TABLE OF CONTENTS TABLE OF AUTHORITIES ........................................  vi

JURISDICTION ................................................... 1 ISSUES PRESENTED .............................................. 1 A. Environmental Petitioners  and Amicus s Issues . . . . . . . . . . . . . . . . 1 B. Utility Water Act   Group( UWAG)  s Issues .................... 2 C. ManufacturersIntake Structure Coalition ( M1SC)  s Issues . . . . . . . . 3 STATEMENTOF THE CASE ........................................ 3 A. Nature Of The Case ...................................... 3 B. Statutory Background ..................................... 6 STATEMENTOF FACTS ........................................... 11 A. Cooling Water Intake Structures ........................... 11 B. Regulatory Background .................................. 15 STANDARD OF REVIEW ........................................... 20 SUMMARY OF ARGUMENT ....................................... 23 A. Summary of Argument on EnvironmentalPetitioners  and Amicus s Issues ........................................ 23 B. Summary of Argument on UWAG s Issues . . . . . . . . . . . . . . . . . . . 25 C. Summary of Argument on MISC s Issues .................... 27  1 ARGUBMENT ..................................................... 27 I. ENVIRONMENTAL PElTITIONERS  PETITIONS SHOULD BE DENIED . . . . . . . . . . . ,. ....................................... 27 A. Best TechnologyAvailable Does Not Require Dry Cooling ...... 27 1. EPA ReasonablyInterpreted The Statute To Authorize ConsiderationOf Costs And Energy Impacts In Deterrni ning The Best Technology Available ................... 28 a. EPA , sinterpretation is consistent with other techno logy based standards in the CWA ................ 29 b. EPA s interpretation is supported by the legislative history of tj 316( b) and by judicial precedent ....... 33 c. EPA% interpretation is entitled to deference. ....... 35 2. EPA Properly Rejected Dry Cooling as the Best Technolo gy Available Based on Considerationof Relevant Factors .. 36 a.

b.

c.

d. The high costs of dry cooling would create a barrier to entry for some facilities ..................... 36 Dry cooling results in unacceptable energy consump ,

tion and increased air emissions ................. 39 Dry cooling technolo. gyis not feasible for all facilities subject to the Rule ............................ 41 The sllight additional reductions in entrainment do not require EPA to adopt dry cooling as the best technology available .......................... 43 ..  11 e. EPA h. as substantial discretion in weighing of the factors and its determination is entitled to deference . 47 B. Track I1 Of EPA s Rule Is Authorized By CWA 5 316( b) And SupportedBy The . AdministrativeRecord .................... 48 1. EPA s Track. I1 Requirement of Comparable Reduction in Impingement and Entrainment is Reasonable . . . . . . . . . . . .50 2. EPA Reasonably Interpreted CWA 5 316( b) to Permit Restoration Measures as a Compliance Option .... :. ..... 54 3. Track I1 Does Not Require a Case By Case Determination of Best Technology Available ........................ 57 C. The Alternative Requirements Provision of EPA s Rule is Authorized by CWA 5 3 16( b) and Supported by the Administrative Record ................................................ 59 11.. UWAG S PETITION SHOULD BE DENIED ...................... 65 A,. EPA s Track I Requirements Reasonably Implement CWA 5 316( b) By Focusing On Reducing The Impingement And Entrainment Of Aquatic Organisms; Caused By Cooling Water Intake Structures .. 65 1. EPA Reasonably Sought To Limit Impingement and Entrainment In Implementing CWA 8 316( b) ............ 66 2. EPA Reasonably Rejected UWAG s Various Claims That Impingement And Entrainment Are Not Adverse Environmental Impacts .............................. 71 3. EPA Considlered Non Water Quality Environmental Impacts Of The Rule And Reasonably Determined That They Would Not Pose A SignificantProblem ...................... 73 ...  111 ~

4. UWAG  0th r Criticisms of EPA s Track I Reqi irements Should Be Rejected ................................ 75 B. EPA Reasonably Included Additional Design And Construction Requirements in 40 C. F. R. 5 125.84@)( 4) and ( 5) To Further Minimize Impingement and Entrainment in Certain Circumstances ......................................... 80 C. EPA Reasonably Chose To Set An Intake Velocity Limit Based on   Through Screen Velocity  And To Set The Limit at 0.5 Feet Per Second ................................................. 85 1. EPA Reasonably Chose to Set a   Through Screen Velocity  Standard Rather Than an   Approach Velocity  Standard ... 86 2. EPA s Decision to Set the Intake Velocity Limit at 0.5 ft/ s Was Supportedby the Record and Will Not Preclude Appropriate Technologies ........................... 87 D. EPA s Proportional Flow Limits Are Supportedby The Record And Were Within The Scope Of EPA s Reasonable Scientific And Technical Juclgment ................................. 90 1. The Proportional Flow Limits For Rivers And Estuaries Are SupportedBy The Record And Are Reasonable ...... 92 2. EPA s Protection Of The Natural Thermal Stratification In Lakes and R eservoirsIs Reasonabie ................... 95 3. EPA Considlered How Facilities Would Meet The Proportional Flow Limitation And The Costs Of Doing So . . . . . . . 96 E. The Provision Related To State Law Requirements In 40 C. F. R. 9 125.84( e) Is Authorized by the Clean Water Act . . . . . . . . . . . . . . .99  iV 111. MISC S PETITION SHOULD BE DENIED ...................... 103 A. The Three Provisions Challenged by MISC Are Within EPA s Authority ............................................. 103 B. EPA Provided Adequate Notice and OpportunityFor Comment On The Three Provisions Challenged by MISC ............... 106 C. EPA s Case By Calse Provisions Are Consistent With Prior Regulations ........................................... 112 CONCLUSION .................................................. 113  V TABILE OF AUTHORITIES FEDERAL CASES American Iron & Steel Inst. v. E&, 526 F. 2d 1027 ( 3d Cir. 1975) ................................... 31 American Petroleum Institute v. EPA, 787 F. 2d 965 ( 5th Cir. 1986) ................................... 47 Atmalachian Power Co. v. EPA:, 249 F. 3d 1032 ( D. C. Cir. 2001) .................................. 53 Baltimore Gas & Elec. Co. v. " X, 462U. S. 87( 1983) ........................................... 22 BASF Wyandotte Corp. v. Costlle, 598 F. 2d 637 ( 1st Cir. 19' 79) .................................... 31 BP Exploration and Oil Inc. v. E=, 66 F. 3d 784 ( 6th Cir. 1995) ....................... .39,41,46,48,75 Chem. Mfk. Ass'n v. EPA, 9119 F. 2d 158 ( D. C. Cir. 1990) .................................. 22 Chemical Mfrs. Ass'n v. EPA, 870 F. 2d 177 ( 5thCir. 19: 89) .......................... 10,30,31,77 Chevron U. S. A., Inc. v. NRDC, 467 US. 837 ( 1984) ............................. .21,35,56,67,79 C. I. R. v. Lundy, 516U. S. 235( 1996) .......................................... 33 CPC Int'l v. Train, 540 F. 2d 1329 ( 8th Cir. 11376) ............................... 30,77  vi Cronin Y. Browner, 898 F. Supp. 1052 ( S. D. N. Y. 1995) ........................... 32,43 EDF v. Thomas, 870 F. 2d 892 ( 2d Cir. 1989) .................................... 32 E. I. duPont de Nemours & Co. v. Train, 430 U. S. 112 ( 1977) .................................... 30,62,69 EPA v. California ex rel. State Water Resources Control Board, 426U. S. 200( 1976) .......................................... 7 EPA v.   NationalCrushed Stone:, 449 U. S. 64 ( 1980) ........................................ 38,61 Ethvl COT. v. EPA, 541 F. 2d 1 ( D. C. Cir. 1976)( en banc) ...................... 20,22,53 Hudson Riverkeeper Fund, Inc. v. Orange & Rockland Util.. Inc., 835 F. Supp. 160 ( S. D. N.  Y. 1993) ................................ 34 Huls Am., Inc. v. Browner, 83 F. 3d 445 ( D. C. Cir. 1996) ................................... 22 In Re Public Service Co. of New Hampshire, 10 Env t Rep. Cas. ( BNA) 1257 ( 1977) ........................... 70 Kennecott v. EPA, 780 F. 2d 445 ( 4th Cir. 19186) ................................... 46 Lead Industries Association v. Ea, 647F. 2d1130( D. C. Cir. 1980) ................................. 34 Mississippi Com n. on Natural Resources v. Costle, 625 F. 2d 1269 ( 5th Cir. 1! 989) .................................. 34  vii Motor Vehicle Mfrs. Ass n of IJnited States. Inc. v. State Farm Mut. Auto. Ins. Co., 463 U. S. 29 ( 1983) ........................................ 57,75 National Black Media Coalition v. F. C. C., 791 F. 2d 1016 ( 2d Cir. 1986) .............................. 106,111 National Wildlife Fed. v. EPA, 286 F. 3d 554 ( D. C. Cir. ;! 002) ..................... .30,39,47,53,77 Natural Res. Def. Council v. Miuszynski, 268 F. 3d 91 ( 2d Cir. 200l) ................................. .20,53 New York Currency Research COT. v. CFTC, 180 F. 3d 83 ( 2d Cir. 199! 2) ..................................... 68 New York v. Reillv, 969 F. 2d 114  7 ( D. C. Cir. 1992) .............................. 22,53 NLRB v. CuJ tin Matheson Scientific, Inc., 494 us. 775 ( 1990) .......................................... 57 NRDC v. EPA, 537 F. 2d 642 ( 2d Cir. 1976) .................................... 61 NRDC v. EPA, 863 F. 2d 1420 ( 9th Cir. 1988). ............................... 47,60 P. U. D. No. 1 v. Washington De: p t of Ecolom, 511U. S. 700( 1994) ......................................... 101 Rust v. Sullivan, 500 US. 173 ( 1991) .......................................... 56 Seacoast Anti Pollution Leame v. Costle, 597 F. 2d 306 ( 1st Cir. 19  79) .................................... 33 ...  v111 Small Refiner'Lead Phase Down Task Force v. EPA, 705 F. 2d 506 ( D. C. Cir. l983) ............................ :..... 21 Stinson v. United States, 508U. S. 36( 1993) ........................................... 22 Sutherland v. Reno, 228 F. 3d 171 ( 2dCir. 2000) .............................. 21,35,79 Texas Oil & Gas Ass'n v. EPA, 161 F. 3d 923 ( 5th Cir. 1998) ................................ 35,69 United States Steel Corp. v. Train, 556 F. 2d 822 ( 7th Cir. 1977) ................................ 34,78 United States v. Barial, 31 F. 3d 216 ( 4th Cir. 1994) .................................... 68 United States v. L. A. Tucker Truck Lines, 344 U. S. 33 ( 1952) ........................................... 84 United States v. Larionofc 431U. S. 864( 1977) .......................................... 22 United States v. Mead Corp., 533U. S. 218( 2001) .......................................... 55 Virginia Elec. & Power Co. v. Costle, 566 F. 2d 446 ( 4th Cir. 1977) ................................... 31 Weyerhaeuser Co. v. Costle, 590F. 2d 1011 ( D. C. Cir. 1978) .............................. 48,74 Whitrnan v. American Trucking: Associations, 531U. S. 457( 2001) .......................................... 34  ix FEDERAL STATUTES 2U,. S. C. § 1532( a) ................................................. 78 5 U. S. C. 5 706( 2)( A) ............................................... 20 5 U. S. C. $ 8 551 559,701 706 ....................................... 20 Clean Water Act, 33 U. S. C. $ 5 1251 1387 .............................. 6 CWA 5 lOl( a), 33 U. S. C. 5 1251( a) .............................. 6,55, 99 CWAS lOl( b), 33U. S. C. 5 1251( a) ................................... 99 CWA 5 301, 33 U. S. C. 5 1311 ....................................... 8 CWA 5 301( a), 33 U. S. C. 5 1311( a) ................................... 7 CWA 5 301( b)( l)( A), 33 U. S. C. 5 131l( b)( l)( A) ........................ 30 CWA 5 301( b)( 2)( A), 33 U. S. C. 5 1311( b)( 2)( A) ........................ 9 CWA 5 3dl( b)( l)( C), 33 U. S. C .. 5 1311( b)( l)( C) ....................... 110 CWA $ 301( n), 33 U. S. C. 5 1311( n) ................................... 60 CWA 3 304( b)( l)( B). 33 U. S. C., 5 1314( b)( l)( B) ........................ 30 CWA 5 304( b)( 2)( B), 33 U. S. C., 5 1314( b)( 2)( B) ..................... 10, 30 CWA 5 304( b)( 3), 33 U. S. C. 5 11314( b)( 3) .............................. 30 CWA 5 304( b)( 4)( B), 33 U. S. C. 5 1314( b)( 4)( B) ........................ 31 CWA 5 306. 33 U. S. C. 5 1316 ................................... 1,8, 77 CWA 5 306( a)( l). 33 U. S. C. 3 1316( a)( l) ......................... 9. 10. 45  X CWA 5 306( b). 33 U. S. C. $ 131.6( b). ................................. 105 10. CWA 5 306( b)( l)( B), 33 U. S. C. 5 1316( b)( l)( B) . . . . . . . . . . . . . . . . . . 9 , 2 9 CWA 8 306( c). 33 U. S. C. 5 1316( c) .................................. 105 CWA 5 316. 33 U. S. C. 5 1326 ....................................... 1 CWA 5 316( a). 33 U. S. C. 8 132: 6( a) ................................... 67 CWA 5 316( b), 33 U. S. C. 5 132! 6( b) ......................... <IP_ADDRESS>. 103 CWA 5 401. 33 U. S. C. § 1341 .................................. 100. 111 CWA 5 401( d). 33 U. S. C. 5 13411( d) . . . . . . . . . . . . . . . . . . .. <IP_ADDRESS>. 102 CWA 5 509( b). 33 U. S. C. 5 1369( b) ................................ 7. 102 CWA Cj 509( b)( l). 33 U. S. C. 5 : 1369( b)( 1) ............................ 1. 20 CWA 5 509( b)( l)( E). 33 U. S. C. § 1369( b)( l)( E) ......................... 1 CWA $ 510. 33 U. S. C. 5 1370 ...................... .<IP_ADDRESS>. 111 FEDERAL REGULATIONS 40C. F. R. g 122 ...................................................

