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EPA’s New Rule for Cooling Water Intake Structures at

“Existing” (Phase II) Facilities

Kristy A.N. BulleitHunton & Williams1900 K Street, N.W.

Washington, DC 20006202-955-1547 kbulleit@hunton.com

James N. Christman and Elizabeth E. Aldridge Hunton & Williams

Riverfront Plaza, East Tower, 951 East Byrd StreetRichmond, VA 23219

804-788-8368 jchristman@hunton.com804-788-8549 ealdridge@hunton.com

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Background

Phase II rule for existing facilities was signed February 16, 2004

To be published in the Federal Register in about mid-March 2004

Becomes final for judicial review purposes two weeks after publication in the Federal Register

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Background

On February 3, 2004, the Second Circuit Court of Appeals ruled that restoration cannot be used for new (Phase I) facilities

Nevertheless, EPA decided to allow restoration in the Phase II rule, but limited the circumstances under which it can be used.

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Applies to a Facility If

Primary activity is to generate and transmit electric power or to generate electric power for sale to a different entity for transmission

Has a total design intake flow 50 MGDUses 25% of water withdrawn exclusively

for cooling purposesCommenced construction on or before January

17, 2002

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Adding New Units

“Existing” facility includes any modification of or addition of a unit at an existing facility that is not a “new facility” (§ 125.83)

An existing facility that adds a new generating unit at the same site for repowering and concurrently increases the design capacity of its intake structure or adds a new intake structure where it did not previously have one (when converting a gas turbine to a combined cycle unit, for example) is an “existing” facility

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New units added to a facility for purposes of the same general industrial operation

EPA does not want to discourage upgrades, modifications, or repowering that would increase energy efficiency or supply

“Existing” Facility Includes

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The Rule in a Nutshell:Two Performance Standards

Calculate “baseline” Reduce impingement mortality 80-90% from

baseline Also reduce entrainment 60-90% if

• Capacity utilization 15% (not a peaking unit) and either:

• Withdrawn water from tidal river, estuary, ocean, or Great Lakes or

• Design intake flow withdraws > 5% of mean annual flow of freshwater river or stream

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Capacity Utilization Rate

Ratio of average annual net generation (in MWh) and total net capability to generate power (in MW) multiplied by number of hours during year.

If facility has multiple CWIS and each structure serves a separate unit or group of units, CWIS capacity utilization rate may be calculated separately.

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Capacity Utilization Rate (cont’d)

Measured over representative 5 year period, unless plant commits to remain below 15%

Only applies to steam units

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Five Ways to Comply

1. Cooling water flow “commensurate with a closed-cycle recirculating system”

-- Maximum through-screen design intake velocity of 0.5 ft/s meets impingement mortality standard only

2. Demonstrate that existing intake reduces impingement mortality 80-95% from a “calculation baseline” and, for some plants, reduces entrainment 60-90%

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3. Reduce impingement mortality 80-95% and, for some plants, reduce entrainment by 60-90% using

- Design and construction technologies- Operational measures- Restoration, in some cases

4. In freshwater rivers and streams, use cylindrical wedge-wire screens meeting conditions in § 125.99(a)(1)

- Or a technology-approved by the state that can “consistently meet” the performance standards in the state

Five Ways to Comply (cont’d)

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Conditions for Wedge-wire Screens

• Freshwater river or stream• Sufficient ambient counter currents to promote

cleaning of screen face• Maximum through-screen design intake velocity

0.5 ft/s• Slot size appropriate for eggs, larvae, and

juveniles at site• Entire main condenser cooling water flow

directed through the screens (except small flows < 2 MGD for auxiliary plant cooling)

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5. Site-specific requirements under the cost-cost or cost-benefit test

Five Ways to Comply (cont’d)

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Applying the Performance Standards

“Calculation baseline”: Estimate of impingement mortality and entrainment that would occur assuming• Cooling water system designed as once-through• Opening located at the shoreline near the water

surface• 3/8-inch mesh traveling screen parallel to the

shoreline• No controls implemented in whole or in part for the

purpose of reducing impingement mortality and entrainment.

