	Data Updates
B.	Regulatory Approach and Compliance
C.	New Units

VI.	Basis for the Final Regulation
A.	EPA's Approach to BTA
B.	Overview of Final Rule Requirements
C.	Technologies Considered to Minimize Impingement and Entrainment
D.	Technology Basis for Today's Final Rule

E.	Option Selection
F.	Other Options Considered for Today's Final Regulation
G.	Final Rule BTA Performance Standards
H.	Economic and Benefit Analysis for the Final Rule
I.	Site-Specific Consideration of Entrainment Controls

VII.	Response to Major Comments on the Proposed Rule and Notices of Data Availability (NODAs)
A.	Scope and Applicability
B.	Proposed Amendments Related to Phase I Rule
C.	Environmental Impact Associated with Cooling Water Intake Structures
D.	EPA's Approach to BTA
E.	BTA Performance Standards
F.	Implementation
G.	Costs
H.	Monitoring and Reporting
I.	Endangered Species Act

VIII.	Implementation
A.	When Does the Final Rule Become Effective and How are the Requirements Sequenced in an Orderly Way?
B.	How Does the Final Rule Reduce Biological Monitoring Requirements?
C.	What Information Will I Be Required to Submit to the Director When I Apply for My NPDES Permit?
D.	When Are Permit Application Studies Due?
E.	How Will the Director Determine the Best Technology Available for Minimizing Adverse Environmental Impacts?
F.	What are Example Permit Conditions and Compliance Monitoring for Impingement Mortality?
G.	What Monitoring is Required for Entrainment?
H.	What Reports Am I Required To Submit?
I.	What Records Will I Be Required to Keep?
J.	What Are the Respective Federal, State, and Tribal Roles?
K.	Protection of Endangered and Threatened Species and Designated Critical Habitat
L.	Permits for Existing Facilities are Subject to Requirements under Other Federal 	Statutes

IX.	Cost Development and Economic Impact Analysis
A.	Overview of Costs to Regulated Facilities and Federal and State Governments
B.	Development of Compliance Costs
C.	Social Costs
D.	Economic Impacts
E.	Employment Effects

X.	Benefits Analysis
A.	Introduction
B.	Regional Study Design
C.	Physical Impacts of Impingement Mortality and Entrainment
D.	National Benefits of the Final Rule and Options Considered

XI.	Related Acts of Congress, Executive Orders, and Agency Initiatives
A.	Executive Order 12866: Regulatory Planning and Review and Executive Order 13563: Improving Regulation and Regulatory 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
L.	Congressional Review Act

I.	Executive Summary and Scope of Today's Rulemaking
A.	Executive Summary
1.	Summary of the Major Provisions of the Regulatory Action
This rule establishes requirements under section 316(b) of the Clean Water Act (CWA) for 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 United States and use at least 25 percent of the water they withdraw exclusively for cooling purposes. These national requirements, which will be implemented through National Pollutant Discharge Elimination System (NPDES) permits, apply to the location, design, construction, and capacity of cooling water intake structures (CWIS) at regulated facilities by setting requirements that reflect the best technology available (BTA) for minimizing adverse environmental impact. On April 20, 2011, EPA published a proposed rule that included several options for addressing these impacts. EPA published two Notices of Data Availability (NODA), on June 11, 2012 and June 12, 2012, that further clarified EPA's approach. This final rule constitutes EPA's response to the remand of the Phase II and Phase III rules. In addition, EPA is also responding to the decision in Riverkeeper I to remove from the Phase I new facility rule the restoration-based compliance alternative and the associated monitoring and demonstration requirements.
2.	Need for the Rule
Cooling water is withdrawn for the purpose of dissipating waste heat from industrial processes. Over half of all water withdrawn in the United States each year is for cooling purposes. By far, the largest industrial use of cooling water is for thermoelectric generation, but cooling water is also used in the manufacture of aluminum, chemicals and allied products, food and kindred products, pulp and paper, refined petroleum products, and steel, as well as in other industries. Although newer designs are more efficient, the long life of the capital equipment in these industries suggests that the adverse environmental impacts could continue for decades. Electric generators, for example, typically convert 30 to 40 percent of the heat content of their fuel to electricity, depending on their fuel source, age of their facility, and capacity utilization (see TDD 5.1). The purpose of cooling water withdrawals is to dissipate that portion of the heat that is a by-product of industrial processes that facilities have not used and therefore view as waste heat.
The withdrawal of cooling water by existing facilities removes and kills hundreds of billions of aquatic organisms from waters of the United States each year, including plankton (small aquatic animals, including fish eggs and larvae), fish, crustaceans, shellfish, sea turtles, marine mammals, and many other forms of aquatic life. Most impacts are to early life stages of fish and shellfish. Aquatic organisms drawn into CWIS are either impinged (I) on components of the intake structure or entrained (E) in the cooling water system itself. In CWA section 316(b) and in this rulemaking, these impacts are referred to as adverse environmental impact (AEI). Rates of I&E depend on species characteristics, the facility's environmental setting, and the location, design, construction and capacity of the facility's CWIS. In addition to direct losses of aquatic organisms from I&E, a number of indirect, ecosystem-level effects may also occur, including (1) disruption of aquatic food webs resulting from the loss of impinged and entrained organisms that provide food for other species, (2) disruption of nutrient cycling and other biochemical processes, (3) alteration of species composition and overall levels of biodiversity, and (4) degradation of the overall aquatic environment. In addition to the impacts of a single CWIS on currents and other local habitat features, environmental degradation can result from the cumulative impact of multiple intake structures operating in the same watershed or intakes located within an area where intake effects interact with other environmental stressors. Finally, although it is difficult to measure, the compensatory ability of an aquatic population, which is the capacity for a species to increase survival, growth, or reproduction rates in response to decreased population, is likely compromised by I&E and the cumulative impact of other stressors in the environment over extended periods of time.
 The beneficiaries of fish protection at cooling water intakes include fisherman, both recreational and commercial, and people interested in well-functioning and healthy aquatic ecosystems. While most people consume electricity, they consume electricity in differing amounts, and may not be uniformly interested in, or willing to pay for, fish protection. Thus, there is imperfect overlap between those who could be required to pay for fish protection and those who would benefit from fish protection. Those who desire more fish protection have extremely limited opportunities in which they can express their willingness to pay for fish protection in market transactions that result in fish protection. In addition, deregulation in the electric industry has made it more difficult for merchant power producers to both remain competitive and pass along to consumers costs associated with fish protection, relative to rate-regulated electric utilities that are vertically integrated.
Fish protection at cooling water intakes is also variable, based on species and their migrations, waterbody, size of a cooling water intake, presence of multiple facilities on a waterbody, and many more variables that are highly site specific. In addition, given the history of litigation around this section of the Clean Water Act, states have, in some instances, administratively continued permits while awaiting final Federal action, and thus fish protection has been delayed, in some instances for decades.
Promulgation of today's final rule will complete EPA's regulations under section 316(b) of the Clean Water Act. This rule includes a national performance standard as the BTA to address impingement mortality (IM) at existing CWIS. This national standard for impingement reflects EPA's assessment that impingement reduction technology is available, feasible and demonstrated, and thus BTA for existing facilities. The impingement mortality standard is based on modified traveling screens with fish returns and includes a performance standard as one compliance alternative, but also offers six other compliance alternatives that are equivalent or better in performance.  With regard to entrainment, this rule contains a national BTA standard that is a process for a site-specific determination of entrainment mitigation requirements at existing CWIS. The entrainment provision reflects EPA's assessment that there is no single technology basis that is BTA for entrainment at existing facilities, but instead a number of factors that are best accounted for on a site-specific basis. Site-specific decision making may lead to a determination by the NPDES permitting authority that entrainment requirements should be based on variable speed pumps, water reuse, fine mesh screens, a closed-cycle recirculating system, or some combination of technologies that constitutes BTA for the individual site. The site-specific decision-making may also lead to no additional technologies being required.
In addition to the above provisions, which apply to existing units at existing facilities, the rule establishes a BTA standard, for both impingement mortality and entrainment, for new units at existing facilities. Under this standard, new units at existing facilities will be subject to requirements similar to the section 316(b) requirements for new facilities subject to the previously promulgated Phase I rule.
In addition, there is a need to regulate even those facilities that adopt the most effective technology.  Cooling water is withdrawn for the purpose of dissipating waste heat from industrial processes. Over half of all water withdrawn in the United States each year is for cooling purposes. By far, the largest industrial use of cooling water is for thermoelectric generation, but cooling water is also used in the manufacture of aluminum, chemicals and allied products, food and kindred products, pulp and paper, refined petroleum products, and steel, as well as in other industries. Although newer designs are more efficient, the long life of the capital equipment in these industries suggests that the adverse environmental impacts could continue for decades.Closed-cycle cooling is a technology that recirculates cooling water, reducing withdrawals from surface waters. Closed-cycle cooling can reduce water withdrawals by at least 95 percent, compared to once-through cooling, but is itself capital intensive. Facilities that retrofit  to closed-cycle cooling without also modifying their condenser  may not be able to operate at full capacity during summer peak periods of electricity demand (replacing the condenser would require longer outages). Operators who retrofit closed-cycle cooling systems have a financial incentive not to run their system in closed-cycle mode during summer months. Thus, decision making at facilities that use cooling water may not take society's preferences for fish protection into account in their actions.
Thus, there is imperfect overlap between those who could be required to pay for fish protection and those who would benefit from fish protection.  who desire more fish protection have extremely limited opportunities in which they can express their willingness to pay for fish protection in market transactions that result in fish protection. In addition, deregulation in the electric industry has made it more difficult for merchant power producers to both remain competitive and pass along to consumers costs associated with fish protection, relative to rate-regulated electric utilities that are vertically integrated.
      EPA notes that some facilities have installed, and some NPDES permits require, controls that protect aquatic organisms from impingement and entrainment. Facilities may have adopted controls as good stewards. Directors may have required controls to meet state water quality standards, particularly with regard to temperature. Based on our evaluation of available evidence, these actions have not been widespread enough to discourage cooling water withdrawals from waters where they have the greatest impact on aquatic organisms. Site-specific decision making may lead to a determination by the NPDES permitting authority that entrainment requirements should be based on variable speed pumps, water reuse, fine mesh screens, a closed-cycle recirculating system, or some combination of technologies that constitutes BTA for the individual site. The site-specific decision-making may also lead to no additional technologies being required.