40C. F. R. 5 122.2 ................................................. 108 40C. F. R. 5 123.30 .............................................. 7. 102 40C. F. R. g 124.2 108 .................................................

40C. F. R. g 124.19 .............................................. 7. 102 40 C. F. R. § . 124.53( d) ............................................. 100  xi 1 40C. F. R. s 124.53( e) ............................................. 100 40 C. F. R. 125.80( c) ............................ <IP_ADDRESS>. 109 40C. F. W. s 125.84 ................................................ 105 40C. F. W. g 125.84( b) .............................................. 5 40C. F. R. 5 125.84( b)( 2) ............................................ 2 40 C. F. R. 5 125.84( b)( 3) ....................................... 2,90, 96 40 C. F. 12.5 125.84( b)( 3)( i) .......................................... 91 40 C. F. R. 125.84( b)( 3)( ii) ......................................... 96 40 C. F. R. 125.84( b)( 4) ................................... .2,26,80, 89 40 C. F. R. 5 125.84( b)( 5) .................................... 2,26,80, 89 40 C. F. R. 5 125.84( d) ......................................... 5,58, 89 40 C. F. R. tj 125.84( d)( 1) ............................................ 49 40 C. F. R. $ 125.84( d)( l)( i) .......................................... 54 40C. F. R. § 125.84( e) .................... 3,26,99,103.106,109. 110. 111 40C. F. R. 9 125.84( g) ......................................... 109. 110 40 C. F. R. tj 125.85 ............................................ 6,75, 99 4OC. FR. § 125.85 ................................................. 59 40 C. F. R. fj 125.85( a)( 2) ............................................ 60 40 C. F. R. 5 125.86(~)( 2)......................................... 52, 58  xii 40 C. F. R. § 125.86( c)( 2)( i) .......................................... 58 40 C. F. R. 5 125,86( c)( 2)( ii) ......................................... 54 40 C. F. R. 8 125.89( b) ............................................. 108 40 C. F. R. 8 125.89( b)( l)( i) ............................. 103,104,107,108 FEDERAL REGISTER 39 Fed. Reg. 6579 ( Feb. 20,1974) .................................... 61 51 Fed. Reg. 24,974 ( July 9,19136).................................... 31 61 Fed. Reg. 57,518 ( Nov. 6,1996) ................................... 49 65 Fed. Reg. 49,060 ( Aug. 10,2! 000) .................................. 13 66 Fed. Reg. 28,869 ( May 25,2001) .................................. 17 66 Fed. Reg. 65,256,65,262 63 ( Dec. 18,2001) ..................... passim EXECUTIVE ORDERS Executive Order 12,866, 8 10,58 Fed. Reg. 51,735,51,744 ( Sept. 30, 1993). .. 78 LEGISLATIVE HISTORY 118 Cong. Rec. 33,762 ( 1972), reprinted in 1 Legislative History of the Water Pollution Control Act Amendments of 1972, 9YdCong., lStSess., at 264 ( Corn. Print 1973) . . . . . . . . . . . . . .33,69,78 Pub. L. No. 100 4, § 306, reprinted in 1987U. S. C. C. A. N. 5,22( 1987)................................. 61 ...  x111 APA BAT BADT BPJ BTA CWA EA Entrainment EPA Impingement JA MGD MISC NODA NPDES Rule TDD UMRA UWAG GLOSSARY Adrninistratj. veProcedure Act, 5 U. S. C. $ 5 551 559,701 706 Best Availalile Technology Best Available Demonstrated Technology Best Professional Judgment Best Technollogy Available Clean Water Act Economic Assessment When organisms are pulled into and through the facility s cooling system United States Environmental Protection Agency When organisms are trapped against a cooling water intake structure by the force of inflowing water Joint Appendix Millions of Gallons per Day Petitioner ManufacturersIntake Structure Coalition Notice of Data Availability National Pollution Discharge Elimination System EPA s   Regulation Addressing Cooling Water Intake Structures for New Facilities,  66 Fed. Reg. 65,255 ( Dec. 18, 2001).

Technical Development Document Unfunded Mandates Refonn Act, 2 U. S. C. 5 1532( a).

Petitioner Utility Water Act Group 1/ The citation of the CWA provisions is potentially confusing because numbering of the CWA sections does not match the numbering of the provisions in the United States Code. For example, CWA § 316 is codified at 33 U. S. C. § 1326, and CWA § 306 is codified at 33 U. S. C. § 1316. To minimize that confusion, EPA will clearly identify whether it is referring to the CWA section (" CWA § ___") or the United States Code section (" 33 U. S. C. § ___"). JURISDICTION Petitioners challenge certain aspects of EPA's " Regulation Addressing Cooling Water Intake Structures for New Facilities," 66 Fed. Reg. 65,255 ( Dec. 18,

2001), 40 C. F. R. § 122 et. seq. ( the " Rule"), promulgated pursuant to Section 316( b) of the Clean Water Act (" CWA"), 33 U. S. C. § 1326( b). 1/ The petitions were timely filed under 33 U. S. C. § 1369( b)( 1), and this Court has jurisdiction under 33 U. S. C. § 1369( b)( 1)( E).

ISSUES PRESENTED A. Environmental Petitioners' and Amicus's Issues 1. Whether EPA reasonably established performance requirements reflecting the best technology available for cooling water intake structures at new facilities?

2. Whether EPA reasonably allowed facilities to use technologies of their choosing as long as they achieve performance comparable to that which would be achieved by compliance with the requirements reflecting best technology available?  2  3. Whether EPA reasonably provided permitting authorities the flexibility to establish less stringent permit terms if the costs of compliance with the best technology available would: ( a) result in compliance costs wholly disproportionate to the costs considered by EPA; or ( b) cause adverse environmental impacts not considered by EPA?

B. Utility Water Act Group ( UWAG)' s Issues 1. Whether EPA reasonably focused on impingement and entrainment in establishing requirements to minimize the adverse environmental impact of cooling water intake structures?

2. Whether EPA reasonably included additional design and construction requirements in 40 C. F. R. § 125.84( b)( 4) and ( 5) to further minimize impingement and entrainment in certain circumstances?

3. Whether EPA in 40 C. F. R. § 125.84( b)( 2) reasonably limited the velocity at which water is drawn into intake structures as measured at the location where impingement occurs ( called " through screen velocity"), and whether EPA reasonably set the " through screen velocity" limit at 0.5 feet per second?

4. Whether EPA's " proportional flow limits" in 40 C. F. R. § 125.84( b)( 3)

( which limit the volume of water that a facility may intake based on the size of the water body from which it is removing water) are supported by the record and were within the scope of EPA's reasonable scientific and technical judgment?  3  5. Whether the provision requiring compliance with certain state law requirements in 40 C. F. R. § 125.84( e) is authorized by the Clean Water Act?

C. Manufacturers Intake Structure Coalition ( MISC)' s Issues 1. Whether the three regulatory provisions challenged by MISC ( which concern ( 1) " case by case" requirements imposed on smaller intake structures,

( 2) the requirement that permitting agencies review permits at the time of reissuance, and ( 3) the provision requiring compliance with certain state law requirements) were within EPA's authority to promulgate?

2. Whether EPA provided adequate opportunity for notice and comment on the three provisions challenged by MISC?

3. Whether EPA's " case by case" provisions imposed on smaller intake structures are inconsistent with prior regulations?

STATEMENT OF THE CASE A. Nature Of The Case Electric power plants and manufacturing facilities typically use large amounts of cooling water in their power generation and manufacturing processes to absorb waste heat. To obtain that water, these facilities employ " cooling water intake structures" that collectively withdraw hundreds of billions of gallons of water each day from our nation's lakes, rivers and other water bodies. 66 Fed. Reg. at 65,262 ( JA XX). As these structures withdraw such large volumes of water, they also 2/ " Impingement" occurs when organisms are trapped against the intake structures by the force of the inflowing water, and can cause suffocation, starvation and physical injury to the trapped organisms. " Entrainment" occurs when organisms are pulled into and through the facility's cooling system, which can cause death and injury from the machines, heat and chemical processes that are part of the cooling system. A more detailed description of impingement and entrainment is provided at 66 Fed. Reg. 65,256, 65,262 63 ( Dec. 18, 2001) ( JA XX XX).

3/ Performance requirements for cooling water intake structures at existing facilities will be established by separate rulemakings in Phases II and III.

 4  " impinge" and " entrain" aquatic organisms of all varieties   from the smallest plankton, fish eggs and larvae to the largest adult fish. 66 Fed. Reg. at 65,262 63 ( JA XX XX). 2/ The environmental impacts from impingement and entrainment are not only the immediate effects on the affected organisms, but can also include secondary effects on populations and ecosystems.

Clean Water Act § 316( b) requires 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). The Rule at issue in this case is " Phase I" of EPA's implementation of CWA § 316( b). It establishes performance requirements for the cooling water intake structures at new facilities. 3/

In the Rule, EPA took a two track approach towards minimizing adverse environmental impact. Track I of the Rule contains requirements for ( 1) intake flow 4/ Closed cycle recirculating wet cooling technology recycles the cooling water and dissipates heat through evaporative cooling. A more complete description of the technology can be found at 66 Fed Reg. at 65,282/ 2 ( JA XX).

 5  volume limits based on what can be achieved with a technology referred to as closed cycle recirculating wet cooling technology; 4/ ( 2) intake flow velocity ( restricting the speed at which water may move through the intake structure);

( 3) proportional flow limits ( which limit intake volume based on the size of the specific water body from which the water is being withdrawn); and ( 4) design and construction technologies for minimizing impingement and entrainment. 40 C. F. R.

§ 125.84( b); 66 Fed. Reg. at 65,259 60 ( JA XX XX). Track II of the Rule allows a new facility to employ technologies other than those on which Track I is based if the operator can demonstrate that ( 1) the other technologies achieve reductions in impingement and entrainment comparable to those that would be achieved under Track I; and ( 2) the facility will meet the Track I proportional flow limitations.

40 C. F. R. § 125.84( d); 66 Fed. Reg. at 65,260 ( JA XX). Finally, EPA's Rule allows facilities to request less stringent alternative requirements based on a demonstration that ( 1) the otherwise applicable requirements would either ( a) impose compliance costs that are wholly out of proportion to the costs considered by EPA in this rulemaking, or ( b) cause significant adverse environmental impacts or increased energy use; ( 2) the alternative requirements are  6  no less stringent than justified by the wholly out of proportion costs or the adverse impacts caused by the otherwise applicable requirements; and ( 3) the alternative requirements will ensure compliance with other CWA or state law requirements.

40 C. F. R. § 125.85; 66 Fed. Reg. at 65,322 ( JA XX). In short, EPA's Rule will minimize impingement and entrainment ( and the other environmental impacts that come from impingement and entrainment) while at the same time provide facilities with significant flexibility in how they achieve these requirements.

In this case, as is often true, interested parties with a variety of viewpoints have challenged EPA's Rule. Industry petitioners claim that EPA's regulation is too stringent and not flexible enough to recognize the different circumstances faced by each facility. Environmental group petitioners claim that EPA's regulation is not stringent enough and provides too much flexibility. As demonstrated below, neither group of petitioners is correct. In this Rule, EPA reasonably implemented the requirements of CWA § 316( b), and this Court should uphold EPA's regulation in all respects.

B. Statutory Background The purpose of the Federal Water Pollution Control Act, also known as the Clean Water Act (" CWA"), 33 U. S. C. § 1251 1387, is " to restore and maintain the chemical, physical, and biological integrity of the Nation's waters." 33 U. S. C. §  7  1251( a). To accomplish this end, 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 as authorized by the CWA; ( 2) authority for EPA or authorized States or Tribes to issue National Pollutant Discharge Elimination System (" NPDES") permits that regulate the discharge of pollutants; and ( 3) requirements for EPA to develop effluent limitation guidelines and standards and for States to develop water quality standards that are the basis for NPDES permit limitations. Permits issued to dischargers under the NPDES program transform the generally applicable technology based regulations and state water quality standards into specific discharge limits applicable to that facility. EPA v. California ex rel. State Water Resources Control Board, 426 U. S.

200, 205 ( 1976). Where there is no nationally applicable technology based standard, permit authorities develop discharge limitations on a " best professional judgment" ( or " BPJ") basis. NPDES permits are subject to judicial review under state procedures for state issued permits ( 40 C. F. R. § 123.30) or, following an administrative challenge to EPA under 40 C. F. R. § 124.19, judicial review in federal court under CWA § 509( b), 33 U. S. C. § 1369( b).

Most of the provisions of the CWA protect the nation's waters by regulating discharges into waters of the United States. See, e. g., 33 U. S. C. § 1311( a) (" Except  8  as in compliance with this section and sections [ 33 U. S. C.] 1312, 1316, 1317, 1328,

1342, and 1344, of this title, the discharge of any pollutant by any person shall be unlawful.") In this case, however, the statutory provision at issue protects the nation's waters from environmental impacts caused by the intake of water.

In CWA § 316( b), 33 U. S. C. § 1326( b), Congress required that any CWA permit setting effluent discharge limits would also require that any cooling water intake structures for that facility " reflect the best technology available for minimizing adverse environmental impact." Section 316( b), 33 U. S. C. § 1326( b),

states, in full:

Any standard established pursuant to [ 33 U. S. C. § § 1311 or 1316] 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.

The phrase " best technology available" in CWA § 316( b) is not defined in the statute, but its meaning can be understood in light of similar phrases used elsewhere in the CWA.

