Supreme Court Mulls Cost-Benefit Question for Power Plants

The U.S. Supreme Court last week heard oral arguments in Entergy v. EPA, a case that questions an appellate court decision that said the Environmental Protection Agency (EPA) cannot conduct a cost-benefit analysis in regulating how power plants use cooling water from rivers and lakes. Power companies and the EPA—pitted against environmental groups led by Riverkeeper Inc. and six northeastern states—are looking to overturn that ruling.

At the heart of the arguments were whether Section 316(b) of the Clean Water Act, 33 U.S.C. 1326(b), authorizes the EPA to compare costs with benefits in determining the “best technology available for minimizing adverse environmental impact” at cooling water intake structures.

The outcome could determine whether existing power plants need to make costly upgrades to reduce the number of fish and aquatic organisms trapped in their cooling systems.

The Bush administration and power companies, including Public Service Enterprise Group Inc. and Entergy Corp., want to revive the 2004 EPA regulation that allowed the cost of updating cooling tower systems to be weighed against potential environmental benefits. They said (PDF)  the EPA has taken costs and benefits into account for more than 30 years and contended that the ruling in January 2007 by the 2nd U.S. Circuit Court of Appeals to strike down the regulation would impose unreasonable requirements on businesses.

The environmental groups’ claims alleged that the EPA’s cost-benefit analysis violated the Clean Water Act by leading to the use of structures that were insufficient to protect aquatic organisms. They also argued that other provisions in the Clean Water Act protect against the imposition of irrational requirements on plants, that the EPA could consider “cost” as part of its assessment of whether a technology was available, and that therefore the agency did not need to re-adopt the regulation.

According to Dow Jones Newswires, during last week’s oral arguments, the court “appeared split,” though justices looked to find a “middle ground.”

“Conservative justices sounded deferential to the EPA’s cost-and-benefit rules. But the liberal bloc of the court sounded unhappy with the Second Circuit ruling that outright rejected the EPA’s cost-and-benefit plan, suggesting it is reasonable for the EPA to give some weight to industry costs,” the agency reported.

Justices Antonin Scalia, Samuel Alito, and David Souter were unconvinced that the Clean Water Act’s language allowed for a clear interpretation of “cost” within the concept of “availability,” reported Bloomberg—which speculated that the court will likely back the power plants.

Justice Anthony Kennedy, on the other hand, said that the “best technology available” standard for cooling structures was more rigorous than other standards elsewhere in the Clean Water Act, Bloomberg said.

The cases are Entergy v. EPA, 07-588; PSEG Fossil LLC v. Riverkeeper Inc., 07- 589; and Utility Water Act Group v. Riverkeeper Inc., 07-597.

The court’s decision is expected by July 2009.

Sources: U.S. Supreme Court, U.S. Department of Justice, Dow Jones Newswires, Bloomberg

SHARE this article