3.	Costs and Benefits
As presented in Exhibit I-1, EPA assessed the expected costs to society for complying with the final rule, accounting for both the existing CWIS unit provision and the new unit provision, as $275 million and $297 million per year at the 3 percent and 7 percent discount rates, respectively. These costs reflect permit applications, studies, recordkeeping, monitoring, and reporting required by the rule. The costs also include costs of technologies for complying with the BTA for IM. The cost of additional technologies that may be required to meet the site-specific BTA for entrainment are not included in this analysis because, as explained in Section VII, EPA cannot estimate, with any level of certainty, what site-specific determinations will be made based on the analyses that will be generated as a result of the national BTA standard for entrainment decision-making established by today's rule.
EPA estimates that today's final rule  -  including standards for both existing units and new units at existing facilities  -  will achieve monetized benefits to society of $33 million and $29 million annually, again depending on the discount rate. This estimate of benefits omits important categories of benefits that EPA expects the rule will achieve, such as most of the benefits associated with fish other than commercially and recreationally harvested fish. As a result, these estimates are likely to understate substantially the rule's expected benefits to society. In estimating the benefits of today's rule, EPA did not rely on the results of the stated preference survey conducted by the Agency and described in the June 12, 2012 Notice of Data Availability (77 FR 34927 (June 12, 2012)).  Included in the monetized benefits is EPA's estimate that the final rule will reduce greenhouse gas (GHG) emissions by 9.3 million tons of CO2-equivalent emissions over the 40-year compliance period for this analysis. Based on this reduction in GHG emissions, EPA estimates benefits to society (based on social cost of carbon (DCN 12-4853)) ranging from $12 million to $13 million annually (see Section 9 of the BA), depending on the discount rate and other assumptions in the social cost of carbon analysis.
Exhibit I-1. Total annualized social costs and benefits for the final rule (in millions, 2011 dollars)

                                Existing Units
                                   New Units
                                    Total
Using 3 percent discount rate

Social Costs
                                                                         $272.4
                                                                           $2.5
                                                                         $274.9
Social Benefits
                                                                          $33.0
                                                                          -$0.2
                                                                          $32.8
Using 7 percent discount rate

Social Costs
                                                                         $295.3
                                                                           $2.0
                                                                         $297.3
Social Benefits
                                                                          $28.7
                                                                          -$0.1
                                                                          $28.6

EPA expects that the final rule will have relatively minor economic impacts on the regulated facilities, the entities that own them, and the overall electric power sector, which is the industry most affected by today's rule. Under the rule's existing unit provisions, EPA estimates that a substantial majority (86 percent) of electric generators will incur compliance costs of less than 1 percent of revenue, indicating the minor impact of the rule on these facilities.
EPA also expects very small impacts on the non-power sector component of regulated facilities. EPA estimates that 504 out of 509 facilities will incur costs less than one percent of revenue, five will incur costs between one and three percent, and none will incur costs greater than 3 percent. In addition, EPA estimates that no manufacturing facilities will close as a result of today's rule, and that only 12 facilities in the non-power sector component will experience moderate financial stress short of closure. These 12 facilities represent approximately 3 percent of the estimated total regulated facilities in the non-power sector component.
At the level of the entities that own regulated facilities, EPA estimates that 91 to 94 percent of entities owning regulated facilities in the electric power sector will incur compliance costs of less than 1 percent of revenue under the rule's existing unit provisions. Likewise, for the non-power sector component of regulated facilities, EPA estimates that 90 to 95 percent of entities owning regulated facilities will incur compliance costs of less than 1 percent of revenue under the rule's existing unit provisions.
Finally, EPA estimates that today's rule will have a minor impact on the overall electric power sector and electricity consumers. EPA estimates that the rule will not affect national or regional electricity markets on a long-term basis. In addition, EPA expects there to be no effects of the final rule on the reliability of electricity generation, transmission and distribution. In terms of consumer impacts, EPA estimates, on average, across the United States, that the final rule will increase electricity production costs by 0.009 cents per kWh, causing an estimated 0.1 percent increase in average electricity prices. The corresponding annual increase in electricity costs is approximately $1.03 per household.

B.	Scope of Today's Rulemaking
Today's final rule represents the last stage in EPA's efforts to implement section 316(b) of the CWA. In the course of their operations, electric power facilities and certain manufacturing facilities use large amounts of water either for cooling purposes or in their manufacturing processes. Such facilities typically remove water from nearby sources using "cooling water intake structures." The structures associated with water removal pose a number of threats to the environment. Principally, aquatic organisms are squashed against intake screens  -  impingement  -  or drawn into the cooling system  -  entrainment. Section 316(b) requires EPA to develop standards for cooling water intakes structures.
Today's final rule establishes national requirements applicable to the location, design, construction, and capacity of cooling water intake structures at existing facilities that reflect the BTA for minimizing the adverse environmental impacts -  impingement and entrainment  -  associated with the use of these structures. It represents the culmination of EPA's efforts to implement section 316(b) and, as such, fulfills EPA's obligation under a settlement agreement entered in the United States District Court for the Southern District of New York in Riverkeeper Inc., et al. v. Jackson, No. 93 Civ. 0314 (AGS). (For a more detailed discussion of the settlement agreement, see Section II.C.)
This final rule establishes requirements for all existing facilities with a DIF (design intake flow) of more than 2 mgd. EPA estimates that a total of 1,065 facilities will be subject to the final rule, including 544 Electric Generators, 509 Manufacturers in six Primary Manufacturing Industries, and 12 Manufacturers in Other Industries. The rule also clarifies the definition and requirements for new units at existing facilities. The applicable requirements are summarized in Exhibits I-2 and I-3.
Exhibit I-2. Applicability by phase of the 316(b) rules
                            Facility characteristic
                                Applicable rule
New power-generating or manufacturing facility
       Phase I rule
 New offshore oil and gas facility
       Phase III rule
 New unit at an existing power-generating or manufacturing facility
       This rule
 Existing power-generating or manufacturing facility
       This rule
 Existing offshore oil and gas facility and offshore seafood processing facilities
       This rule (site-specific, BPJ)

Exhibit I-3. Applicable requirements of today's rule for existing facilities
                            Facility characteristic
                            Applicable requirements
Existing facility with a DIF greater than 2 mgd and an AIF (actual intake flow) greater than 125 mgd
 Impingement mortality standards at § 125.94(c) and site-specific entrainment requirements under the entrainment standards at § 125.94(d) (Additional study requirements at § 122.21(r)(1)(ii)(B))
 Existing facility with a DIF greater than 2 mgd but AIF not greater than 125 mgd
 Impingement mortality standards at § 125.94(c) and site-specific entrainment requirements under the entrainment standards at § 125.94(d)
 New unit at an existing facility where the facility has a DIF greater than 2 mgd
 Impingement mortality and entrainment standards  for new units at § 125.94(e)
 Other existing facility with a DIF of 2 mgd or smaller or that has an intake structure that withdraws less than 25 percent of the water for cooling purposes on an actual intake flow basis
 Case-by-case BPJ permitting per § 125.90(b)