In CWA § § 301 and 306, 33 U. S. C. § § 1311 and 1316, Congress directed EPA to set effluent discharge standards for new sources based on the " best available demonstrated technology" and for existing sources based on the " best available 5/ For new sources, 33 U. S. C. § 1316( b)( 1)( B) directs EPA to establish " standards of performance." The phrase " standards of performance" under 33 U. S. C. § 1316( a)( 1) is defined as being the effluent reduction that is " achievable through application of the best available demonstrated control technology, processes, operating methods or other alternatives . . . ." This is commonly referred to as " best available demonstrated technology" or " BADT." For existing sources, 33 U. S. C. § 1311( b)( 2)( A) directs EPA to establish effluent limitations " which shall require the application of the best available technology economically achievable" for each category or class of sources. This is commonly referred to as " best available technology" or " BAT."

 9  technology." 5/ Under these provisions, the discharge of pollutants from point sources is based not on the impact of the discharge on the receiving waters, but instead upon the capabilities of the equipment or " control technologies" available to control those discharges.

The phrases " best available demonstrated technology" and " best available technology"   like " best technology available" in CWA § 316( b)   are not expressly defined in the statute. However, the CWA specifies factors to be considered in establishing the " best available demonstrated technology" and " best available technology."

For " best available technology," the CWA directs EPA to consider:

the age of equipment and facilities involved, the process employed, the engineering aspects . . . of various types of control techniques, process changes, the cost of achieving such effluent reduction, non water quality environmental impacts ( including energy requirements), and such other factors as [ EPA] deems appropriate. 6/ Court opinions concerning these phrases are discussed below in Argument Sections I. A. 1 and II. A. 4 below.

 10  33 U. S. C. § 1314( b)( 2)( B). For " best available demonstrated technology," EPA is required to take into consideration the cost of achieving the effluent reduction and any non water quality environmental impacts and energy requirements. 33 U. S. C. § 1316( b)( 1)( B). In doing this, EPA typically considers whether the cost of the option under consideration will be a " barrier to entry" for some facilities ( meaning that the cost would prevent facilities from entering the market), and whether the costs can reasonably be borne by the industry. Chemical Mfrs. Ass'n v. EPA, 870 F. 2d 177, 202 ( 5th Cir. 1989). Because new facilities have the opportunity to install the best and most efficient production processes and wastewater treatment technologies, and in light of the plain language of 33 U. S. C. § 1316( a)( 1), EPA properly considers the best demonstrated process changes, in plant controls, and end of process control and treatment technologies that reduce pollution to the greatest degree achievable.

Based on these statutory provisions and court opinions concerning the phrases " best available demonstrated technology" and " best available technology," 6/ EPA interpreted the similarly worded phrase " best technology available" to have a similar 7/ Hereinafter, Comment Responses for 316bNFR will be cited as " CR" and the comment number. For example, " CR 068.007."

 11  meaning. Comment Response 316bNFR. 068.007 at 11837/ ( JA XX). Specifically,

EPA interpreted CWA § 316( b) as authorizing EPA to: ( 1) establish national requirements to install technology that was " technically available, economically practicable, and where EPA has considered the other environmental impacts of the requirements, such as [ increased energy use]," CR 068.007 at 1182 ( JA XX); and ( 2)

establish flexibility to allow the use of other technologies that achieve comparable reductions in environmental impacts. CR 068.007 at 1182 ( JA XX). See also CR 206.014 at 1889 90 ( JA XX XX) ( CWA § 316( b) does not require EPA to conduct a cost benefit assessment, but does permit EPA to reasonably consider a technology's " economic achievability" in a manner that is analogous to how costs are considered for " best available technology" and " best available demonstrated technology").

STATEMENT OF FACTS A. Cooling Water Intake Structures EPA considered several types of cooling water intake systems and evaluated their effectiveness in reducing impingement and entrainment. EPA determined that the key elements in reducing the level of impingement and entrainment are ( 1) the volume of water withdrawn from the source waterbody into the cooling water intake 8/ Capacity reflects the volume of water that can be withdrawn through a cooling water intake structure over a period of time. Limiting the volume of water withdrawn from a waterbody typically reduces the number of aquatic organisms in that waterbody that otherwise would be entrained. Reducing the capacity of a cooling water intake system is one of the most effective ways to reduce entrainment. 66 Fed. Reg. at 65,273/ 2 ( JA XX).

9/ In the direct vicinity of the intake structure, the velocity of the water entering the structure exerts a direct physical force against which fish and other organisms must act to avoid impingement and entrainment. Intake velocity is one of the key factors that affects the impingement of fish and other aquatic biota. 66 Fed. Reg. at 65,274/ 1 ( JA XX).

10/ Locating the intake structure in a waterbody that is sufficiently large in proportion to the amount of water withdrawn can reduce impingement and entrainment. Proportional flow limitations restrict the intake flow to a capacity appropriate for the size of the waterbody. 66 Fed. Reg. at 65,276/ 3 277/ 3 ( JA XXXX

 12  system (" capacity"); 8/ ( 2) the speed at which the water is taken into the cooling water intake system (" velocity"); 9/ and the size of the waterbody in which the intake is located (" proportion"). 10/

" Once through" cooling systems withdraw water and circulate it once through the facility's cooling system, and discharge heated water back into the source waterbody. Because a once through cooling systems requires continuous withdrawal of a large volume of water from the source waterbody, a single system 11/ For a complete description of once through technology and its environmental impacts, see Technical Development Document for the Final Regulations (" TDD") at 2   1 ( JA XX).

12/ A more complete description of this technology can be found at 66 Fed Reg. at 65,282/ 2 ( JA XX); TDD at 2 2 ( JA XX).

 13  can remove as much as 3.2 billion gallons of water per day from a source waterbody. 11/

Closed cycle recirculating wet cooling systems withdraw significantly less water for cooling than once through systems. Rather than discharging the heated water back into the source waterbody, the heat is dissipated through evaporative cooling in ponds or towers, and the water is then recycled through the facility's cooling system. 12/

Dry cooling systems require even less intake of water than the closed cycle technology. They use either a natural or mechanical air draft to transfer heat from condenser tubes to air. 66 Fed. Reg. at 65,282/ 2 ( JA XX). There are also hybrid systems, that combine wet and dry cooling. 66 Fed. Reg. at 65,305/ 2 ( JA XX).

Other technologies to reduce impingement and entrainment include intake screens, which mechanically screen debris from the intake structure, 65 Fed. Reg.

49,060, 49,093/ 2 ( Aug. 10, 2000) ( JA XX); passive intake systems, which screen out debris and biota with little or no mechanical activity, 65 Fed. Reg. at 49,093/ 3 ( JA XX); diversion or avoidance systems, which are devices designed to take 13/ These are commonly referred to as " operational measures" and include such things as: ( 1) variable speed pumps that automatically reduce intake based on the temperature of the source water and the cooling needs of the facility; ( 2) intermittent or seasonal flow reductions that correspond to migrations or spawning; and ( 3) more frequent cleaning or rotating of screens to remove debris and ensure proper operation.

14/ Although not always true, moving the intake from the shoreline to a location farther from shore or at a different point in the water column often will affect the amount of impingement and entrainment.

15/ Restoration measures may include, for example, conservation of fish or aquatic organisms, enhancement of the aquatic habitat harmed or destroyed by the cooling water intake system, creation of new habitats to serve as spawning or nursery areas, or creation of a fish hatchery to restock fish being impinged and entrained with fish that perform a similar function in the aquatic community.

 14  advantage of the natural behavioral patterns of fish so that the fish will not enter the intake structure, 65 Fed. Reg. at 49,094/ 1 ( JA XX); and fish handling systems,

which collect fish and other organisms that have been impinged and safely transport them back to open waters, 65 Fed. Reg. at 49,093/ 2 ( JA XX). See also, 66 Fed.

Reg. at 65,279/ 1 ( JA XX).

EPA also considered various ways that the equipment can be operated to reduce impingement and entrainment, 13/ and how the location of the intake can reduce impingement and entrainment. 14/ In addition, EPA considered restoration measures as a technology for minimizing adverse environmental impact. 66 Fed.

Reg. at 65,280/ 3 ( JA XX). 15/ Such measures are designed to compensate for  15  organisms that are impinged or entrained, and thereby reduce the net loss resulting from the intake structure.

The effectiveness of these different technologies in reducing impingement and entrainment varies greatly depending not only upon the technology, but also on site specific characteristics such as the location of the facility, the volume of the source waterbody, whether it is salt or fresh water, the types of fish and shellfish in the waterbody, and other factors. TDD at 5 1 ( JA XX).

B. Regulatory Background Prior to this Rule, cooling water intake structures were regulated by the permitting authority on a case by case, site specific basis. The permitting authority was required to use " best professional judgment" to determine the " best technology available [ to] minimiz[ e] adverse environmental impact" at each facility. 66 Fed.

Reg. at 65,262/ 1 2 ( JA XX). To assist permitting officials in the exercise of their best professional judgment, EPA published draft guidance. See Draft Guidance for Evaluating the Adverse Impact of Cooling Water Intake Structures on the Aquatic Environment: Section 316( b) P. L. 92 500 ( EPA, 1977) ( JA XX XX). The Guidance proposed a detailed process involving the development of a site specific study of the environmental impacts associated with each facility and recommended a basis for determining the best technology available to minimize the adverse environmental impact at that facility. In implementing the Guidance, most 16/ See, e. g., In the Matter of Public Service Co. of New Hampshire, et al., ( Seabrook Stations 1 and 2) NPDES Case No. 76 7 ( NPDES Permit Application No. NH 0020338, 1977 NPDES LEXIS 6 ( June 10, 1977); Decision of the General Counsel, No. 63 In re Central Hudson Gas & Elec. Corp., ( July 29, 1977). CR 206.014 at 1889 ( JA XX).

17/ In the process, EPA issued a 22 page preliminary survey to 2,600 existing facilities, followed up by a lengthy questionnaire seeking detailed information concerning the technologies in use, the effectiveness of the technologies in reducing impingement and entrainment, and the capital and operating costs of the technologies. EPA also purchased information from a proprietary database that provided data on projected new facilities, including the size of planned facilities, the potential locations of new facilities, the design of the cooling water intake structure, the volume of water projected to be taken in, and detailed financial information. 66 Fed. Reg. at 65,265/ 2 268/ 1 ( JA XX XX).

 16  permitting authorities applied a " wholly disproportionate test" that determined whether the costs of the technology were wholly disproportionate to the environmental benefits. 16/ The permitting process was resource intensive, often leading to lengthy challenges. 66 Fed. Reg. at 65,262/ 2 ( JA XX). Moreover, the case by case approach often resulted in different technology requirements at similarly situated facilities.

To replace this regime, this Rule establishes technology based performance requirements for cooling water intake structures at new facilities nationwide.

During the rulemaking, EPA developed extensive information concerning cooling water intake structures. 17/ Based on its assessment of the information, EPA published its proposed rule on August 10, 2000. 65 Fed. Reg. at 49,075 ( JA XX).  17  The proposed rule included capacity requirements based on closed cycle recirculating wet cooling technology, and a velocity limitation of 0.5 ft/ sec. for biologically sensitive areas. 65 Fed. Reg. at 49,088/ 2 ( JA XX). EPA also proposed " proportional flow requirements," which limit the volume of water that a facility may intake based on the size of the water body from which it is removing water.

The proposal also included a provision giving the permitting authority discretion to require different identified technologies, when appropriate, based on a site specific,

case by case analysis. 65 Fed. Reg. at 49,082/ 2 ( JA XX) . EPA received substantial comment on the proposal from both industry groups and environmental groups.

On May 25, 2001, EPA issued a Notice of Data Availability (" NODA"),

summarizing the information it had collected and received in response to the proposed rule. 66 Fed. Reg. at 28,853 ( JA XX). In the NODA, EPA solicited further comment on various two track approaches. 66 Fed. Reg. 28,869 70 ( JA XX XX). In response to its proposed rule and NODA, EPA received and considered over 2000 public comments and, during that period, conducted significant public outreach to solicit further input. By the time EPA made its final determination, it had extensive information about cooling water intake structures and the facilities that would likely be subject to the rule.  18  During the rulemaking process, the industry groups  led by petitioner UWAG  advocated a two track approach, in which Track I would require compliance with a suite of technologies identified as the " best technology available," and Track II would permit a site specific, case by case determination of best technology available, similar to the approach used under the 1977 Draft Guidance. EPA rejected the Track I approach advocated by the industry group because EPA did not believe the suite of technologies proposed reflected controls representing the best technology available. Instead, EPA adopted performance requirements in the final Rule based, in part, on closed cycle recirculating wet cooling systems, which EPA determined to be more effective at reducing impingement and entrainment, and which EPA found to be both technically available and economically practicable. 66 Fed. Reg. at 65,284/ 3 ( JA XX).

EPA also rejected the industry groups' Track II approach, because EPA determined that measurement of reductions in impingement and entrainment was more objective and more efficient than the population studies proposed by industry.

Further, EPA believed that the site specific, case by case approach favored by the industry groups was too slow for permitting new facilities. 66 Fed. Reg. at 65,284/ 2 85/ 2 ( JA XX XX). Instead, EPA adopted a Track II approach in the final Rule that would provide a facility the flexibility to employ the technologies the  19  industry groups had suggested for its proposed Track I, as long as the applicant could demonstrate that its technologies would result in reduction of impingement and entrainment comparable to that which would be achieved under EPA's Track I approach .

The environmental groups also commented during the rulemaking process and advocated dry cooling technology as the best technology available for minimizing adverse environmental impact. EPA rejected dry cooling as the basis for best technology available for several reasons: ( 1) the high costs of dry cooling could be a barrier to entry for some projected facilities, and would create a disincentive to the construction of new facilities and encourage modification and life extension of existing ( and generally more polluting) facilities; ( 2) dry cooling had not been demonstrated to be technically feasible for many manufacturers and large power plants, and new facilities subject to such a requirement would be at a competitive disadvantage to the facilities not subject to the requirement; ( 3) dry cooling technology caused unacceptable non water quality adverse environmental impacts, such as increased energy consumption and air emissions; and ( 4) the higher cost of the technology was not justified by the incremental further reduction in impingement and entrainment as compared to the wet cooling technology.

