	Introduction

Thermoelectric generating plants and many manufacturing facilities withdraw large volumes of water for use in production and, especially, to absorb waste heat from their industrial processes. Together, water withdrawals by manufacturers and electricity generators represent more than one-half of the 410 billion gallons of water withdrawn daily for various uses in the United States. Withdrawing water from streams, rivers, lakes, and coastal waters is a necessity for most electricity generating and manufacturing facilities, but facilities that require water for cooling also present special problems for aquatic resources. And the process of drawing surface water into the plant or facility can simultaneously pull fish, shellfish, and tiny organisms into the plant, generally killing them. The Environmental Protection Agency (EPA) has been engaged in regulatory efforts to implement Section 316(b) for more than 35 years. In March 2011, EPA proposed national requirements to be implemented through CWA discharge permits to minimize adverse environmental impact of cooling water intake structures at existing electricity generating and manufacturing facilities. Even before release, the proposed regulations were highly controversial among stakeholders and some Members of Congress. The issue for Congress has been whether a stringent and costly environmental mandate could jeopardize reliability of electricity supply in the United States. Many industry stakeholders feared, while environmental groups hoped, that EPA would require installation of technology called closed-cycle cooling that most effectively minimizes impingement and entrainment, but also would be the most costly technology option. However, as discussed in this report, the EPA proposal declined to mandate closed-cycle cooling universally and instead proposed a less costly, more flexible regulatory option. EPA's efforts to implement Section 316(b) have a long and complicated history, including legal challenges at every step by industry groups and environmental advocates (for details, see the Appendix ). It was published in the Federal Register on August 15, 2014, with an effective date of October 14, 2014. In total, the final rule would apply to approximately 1,065 facilities. The universe of steam electric generators that would be affected by the final rule is 544 facilities. EPA concluded that closed-cycle cooling reduces impingement and entrainment mortality to a greater extent than other technologies. Thus, in the proposed rule, the agency rejected closed-cycle cooling as the uniform basis for national entrainment controls at existing facilities. This conclusion was based on four factors. This is referred to as energy penalty. Fossil-fueled facilities would need to burn additional fuel to compensate for the energy required to operate cooling towers, thus emitting additional pollutants, including nitrogen oxides, sulfur dioxide, mercury, and especially additional particulate matter formation associated with plume drifts. Land availability concerns might limit the feasibility of installing cooling towers on a site-specific basis. Industry groups and some states endorsed the flexibility provided in this part of the proposal to not establish a blanket requirement that closed-cycle cooling be installed at all existing facilities, while environmental advocacy groups and some states were critical of it. Based on potential energy penalty and other factors, EPA recommended site-specific determination of the need for entrainment mortality controls, which might require cooling towers, or it might not. To the extent that permitting authorities already incur costs for administering permits based on Best Professional Judgment, incremental costs of the final rule to permitting authorities are overstated. Uncertainties of Compliance Cost Estimates

EPA acknowledged a number of uncertainties about compliance cost estimates in the final rule. Industry groups were pleased that EPA did not propose closed-cycle cooling for all existing facilities—as many in industry had feared—so they focused their critiques on the impingement standards and urged EPA to revise the rule to provide greater flexibility that would be more cost-effective. States were somewhat divided in their responses, with many favoring more flexibility in the rule to lessen the administrative burden on permitting authorities, but some advocating a more prescriptive approach regarding entrainment, rather than one calling for site-specific determinations, as in EPA's preferred option in 2011. Stakeholder groups again differ in evaluating the final rule, but their views diverge from those on the 2011 proposal. Environmental groups, who had advocated that EPA include stringent closed-cycle cooling as a uniform requirement representing BTA, said that they were extremely disappointed with the final rule and likely would challenge it in federal court. Since release of the final rule, some Members of Congress argue that the rule's costs threaten the affordability and reliability of electricity.
Thermoelectric generating plants and manufacturing facilities withdraw large volumes of water for production and, especially, to absorb heat from their industrial processes. Water withdrawals by power producers and manufacturers represent more than one-half of water withdrawn daily for various uses in the United States. Although water withdrawal is a necessity for these facilities, it also presents special problems for aquatic resources. In particular, the process of drawing surface water into the plant through cooling water intake structures (CWIS) can simultaneously pull in fish, shellfish, and tiny organisms, injuring or killing them. Congress enacted Section 316(b) of the Clean Water Act (CWA) specifically to address CWIS.
Regulatory efforts by the Environmental Protection Agency (EPA) to implement Section 316(b) have a long and complicated history over more than 35 years, including legal challenges at every step by industry groups and environmental advocates. Currently most new facilities are regulated under a rule issued in 2001, while a rule for existing facilities was challenged and remanded to EPA for revisions. In response, in 2011 EPA proposed national requirements affecting approximately 1,150 existing electric power plants and manufacturing facilities. Even before release, the proposed regulations were highly controversial among stakeholders and some Members of Congress. The issue for Congress has been whether a stringent and costly environmental mandate could jeopardize reliability of electricity supply in the United States. Many in industry feared, while environmental groups hoped, that EPA would require installation of technology called closed-cycle cooling that most effectively minimizes the adverse environmental impacts of CWIS, but also is the most costly technology option.
The EPA proposal declined to mandate closed-cycle cooling universally and instead favored a less costly, more flexible regulatory option. EPA's recommended approach in the 2011 proposal would essentially codify current CWIS permitting procedures for existing facilities, which are based on site-specific determinations and have been in place administratively for some time because of legal challenges to previous rules. EPA acknowledges that closed-cycle systems reduce the adverse effects of CWIS to a greater extent than other technologies, but in the proposed rule it rejected closed-cycle cooling as a uniform requirement to minimize entrainment at existing facilities. The agency based that conclusion on four factors: additional energy needed by electricity and manufacturing facilities to operate cooling equipment (i.e., energy penalty), additional air pollutants that would be emitted because fossil-fueled facilities would need to burn more fuel as compensation for the energy penalty, land availability concerns in some locations, and limited remaining useful life of some facilities that would not justify retrofit costs.
Not surprisingly, stakeholder groups viewed the proposal differently. Environmental groups endorsed the parts of the rule that would establish nationally uniform requirements, but criticized those allowing for site-specific determinations. Industry groups urged EPA to provide greater flexibility that would be more cost-effective. State permitting authorities were divided on modifying the rule to be more flexible. The final rule was delayed several times, largely due to EPA's consultation with federal wildlife services on potential impact of the rule on threatened and endangered species. The final rule was published in the Federal Register on August 15, 2014, with an October 14 effective date. EPA again declined to mandate closed-cycle cooling as a uniform requirement and provided several compliance options that are more flexible and less costly than the 2011 proposal. EPA estimates the annual compliance costs of the final rule to be $275 million and the annualized benefits to be $33 million. Projected costs do not reflect any site-specific requirements that permitting authorities may establish.
Stakeholder groups differ in evaluating the final rule, and their views diverge from those on the 2011 proposal. Environmental groups, who had advocated that EPA include closed-cycle cooling as a uniform requirement at existing facilities, said that they were extremely disappointed with the final rule, and they have already filed several challenges to it in federal court. The petroleum industry also has filed a legal challenge, as did representatives of the electric power industry, even though the latter indicated overall approval of the final rule. Some Members of Congress have criticized the final rule's cost as a threat to affordability and reliability of the nation's electricity supply.