At an early stage in the development of section 316(b) requirements, EPA divided its rulemaking effort into three phases. The first addressed new facilities, the second, large existing electricity utility facilities and the third, the remaining electric generating facilities not addressed in the earlier phases as well as existing manufacturing operations. As EPA's analysis progressed, however, it became clear that it could address in one rulemaking cooling water intake structures at both existing steam electric generating and manufacturing facilities. From a biological perspective, the effect of intake structures on impingement and entrainment does not differ depending on whether an intake structure is associated with a power plant or a manufacturer. In 2009, following judicial challenge of the Phase II rule, EPA asked the U.S. Court of Appeals for the Second Circuit to remand the rule to the Agency for further action consistent with a decision by the U.S. Supreme Court in Entergy Corp. v. Riverkeeper, Inc. and the Second Circuit's decision on the Phase II rule in Riverkeeper, Inc. v. EPA, 475 F.3d 83 (2d cir. 2007). In 2009, EPA also asked the U.S. Court of Appeals for the Fifth Circuit to remand certain aspects of EPA's Phase III rule that were before it in a petition for review. Today's rule responds to these remands as well to the Second Circuit's remand of limited aspects of the Phase I section 316(b) rule in Riverkeeper Inc. v. Johnson, 358 F.3d 174 (2nd Cir. 2004). EPA has here consolidated the universe of potentially regulated facilities from the remanded 2004 Phase II rule with the existing facilities in the remanded 2006 Phase III rule for establishing requirements in a single proceeding.
C.	General Applicability
This rule applies to owners and operators of existing facilities that meet all following criteria:
   * The facility is a point source that uses or, in the case of new units at an existing facility, proposes to use cooling water from one or more cooling water intake structures, including a cooling water intake structure operated by an independent supplier not otherwise subject to 316(b) requirements that withdraws water from waters of the United States and provides cooling water to the facility by any sort of contract or other arrangement;
   * The facility-wide DIF for all cooling water intake structures at the facility is greater than 2 mgd;
   * The cooling water intake structure withdraws cooling water from waters of the United States; and
   * At least 25 percent of the water actually withdrawn  -  actual intake flow (AIF)  -  is used exclusively for cooling purposes.
A facility may choose to demonstrate compliance with the final rule for the entire facility, or for each individual cooling water intake structure.
EPA is adopting provisions that promote the reuse of water from certain sources for cooling and that ensure that the rule does not discourage the reuse of cooling water for other uses such as process water. For example, the final rule at § 125.91(c) specifies that obtaining cooling water from a public water system, using reclaimed water from wastewater treatment facilities or desalination plants, or recycling treated process wastewater effluent (such as wastewater treatment plant "gray" water) does not constitute use of a cooling water intake structure for purposes of this rule. In addition, the definition of cooling water at § 125.92 provides that cooling water obtained from a public water system, reclaimed water from wastewater treatment facilities or desalination plants, treated effluent from a manufacturing facility, or cooling water that is used in a manufacturing process either before or after it is used for cooling as process water is not considered cooling water for the purposes of calculating the percentage of a facility's intake flow that is used for cooling purposes. Therefore, water used for both cooling and non-cooling purposes does not count toward the 25 percent threshold. Examples of water withdrawn for non-cooling purposes includes water withdrawn for warming by LNG (liquefied natural gas) facilities and water withdrawn for public water systems by desalinization facilities.
Today's rule focuses on those facilities that are significant users of cooling water. The rule provides that only those facilities that use 25 percent or more of the water withdrawn exclusively for cooling purposes (on an actual intake flow basis) are subject to the rule. EPA previously considered a number of cut-points or approaches for focusing the applicability of the rule (66 FR 28854, May 25, 2001 and 66 FR 65288, December 18, 2001). EPA used the 25 percent threshold in each of the Phase I, II, and III rules. For this rule, EPA did not receive any new data supporting a different threshold or identify new approaches to the applicability of the rule. Consequently, EPA is adopting 25 percent as the threshold for the percent of flow used for cooling purposes to ensure that a large majority of cooling water withdrawn from waters of the United States are subject to the rule's requirements for minimizing adverse environmental impact. Because power-generating facilities typically use far more than 25 percent of the water they withdraw exclusively for cooling purposes, the 25 percent threshold will ensure that intake structures accounting for nearly all cooling water used by the power sector are addressed by today's rule requirements. While manufacturing facilities often withdraw water for more purposes than cooling, the majority of the water is withdrawn from a single intake structure. Once water passes through the intake, water can be apportioned to any desired use, including uses that are not related to cooling. However, as long as at least 25 percent of the water is used exclusively for cooling purposes, the intake is subject to the requirements of today's rule. EPA estimates that approximately 70 percent of manufacturers and 87 percent of power-generating facilities that meet the first three criteria for applicability outlined above also use 25 percent or more of intake water for cooling and thus are subject to today's rule. (See 66 FR 65288, December 18, 2001.)
For facilities that are below any of the applicability thresholds in today's rule  -  for example, a facility that withdraws less than 25 percent of the intake flow for cooling purposes  -  the Director must set appropriate requirements on a case-by-case  basis, using BPJ, based on § 125.90(b). Today's rule is not intended to constrain permit writers at the Federal, State, or Tribal level, from addressing such cooling water intake structures. Also, EPA decided to adopt for the final rule the proposed provision that requires the owners and operators for certain categories of facilities (existing offshore oil and gas facilities, existing offshore seafood processing facilities and offshore LNG terminals) to meet case-by-case BTA impingement and entrainment requirements, established by the Director. Such facilities are subject to permit conditions implementing CWA section 316(b) if the facility is a point source that uses a cooling water intake structure and has, or is required to have, an NPDES permit.
D.	What is an "Existing Facility" for Purposes of the Final Rule?
In today's rule, EPA is defining the term "existing facility" to include any facility subject to section 316(b) that is not a "new facility" as defined in 40 CFR 125.83 (the Phase I rule).
A point source discharger would be subject to Phase I or today's rule even if the cooling water intake structure it uses is not located at the facility. In addition, modifications or additions to the cooling water intake structure (or even the total replacement of an existing cooling water intake structure with a new one) does not convert an otherwise unchanged existing facility into a new facility, regardless of the purpose of such changes (e.g., to comply with today's rule or to increase capacity). Rather, the determination as to whether a facility is new (Phase I) or existing (today's rule) focuses on whether or not it is a greenfield or stand-alone facility whose processes are substantially independent of  an existing facility, and whether or not there are changes to the cooling water intake.  New facility does not include new units that are added to a facility for purposes of the same general industrial operation.  For example, a new peaking unit at an existing electrical generating station is not a new facility (40 CFR 125.83).  The distinction between an existing facility and a new facility is separate from the distinction between an existing unit at an existing facility and a new unit at an existing facility, which is discussed at greater length in Section J below.
E.	What is "Cooling Water" and What is a "Cooling Water Intake Structure?"
EPA has slightly revised the definition of cooling water intake structure from proposal for today's rule. In today's final rule, a cooling water intake structure is defined as the total physical structure and any associated constructed waterways used to withdraw cooling water from waters of the United States. Under the definition in today's rule, the cooling water intake structure extends from the point at which water is first withdrawn from Waters of the United States up to, and including, the intake pumps. The final rule at § 125.91(c) also specifies that obtaining cooling water from a public water system, using reclaimed water from wastewater treatment facilities (such as wastewater treatment plant "gray" water) or desalination plants, or recycling treated process wastewater effluent does not constitute use of a cooling water intake structure for purposes of applicability of this rule. As a point of clarification, facilities subject to today's rule may choose to use another entity's treated wastewater as a source of cooling water, thereby reducing cooling water withdrawals and associated impingement and entrainment. EPA notes that because the entity providing the wastewater for cooling has already treated it to meet any applicable discharge requirements (e.g., otherwise applicable effluent limitations guidelines and standards, water quality standards, etc.), EPA is not concerned that this provision will lead to pollutant discharges that would not have occurred if the treated effluent had been discharged by the other entity.
Today's rule adopts the new facility rule's definition of cooling water as water used for contact or noncontact cooling, including water used for equipment cooling, evaporative cooling tower makeup, and dilution of effluent heat content. The definition specifies that the intended use of cooling water is to absorb waste heat [not being efficiently used or recaptured for production and thus] rejected from the process or processes used or from auxiliary operations on the facility's premises. The definition also indicates that cooling water obtained from a public water system, reclaimed water from wastewater treatment facilities or desalination plants, treated effluent from a manufacturing facility, or cooling water that is used in a manufacturing process either before or after it is used for cooling as process water would not be considered cooling water for the purposes of determining whether 25 percent or more of the actual intake flow is cooling water. This clarification is necessary because cooling water intake structures typically bring water into a facility for numerous purposes, including industrial processes; use as circulating water, service water, or evaporative cooling tower makeup water; dilution of effluent heat content; equipment cooling; and air conditioning. Note, however, that all intake water (including cooling and non-cooling process) is included in the determination as to whether the 2 mgd DIF threshold for covered intake structures is met.
F.	Would My Facility Be Covered Only If It Is a Point Source Discharger?
Today's rule applies only to facilities that have an NPDES permit or are required to obtain one. This is the same requirement EPA included in the Phase I new facility rule at § 125.81(a)(1). Requirements for complying with CWA section 316(b) will continue to be applied through NPDES permits.
On the basis of the Agency's review of potential existing facilities that employ cooling water intake structures, the Agency anticipates that most facilities will control the intake structure that supplies them with cooling water, and discharge some combination of their cooling water, wastewater, or stormwater to a water of the United States through a point source regulated by an NPDES permit. In such cases, the facility's NPDES permit must include the requirements for the cooling water intake structure. If an existing facility's only NPDES permit is a general permit for stormwater discharges, the Agency anticipates that the Director will write an individual NPDES permit containing requirements for the facility's cooling water intake structure. Alternatively, requirements applicable to cooling water intake structures could be incorporated into general permits. If requirements are placed into a general permit, they must meet the requirements set out at 40 CFR 122.28.