66 Fed. Reg. at 65,282 84 ( JA XX XX).  20  STANDARD OF REVIEW Judicial review under 33 U. S. C. § 1369( b)( 1) is governed by the standards set forth in the Administrative Procedure Act (" APA"), 5 U. S. C. § § 551 559, 701 706,

which establishes a highly deferential standard of review for agency action. Such action is valid unless it is " arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U. S. C. § 706( 2)( A).

" Review under this provision is ` narrow,' limited to examining the administrative record to determine ` whether the [ agency] decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment.'" Natural Res. Def. Council v. Muszynski, 268 F. 3d 91, 97 ( 2d Cir.

2001) (" NRDC") ( quoting City of New York v. Shalala, 34 F. 3d 1161, 1167 ( 2d Cir. 1994)). The Court " may not substitute its judgment for that of the agency[.]"

Muszynski, 268 F. 3d at 97. Rather, the Court should affirm EPA's decision unless the decision was based on ` factors which Congress has not intended [ EPA] to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.'

NRDC, 268 F. 3d at 97 ( quoting City of New York, 34 F. 3d at 1167). In short, this standard of review presumes the validity of agency action, Ethyl Corp. v. EPA, 541  21  F. 2d 1, 34 ( D. C. Cir. 1976) ( en banc), and if the agency's reasons and policy choices conform to " certain minimal standards of rationality," the action is reasonable and must be upheld. Small Refiner Lead Phase Down Task Force v. EPA, 705 F. 2d 506, 521 ( D. C. Cir. 1983).

With regard to questions of statutory interpretation, the Court must first consider whether Congress has directly addressed the question at issue. If so, " that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress." Chevron U. S. A., Inc. v. NRDC, 467 U. S. 837, 842 43 ( 1984). However, if the statute is silent or ambiguous on an issue,

the Court must accept the agency's interpretation if it is reasonable; the agency's interpretation need not represent the only permissible reading of the statute nor the reading that the Court might originally have given the statute. Id. at 843 & n. 11;

Sutherland v. Reno, 228 F. 3d 171, 173 ( 2d Cir. 2000) (" When reviewing an agency determination, federal courts must accord substantial deference to an agency's interpretation of the statutes it is charged with administering.")

Further, the Court should give " controlling weight" to EPA's interpretations of its own regulations, unless an interpretation " is plainly erroneous or inconsistent with the regulation." Stinson v. United States, 508 U. S. 36, 45 ( 1993) ( citations omitted); United States v. Larionoff, 431 U. S. 864, 872 ( 1977).  22  When the agency's decision rests on an evaluation of complex scientific data within the agency's technical expertise, as it does in this case, courts are " extremely deferential." New York v. Reilly, 969 F. 2d 1147, 1152 ( D. C. Cir. 1992). Where the agency decision turns on issues requiring the exercise of technical or scientific judgment, the court " must look at the decision not as the chemist, biologist, or statistician that [ it is] qualified neither by training nor experience to be, but as a reviewing court exercising [ its] narrowly defined duty of holding agencies to certain minimal standards of rationality." Ethyl Corp., 541 F. 2d at 36. See Baltimore Gas & Elec. Co. v. NRDC, 462 U. S. 87, 103 ( 1983) ( when reviewing an agency's scientific conclusions within its area of special expertise, " a reviewing court must generally be at its most deferential."); Hüls Am., Inc. v. Browner, 83 F. 3d 445, 452 ( D. C. Cir. 1996) ( court should " give an extreme degree of deference to the agency when it ` is evaluating scientific data within its technical expertise'"); Chem. Mfrs.

Ass'n v. EPA, 919 F. 2d 158, 167 ( D. C. Cir. 1990) (" It is not the role of courts to ` second guess the scientific judgments of the EPA,' and [ courts] give considerable latitude to the EPA in drawing conclusions from scientific and technological research'").

SUMMARY OF ARGUMENT A. Summary of Argument on Environmental Petitioners' and Amicus's Issues  23  For Track I of the Rule, EPA adopted performance requirements based, in part, on closed cycle recirculating wet cooling, which it determined was the best technology available. EPA properly rejected dry cooling as the basis for the technology based standard because EPA concluded that: ( 1) dry cooling was not economically available to all facilities that would be subject to the Rule, because the high costs of dry cooling would create a barrier to entry for some facilities, and would be a disincentive to others, thereby encouraging the continued repair of older and more polluting existing facilities; ( 2) dry cooling has unacceptable non water quality environmental impacts because it consumes more energy than wet cooling and thus increases energy consumption and results in increased air emissions; ( 3)

dry cooling has not been demonstrated as feasible for many manufacturers and for large power producers, and dry cooling is inefficient in warm climates, thus creating a competitive disadvantage for some facilities; and ( 4) the modest incremental reductions in impingement and entrainment ( dry cooling is approximately 4% 7%

more effective than wet cooling) do not justify the 900% increase in costs. EPA's rejection of dry cooling and selection of closed cycle recirculating wet cooling as the best technology available is reasonable, well supported by the administrative record, consistent with the goals and purposes of the statute, and is entitled to deference. 66 Fed. Reg. at 65,282/ 3 83/ 1 ( JA XX XX).  24  For Track II of the Rule, EPA provided that a facility can employ any technology or group of technologies that will reduce impingement and entrainment to a level comparable to what would be achieved through compliance with the Track I performance requirements. The Track II option is not less stringent than Track I; rather, the " comparable" requirement simply reflects the variability inherent in measurement of the reduction of impingement and entrainment. EPA's expertise on such technical matters is entitled to substantial deference. Moreover,

EPA reasonably interprets the statute as authorizing the use of restoration measures to replace organisms that are impinged or entrained. This interpretation is consistent with the goals and objectives of the statute and it, too, is entitled to deference.

Because the Rule applies to so many different types of facilities, EPA reasonably allowed permitting authorities the flexibility to impose alternative requirements when the actual costs of compliance with the best technology available at a particular facility are wholly disproportionate to the costs EPA considered during the rulemaking process, or if compliance with the best technology available would result in significant environmental impacts not considered by EPA. EPA reasonably concluded that these are site specific issues,

often of local concern, that can be best addressed during the permitting process.  25  EPA's interpretations are consistent with the goals and objectives of the statute and its factual conclusions are reasonable and well supported by the administrative record. Accordingly, EPA's interpretations and conclusions are entitled to substantial deference and should be upheld in all respects.

B. Summary of Argument on UWAG's Issues EPA's Track I requirements reasonably implement CWA § 316( b) by focusing on reducing the impingement and entrainment of aquatic organisms caused by cooling water intake structures. EPA permissibly reads the phrase " adverse environmental impact" in CWA § 316( b) to be broad enough to include the killing and harming of large numbers of fish and other aquatic organisms, not only killing that has demonstrated long term impacts on the species' population or the ecosytem,

as UWAG contends, and EPA's interpretation is entitled to deference. Further,

EPA actually considered the various non water quality environmental concerns that UWAG claims the Agency ignored during the rulemaking, and concluded that they were not significant. Finally, UWAG's other arguments concerning the adequacy of the alternative requirements and the lack of a cost/ benefit analysis fail to demonstrate any error on EPA's part.

EPA also reasonably included additional design and construction requirements in 40 C. F. R. § 125.84( b)( 4) and ( 5) to further minimize impingement and entrainment in certain circumstances. EPA's decision to have these additional  26  requirements applied by the permitting authority on a site specific basis was reasonable. In sum, UWAG has not demonstrated that the additional design and construction requirements are unreasonable or beyond EPA's authority.

EPA further reasonably chose to set an intake velocity limit based on " through screen velocity" and to set the limit at 0.5 feet per second. EPA's proportional flow limits are supported by the record and were within the scope of EPA's reasonable scientific and technical judgment. Finally, the provision related to state law requirements in 40 C. F. R. § 125.84( e) is authorized by the CWA.

UWAG's argument that this provision is not authorized by CWA § 316( b) is offpoint EPA based this provision on the statutory provisions in CWA § § 401( d) and 510, 33 U. S. C. § § 1341( d) and 1370.

C. Summary of Argument on MISC's Issues MISC challenges three provisions that concern: ( 1) " case by case"

requirements imposed on smaller intake structures; ( 2) the requirement that permitting agencies review permits at the time of reissuance; and ( 3) the requirement that facilities comply with state law requirements. Contrary to MISC's arguments, and as discussed further below, these challenged provisions are within EPA's authority under the statute, were adopted with adequate notice and comment proceedings, and are consistent with prior regulations.  27  ARGUMENT I. ENVIRONMENTAL PETITIONERS' PETITIONS SHOULD BE DENIED.

The Environmental Petitioners challenge all three compliance options of the Rule. In Argument I. A. below we address challenges to Track I, and demonstrate that EPA reasonably adopted performance requirements for best technology available based on closed cycle recirculating wet cooling, rather than dry cooling.

In Argument I. B. below we address challenges to Track II, and demonstrate that EPA reasonably provided for the use of different technologies, as long as the technologies employed will achieve a reduction in impingement and entrainment comparable to that which would be achieved through Track I requirements. In Argument I. C. below, we address challenges to the alternative requirements provision, and demonstrate that it is authorized by the CWA and is a reasonable exercise of EPA's discretion.

A. Best Technology Available Does Not Require Dry Cooling.

The Environmental Petitioners and Amici challenge EPA's decision to base the best technology available on closed cycle recirculating wet cooling technology on two grounds. First, they argue that EPA is not authorized to consider costs and energy impacts in determining best technology available. However, as demonstrated in Part 1 of this Argument, EPA reasonably interprets CWA § 316( b)  28  to permit consideration of costs and energy impacts in determining the best technology available. Second, they argue that, even if consideration of those factors is permissible, EPA abused its discretion by rejecting dry cooling as the best technology available. However, as demonstrated in Part 2 of this Argument, EPA reasonably concluded, after consideration of the relevant factors, that closed cycle recirculating wet cooling constituted the best technology available to minimize adverse environmental impact.

1. EPA Reasonably Interpreted The Statute To Authorize Consideration Of Costs And Energy Impacts In Determining The Best Technology Available.

The Environmental Petitioners challenge EPA's decision to reject dry cooling as the best technology available on grounds that CWA § 316( b) does not authorize EPA to consider the costs and energy impacts of dry cooling as a factor in its decision. EPA interprets § 316( b) consistently with its interpretation of other technology based provisions in the Clean Water Act, all of which not only permit,

but require, that costs and non water quality environmental impacts be considered in establishing the technology based standard.

a. EPA's interpretation is consistent with other technology based standards in the CWA.

CWA § 316( b) requires that the " best technology available for minimizing adverse environmental impact" of cooling water intake structures must be included  29  in " any standard established pursuant to section 1311 of this title [ CWA § 301] or section 1316 of this title [ CWA § 306]." 33 U. S. C. § 1326( b). Those sections establish the statutory authority for EPA to promulgate technology based standards for effluent discharges from new sources ( CWA § 306) and existing sources ( CWA § 301). EPA adopted an approach to considering costs and other environmental impacts that is analogous to the way those factors are considered in establishing standards under CWA § § 301 and 306. CR 206.014 at 1898 ( JA XX); CR 068.007 at 1183 ( JA XX).

CWA § 306( b)( 1)( B), which governs the effluent discharge standards for new sources, expressly states that in establishing the " best available demonstrated control technology" the Administrator 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)( 1)( B). The cost consideration is mandatory in establishing the technology based standards for new sources under CWA § 306. "[ T] he Administrator must inquire into the initial and annual costs of applying the technology and make an affirmative determination that those costs can reasonably be borne by industry." National Wildlife Fed'n v. EPA, 286 F. 3d 554,

570 ( D. C. Cir. 2002) citing Chem. Mfrs. Ass'n v. EPA, 870 F. 2d 177, 262 ( 5th Cir.

1989); CPC Int'l v. Train, 540 F. 2d 1329, 1341 ( 8th Cir. 1976). 18/ CWA § 301( b)( 2)( E) provides a separate standard for conventional pollutants, " best conventional pollutant control technology," which also requires consideration of costs. 33 U. S. C. § 1314( b)( 4)( B). EPA established a two part test to implement this requirement. 51 Fed. Reg. 24,974 ( July 9, 1986).

 30  CWA § 316( b) also cross references CWA § 301( b), which provides two stages for regulation of effluent discharge from existing facilities. E. I. duPont de Nemours & Co. v. Train, 430 U. S. 112, 121 ( 1977). The first level of control, set forth in CWA § 301( b)( 1)( A), requires application of the " best practicable control technology currently available," which in turn requires " consideration of the total cost of application of technology in relation to the effluent reduction benefits to be achieved from such application" and must also take into account " non water quality environmental impact ( including energy requirements)." 33 U. S. C. § 1314( b)( 1)( B). The second level of control, set forth in CWA § 301( b)( 2)( A),

requires application of the " best available technology economically achievable,"

which in turn requires consideration of " the cost of achieving such effluent reduction, [ and] non water quality environmental impact ( including energy requirements)." 33 U. S. C. § 1314( b)( 2)( B). See also 33 U. S. C. § 1314( b)( 3)

( control measures must take into account " the cost of achieving such elimination of the discharge of pollutants"). 18/ Although the standards are somewhat different,

each requires that EPA consider the cost of the technology and the other environmental impacts when selecting the standard. See, e. g., Chemical Mfrs. 19/ The Environmental Petitioners concede that CWA § 316( b) requires technology based standards similar to those established for effluent discharges under CWA § § 301 and 306. See Env. Pet. Br. at 18 ( EPA " must adhere to the same basic rules as the effluent limitations EPA established under Section [ sic] 301 and 306."). Environmental Petitioners nevertheless argue that EPA cannot consider the cost and energy impacts in the CWA § 316( b) regulation which it is required to consider in regulation of effluent discharges under CWA § § 301 and 306. EPA's interpretation, on the other hand, consistently interprets all of the technology based standards in these sections.

