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High Court Reversal Sides With Generators Over Environmentalists

Putting to bed the long-running dispute between utilities and environmental advocates over power plant cooling water intake structures, the U.S. Supreme Court said last week that the Environmental Protection Agency (EPA) can run a cost-benefit analysis to determine the best technology for mitigating the environmental impact rather than simply selecting the best technology available. The high court's 6-3 ruling overturned a decision made last year by the U.S. Court of Appeals for the Second Circuit.

In agreeing to hear the matter last April, the Supreme Court consolidated three similar cases -- Entergy Corp. vs. EPA, PSEG Fossil LLC vs. Riverkeeper Inc. and Utility Water Act Group vs. Riverkeeper Inc.

The companies asked the Supreme Court to overturn the appeals court decision that would require companies to adopt the best technology available, regardless of cost. The companies were seeking reinstatement of the EPA rule allowing cost of various technologies to be considered. Cooling water intake structures draw water into power plants to offset the immense heat created during power generation.

"We conclude that the EPA permissibly relied on cost-benefit analysis in setting the national performance standards and in providing for cost-benefit variances from those standards as part of the Phase II regulations," said Justice Antonin Scalia in reversing the decision. "The Court of Appeals' reliance in part on the agency's use of cost-benefit analysis in invalidating the site-specific cost-benefit variance provision was therefore in error, as was its remand of the national performance standards for clarification of whether cost-benefit analysis was impermissibly used."

Stephen Breyer concurred in part, saying he agreed that Congress intended a cost-benefit analysis, but only a narrow one. Joining Scalia and Breyer were Chief Justice John Roberts and Justices Samuel Alito, Anthony Kennedy and Clarence Thomas.

Justice John Paul Stevens authored the dissenting opinion. "Like the Court of Appeals, I am convinced that the EPA has misinterpreted the plain text of 316(b) [of the Clean Water Act]," Stevens said. "Unless costs are so high that the best technology is not 'available,' Congress has decided that they are outweighed by the benefits of minimizing adverse environmental impact. Section 316(b) neither expressly nor implicitly authorizes the EPA to use cost-benefit analysis when setting regulatory standards; fairly read, it prohibits such use."

The EPA's stance on power plant water intake has been the focus of a legal battle for several years. In July 2004 several state attorneys general announced that they were seeking judicial review of the EPA's Phase II rule, which would make it easier for existing power plants to avoid installing technologies designed to help reduce the amount of water being withdrawn from oceans, bays and rivers. In July 2007 the EPA formally suspended the rule in its entirety and directed states to use their "best professional judgment" in evaluating intake systems.

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