As EPA stated in the preamble to the final Phase I rule (66 FR 65256, December 18, 2001), the Agency encourages the Director to closely examine scenarios in which a facility withdraws significant amounts of cooling water from waters of the United States but is not required to obtain an NPDES permit. As appropriate, the Director must apply other legal requirements, where applicable, such as CWA sections 401 or 404, the Coastal Zone Management Act, the National Environmental Policy Act, the Endangered Species Act, or similar State or Tribal authorities to address adverse environmental impact caused by cooling water intake structures at those facilities.
G.	Would My Facility Be Covered If It Withdraws Water from Waters of the United States? What If My Facility Obtains Cooling Water from an Independent Supplier?
The requirements in today's rule apply to cooling water intake structures that have the design capacity to withdraw amounts of water greater than 2 mgd from waters of the United States. Waters of the United States include the broad range of surface waters that meet the regulatory definition at 40 CFR 122.2 and 40 CFR 230.3, which includes lakes, ponds, reservoirs, nontidal rivers or streams, tidal rivers, estuaries, fjords, oceans, bays, and coves. These potential sources of cooling water can be adversely affected by impingement and entrainment.
Some facilities use an impoundment such as a man-made pond or reservoir as part of a cooling system. Cooling water is withdrawn from the pond or reservoir at one point and heated water is discharged to a different point, using mixing and evaporative processes. As explained above, section 316(b) and today's final rule apply only to withdrawals of cooling water from waters of the United States; accordingly, to the extent a facility withdraws cooling water from a pond or reservoir that is not itself a water of the United States and does not withdraw any make-up water from waters of the U.S., the requirements of today's rule do not apply to such systems. Impoundments that are not constructed from a waters of the U.S. but do withdraw make-up water from waters of the U.S. can be closed-cycle recirculating systems subject to the requirements of today's rule, provided that withdrawal for make-up water is minimized.
Facilities that withdraw cooling water from impoundments that are in whole or in part waters of the United States and that meet the other criteria for coverage (including the requirement that the facility has or will be required to obtain an NPDES permit) are subject to today's rule. In today's rule, the agency is defining the term closed-cycle recirculating system to include, at § 125.92(c)(2), a system with impoundments of waters of the U.S. where the impoundment was lawfully created for the purpose of serving as part of the cooling water system. In determining whether an impoundment qualifies as a closed-cycle recirculating system, the Director will determine whether the make-up water withdrawals for such a system have been minimized.  In many cases, EPA expects that such make-up water withdrawals are commensurate with the flows of a closed-cycle cooling tower. Some of these impoundments may qualify for the waste treatment exclusion found in the definition of a waste treatment system at 40 CFR 122.2, and this rule does not affect the applicability of that exclusion.
EPA does not intend for this rule to change the regulatory status of impoundments. Impoundments are addressed in the definition of waters of the United States at 40 CFR 122.2 and 40 CFR 230.3. The determination whether an impoundment is a water of the United States is to be made by the Director on a site-specific basis. The EPA and the U.S. Army Corps of Engineers have jointly issued jurisdictional guidance concerning the term waters of the United States in light of the Supreme Court's decision in Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers, 531 U.S. 159 (2001) (SWANCC). A copy of that guidance was published as an Appendix to an Advanced Notice of Proposed Rulemaking on the definition of the phrase waters of the United States, see 68 FR 1991, January 15, 2003, which is at http://www.epa.gov/owow/wetlands/pdf/ANPRM-FR.pdf. The agencies additionally published guidance in 2008 regarding the term waters of the United States in light of both the SWANCC and subsequent Rapanos case (Rapanos v. United States, 547 U.S. 715 (2006)). The EPA published a proposed revision to the definition of "Waters of the United States" under the Clean Water Act on April 21, 2014 (see 79 FR 22188).
EPA recognizes that some impoundments may be man-made waterbodies that support artificially managed and stocked fish populations. As a result, EPA has included a provision in today's final rule to allow the Director to waive certain permit application requirements for such facilities. Note, however, that these facilities are still subject to the final rule.
EPA acknowledges that the point of compliance for facilities located on impoundments may also vary depending on where the facility withdraws from a water of the United States. Again, only cooling water systems with withdrawals of cooling water from waters of the United States are covered by section 316(b) and today's rule.  Because a facility may withdraw cooling water from a water of the United States either directly or as makeup water for a closed-cycle cooling system, the Director may determine where within a facility's cooling water intake structure is or are the facility's point or points of compliance.
The Agency recognizes that some facilities that have or are required to have an NPDES permit might not own and operate the intake structure that supplies their facility with cooling water. In addressing facilities that have or are required to have an NPDES permit that do not directly control the intake structure that supplies their facility with cooling water, § 125.91 provides (similar to the new facility rule) that facilities that obtain cooling water from a public water system, use reclaimed water from a wastewater treatment facility or desalinization plant, or use treated effluent are not deemed to be using a cooling water intake structure for purposes of this rule. However, obtaining water from another entity that is withdrawing water from a water of the United States will be counted as using a cooling water intake structure for purposes of determining whether an entity meets the threshold requirements of the rule. For example, facilities operated by separate entities might be located on the same, adjacent, or nearby property. One of these facilities might take in cooling water and then transfer it to other facilities that discharge to a water of the United States. Section 125.91(b) specifies that use of a cooling water intake structure includes obtaining cooling water by any sort of contract or arrangement with one or more independent suppliers of cooling water if the supplier or suppliers withdraw water from waters of the United States but that is not itself a new or existing facility subject to CWA section 316(b), except if it is a public water system, a wastewater treatment facility or desalination plant providing reclaimed water, or a facility providing treated effluent for reuse as cooling water pursuant to § 125.91(c).
As a practical matter, the existing facilities subject to this rule are the largest users of cooling water and therefore typically withdraw volumes of water for cooling that warrant owning the cooling water intake structures. In some cases, such as at nuclear power plants or critical baseload facilities, the need for cooling water includes safety and reliability reasons that would likely preclude any independent supplier arrangements. Therefore, EPA expects this provision will have only limited applicability. EPA is nevertheless retaining the provision to prevent facilities from circumventing the requirements of today's rule by creating arrangements to receive cooling water from an entity that is not itself subject to today's rule and that is not otherwise explicitly exempt from today's rule(such as drinking water or treatment plant discharges reused as cooling water).
H.	What Intake Flow Thresholds Result in an Existing Facility Being Subject to the Final Rule?
EPA determines the cooling water flow at a facility in two ways. The first is based on the DIF, which reflects the maximum intake flow the facility is capable of withdrawing. While this normally is limited by the capacity of the cooling water intake pumps, other parts of the cooling water intake system could impose physical limitations on the maximum intake flow the facility is capable of withdrawing. The second method for determining cooling water flow is based on the AIF, which reflects the actual volume of water withdrawn by the facility. EPA has defined AIF to be the average water withdrawn each year over the preceding three years. Both of these methods are used in today's rule.
Today's final rule applies to facilities that have a total DIF of greater than 2 mgd (see § 125.91). At a threshold of 2 mgd, today's rule covers 99.8 percent of the total water withdrawals by utilities and other industrial sources (if the other criteria for coverage are met), which includes 70 percent of manufacturing facilities and 87 percent of electric generators. EPA also chose the greater than 2 mgd threshold because it was consistent with the applicability criteria in the Phase I rule.
There are substantial environmental benefits that will accrue with a threshold of 2 mgd. For example, EPA's analysis indicates that greater than 82 percent of impinged fish mortality across all facilities would be prevented by this rule at this threshold.  EPA also considered a threshold of 50 mgd. The record includes 38 studies documenting IM at more than 40 facilities with flows lower than 50 mgd. Further, the industry questionnaire demonstrates that such facilities are twice as likely to have no controls in place for impingement or entrainment than are facilities with intake flows greater than 50 mgd. In addition, lower intake flow facilities can have similar impacts to those of larger flow facilities as sizable numbers of fish are impinged by lower flow facilities. Moreover, site-specific impacts of lower flow facilities may be significant, particularly where threatened or endangered species are present.
Although smaller flow facilities (those less than 50 mgd) constitute a large proportion of the total number of the facilities regulated (476 of 1,065), the total compliance cost for these smaller facilities are only a small portion of the total compliance cost of the rule ($23 million of $275 million). Thus any perceived aggregate cost savings from setting the threshold higher than 2 mgd would be minimal.
There is no appreciable difference in the cost effectiveness of the rule with a higher applicability threshold. For example, the cost effectiveness of the rule with a threshold of 2 mgd is $0.42 per age-one equivalent losses (A1E). At a threshold of 50 mgd the cost effectiveness would be $0.41 per A1E. In addition, the incremental cost of the 2 mgd threshold relative to a 50 mgd threshold is negligible for the electric power industry at less than 0.1 percent of annual electricity sector revenue, which exceeds $126 billion. The facility-level impacts are negligible to zero at either 2 or 50 mgd threshold. At the 2 mgd threshold, only 5 (1 percent) of the manufacturing facilities have a cost-to revenue ratio exceeding 1 percent (but less than 3 percent). While this drops to zero facilities at the 50 mgd threshold, the difference of 5 facilities out of 509 facilities is not significant. Costs for lower flow facilities are so small that the average annual household utility bill would not measurably decrease by changing the threshold from 2 to 50 mgd. While 58 percent of the small facilities affected by the final rule are below 50 mgd, 40 percent of them already meet one of the compliance alternatives for impingement mortality of the rule and likely would not need to install any additional compliance technologies. And small businesses account for only 17 percent of facilities at or below 50 mgd, demonstrating that there would not be a disproportionate impact on small businesses at a 2 mgd threshold.
Thus, EPA concluded that the threshold of 2 mgd ensures that the users of cooling water causing the most adverse environmental impact are subject to the rule. Raising the threshold for applicability of the rule's impingement and entrainment requirements to 50 mgd as some commenters suggested was not supportable given the statistics and information described above.