 31  Ass'n v. EPA, 870 F. 2d at 237 38; BASF Wyandotte Corp. v. Costle, 598 F. 2d 637,

662 ( 1st Cir. 1979); American Iron & Steel Inst. v. EPA, 526 F. 2d 1027, 1051 ( 3d Cir. 1975).

Because CWA § § 301 and 306 are expressly cross referenced in CWA § 316( b), EPA reasonably interprets CWA § 316( b) as authorizing consideration of the same factors considered under CWA § § 301 and 306, including cost and nonwater quality environmental impacts. 19/ Courts have twice concluded that the cross reference in CWA § 316( b) to CWA § § 301 and 306 implicitly incorporates the provisions of those sections. In Virginia Elec. & Power Co. v. Costle, 566 F. 2d 446, 449 ( 4th Cir. 1977), the court held that the issuance of a regulation under CWA § 316( b) was an " other limitation" under CWA § § 301 and 306. In Cronin v.

Browner, 898 F. Supp. 1052, 1059 ( S. D. N. Y. 1995), the Court held that the express statutory deadlines for promulgating regulations under CWA § § 301 and 306 apply 20/ The court in Cronin distinguished this Court's decision in EDF v. Thomas, 870 F. 2d 892 ( 2d Cir. 1989), which rejected a similar argument because the statutory section at issue did not expressly cross reference the statutory section which contained the deadline for promulgation of regulations. As the court in Cronin aptly noted, the EDF decision strongly suggests that an express crossreference ( such as in § 316( b)) would compel application of the deadline. Cronin, 898 F. Supp. at 1059 60.

 32  also to regulations promulgated under CWA § 316( b), notwithstanding the absence of a deadline in CWA § 316( b). 20/

Even if the direct statutory cross reference in CWA § 316( b) to CWA § § 301 and 306 did not incorporate the standards of those sections, it would nonetheless be reasonable for EPA to interpret the CWA § 316( b) standard of " best technology available" consistently with the similar standards of " best available demonstrated control technology" in CWA § 306( b)( 1)( B), " best available technology economically achievable" in CWA § 301( b)( 2)( A), and " best practicable control technology" in CWA § 301( b)( 1)( A). If Congress had intended the standards for cooling water intake structures to depart so significantly from the standards governing effluent discharges, Congress would not have used virtually the same language to describe the standard. C. I. R. v. Lundy, 516 U. S. 235 250 ( 1996) ( It is a normal rule of statutory construction that identical words used in different parts of 21/ Again, Environmental Petitioners concede that " Congress's use of ` best technology' language in CWA § 316( b) underscores its intent to incorporate cooling water withdrawal limitations into the technology based framework of the Act", and acknowledge that ` best technology available' ( BTA) . . . is textually similar to the ` best available technology' ( BAT) standard of CWA § 301( b)( 2)( A) and the ` best available demonstrated control technology' standard of CWA § 306( a)( 1). Env. Pet. Br. at 25. Yet, again, they inconsistently argue that EPA must ignore the cost and energy considerations that are clearly incorporated into those technology based standards.

 33  the same act are intended to have the same meaning.) 21/ CR 206.014 at 1888 89 ( JA XX).

b. EPA's interpretation is supported by the legislative history of § 316( b) and by judicial precedent.

EPA's interpretation is also supported by the legislative history of CWA § 316( b): "` best technology available' should be interpreted as best technology available at an economically practicable cost." See 118 Cong. Rec. 33,762 ( 1972),

reprinted in 1 Legislative History of the Water Pollution Control Act Amendments of 1972, 93d Cong., 1st Sess. at 264 ( Comm. Print 1973) ( Statement of Representative Don H. Clausen). CR 068.007 at 1183 ( JA XX).

Moreover, EPA's interpretation of CWA § 316( b) is consistent with judicial interpretations of the section. See, e. g., Seacoast Anti Pollution League v. Costle,

597 F. 2d 306, 311 ( 1st Cir. 1979) (" The legislative history clearly makes cost an acceptable consideration in determining whether the intake design ` reflect[ s] the best technology available'"); United States Steel Corp. v. Train, 556 F. 2d 822, 850  34  ( 7th Cir. 1977) (" we trust that EPA will conduct a limited cost benefit analysis once the information on which an evaluation of the various technologies can be made becomes available"); Hudson Riverkeeper Fund, Inc. v. Orange & Rockland Util.,

Inc. 835 F. Supp. 160, 165 66 ( S. D. N. Y. 1993). CR 206.014 at 1889 ( JA XX).

The only authority identified by Environmental Petitioners to support their restrictive interpretation of the statute is inapposite. They rely on Whitman v.

American Trucking Associations, 531 U. S. 457, 465 ( 2001), and Lead Industries Association v. EPA, 647 F. 2d 1130, 1148 ( D. C. Cir. 1980). Aside from the obvious fact that both of those cases arose under the Clean Air Act, rather than the Clean Water Act, the cases do not even involve technology based standards. Both interpreted health based ambient air quality standards, which are more analogous to the human health based or environmentally based water quality standards under the Clean Water Act. Both of those cases involved interpretation of health based criteria which must adequately protect human health or the environment without regard to cost considerations. Mississippi Comm'n on Natural Resources v.

Costle, 625 F. 2d 1269, 1277 ( 5th Cir. 1989) ( Under the CWA, while economics are considered in designating uses for a waterbody, economic factors are irrelevant in setting criteria to meet those uses). By way of contrast, every technology based standard under the Clean Water Act incorporated in NPDES permits requires that EPA consider the costs of compliance and non water quality environmental  35  impacts, including energy. Environmental Petitioners have cited no relevant authority to support their overly strict and narrow reading of the statute, and it should be rejected.

c. EPA's interpretation is entitled to deference.

EPA's interpretation that CWA § 316( b) authorizes EPA to consider the same factors it considers in regulating effluent discharges under CWA § 306 establishing " best available demonstrated control technology" or under CWA § 301 establishing " best available control technology" is reasonable, based on the similarity in the standards and the statutory cross reference to those provisions. Because EPA's interpretation is " reasonable in light of the goals and purposes of the statute," the Court must defer to EPA's interpretation. Chevron, U. S. A. v. NRDC, 467 U. S. at 844; Sutherland v. Reno, 228 F. 3d at 173 (" When reviewing an agency determination, federal courts must accord substantial deference to an agency's interpretation of the statutes it is charged with administering"). See also Texas Oil & Gas Ass'n v. EPA, 161 F. 3d 923, 938 ( 5th Cir. 1998) ( citing American Forest &

Paper Ass'n v. EPA, 137 F. 3d 291, 297 ( 5th Cir. 1998) ( applying the Chevron test to EPA's interpretation of the CWA)).

2. EPA Properly Rejected Dry Cooling as the Best Technology Available Based on Consideration of Relevant Factors.  36  Environmental Petitioners next complain that even if EPA is authorized to consider compliance costs and non water quality environmental impacts, its rejection of dry cooling as the best technology available was nonetheless an abuse of discretion. EPA, however, considered all relevant factors, including: ( a) the high costs of dry cooling; ( b) non water quality environmental impacts of dry cooling,

including increased energy consumption; ( c) technical feasibility of dry cooling;

and ( d) effectiveness of wet cooling in minimizing impingement and entrainment,

and concluded that closed cycle recirculating wet cooling is the best technology available. EPA's weighing of the factors is entitled to a high degree of deference,

and should be upheld.

a. The high costs of dry cooling would create a barrier to entry for some facilities.

EPA concluded that dry cooling technology is not economically available to all of the projected facilities subject to the rule because the high costs of dry cooling may be a barrier to entry. 66 Fed. Reg. at 65,282/ 3 83/ 2 ( JA XX XX); CR 206.014 at 1890 ( JA XX). EPA's economic analysis demonstrates that the annualized cost of dry cooling is ten times more than the cost of wet cooling. 66 Fed. Reg. at 65,282/ 3 83/ 1 ( JA XX XX). For some of the projected facilities, the requirement of dry cooling would result in annualized compliance costs in excess of 10% of revenues. For virtually all of the projected facilities subject to the rule, the 22/ For example, a dry cooling installation at a new electrical generating facility would approach 7% of construction costs, versus approximately 2% of construction costs for wet cooling. CR 206.014 at 1891 ( JA XX).

 37  requirement of dry cooling would result in annualized compliance costs of at least 4% of revenues. 66 Fed. Reg. at 65,282/ 3 ( JA XX). Original capital investment costs of dry cooling technology are also significantly greater than those of wet cooling towers. 22/ EPA determined these costs to be excessive, and was concerned that the high costs of dry cooling would create an economic barrier to entry.

EPA also determined that the high cost of dry cooling is unacceptable because it would create a disincentive to construction of new facilities and encourage the continued repair of older existing facilities, which typically have greater adverse environmental impact. 66 Fed. Reg. at 65,283/ 1 ( JA XX);

CR 006.014 at 1893 ( JA XX). Further, because of the higher operational costs, new facilities employing dry cooling technology would be at a distinct competitive disadvantage to existing sources in the industry not subject to the requirement.

66 Fed. Reg. at 65,283/ 1 ( JA XX).

Environmental Petitioners question EPA's concern that the high costs of dry cooling will pose a barrier to entry for some facilities, relying on EPA v. National Crushed Stone, 449 U. S. 64 ( 1980), in which the Supreme Court acknowledged that costs of compliance with the technology based standard may force some marginal 23/ See A Legislative History of the Water Pollution Control Act Amendments of 1972, 93d Cong. 1st Sess. at 172 ( Comm. Print 1973): " The Conferees would expect that this cost test would be considerably more restrictive than the test which ( continued...)

 38  plants to close. However, the Environmental Petitioners have taken the Supreme Court's statement out of context. The petitioners in that case challenged a variance provision on grounds that it did not allow a facility to obtain a variance from the " best practicable control technology" standard based on its economic inability to comply with the standard. The Supreme Court explained that the [ EPA] is directed to consider the benefits of effluent reductions as compared to the costs of pollution control in determining BPT limitations. Thus, every BPT limitation represents a conclusion by [ EPA] that the costs imposed on the industry are worth the benefits in pollution reduction that will be gained by meeting those limits.

Id. at 76 77. The Supreme Court thus approved EPA's consideration of costs imposed on the industry when it established the technology based standard, just as EPA did in this case.

Environmental Petitioners further argue that EPA should not consider potential barriers to entry because the costs of compliance should be of less concern in regulating new sources than it is with respect to existing sources. EPA agrees that more stringent standards may be more appropriate for new sources than for existing sources, because new sources have more design flexibility than existing sources. 23/ However, the ability of new sources to meet more restrictive 23/(... continued) would be applied to ` best available technology' because pollution control alternatives are available to a new source which are not available to existing sources."

24/ For estimates and comparisons of the energy consumption between dry cooling technology and wet cooling technology, see 66 Fed. Reg. at 65,268/ 3 ( JA XX) and TDD at Chap. 3 ( JA XX).

 39  requirements does not mean that cost is of no concern. It is clear that cost is an appropriate consideration in setting new source performance standards under CWA § 306 and, by extension, CWA § 316( b). National Wildlife Fed'n v. EPA, 286 F. 3d at 570 ( EPA's rejection of a more stringent, but more costly, option for new sources not arbitrary and capricious); BP Exploration & Oil Inc., 66 F. 3d at 796, 800 ( same). In this rulemaking, EPA reasonably determined that the costs of dry cooling could not be borne by the industry as a whole, and EPA's determination is entitled to deference.

b. Dry cooling results in unacceptable energy consumption and increased air emissions.

EPA concluded that dry cooling technology would lead to significantly greater energy consumption than the use of wet cooling, because dry cooling technology requires more energy than wet cooling to produce the same amount of power ( referred to as an " energy penalty"). 24/ 66 Fed. Reg. at 65,283/ 2 84/ 1 ( JA XX XX). EPA calculated that a national standard based on dry cooling would 25/ For detailed estimates of air emission increases associated with the increased energy consumption of dry cooling technology, see 66 Fed. Reg. at 65,269/ 2 3 ( JA XX); TDD at Chap. 3 ( JA XX).

 40  reduce the nation's future energy production capacity by 1900 MW   the equivalent of three large coal fired power plants. CR 206.014 at 1892 ( JA XX).

Moreover, the additional energy consumed by dry cooling technology would require the production of replacement energy, which in turn results in greater air emissions. 25/ EPA determined that these non water quality environmental impacts associated with dry cooling technology were unacceptable.

Environmental Petitioners criticize EPA's consideration of increased energy consumption and increased air emissions, characterizing both as " so extremely minor as to be diminimus [ sic]." Env. Pet. Br. at 48. However, the Environmental Petitioners' reference to the nationwide increase in energy consumption resulting from dry cooling as .5% lacks any meaningful context. The comparative increase in energy consumption for wet cooling is .026%  more than an order of magnitude less than the dry cooling alternative. CR 206.012 at 1879 80 ( JA XXXX EPA determined that the modest decrease in entrainment that could be realized through the use of dry cooling technology did not justify the increase in energy consumption and air emissions.  41  A similar balancing of two environmental harms was upheld by the court in BP Exploration and Oil Inc., 66 F. 3d 784, considering a rule in which EPA rejected a zero discharge standard due to air emissions that would result from such a requirement. The court stated: " If any entity has the ability to weigh the relative impacts of two different environmental harms, it is the EPA." Id. at 802. In this rulemaking, EPA reasonably concluded that the increased energy consumption and related emissions associated with dry cooling are not acceptable, and EPA's determination is entitled to deference.

c. Dry cooling technology is not feasible for all facilities subject to the Rule.