Raising the applicability threshold to 50 mgd would have meant that 476 facilities, almost half of the 1,065 facilities subject to the national standards set by today's rule, would not be subject to the rule. Ignoring so many facilities when setting national standards fails to apply the common sense approaches set forth in this rule for minimizing adverse environmental impacts from cooling water intake structures.
Excluding such a large number of facilities from this rule would create regulatory uncertainty for those facilities since they would remain subject to CWA permitting requirements, but without the benefits of the structure of this rule.  Directors would have an obligation to establish controls on a case-by-case basis for these lower flow facilities using a BPJ analysis instead of using the more straightforward and transparent provisions of setting controls based on national standards contained in this rule. Such BPJ analyses can be uncertain, and can be time consuming and complex to develop for both Directors and owners and operators of facilities. Case-by-case BPJ permits (instead of permits based on the national standards in today's rule) would likely increase the time and costs to states for such permits to be developed, further delaying the minimization of adverse environmental impacts called for by CWA section 316(b). Maintaining an applicability threshold of 2 mgd DIF best combines the shared goals of minimizing adverse environmental impacts as required by the CWA, and the predictability and flexibility contained in the rule.
EPA acknowledges that there may be circumstances where flexibility in the application of the rule may be called for and the rule so provides.  For example, some low flow facilities that withdraw a small proportion of the mean annual flow of a river may warrant special consideration by the Director. As an illustration, if a facility withdraws less than 50 mgd AIF, withdraws less than 5 percent of mean annual flow of the river on which it is located (if on a river or stream), and is not co-located with other facilities with CWISs such that it contributes to a larger share of mean annual flow, the Director may determine that the facility is a candidate for consideration under the de minimis provisions contained at § 125.94(c)(11).  In the case of facilities on lakes and reservoirs, co-location would be better determined by multiple CWIS facilities on the same waterbody, rather than distance.
In either case, the flexibilities contained in the rule for the Director to consider the site-specific characteristics of each intake structure within the national standard provide a useful mechanism for facilities with lower intake flows and low impacts to be considered.
EPA is continuing to base applicability on DIF as opposed to AIF for several reasons. In contrast to AIF, DIF is a fixed value based on the design of the facility's operating system and the capacity of the circulating and other water intake pumps. This provides clarity because the DIF does not vary with facility operations, except in limited circumstances, such as when a facility undergoes major modifications. On the other hand, actual flows can vary significantly over sometimes short periods. For example, a peaking power plant might have an AIF close to the DIF during times of full energy production, but an AIF of zero during lengthy periods of standby. Use of DIF provides clarity as to regulatory status, is indicative of the potential magnitude of environmental impact, and avoids the need for monitoring to confirm a facility's status. For more information about these thresholds, see 69 FR 41611, July 9, 2004.
Under this rule, all facilities with a DIF of greater than 2 mgd, that meet the other three criteria for applicability of today's rule, must submit basic information describing the facility, Source Water Physical Data, Source Water Biological Characterization Data, and Cooling Water Intake System Data. In addition, these facilities must submit additional facility-specific information including the selected impingement compliance option, and operational status of each of the facility's units. Certain facilities withdrawing the largest volumes of water for cooling purposes have additional information and study requirements such as relevant biological survival studies and the entrainment study as described below.
The final rule uses AIF rather than DIF for purposes of determining which facilities must provide the information required in § 122.21(r)(9) through (13), referred to as the entrainment study. Thus, the rule provides that any facility subject to the rule with actual flows in excess of 125 mgd must provide an entrainment study with its permit application (which includes the Entrainment Characterization Study at § 122.21(r)(9)). Adverse environmental impacts from entrainment result from actual water withdrawals, and not the maximum designed level of withdrawal. Further, using actual flow might encourage some facilities to adopt operational practices to reduce their flows below 125 mgd AIF to avoid collecting supplemental data and submitting the additional entrainment study. Furthermore, any facility that has DIF greater than 2 mgd, that meets the other three criteria for applicability of today's rule, is required to submit basic information that will allow the Director to verify its determination of whether it meets the 125 mgd AIF threshold.
EPA has selected an administrative threshold of 125 mgd AIF for submission of the entrainment study because this threshold will capture 90 percent of the actual flows but will apply to only 30 percent of existing facilities. Further, based on EPA's data there are no closed-cycle recirculating systems in use above this threshold. The 125 mgd AIF threshold will significantly limit facility burden at more than two-thirds of the potentially affected facilities while focusing the Director on major cooling water withdrawals. Contrary to a number of public comments, however, EPA is not implying or concluding that the 125 mgd threshold is an indicator that facilities withdrawing less than 125 mgd are (1) not causing any adverse impacts or (2) automatically qualify as meeting BTA. In other words, the threshold, while justified on a technical basis, does not result in exemptions from the rule.  Instead, EPA is making a policy decision as to which facilities must provide a certain level and type of information. The Director, of course, will retain the discretion to require reasonable information to make informed decisions at the smaller facilities. The 125 mgd threshold focuses on the facilities with the highest intake flows and the highest likelihood of causing adverse impacts; it is not an indicator that facilities under that threshold are no longer of concern in the final rule.
In today's rule, EPA seeks to clarify that for some facilities, the DIF is not necessarily the maximum flow associated with the intake pumps. For example, a power plant might have redundant circulating pumps, or might have pumps with a name plate rating that exceeds the maximum water throughput of the associated piping. EPA intends for the DIF to reflect the maximum rate at which a facility can physically withdraw water from a source waterbody (usually normalized to a daily rate in mgd). This also means that a facility that has permanently taken a pump out of service should be able to consider such constraints when reporting its DIF, as the facility's capacity to withdraw water may have fundamentally changed. Additionally, if a facility's flow is limited by constrictions in the piping or other physical limitations (e.g., a given portion of its cooling system that can only safely handle a given amount of flow) and that flow is lower than the DIF for the pumps, the facility should be able to consider such constraints when reporting its DIF, because it is not capable of withdrawing its full pumping DIF without compromising the cooling system.
I.	What are the Requirements for Existing Offshore Oil and Gas Facilities, Offshore Seafood Processing Facilities or LNG Terminals BTA Requirements under the Final Rule?
Under today's rule, existing offshore oil and gas facilities, existing offshore seafood processing facilities and existing LNG terminals will be subject to section 316(b) requirements on a BPJ basis. In the Phase III rule, EPA studied offshore oil and gas facilities and offshore seafood processing facilities and could not identify any technologies (beyond the protective screens already in use) that are technically feasible for reducing impingement or entrainment in such existing facilities.  As discussed in the Phase III rule, known technologies that could further reduce impingement or entrainment would result in unacceptable changes in the envelope of existing platforms, drilling rigs, mobile offshore drilling units, offshore seafood processing facilities, and similar facilities as the technologies would project out from the hull, potentially decrease the seaworthiness, and potentially interfere with structural components of the hull. It is also EPA's view that for many of these facilities, the cooling water withdrawals are most substantial when the facilities are operating far out at sea and, therefore, not withdrawing from a water of the United States. EPA is aware that LNG facilities may withdraw hundreds of million gallons per day of seawater for warming (re-gasification). However, some existing LNG facilities might still withdraw water where 25 percent or more of the water is used for cooling purposes on an actual intake flow basis. EPA has not identified a uniformly applicable and available technology for minimizing impingement mortality and entrainment at these facilities. However, technologies might be available for some existing LNG facilities. LNG facilities that withdraw any volume of water for cooling purposes will be subject to site-specific, BPJ determinations of BTA.
EPA has not identified any new data or approaches that would result in a different determination. Therefore, EPA has adopted the approach of the proposed rule and is requiring that NPDES Permit Directors, on a case-by-case basis using BPJ, determine BTA for existing offshore oil and gas extraction facilities, existing offshore seafood processing facilities, and existing LNG terminals.
J.	What is a "New Unit" and How Are New Units Addressed Under the Final Rule?
Today's rule establishes requirements for new units at an existing facility that are different than those applicable to existing units at an existing facility. The requirements for new units at existing facilities are modeled after the requirements for a new facility in the Phase I rule. Under today's rule, a new unit means a newly built, stand-alone unit, whose construction begins after the effective date of the rule. EPA is also clarifying that while Phase I does not include units newly constructed at an existing facility for the same general industrial operation, such units do constitute a new unit at existing facilities and, as such, are subject to today's final rule.
On the basis of the public comments received on how to define "new unit," EPA provides a clear definition for this term in the final rule. The definition for a new unit at an existing facility establishes a clear regulatory framework for both affected facilities and Directors. This definition captures facilities that are undergoing major construction projects involving the construction of a new stand-alone unit, while not discouraging upgrades.  For example, a nuclear facility conducting a measurement uncertainty capture or a stretch power uprate, or a fossil-fuel facility repowering an existing generating unit, would not be considered to result in the relevant unit becoming a new unit. As another example, under this definition placing an offshore facility or vessel into a dry dock for maintenance or repair does not result in either the offshore facility, vessel, or the dry dock as being defined as a new unit.
Section VI discusses EPA's rationale for establishing the definitions for new units at existing facilities described below.
1.	Electric Generators
The final rule defines a new unit at an existing facility as a newly built, stand-alone unit that is constructed at an existing facility and that does not meet the definition of a new facility. An existing unit that is repowered or undergoes significant modifications (such as where the turbine and condenser are replaced) is not considered a new unit
. Exhibit I-4 below provides several examples and whether these hypothetical units will be defined as new or existing units.
Exhibit I-4. Examples of new and existing units at existing electric generation facilities
                 Examples of new units at an existing facility
                          Examples of existing units

A unit that is constructed at a stand-alone location at an existing intake structure

An existing unit is retired and demolished, with a new unit constructed in the former unit's location as a replacement (regardless of the change in generating capacity, the change in cooling water intake flow, or the use of an existing intake structure)
A unit where a new boiler or fuel type is employed

2.	Manufacturers
At manufacturing facilities that generate electricity onsite, the previous discussion of how to define new units at existing electric generating facilities generally applies. Some manufacturers employ different industrial processes than an electric generator and therefore have different industrial equipment (including cooling systems). In particular, manufacturers may not use a steam condenser or steam turbine for their industrial processes, making the definition for "repowering" above inappropriate for manufacturing facilities. However, manufacturers may have opportunities to reuse cooling water that power plants do not, and in site visits, EPA found many manufacturers have conducted energy and water audits resulting in significant reductions in water withdrawals. The final rule provides for manufacturers to receive credit for such reductions in fresh water withdrawals,
It is not as easy to identify a similar conceptual approach for defining new manufacturing units at existing manufacturing facilities because waste heat can be generated from a variety of sources including exothermic processes, product heating and cooling, and the processing, handling, treating, or disposal of feed streams, waste streams, by-products, and recycled components. Sources may include direct cooling transferred across an inert material (e.g., heat exchanger, steam condenser), indirect cooling using a working fluid (e.g., chillers, refrigeration), or contact cooling where cooling water comes into direct contact with a product or process stream. Unlike electric generating units where the majority of cooling water comes from a single process source (the steam condenser), manufacturing units may include many separate non-contact or contact cooling water sources dispersed throughout the production processes and the facility. Thus, a definition for manufacturing units must take into consideration a broader category of cooling water sources.

For power generators, the term "generating unit" is quite clear since there is only one product (electricity), the non-contact cooling water predominantly comes from one source, and the application of the term is well understood in the industry. But for some manufacturing facilities, it may be unclear what constitutes a "unit" since manufacturing processes can involve numerous vertically integrated processes or production steps that may involve intermediate products. For example, a unit could encompass an entire series of production steps (start to finish) or simply the individual steps. Also, there may be ancillary support equipment that serves various functions and it is not clear whether this will be considered a unit or part of a unit.
For example, a petroleum refiner will typically include various processes such as distillation, cracking, hydrotreating, coking, reforming, and different types of various products. Various intermediate products from these processes may be directly transported (piped) from one process to another or stored and some may be sold. And because various intermediate and final process products may be blended into different products, differentiating units on a product or intermediate product basis may not provide clear distinctions.

For these reasons EPA has defined new unit to simply mean a new stand-alone unit. A new unit may include one or more distinct production lines that are added to increase product output and operate parallel to and independently of existing production equipment.  A new unit does not include the replacement or rebuilding of one or more distinct production lines or distinct processes involving the replacement of the majority of the waste heat producing equipment that serves as sources of non-contact cooling water and the majority of the heat exchanging equipment that contributes heat to the non-contact cooling water. Such modifications alone do not render the unit a new unit. A unit undergoing such modifications would continue to be considered an existing unit and would be regulated under the existing unit provisions of this rule. This definition therefore does not impose any disincentives for the replacement/upgrade of individual components or ancillary equipment alone.
Exhibit I-5 below provides several examples of whether these hypothetical units are defined as new or existing units. As noted above, the Director has broad discretion to assess the scope of any modifications at the manufacturing facility and to determine whether the new construction comprises a stand-alone unit. For the purposes of today's final rule, the Director does not need to address whether the stand-alone unit is for the same general industrial purposes, or whether the new unit is a replacement unit. The key factors in assessing whether a unit will be defined as new lies with whether the construction results in a stand-alone unit.
Exhibit I-5. Examples of new and existing units at manufacturers
                 Examples of new units at an existing facility
              Examples of existing units at an existing facility
A unit that is constructed at a stand-alone location at an existing facility (either adjacent to existing units or on newly acquired or developed property)
A unit where only the waste heat generating process equipment or the cooling system equipment is replaced
A unit that is constructed adjacent to an existing unit for the same industrial activity (such as expanding the production output by building a second unit as a stand-alone unit next to the existing unit)
A unit where modifications are made to the waste heat generating process equipment or the cooling system (e.g., optimization, repairs, upgrades to operational elements)
An existing unit is retired before or after a new unit is constructed as a replacement (regardless of the change in production capacity, the change in cooling water intake flow, or the use of an existing intake structure)
Replacement or upgrade of ancillary equipment (e.g., pumps, motors, HVAC, etc.)
An existing unit is retired and demolished, with a new unit constructed in the former unit's location as a replacement (regardless of the change in production capacity, the change in cooling water intake flow, or the use of an existing intake structure)

Replacement or upgrade of ancillary equipment (e.g., pumps, motors, HVAC, etc.)

K.	Amendments Related to the Phase I Rule
EPA is making limited changes to the Phase I rule at 40 CFR Part 125 Subpart I. The changes fall into two categories. The first is deleting the provision in the Phase I rule that would allow a facility to demonstrate compliance with the Phase I BTA requirements in whole or in part through restoration measures. This 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 that the statute did not authorize restoration measures to comply with CWA section 316(b) requirements. The second category of changes reflects technical corrections or errors that do not change the substance of the Phase I rule. EPA has not reopened any other aspects of the Phase I rule other than the provisions specifically noted here.
1.	Restoration Provisions Not Authorized
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 originally allowed 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 66 FR 65280 - 65281, December 18, 2001.
Upon legal challenge, the Second Circuit Court concluded that EPA exceeded its authority by allowing new facilities to comply with CWA 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. Today's final rule amends Phase I to remove those provisions in §§ 125.84(d) and 125.89(b)(1)(ii) authorizing restoration measures in conformance with the Second's Circuit's decision. Today's rule also specifically deletes permit application requirements contained in the Comprehensive Demonstration Study at § 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 might reduce the alternatives available to some Phase I facilities. EPA notes, however, 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.
2.	Corrections to Subpart I
Today's final rule changes the applicability of the technical requirements at § 125.84 and permit application requirements at § 125.86 statement to match the applicability statement at § 125.81(a)(3). The applicability in all three instances should specify DIF or withdrawals "greater" than the specified value of 2 mgd. See Basis for the Final Regulation at 66 FR 65270, December 18, 2001.
Today's rule also corrects 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 final rule corrects the permit 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.