EPA concluded that dry cooling is not technically feasible at many facilities that will be subject to the Rule. 66 Fed. Reg. at 65,284/ 1 2 ( JA XX); CR 206.013,

at 1884 85 ( JA XX). For example, many manufacturing facilities require wet cooling technology because they use the cooling water in their manufacturing process and dry cooling technology will not provide the required volume of water.

In some cases, the manufacturing facilities require the use of cooling water at temperatures that cannot be reliably met by utilizing dry cooling. 66 Fed. Reg. at 65,284/ 1 2 ( JA XX). Dry cooling technology is also unavailable to many power producers, as it has not been demonstrated to be feasible at large coal fired 26/ At the time of promulgation of this Rule, the largest application of dry cooling at a coal fired plant in the United States was a plant with a capacity of 330 MW. 71% of the projected coal fired plants within the scope of this Rule are larger than that. CR 206.013 at 1885 ( JA XX).

27/ The temperature at the largest plant where dry cooling technology was demonstrated was below average for conditions throughout the United States. The practical limitations of dry cooling prevent it from operating as efficiently as wet cooling in warm temperatures. CR 206.014 at 1893 ( JA XX). The increased energy consumption for a dry cooling plant in a hot environment can exceed 12%. TDD at Chap. 3 ( JA XX).

 42  plants. 26/ Further, dry cooling technology is not efficient in parts of the country with warm temperatures, and the inefficiencies of dry cooling under high temperature conditions in some regions of the country would create an unfair competitive advantage for those facilities located in cooler regions of the country.

66 Fed. Reg. at 65,283/ 1 ( JA XX). 27/ EPA thus concluded that dry cooling was not an available technology for all new facilities. 66 Fed. Reg. at 65,284/ 1 2 ( JA XX).

Environmental Petitioners challenge EPA's consideration of the technical availability of dry cooling technology, insisting that EPA cannot reject a demonstrated technology based on engineering problems that make dry cooling technology unavailable to some industries. Env. Pet. Br. at 48. The Environmental Petitioners urge that, to the extent dry cooling is not technically feasible for all industries, EPA is required to regulate cooling water intake on an industry by 28/ While that may have been an option available to EPA, EPA is clearly authorized to regulate cooling water intake systems by a single rule applicable to all industries. Cronin v. Browner, 898 F. Supp. at 1060. Environmental Petitioners expressly recognize EPA's authority to implement the CWA § 316( b) with a regulation that applies to all point sources that use cooling water intake structures. Env. Pet. Br. at 27.

 43  industry basis. 28/ EPA did consider that approach, including subcategorization strategies based on regional location of the facilities, size, and type of process ( e. g., steam electric power plants v. manufacturing facilities). 66 Fed. Reg. at 65,270, n. 29 ( JA XX); CR 006.007 at 29 30 ( JA XX). EPA, however, rejected that approach because EPA is concerned that if dry cooling were required at some facilities ( at which its feasibility has been demonstrated) but not all facilities, it would create a competitive disadvantage for those facilities subject to the dry cooling requirements. 66 Fed. Reg. at 65,283/ 1 ( JA XX).

d. The slight additional reductions in entrainment do not require EPA to adopt dry cooling as the best technology available.

Environmental Petitioners argue that dry cooling is the best technology available because it would lead to slightly greater reductions in adverse environmental impact. EPA recognizes that dry cooling is somewhat more effective than wet cooling in reducing entrainment ( although it is not more effective in reducing impingement), but Environmental Petitioners have grossly distorted the comparison. Env. Pet. Br. at 48. EPA's analysis shows that wet 29/ The effectiveness of wet cooling technology with respect to entrainment varies, depending upon the waterbody and other factors. Closed cycle wet cooling systems using fresh water may reduce water usage, and therefore entrainment, by 96 to 98 % over once through cooling systems, whereas closed cycle wet cooling systems using salt water may reduce water usage, and therefore entrainment, by 70 to 96 % over once through cooling systems. 66 Fed. Reg. at 65,273/ 3 ( JA XX). The vast majority of new facilities in the scope of the Rule will locate on fresh water, thereby maximizing the reductions achievable through the use of wet cooling. Economic Analysis of the Final Regulations ( EA) at 5 11 ( JA XX X).

30/ Economic analysis demonstrated that dry cooling would result in annualized compliance costs of over $ 490 million, as compared to $ 47 million for the compliance costs of wet cooling. 66 Fed. Reg. at 65,282/ 3 83/ 1 ( JA XX XX).

 44  cooling virtually eliminates impingement and substantially reduces entrainment.

Compared to once through cooling systems, closed cycle recirculating wet cooling reduces impingement and entrainment by 92% to 95%, whereas dry cooling reduces impingement and entrainment by up to 99%. 29/ EPA found that this difference in effectiveness did not justify the ten times greater costs associated with dry cooling technology. CR 206.012 at 1881 ( JA XX). 30/ EPA thus concluded that wet cooling is substantially more cost effective than dry cooling. 66 Fed. Reg. at 65,284/ 1 ( JA XX).

EPA does not interpret CWA § 316( b) as requiring complete elimination of adverse environmental impacts. Rather, EPA interprets CWA § 316( b) as allowing some discretion to consider technologies that very effectively reduce, but do not completely eliminate, impingement and entrainment as meeting the requirements  45  of CWA § 316( b). 66 Fed. Reg. at 65,282/ 3 ( JA XX). EPA believes that the unique phrase " minimizing adverse environmental impact" in CWA § 316( b)

supports an interpretation that considers the practicability and reasonableness of incrementally stringent measures, including, among other things, economic considerations.

EPA's interpretation is consistent with the interpretation of other technology based performance standards. For example, CWA § 306, governing new source performance standards for effluent discharges, provides:

[ the] standard for the control of the discharge of pollutants which reflects the greatest degree of effluent reduction which the Administrator determines to be achievable through application of the best available demonstrated control technology, processes, operating methods, or other alternatives, including, where practicable, a standard permitting no discharge of pollutants.

33 U. S. C. § 1316( a)( 1). Even this section, which expressly authorizes a zerodischarge standard, does not require EPA to adopt technology to achieve zero discharge when the cost is too high. EPA reasonably considered the mandate of CWA § 316( b) to " minimize" adverse environmental impact to be no more stringent than the authority to adopt a zero discharge standard. CR 206.032 at 1928 ( JA XX).

Environmental Petitioners insist that EPA must look to the best performing pilot plant, not the average plant, to determine the best technology available, 31/ EPA considered every existing dry cooling installation in the United States and abroad. For complete description, see TDD at 4 3, 4 4 ( JA XX).

 46  relying on Kennecott v. EPA, 780 F. 2d 445 ( 4th Cir. 1986). Although Kennecott requires that EPA consider the model plant, it did not require that the model technology be adopted. The Court stated: " The cost of installing and operating a model technology is not, however, a matter that Congress has permitted the agency to ignore. The statute requires EPA to take into account the cost of achieving effluent reduction." Kennecott, 780 F. 2d at 456. EPA did consider many plants operating with dry cooling technology, 31/ but considering those plants does not require EPA to adopt performance requirements based on the technology.

In BP Exploration & Oil Inc. v. EPA, 66 F. 3d 784 ( 6th Cir. 1995), the NRDC made an argument similar to that made by Environmental Petitioners. NRDC alleged that EPA illegally rejected a demonstrated technology that achieved zero discharge even though it represented the " best single performer in an industry."

The court concluded that " EPA acted within its statutory authority in rejecting zero discharge based on reinjection," explaining that " the CWA's requirement that EPA choose the best technology does not mean that the chosen technology must be the best pollutant removal. Obviously, BAT and NSPS must be acceptable on the basis of numerous factors, only one of which is pollution control." Id. at 796.

See also American Petroleum Institute v. EPA, 787 F. 2d 965, 972 ( 5th Cir. 1986)  47  (" EPA would disserve its mandate were it to tilt at windmills by imposing BAT limitations which removed de minimis amounts of polluting agents from our nation's waters, while imposing possibly disabling costs upon the regulated industry.").

e. EPA has substantial discretion in weighing of the factors and its determination is entitled to deference.

EPA has considerable discretion in determining the weight to be accorded to each relevant factor in reaching its determination of the best technology available.

In review of standards established under CWA § 306, the D. C. Circuit held that "[ t] he overriding principle in our review of the Final Rule is that the agency has broad discretion to weigh all relevant factors during rulemaking. The CWA does not state what weight should be accorded to the relevant factors; rather, the Act gives EPA the discretion to make those determinations." National Wildlife Fed'n,

286 F. 3d at 570 ( citing BP Exploration & Oil, Inc., 66 F. 3d at 802); NRDC v.

EPA, 863 F. 2d 1420, 1426 ( 9th Cir. 1988). With respect to standards established under CWA § 301, Congress " left EPA with discretion to decide how to account for the consideration factors, and how much weight to give each factor."

Weyerhaeuser Co. v. Costle, 590 F. 2d 1011, 1045 ( D. C. Cir. 1978).

Environmental Petitioners' argument was summarized well by the court in BP Exploration & Oil, Inc.: " As EPA correctly points out, NRDC's contention  48  that economic, energy, and non water quality environmental impacts are less important than achieving zero discharge merely reflects NRDC's disagreement on a policy level. This Court may not substitute NRDC's judgment, any more than our own, for that of the EPA." 66 F. 3d at 802. In this case, the Environmental Petitioners' contention that economic, energy, and non water quality environmental impacts are less important than achieving a slight reduction in impingement and entrainment merely reflects the Environmental Petitioners'

disagreement with EPA on a policy level. This Court should not substitute the Environmental Petitioners' judgment, any more than its own, for that of the EPA.

B. Track II Of EPA's Rule Is Authorized By CWA § 316( b) And Supported By The Administrative Record.

In the Rule, EPA adopted a two track approach to compliance with the technology based standard. 66 Fed. Reg. at 65,259/ 3 ( JA XX). Under Track I of the Rule, a facility may implement any technology that meets the performance requirements based on closed cycle recirculating wet cooling. Under Track II of the Rule, a facility may employ any technology or set of technologies that will reduce the level of impingement and entrainment to a level comparable to that 32/ EPA's approach in this rule is not novel. When establishing effluent guidelines for Pesticide Chemicals: Formulating, Packaging and Repackaging, EPA established a numeric limitation but also a set of best management practices that would yield the same numeric results. See 61 Fed. Reg. 57,518, 57,521 ( Nov. 6, 1996).

 49  which would be achieved by compliance with the Track I performance requirements. 40 C. F. R. § 125.84( d)( 1). 32/

The two track approach provides facilities with greater flexibility in compliance, which EPA concluded is particularly important under a rule, such as this, which governs so many different types of facilities, in many industry groups,

of varying sizes and locations. By providing flexibility, Track II creates an incentive for the development of innovative technologies to meet the requirements of the Rule. 66 Fed. Reg. at 65,270/ 2 ( JA XX).

Environmental Petitioners complain that Track II establishes a less stringent standard and is therefore not the best technology available; that restoration measures permitted under Track II are not authorized by the statute; and that Track II impermissibly requires a case by case determination of best technology available. EPA disagrees. Track II does not create a different standard, but requires comparable performance in the reduction of impingement and entrainment. EPA further believes that any strategy, including restoration, that results in comparable reduction in impingement and entrainment is an authorized 33/ A less stringent standard may be permitted under the alternative requirements provision, discussed in Argument I. C. below. However, that fact is not relevant to the issue of the propriety of Track II.

34/ The measurements are inexact due to unavoidable sampling errors, variability in the performance of the techologies used to minimize entrainment and impingement, and the natural variability of aquatic populations found in the source waterbody. Administrative Report No. 83 3, " Evaluation of 316( b) Demonstration Detroit Edison's Monroe Power Plant" ( March 1978), DCN 1 3025 at 11, 17, 27, ( continued...)

 50  technology under CWA § 316( b). EPA's interpretation of the statute and its factual conclusions, as embodied in Track II, are reasonable, and therefore must be upheld.

1. EPA's Track II Requirement of Comparable Reduction in Impingement and Entrainment is Reasonable.

Contrary to Environmental Petitioners' suggestion, Track II of the Rule does not create a standard that is less stringent than Track I. The Rule establishes a nationwide, uniform, standard for reduction of impingement and entrainment based on the best technology available. The Rule requires that all facilities subject to the Rule meet that standard, either by meeting the performance requirements under Track I, or by achieving a comparable level of reduction in impingement and entrainment under Track II. 33/

EPA required that the reduction in impingement and entrainment be " comparable" rather than " equivalent" because EPA recognized that measurements of impingement and entrainment are not exact. 34/ Given the lack of precision in 34/(... continued) 35, 37, 38, 39 and 41 ( JA XX XX); TDD at 5 1, 5 5 ( JA XX XX); Eugene P. Odum, " Fundamentals of Ecology" ( 3d ed.), DCN 1 1022 at 188 195 ( JA XXXX

35/ New facility determinations regarding flow or impingement and entrainment are, by necessity, estimates based on available data as well as certain assumptions. Such estimates have substantial value but cannot reasonably be expected to achieve a high level of precision. This is particularly true where, as here, impingement and entrainment rates must be correlated with reductions in flow ( which are themselves estimated), reductions in intake velocity, and other design and construction requirements. It also is important to recognize that the efficacies of different design and construction technologies also are based on estimates that are inexact due to data limitations, variations in ambient conditions, and the presence or absence of different species, among other factors. 66 Fed. Reg. at 65,279/ 2 ( JA XX). See also TDD at 5 2 ( JA XX).