II.	Legal Authority for and Background of the Final Regulation
A.	Legal Authority
Today's final rule is issued under the authority of Clean Water Act sections 101, 301, 304, 308, 316, 401, 402, 501, and 510, 33 U.S.C. 1251, 1311, 1314, 1318, 1326, 1341, 1342, 1361, and 1370.
B.	Purpose of the Regulation
The purpose of today's rule is to reduce impingement and entrainment of fish, shellfish and other aquatic organisms at cooling water intake structures.  Today's rule establishes national requirements for cooling water intake structures at existing facilities under section 316(b) of the CWA. That section provides that any standard established pursuant to CWA sections 301 or 306 and applicable to a point source must require that the location, design, construction, and capacity of cooling water intake structures reflect the BTA for minimizing adverse environmental impact. Today's rule establishes requirements applicable to all existing power-generating facilities and existing manufacturing and industrial facilities that are point sources, that have a DIF of greater than 2 mgd from waters of the United States, and use at least 25 percent of the water they withdraw exclusively for cooling purposes on an actual intake flow basis. In addition, EPA is today also making minor changes to its earlier rule establishing section 316(b) requirements for new facilities. Specifically, EPA is removing a provision that would have allowed a restoration-based alternative for complying with performance standards as well as the associated monitoring and other requirements for demonstrating compliance.
C.	Background
1.	The Clean Water Act
a.	General
The Federal Water Pollution Control Act, also known as the 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, 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 and (2) authority for EPA or authorized States or Tribes to issue NPDES permits that authorize and regulate the discharge of pollutants.
CWA section 402 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-six 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 and possibly water-quality-based effluent limitations. Under section 316(b), NPDES permits are required to contain conditions to implement the requirements of section 316(b).
CWA section 510 provides that, except as provided in the CWA, nothing will 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 CWA, 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). New York and California have enacted State requirements that are at least as stringent as those of the final rule, and therefore, EPA has analyzed facilities in those States that are subject to those State requirements as already complying with the final rule. Those facilities still must comply with the administrative requirements of the final rule.
CWA sections 301, 304, and 306 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 on the basis of the pollutants of concern discharged by the industry, the degree of control that can be attained using various levels of pollution control technology appropriate for each industrial process or subcategory, consideration of various economic tests implemented under the authority of the CWA for each level of control, and other factors identified in CWA sections 304 and 306 (such as non-water quality environmental impacts including energy impacts). EPA has promulgated regulations setting effluent limitations guidelines and standards under CWA sections 301, 304, and 306 for 57 industry categories. See 40 CFR parts 405 through 471. EPA has established effluent limitations guidelines and standards that apply to the industry categories that are the largest users of cooling water (e.g., steam electric power generation, paper and allied products, petroleum refining, iron and steel manufacturing, and chemicals and allied products), as well as many other industrial categories that may include facilities subject to this final rule.
b.	Section 316(b)
Section 316(b) states, in full,
      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.

33 U.S.C. 1326(b). This provision is unique among CWA provisions because it addresses the adverse environmental impact caused specifically by the intake of cooling water, in contrast to other provisions of the Act that regulate the discharge of pollutants into waters of the United States.
The CWA does not further define the substantive standard specified in section 316(b)  -  "best technology available for minimizing adverse environmental impact" (BTA). 33 U.S.C. 1326(b). The standard that cooling water intake structures must achieve under section 316(b)  -  BTA  -  is a different standard from those prescribed under sections 301 and 306 of the Act. Riverkeeper, Inc. v. v. EPA, 358 F.3d 174 (2d Cir. 2004). Moreover, unlike sections 304 and 306, section 316(b) does not set forth the specific factors that the EPA must consider in determining BTA. BTA is "the only substantive statutory requirement explicitly applicable to the intake structure regulations." Id. at 186. Unlike other provisions of the Act, section 316(b) standards are not subject to a "host" of other requirements or limitations. Ibid. There is no "elucidating language applicable to the BTA test." Entergy Corp. v. Riverkeeper, Inc., 556 U.S. 208, 221 (2009).
Section 316(b) does, however, cross-reference sections 301 and 306 of the CWA by stating that any standards established pursuant to those sections also require that cooling water intake structures reflect BTA. Ibid. This cross reference, in the view of the Second Circuit, is an invitation, not a straitjacket. EPA "may" look to the referenced sections in discerning what factors Congress intended EPA to consider in determining BTA.
      Because section 316(b) refers to sections 301 and 306 but provides a different standard ("best technology available for minimizing adverse environmental impact" instead of, for example, "best available demonstrated control technology") and does not explicitly provide that regulations pursuant to section 316(b) are subject to the requirements of sections 301 and 306, we think it is permissible for the EPA to look to those sections for guidance but to decide that not every statutory directive contained therein is applicable to the Rule.

The terse statutory description of BTA and the absence of any prescribed statutory factors for consideration in determining BTA suggest that Congress delegated EPA significant rulemaking discretion in this area.
As noted, in contrast to effluent limitations guidelines and standards, 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 uniform nationally applicable performance requirements through rule making.
The U. S. Supreme Court has, however, recently provided guidance, in Entergy Corp. v. Riverkeeper, Inc., in interpreting section 316(b) and what factors EPA may consider in its standard-setting. That decision addressed the question of whether CWA section 316(b) authorizes EPA to compare costs and benefits of various technologies when setting national performance standards for cooling water intake structures under CWA section 316(b). In overturning EPA's earlier rule to establish section 316(b) requirements for existing facilities, the Second Circuit held that balancing costs and benefits was an impermissible factor for standard setting under section 316(b). 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 permissible for EPA to consider 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 do so. 556 U.S. 208, 222-23.
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 properly consider one factor (cost/benefit analysis) under section 316(b), the language also indicates that EPA has wide discretion in considering other factors that it deems relevant to 316(b) standard setting. 556 U.S. 208, 222 (2009) ("It is eminently reasonable to conclude that § 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.").
Regarding the other factors EPA may, but is not mandated to, consider, as noted above, section 316(b) cross references CWA sections 301 and 306 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. Following the decisions of the Second Circuit in reviewing both the Phase I and Phase II rules, EPA has interpreted the cross reference as authorizing consideration of the factors considered under those provisions to help guide section 316(b) rulemaking without determining that each of those factors is applicable to this rule. Thus, for example, section 306 directs EPA to establish performance standards for new sources based on the BADT (best available demonstrated control technology). 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).
Similarly, CWA section 301 requires EPA

, in establishing standards known as effluent limitations guidelines, to consider specified factors. For a complete discussion of factors considered in establishing section 301 effluent limits, see 76 FR 22178-22179, April 20, 2011. But, EPA in establishing section 316(b) standards is not constrained in what factors it considers or bound by any statutorily prescribed tests as is the case with sections 301 and 306. Consequently, while section 316(b) expressly refers to section 301 and 306, and, while it shares some of the same words used in sections 301(b) and 306, its language is different. These differences in the statutory descriptions, coupled with the brevity of section 316(b) itself, prompt EPA to examine the factors described in section 301, 306  and, ultimately, section 304 where relevant in EPA's determination of the "best technology available to minimize adverse environmental impact" of cooling water for intake structures for existing facilities.
As noted above, there are significant differences between section 316(b) and sections 301, 304 and 306. 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." 556 U.S. at 219. 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, as contrasted with 316(b). For example, EPA has established BAT effluent limitations guidelines and new source performance standards on the basis of 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 which historically have been developed on a site-specific basis, where EPA has considered the costs of technologies in relation to the benefits of minimizing adverse environmental impact in establishing 316(b) requirements. 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 could reasonably interpret section 316(b) as authorizing consideration, where appropriate, of the same factors, including costs. EPA stresses that it may therefore consider some of the same factors, even if it is not legally required to consider them in the same way.