 51  measurement, EPA determined that it would not be reasonable to require " equivalence" in measuring reductions in impingement and entrainment for purposes of comparing Track I and the Track II performance. Id. EPA's allowance for a margin of error in the measurement of impingement and entrainment is reasonable, given the numerous factors that must be considered to determine the required level of reduction in impingement and entrainment for Track II and the complexity inherent in assessing the level of performance of different control technologies. 35/ 66 Fed. Reg. at 65,281/ 1 ( JA XX). See also 66 Fed. Reg. at 65,279/ 2 ( JA XX). 36/ EPA has typically used a 10% margin to allow for uncertainty in waterbody measurements. EPA's CWA § 305( b) Guidance recommends for certain conventional pollutants that States may consider a waterbody to meet its designated use if criteria are exceeded in 10% or less of measurements. Guidelines ( continued...)

 52  EPA defined " comparable" as at least 90%. 40 C. F. R. § 125.86. However,

the 90% is not intended to establish a different or less stringent standard but,

rather, is to account for a reasonable margin of error in measuring compliance. As EPA stated in the preamble to the Rule:

EPA does not consider this requirement to mandate exactly the same level of reduction in impingement and entrainment as would be achieved under Track I. Rather, given the numerous factors that must be considered to determine the required level of reduction in impingement and entrainment for Track II and the complexity inherent in assessing the level of performance of different control technologies, EPA believes it is appropriate for a new facility following Track II to achieve reductions in impingement and entrainment that are 90% or greater of the levels achieved under Track I.

66 Fed. Reg. at 65,279/ 2 ( JA XX). In implementation, EPA intends that facilities following Track II will design the cooling water intake structure to obtain the same performance as would be achieved with the use of closed cycle recirculating cooling technology under Track I requirements, but if the subsequent monitoring establishes a 90% or greater reduction in impingement and entrainment, it will be considered comparable. EPA determined that 10% is a reasonable margin of error for such estimates. 36/ 36/(... continued) for Preparation of the Comprehensive State Water Quality Assessments ( 305( b) Reports) and Electronic Updates: Supplement EPA 841 B 97 002B, Sept. 1997 at 3 17. ( App. XX).

 53  In NRDC v. Muszynski, 268 F. 3d 91, 101 02 ( 2d Cir. 2001), this Court upheld EPA's selection of 10% as a reasonable margin of safety in establishing " total maximum daily loads," recognizing that the 10% margin of safety " accounts for the inherent uncertainty in modeling the effect of pollutant loads on the quality of the receiving waterbody." Id. at 101. A similar level of uncertainty exists in the measurement of impingement and entrainment. See also National Wildlife Fed'n,

286 F. 3d at 565 ( approving EPA's reliance on scientific data with a 15% error rate).

EPA is entitled to particular deference with regard to scientific matters in its area of technical expertise. See Baltimore Gas & Elec. Co. v. NRDC, 462 U. S. 87,

103 ( 1983); National Wildlife Fed'n, 286 F. 3d at 559; Appalachian Power Co. v.

EPA, 249 F. 3d 1032, 1051 62 ( D. C. Cir. 2001); New York v. Reilly, 969 F. 2d at 1152; Ethyl Corp., 541 F. 2d at 36. This Court has even approved the exercise of " an uncomfortable degree of discretion" when there is no standard or guideline concerning the appropriate margin. Muszynski, 268 F. 3d at 102. Because Track II compliance requires evaluation of highly variable scientific data and statistical information, a high degree of deference is warranted.  54  2. EPA Reasonably Interpreted CWA § 316( b) to Permit Restoration Measures as a Compliance Option.

The Rule permits the use of restoration measures, in conjunction with other technologies, if the applicant can demonstrate that " the impacts to fish and shellfish, including important forage and predator species, within the watershed will be comparable to those which would result if you were to implement the requirements of [ Track I]." 40 C. F. R. § § 125.84( d)( 1)( i), 125.86( c)( 2)( ii).

Environmental Petitioners argue that the statute does not authorize EPA to allow restoration measures as a compliance option under Track II. However, the statute is silent on this matter, and EPA's interpretation is entitled to deference because EPA's interpretation is consistent with the goals and purposes of the statute.

EPA interprets CWA § 316( b) to provide EPA with sufficient authority to authorize the use of voluntary restoration measures as a means to minimize adverse environmental impact, because the net effect is the same. EPA views restoration measures as part of the " design" of a cooling water intake structure, and considers restoration measures one of several technologies that may be employed, in combination with others, to minimize adverse environmental impact. 66 Fed. Reg.

at 65,315/ 1 ( JA XX). EPA's interpretation is consistent with the purpose of CWA § 316( b): to minimize adverse environmental impact from cooling water intake structures. It is also consistent with the purpose of the CWA generally: " to restore,  55  maintain and protect the biological integrity of the nation's waters." 33 U. S. C. § 1251( a) ( emphasis added). Measures that restore fish and shellfish to replace those that are impinged and entrained further this objective, while offering a significant degree of flexibility to both permitting authorities and facilities. The availability of restoration may make compliance possible for some facilities that might otherwise be unable to build a new facility, or that would be forced to seek protection through the less stringent alternative requirements provision, discussed infra at Argument I. C. 66 Fed. Reg. at 65,314/ 1 ( JA XX).

Because EPA adopted its interpretation through notice and comment rulemaking,

EPA's interpretation is entitled to Chevron deference if it is reasonable in light of the goals and purposes of the statute. United States v. Meade Corp., 533 U. S. 218,

229 ( 2001).

Environmental Petitioners claim that EPA's interpretation is not entitled to deference because, 20 years ago, when Congress was considering the substantial amendments to the Clean Water Act, EPA testified in support of a proposed amendment to CWA § 316( b) that would have expressly authorized the use of restoration measures as compliance options. The Environmental Petitioners conclude from EPA's testimony that EPA interpreted the statute as not authorizing restoration measures as compliance alternatives. It is equally plausible, however, 37/ As the Supreme Court's decision in Chevron confirms, EPA has authority to interpret ambiguous statutory provisions in a manner consistent with the statutory purpose, and its interpretation is entitled to deference.

38/ EPA has gathered substantially more data to inform its judgment since its testimony 20 years ago. EPA has developed extensive information concerning cooling water intake structures, the environmental impact resulting from them, and various technologies available to reduce impingement and entrainment. 66 Fed. Reg. at 65,262 65 ( JA XX XX).

39/ In Chevron the Supreme Court recognized the right of an Agency to change its interpretation notwithstanding Supreme Court affirmance of the earlier view and notwithstanding the interpretation being at variance with prior precedent of the D. C. Circuit. 467 U. S. at 841 42.

 56  that EPA recognized the ambiguity in the statute and proposed the amendment merely for clarification. 37/

Even if that is a fair characterization of EPA's interpretation of the provision 20 years ago, EPA is entitled to change its view, particularly when the passage of time and the gathering of data has provided additional relevant information to inform its judgment. 38/ Agencies are entitled to make " sharp breaks" with their prior statutory interpretations. Rust v. Sullivan, 500 U. S. 173 ( 1991). " This Court has rejected the argument that an agency's interpretation ` is not entitled to deference because it represents a sharp break with prior interpretations' of the statute in question." Rust, 500 U. S. at 186 ( citing Chevron, 467 U. S. at 862). 39/

" In Chevron, we held that a revised interpretation deserves deference because `[ a] n initial agency interpretation is not instantly carved in stone' and ` the agency, to  57  engage in informed rulemaking, must consider varying interpretations and the wisdom of its policy on a continuing basis.'" Id. at 863 64. An agency is not required to "` establish rules of conduct to last forever,'" Motor Vehicle Mfrs.

Ass'n of United States, Inc. v. State Farm Mut. Auto. Ins. Co., 463 U. S. 29, 42 ( 1983) ( quoting American Trucking Ass'ns, Inc. v. Atchison, T. & S. F. R. Co., 387 U. S. 397 ( 1967)); NLRB v. Curtin Matheson Scientific, Inc., 494 U. S. 775 ( 1990),

but rather " must be given ample latitude to ` adapt [ its] rules and policies to the demands of changing circumstances.'" Motor Vehicle Mfrs. Ass'n, 463 U. S. at 42 ( quoting Permian Basin Area Rate Cases, 390 U. S. 747, 784 ( 1968)). 66 Fed. Reg.

at 65,280/ 3 ( JA XX); 66 Fed. Reg. at 65,314/ 2 15/ 2 ( JA XX XX). Because EPA's interpretation is reasonable in light of the purpose and goals of the statute, it is entitled to deference and should be upheld.

3. Track II Does Not Require a Case By Case Determination of Best Technology Available.

Environmental Petitioners also challenge the Track II compliance strategy,

arguing that it impermissibly allows a case by case determination of best technology available. This is a mischaracterization of the Rule. In fact, several industry groups advocated that EPA should adopt a case by case approach to determination of best technology available, but EPA rejected that approach.

66 Fed. Reg. at 65,272/ 3, 65,284/ 2 85/ 2 ( JA XX, XX XX). A case by case  58  compliance approach would have allowed a site specific determination of best technology available, resulting in different levels of reduction in impingement mortality and entrainment, based on an assessment of the waterbody and the impact of the intake on the fish and shellfish population. By contrast, the Rule requires all facilities, regardless of site specific circumstances, to achieve a defined level of performance, without having to first prove an impact on the fish and shellfish population. 40 C. F. R. § 125.86( c)( 2)( i).

Environmental Petitioners also mischaracterize the Comprehensive Demonstration Study required for Track II approval. 40 C. F. R. § 125.84( d)

requires that a Comprehensive Demonstration Study must be conducted to:

confirm that the technology( ies) proposed and/ or implemented at your cooling water intake structure reduce the impacts to fish and shellfish to levels comparable to those you would achieve were you to implement the requirements in § 125.84( b)( 1) and ( 2) of track I.

40 C. F. R. § 125.86( c)( 2). The Demonstration Study is not required under Track I because EPA has already determined that compliance with the performance requirements established in Track I will reduce impingement and entrainment to an acceptable level. However, if a facility chooses the Track II compliance option,

the facility must prove that the proposed technology, or combination of technologies, will achieve comparable results.  59  Although Track II does require a study of the types of aquatic organisms in the waterbody, it is not a water quality based approach, as Environmental Petitioners contend. Env. Pet. Br. at 37. The study is required to measure performance of the facility's reduction of impingement and entrainment, not to determine the impact of the facility on the population. CR 501.003 at 2068 9 ( JA XX XX).

In sum, Environmental Petitioners are concerned that compliance options other than wet cooling will not achieve the same level of reduction in impingement mortality and entrainment as Track I performance standards. Those are concerns about the implementation of Track II compliance strategies, not about the Rule itself. Such concerns are not presently ripe for review, and should be addressed to permitting officials in the context of individual permit decisions.

C. The Alternative Requirements Provision of EPA's Rule is Authorized by CWA § 316( b) and Supported by the Administrative Record.

Section 125.85, 40 C. F. R. § 125.85, of the Rule permits facilities to employ alternative requirements, which may be less stringent than the standard based on the best technology available, but only in certain narrow and limited circumstances that demonstrate the reasonableness of EPA's approach. The alternative requirements are available only if the permitting authority: 40/ In this respect, the alternative requirements provision is distinguishable from the variance provision struck down in NRDC v. EPA which was " wholly silent as to what factors the agency was to consider in granting exceptions." 863 F. 2d at 1432.

 60  determines that data specific to the facility indicate that compliance with the requirement at issue would result in compliance costs wholly out of proportion to those EPA considered in establishing the requirements at issue or would result in significant adverse impacts on local air quality, significant adverse impacts on local water resources, not addressed under § 125.84( d)( 1)( i), or significant adverse impacts on local energy markets.

40 C. F. R. § 125.85( a)( 2).

EPA determined that the use of alternative requirements in such circumstances is both reasonable and consistent with the objective of the statute.

66 Fed. Reg. at 65,322/ 2 3 ( JA XX); CR 206.032 at 1928 ( JA XX). As EPA explained, the Rule will apply to a variety of sources that may be affected differently by the requirements. Although EPA considered all available data it was able to collect, develop and solicit regarding projected new facilities, the alternative requirements provision simply allows the permitting authority to consider site specific information that was not available to, and therefore not considered by, EPA during the rulemaking. 40/ 66 Fed. Reg. at 65,319/ 3 20/ 1 ( JA XX XX).

This provision is very much like the " fundamentally different factors"

provision in CWA § 301( n), 33 U. S. C. § 1311( n), which authorizes alternative 41/ The " Water Quality Act of 1987". Pub. L. No. 100 4, § 306, reprinted in 1987 U. S. C. C. A. N. 5, 22 ( 1987).

42/ In NRDC, the justification for the variance provision offered by EPA was very much like the justification provided for the alternative requirements provision in this case. Compare 39 Fed. Reg. 6579, 6583 ( Feb. 20, 1974) ( explaining rationale for the variance provision considered in NRDC v. EPA) with 66 Fed. Reg. at 65,322 ( explaining rationale for alternative requirements provision in this Rule.)

 61  requirements for sources subject to national technology based standards for effluent discharges, if the facility can establish that it is fundamentally different with respect to factors considered by EPA in promulgating the national standard.

The fundamentally different factors provision was added to the statute in 1987,41/

but prior to the amendment, both this Court and the Supreme Court upheld EPA's rules containing provisions for alternative requirements as reasonable interpretations of the statute. NRDC v. EPA, 537 F. 2d 642, 647 ( 2d Cir. 1976)

(" the establishment of the variance clause is a valid exercise of the EPA's rulemaking authority pursuant to § 501( a) which authorizes the Administrator to promulgate regulations which are necessary and proper to implement the Act"); 42/

EPA v. National Crushed Stone Ass'n, 449 U. S. 64 ( 1980) ( approving EPA's alternative requirements provision in a standard adopted pursuant to CWA § 301( b)( 1), even though the statute did not expressly permit a variance.) EPA's alternative requirements provision in this Rule is similarly a reasonable  62  interpretation of § 316( b) and valid exercise of EPA's rulemaking authority under CWA § 501.

Relying heavily on the Supreme Court's decision in E. I. duPont de Nemours & Co. V. Train, 430 U. S. 112 ( 1977), Environmental Petitioners claim that the statute does not authorize EPA to adopt the alternative requirements provision. The duPont case involved a challenge to a new source performance standard on grounds that it did not provide for a variance, and the issue presented was " whether the new source standards issued under CWA § 306 must allow variances for individual plants." Id. at 115 ( emphasis added). The actual holding of the Supreme Court was no more than that a variance provision is not required in a new source performance standard.

Moreover, EPA's 316( b) rule differs from the CWA § 306 rule considered by the Supreme Court in duPont in two significant respects. First, CWA § 306 applies only to new sources, whereas the statutory standard in CWA § 316( b)

applies to both new and existing sources. Although EPA has chosen to make the distinction between new and existing sources in its regulations, the statutory standard must be interpreted as applicable to both new and existing sources. Both this court and the Supreme Court have approved of such an alternative requirements provision in rules implementing the CWA § 301 standards applicable to existing sources. If the term " standard" in CWA § 316( b) were  63  interpreted as Environmental Petitioners propose, it would necessarily exclude alternative requirements for existing sources as well as for new sources. CR 206.032 at 1928 ( JA XX). The statute should not be read so narrowly.

Second, standards under CWA § § 301 and 306 are established on an industry by industry basis, whereas the standards under CWA § 316( b) apply to all industries subject to the regulation. Thus, while technology based standards under CWA § § 301 and 306 can be tailored to the specific industry, the technology based standards adopted under CWA § 316( b) for new facilities apply to all covered industry sources, of various sizes and with markedly different processes, that may be built in the future. EPA specifically considered power generating facilities and several types of manufacturing facilities in this rulemaking. However, EPA cannot be certain how many other types of facilities may be built in the future that will be subject to this rule, nor can EPA forecast with certainty the unique individual circumstances that may impact the as

yetunidentified facilities. 316bNFR 206.032 at 1928 ( JA XX).

Accordingly, EPA concluded that it was appropriate to allow use of alternative requirements only when compliance with the technology based standard would result in costs wholly out of proportion to the costs EPA considered in its analysis, or if compliance with the standard would result in  64  significant adverse environmental impacts not considered by EPA. 66 Fed. Reg.

at 65,282/ 1 ( JA XX); CR 206.032 at 1928 ( JA XX).

Because the statute is silent on the issue, and because the alternative requirements provision is entirely consistent with the goals and purposes of the statute, EPA's interpretation is entitled to Chevron deference. EPA conducted national rulemaking by considering the costs and non water quality environmental impacts of the Rule nationwide. At the same time, EPA recognized that local concerns about energy availability, air emissions, or water impacts might be so great that they justify a different decision at the local level, or that some facility not considered by EPA during the rulemaking might incur compliance costs wholly out of proportion to the costs EPA considered. EPA concluded that it is reasonable in such cases to allow some flexibility for the local permitting authority to accommodate these concerns. In the absence of a limited provision allowing use of alternative requirements, the Rule may create a barrier to entry for some facilities for which compliance costs would be wholly out of proportion to costs considered by EPA, or for which compliance would result in local environmental impacts ( including reduction of energy sources) that are significant and unacceptable. These unacceptable circumstances can be avoided by judicious use of the alternative requirements provision. As is the case with respect to the  65  Environmental Petitioners' objection to Track II of the Rule, the concerns expressed relate more to the implementation of the alternative requirements provision, and can be dealt with as permits are issued. Accordingly, this Court should uphold the alternative requirements provision as a reasonable interpretation of CWA § 316( b) and under the general rulemaking authority of CWA § 501, as this Court did in NRDC v. EPA.

II. UWAG'S PETITION SHOULD BE DENIED.

In contrast to the arguments by the Environmental Petitioners that the Rule is not stringent enough and provides too much flexibility, UWAG claims that EPA's regulation is too stringent and not flexible enough to recognize the different circumstances faced by each facility. As demonstrated below, EPA reasonably interpreted the statute and implemented the requirements of CWA § 316( b).

A. EPA's Track I Requirements Reasonably Implement CWA § 316( b) By Focusing On Reducing The Impingement And Entrainment Of Aquatic Organisms Caused By Cooling Water Intake Structures.

Cooling water intake structures across the United States collectively withdraw an estimated 279 billion gallons of water per day from the nation's waters. 66 Fed. Reg. at 65,262/ 3 ( JA XX). Such large withdrawals cause environmental impacts as a result of the impingement and entrainment of all forms  66  of aquatic organisms. 66 Fed. Reg. at 65,262/ 3 ( JA XX). Under CWA § 316( b),

cooling water intake structures must reflect the best technology available for minimizing adverse environmental impact. Not surprisingly, EPA's focus in minimizing the environmental impacts from cooling water intake structures was on the reduction of impingement and entrainment.

UWAG, representing electric utilities that use large quantities of cooling water, argues that EPA's concern with impingement and entrainment in Track I was arbitrary and capricious because the Agency assumed that all impingement and entrainment is adverse and ignored other environmental impacts such as increased land use and air emissions. UWAG also raises several other criticisms of EPA's Track I requirements. UWAG Br. at 13 22. As shown below, UWAG's arguments should be rejected.

1. EPA Reasonably Sought To Limit Impingement and Entrainment In Implementing CWA § 316( b).

The fundamental flaw in UWAG's argument on this point is its contention that the statutory requirement to minimize " adverse environmental impact" in CWA § 316( b) may not be read to include the " removing"   that is, the killing   of large numbers of fish or eggs through impingement and entrainment unless this killing has demonstrated adverse effects on the overall fish population or ecosystem. UWAG Br. at 16 17. EPA has concluded otherwise. 43/ Further, even if EPA's reading of CWA § 316( b) were not simply the plain meaning of the language, EPA's reading is a permissible reading for all of the reasons discussed in the text above, and thus must be upheld by this Court. Chevron, 467 U. S. at 842 43 & n. 11 ( if a statute is silent or ambiguous on an issue, a reviewing court must accept the agency's interpretation if it is reasonable).

 67  EPA's reading of CWA § 316( b) is simply the plain meaning of the statute.

The plain language meaning of " adverse environmental impact" is clearly broad enough to include the killing and harming of large numbers of fish and other aquatic organisms, and does not require EPA to demonstrate with certainty that such killing will have long term impacts on the ecosystem or the species'

populations. 43/

Further, EPA's reading is particularly compelling in light of the statutory language that Congress placed in the subsection preceding CWA § 316( b).

In CWA § 316( a), 33 U. S. C. § 1326( a), Congress specified that thermal discharges be limited to levels that protect " a balanced, indigenous population of shellfish, fish and wildlife" in the body of water at issue. By contrast, in CWA § 316( b), Congress used the broader term " adverse environmental impact."

Congress's decision to use the broader language in CWA § 316( b) rather than specifying population impacts as it did in CWA § 316( a) is further support for EPA's reading that " adverse environmental impact" is not just population impact.

66 Fed. Reg. 65,291 92 ( JA XX XX); CR 068.007 at 1184 85 ( JA XX XX)  68  ( discussing significance of difference in language in CWA § 316( a) and ( b));

CR 068.008 at 1189 ( JA XX) ( discussing EPA's interpretation of Congress's intent in focusing CWA § 316( a) on population effects).

This Court's decision in New York Currency Research Corp. v. CFTC, 180 F. 3d 83 ( 2d Cir. 1999), is instructive on this point. In New York Currency Research Corp., this Court compared Congress's use of the phrases " every person" and " each person" in some provisions of the Commodity Exchange Act with the narrower phrase " every commodity trading advisor and commodity pool operator" in another provision, and concluded that this difference in breadth of language should be understood to show that Congress " acted purposefully in what it included and what it excluded." 180 F. 3d at 90. On that same reasoning, this Court should conclude that Congress's use of the broader phrase " adverse environmental impact" in CWA § 316( b) rather the narrower language focusing on population effects in CWA § 316( a) demonstrates Congress's intent to have CWA § 316( b) focus on a broad set of environmental impacts, not just population impacts. See also United States v. Barial, 31 F. 3d 216, 218 ( 4th Cir. 1994)

(" Where Congress has chosen different language in proximate subsections of the same statute, courts are obligated to give that choice effect.") ( citing Russello v.

United States, 464 U. S. 16, 23 ( 1983)).  69  EPA's reading here is also consistent with the legislative history, which states that CWA § 316( b) is intended to minimize " any" adverse environmental impact. 118 Cong. Rec. 33,762 ( 1972), reprinted in 1 Legislative History of the Water Pollution Control Act Amendments of 1972, 93rd Cong., 1st Sess., at 264 ( Comm. Print 1973).

Further, the words " adverse environmental impact" must be understood in light of the entire phrase " best technology available for minimizing adverse environmental impact." EPA reasonably interpreted this phrase consistently with the phrase " best available technology" under CWA § § 301 and 304 and " best available demonstrated . . . technology" under CWA § 306 as authorizing a technology based approach. CR 068.007 at 1183 ( JA XX). " These limitations are technology based rather than harm based; that is, they reflect the capabilities of available pollution control technologies to prevent or limit different discharges rather than the impact that those discharges have on the waters." Texas Oil & Gas Ass'n v. EPA, 161 F. 3d at 927 ( citing E. I. du Pont de Nemours & Co., 430 U. S. at 130 31). Under the reasonable interpretation of CWA § 316( b) as authorizing a technology based approach, EPA is not be compelled to require the permit authority to first establish on a site specific basis how effects of a particular facility on overall fish populations or the ecosystem. 44/ As one example, EPA noted a study of the impact of the Brayton Point Generating Station in Massachusetts, which showed an 87% reduction in finfish populations coincident with the opening of a new cooling water system. 66 Fed. Reg. at 65,264/ 2 ( JA XX).

 70  Finally, EPA has considered the data in the record and concluded that impingement and entrainment are themselves adverse to the environment and provide a more objective and quicker measure of the performance of the technologies that minimize that impact than population or ecosystem studies.

CR 029.013 at 427 ( JA XX); 66 Fed. Reg. at 65,292/ 2 and 65,263 65 ( JA XX,

XX XX). 44/

UWAG's reliance on the EPA Administrator's opinion in In Re Public Service Co. of New Hampshire, 10 Env't Rep. Cas. ( BNA) 1257, 1268 ( 1977)

( cited in UWAG Br. at 16), is misplaced. First, the page in that opinion cited by UWAG is within the portion of the opinion discussing CWA § 316( a), and thus is properly focused on population impacts because subsection ( a) expressly focuses on population. Moreover, in the portion of the In Re Public Service Co. opinion addressing subsection ( b) ( which UWAG does not cite), the discussion focuses on entrapment ( that is, impingement) and entrainment rather than on broader population or ecosystem impacts. 10 Env't Rep. Cas. ( BNA) at 1270 72. Thus, if anything, this case supports EPA's focus on impingement and entrainment as the fundamental adverse environmental impact to be minimized under CWA § 316( b).  71  For these reasons, EPA has reasonably interpreted the phrase " adverse environmental impacts" to include impingement and entrainment. UWAG's contention that " adverse environmental impacts" are only those that cause long term population or ecosystem effects should be rejected.

2. EPA Reasonably Rejected UWAG's Various Claims That Impingement And Entrainment Are Not Adverse Environmental Impacts.

In arguing that EPA should not have considered impingement and entrainment as adverse environmental impacts under CWA § 316( b), UWAG contends that not all impingement and entrainment is adverse. In support of its contention, UWAG makes a variety of points in very summary form, including claims that: ( 1) some of the impacts are to " nuisance" species; ( 2) some declines in population trigger mechanisms that cause the population to rebound; ( 3) some fish losses are fish that are dead or dying anyway; and ( 4) some organisms survive entrainment. UWAG Br. at 15 16.

In making these points, however, UWAG does not even attempt to demonstrate their significance. For example, UWAG does not suggest that the impingement and entrainment of " nuisance" species or of dead and dying fish represent a significant proportion of the fish killed by cooling water intake structures. 45/ EPA acknowledges that episodes of low dissolved oxygen and rapid temperature declines can kill fish that are then impinged on intake structures, but does not believe the record shows that this is a significant cause of fish impingement. 66 Fed. Reg. at 65,290/ 2 ( JA XX). See also CR 042.007 at 680 ( JA XX) (" EPA acknowledges that cold shock die offs occur, but believes these are sporadic phenomena.")

 72  Moreover, UWAG does not demonstrate that EPA failed to consider these points. Indeed, UWAG's own brief provides an example of where EPA considered UWAG's " nuisance species" point. UWAG Br. at 15 n. 9.

In fact, EPA considered these points and the relevant information in the record,

and concluded that:

° Cooling water intake structures do not differentiate between killing indigenous species and nuisance species, and so the fact that some impacts are to nuisance species does not reduce the importance of minimizing impingement and entrainment to protect indigenous species, CR 062.026 at 1077 ( JA XX);

° With respect to UWAG's claim that some population declines trigger population rebounds, these effects are difficult to determine, unknown for many species, and should not be relied upon without significantly more data than is available, CR 068.015 at 1207 ( JA XX), CR 523.003 at 2389 ( JA XX), and CR 523.102 at 2409 ( JA XX);

° The impingement and entrainment of dead or dying fish has not been shown to constitute a significant proportion of impinged and entrained fish, and that the impingement and entrainment of healthy fish is well documented, CR 056.026 at 943 ( JA XX); 45/ and ° while some organisms do survive entrainment, multiple studies demonstrate that the mortality rate from entrainment is high. CR 056.012 at 927 ( JA XX).  73  In short, EPA reasonably declined to adopt UWAG's contention that impingement and entrainment are not adverse environmental impacts.

3. EPA Considered Non Water Quality Environmental Impacts Of The Rule And Reasonably Determined That They Would Not Pose A Significant Problem.

UWAG claims that EPA ignored certain adverse environmental impacts other than impingement and entrainment, such as land use impacts on wetlands or protected habitat, reduced visibility from vapor plumes, salt deposition, increased energy use, and increased emissions of air pollutants. UWAG Br. at 20, 21 22.