2. 	Early Litigation History
On January 19, 1993, a group of individuals and environmental organizations filed, under CWA section 505(a)(2), 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 nondiscretionary duty to issue regulations implementing CWA section 316(b), 33 U.S.C. 1326(b). In 1995, EPA and the plaintiffs executed a consent decree in the case. As amended, it provided for EPA to implement CWA section 316(b) by prescribed dates in the three separate rule-making proceedings. Phase I concerned cooling water intake structures at new facilities, Phase II existing power plants using large volumes of cooling water and Phase III for existing smaller-flow power plants and factories in at least four industrial sectors (pulp and paper making, petroleum and coal products manufacturing, chemical and allied manufacturing, and primary metal manufacturing). EPA promulgated the Phase I rule in December, 2001, the Phase II rule in July, 2004 and the Phase III rule in June, 2006.
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.) asserting that EPA's Phase III rule failed to discharge EPA's duty under CWA section 316(b).
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 2004 Phase II and 2006 Phase III rulemakings. Subsequently, 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 CWA section 316(b) 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 if 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. On July 17, 2012, the parties agreed to an amendment to the settlement agreement to extend the date for the final rule to June 27, 2013.  On June 21, 2013, the parties agreed to extend the date to November 4, 2013, to accommodate completion of formal consultation under the Endangered Species Act.  In part due to the government shutdown, on November 12, 2013, the parties agreed to extend the date to January 14, 2014.  On February 10, 2014, to continue progress on the Endangered Species Act (ESA) consultation process, the parties agreed to extend the date to April 17, 2014. Finally, on April 23 2014, in a conference with the court EPA informed the judge that the EPA and the Services would complete the ESA consultation, so that the EPA would sign the rule by May 16, 2014.  The court entered an order provisionally reinstating the case if EPA failed to inform the court by May 19, 2014 that it had taken the contemplated action.  On May 19, 2014, the Administrator signed this notice for publication in the Federal Register.
3.	Prior EPA Actions to Address Cooling Water Intake Structures
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. The rule added a new § 401.14 to 40 CFR Chapter I that reiterated the requirements of CWA section 316(b). It also added a new part 402, which included three sections: (1) § 402.10 (Applicability), (2) § 402.11 (Specialized definitions), and (3) § 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, electric utility companies challenged those regulations, arguing that EPA had failed to comply with the requirements of the Administrative Procedure Act in promulgating the rule. Specifically, the utilities argued that EPA had violated the Administrative Procedure Act in promulgating regulations mandating consideration of the information in the Development Document in establishing 316(b) conditions in individual NPDES permits because 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. The court determined that the information in the Development Document was part of the substance of a regulation imposing specific obligations in mandatory terms. As such, the information must either be published in the Federal Register in its entirety or to be reasonably available and properly incorporated by reference under Federal Register requirements. The court explained it did not object to site-specific implementation of the section 316(b) requirements ("[w]hile we emphasize we do not fault EPA for its point source by point source application"), it did require EPA to "devise a less uncertain method of advising those affected of the conditions by which they are to be bound."  Appalachian Power Co. v. Train, 566 F.2d 451, 457 (4th Cir. 1977). Without reaching the merits of the regulations themselves, the court remanded the rule. EPA later withdrew part 402. (See 44 FR 32956, June 7, 1979.) Section 402.10, however, now codified at § 401.14, remains in effect.
Following the Fourth Circuit remand of EPA's section 316(b) regulations in 1977, NPDES permit authorities have made decisions implementing CWA section 316(b) and § 401.14 without the direction of a national rule. 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). That draft guidance describes the studies recommended for evaluating the impact of cooling water intake structures on the aquatic environment and recommends a basis for determining the BTA 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 site-specific approach was also consistent with the approach described in the 1976 Development Document referenced in the remanded regulation. (See DCN 1-1056-TC from the Phase I docket.)  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 Director. The process involved developing a site-specific study of the environmental effects associated with each facility that uses one or more cooling water intake structures, and consideration of that study by the Director 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
i.	Rulemaking
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 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 greater than 2 mgd and use at least 25 percent of the water they withdraw solely for cooling purposes on an actual intake flow basis.
In the new facility rule, EPA adopted a two-track approach. Under Track I, facilities that withdraw equal to or greater than 10 mgd were required to meet three requirements. First, 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. Second, the design through-screen intake velocity is restricted to 0.5 fps (foot per second). Third, 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. Further, if there are, for example, endangered or threatened species stressed by a facility's intake structure, a facility that would otherwise meet the applicable performance requirements may have to select and implement additional design and construction or operational measures to address impingement mortality and entrainment if these measures are inadequate to protect the species. Facilities 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 they must still meet specific operational criteria.
Under Track II, a facility had the opportunity to demonstrate to the NPDES permitting authority (Director) that the technologies 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 for restricting intake flow and velocity. In making this demonstration, the regulations allow a facility to rely on a combination of measures in addition to technology controls for reducing impingement and entrainment to achieve results equivalent to the Track I intake flow and velocity requirements. Among these measures, the rule would have allowed restoration of the affected waterbody through efforts such as restocking fish and improving the surrounding habitat to offset the adverse effects that would otherwise be caused by operating the intake structures. The Second Circuit, in reviewing the new facility rule, determined that section 316(b) did not authorize the use of restoration measures in complying with the EPA performance standard. (Note that EPA is removing the provision related to restoration measures from the CFR in this rulemaking but has included the above description of the Phase I rule for completeness.) For more information, see Section I above.
In addition, under the Phase I rule, 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, 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.
ii.	Subsequent Litigation
Various environmental and industry groups challenged the Phase I 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 section 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 rule removes the restoration provisions from the Phase I rule. For more details, see Chapter I of this preamble.
c.	Phase II  -  Large Flow Existing Power Plants
i.	Rulemaking
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 2004 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 DIF 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 on an actual intake flow basis. In addition, power producers fitting the description above were also subject to the final 2004 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 United States even if the supplier was not itself a 2004 Phase II existing facility. EPA included this provision to prevent circumvention of the 2004 Phase II rule requirements by a facility purchasing cooling water from entities not otherwise subject to section 316(b).
The final 2004 Phase II rule and preamble also clarified the definition of an existing power-producing facility. The 2004 Phase II rule defined an existing facility as "any facility that commenced construction as described in § 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 § 125.83." Because 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 2004 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 2004 Phase II rule, EPA established BTA performance standards for the reduction of impingement mortality and, under certain circumstances, entrainment (see 69 FR 41590-41593, July 9, 2004). The performance standards consisted of ranges of reductions in impingement mortality and, if applicable, 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 suite of technologies that EPA determined were commercially available and economically achievable for the industries affected as a whole (69 FR 41598-41610, July 9, 2004). EPA based the impingement mortality and entrainment performance standards on a suite of technologies because it found no single technology to be effective at all affected facilities. For impingement standards, these technologies included the following: (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 the following: (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 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, for more details see Section III.B.1 of the preamble to the proposed rule, 76 FR 22185, April 20, 2011), the rule also allowed facilities to receive credit toward meeting the performance standards for impingement and entrainment reduction associated with alternative locations of their intakes (e.g., deep water where fish and shellfish were less abundant).
The types of performance standard applicable to a facility (i.e., reductions in impingement mortality only or both 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 2004 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 fps or less (to meet the impingement performance standard only); (2) that its 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 § 125.99(a) or an alternative technology that meets the appropriate performance standards and is approved by the Director in accordance with § 125.99(b); or (5) that its costs of compliance would be significantly greater than either the costs considered by the Administrator for a like facility to meet the applicable performance standards, or 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 facility would be significantly greater than the costs considered by EPA in establishing the applicable impingement mortality and entrainment performance standards. Similarly, under the cost-benefit comparison alternative, a Director could determine that the cost of compliance for a facility would be significantly greater than the benefits of complying with the applicable performance standards. If either of these determinations were made, the Director would have to make a site-specific determination of BTA for minimizing adverse environmental impact that came as close as practicable 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 2004 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 on the basis of implementing 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 developing and submitting a TIOP (§ 125.95(b)(4)(ii)) and provisions that specified how compliance could be determined on the basis of implementing a TIOP (§ 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.
ii.	Subsequent Litigation
Industry, environmental stakeholders, and some States challenged many aspects of the 2004 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 2004 Phase II rule and remanded others to EPA for further rulemaking.
As noted above, for the 2004 Phase II rule EPA did not select closed-cycle cooling as BTA. Instead, EPA selected a suite of technologies to reflect BTA, including, for example, screens, aquatic filter barriers, and barrier nets. According to 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 authorized under the CWA as a technology for BTA and that EPA's cost-benefit site-specific compliance alternative was not in accord with the CWA. 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.
iii.	Suspension
As a result of the decision 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 2004 Phase II existing facilities, pending further rulemaking. Specifically, EPA suspended the provisions in § 122.21(r)(1)(ii) and (r)(5), and part 125 Subpart J, with the exception of § 125.90(b). EPA explained that suspending the 2004 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 2004 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 for compliance with the remanded rule. EPA's suspension clarified that pending further rulemaking, permit requirements for cooling water intake structures at 2004 Phase II facilities should be established on a case-by-case, BPJ basis (see § 125.90(b)).
iv.	Supreme Court Decision
Following the 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. v. Riverkeeper, Inc. et al., S. Ct. No. 07-588, et al. On April 14, 2008, the Supreme Court granted the petitions for writs of certiorari submitted by these 2004 Phase II litigants, but it 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. As explained above, the Supreme Court held that it is permissible for EPA to rely on cost-benefit analysis in decision making. 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. 566 U.S. at 223(2009). The ruling supports EPA's discretion to consider costs and benefits, but it imposes no obligation on the Agency to do so.
d.	Phase III  -  Existing Power Plants Below 50 mgd, Existing Manufacturing Facilities, and New Offshore Oil and Gas Facilities
i.	Rulemaking
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 DIF threshold of greater than 2 mgd and that withdraw at least 25 percent of the water exclusively for cooling purposes on an actual intake flow basis. The rule establishes requirements that address intake velocity, proportionate flow for sensitive locations, design and construction technologies or operational measures, monitoring and recordkeeping, based on if a facility employs a sea chest or not, and is fixed or not. Like the Phase I rule, this rule includes a Track II. 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 DIF 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 BPJ. (71 FR 35006, June 16, 2006).
ii.	Subsequent Litigation
Following promulgation of the rule, a number of parties filed petitions for review that were subsequently consolidated for hearing in the U.S. Court of Appeals for the Fifth Circuit. In 2009, EPA petitioned the Fifth Circuit to remand to the Agency those parts of the rule that applied to existing facilities. Specifically, EPA requested remand of those provisions in the Phase III rule that establish 316(b) requirements at electric generators with a DIF of less than 50 mgd, and the provision establishing requirements for existing manufacturing facilities on a case-by-case basis using BPJ. 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 DIF threshold of greater than 2 mgd and that withdraw at least 25 percent of the water exclusively for cooling purposes on an actual intake flow basis.