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Applying the Performance Standards

EPA intends to allow credit for• Angled screen face to guide organisms away from

intake structure

• Opening place in water column instead of at surface

• Any structural or operational controls used in whole or part to reduce impingement mortality or entrainment

“As built” baseline assessment also allowed.

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Special Provisions forLakes and Reservoirs

If you withdraw cooling water from a lake

(other than the Great Lakes) or reservoir,

and you propose to increase the design intake flow,

then, increased flow must not disrupt the “natural thermal stratification or turnover pattern”

unless the disruption does not “adversely affect management of fisheries”

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Interpreting thePerformance Standards

Permit writer has significant discretion as to how the performance standards are applied in the permit

• Permit writer may determine that all species must be considered or only representative species

• Permit writer averaging period apparently can be up to a full five-year permit term (see preamble p. 163)

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Exceptions for Excessive Costs

Rule offers “cost-cost” test and “cost-benefit” test

If your costs are “significantly greater,” you can get site-specific requirements

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Cost-Cost Test

Six-step process prescribed

Determine what technology EPA used for your facility

Use EPA’s costing equation to calculate annualized capital and net operation and maintenance costs for a facility with your design intake flow using the technology chosen by EPA

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Cost-Cost Test (cont’d)

Calculate your own costs and show that they are “significantly” greater than the costs estimated by EPA’s method

“Significantly” is not defined

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Cost-Benefit Test

Cost of compliance must be “significantly greater than the benefits of complying”

While entrainment survival is not part of performance standard, it may be considered through application of cost-benefit test.

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Costs and Benefits

EPA has retreated from some of its worst cost-benefit methods• 50% rule for non-use benefits• Habitat replacement cost analysis of benefits• Societal revealed preference analysis for

threatened and endangered species

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Benefits Valuation Study Requirments

Describe methodologyDevelop valuation estimatesDocument assumptionsAnalyze sources of uncertaintyArrange for peer review (consulting

resource agencies about peer reviewers)Describe non-monetized benefits

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What Site-Specific Requirements?

The site-specific alternative technology must achieve an efficacy that is• As close as “practicable” to the applicable

performance standards• Without resulting in costs that are

significantly greater than the [EPA costs or the calculated benefits] at your facility

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Operational Measures

You may meet the performance standards by “operational measures”• Reductions in cooling water intake flow • Variable speed pumps• Seasonal flow reductions or shutdowns• More frequent rotation of traveling screens

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RestorationRestoration can be used only if permittee first shows

that design and construction technologies/operational measures are less feasible, less cost-effective, or less environmentally desirable.

Restoration results must be substantially similar to performance standards or site-specific alternative.

Restoration Plan may focus on species of concern to resources agencies.

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Application Requirements

All plants must submit source waterbody physical data, CWIS data, and cooling system data

Plants that neither have nor propose to install closed-cycle cooling will have to perform and submit a Comprehensive Demonstration Study (CDS) (unless plant has design velocity < 0.5 ft./s and is subject only to impingement requirements, in which case no CDS required).

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Application Requirements (cont’d)

CDS components depend on specific compliance option chosen. Unless facility plans to show it already meets

performance standards, all CDS start with submission of Proposal for Information Collection to permit writer

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Application Requirements (cont’)

Other CDS components may include:• Source waterbody flow information• Impingement Mortality and/or Entrainment

Characterization Study• Technology and Compliance Assessment

Information, which may includeo Design and Construction Technology Plan

o Technology Installation and Operation Plan

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TIOPThe Technology Installation and Operation Plan

describes how you will install, operate, monitor, and maintain the intake technology and “adaptive management steps” to take if the technology does not perform as expected.

TIOP is crucial, because permittee may request that TIOP compliance = compliance with rule.

If permittee fails to comply with performance standard but meets TIOP, it may request site-specific alternative requirements.

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Application Requirements (cont’d)

Restoration Plan (if appropriate) Information to Support Site-specific

Determination of BTA, including• Comprehensive Cost Evaluation Study

• Valuation of Monetized Benefits of Reducing (IM&E) (cost-benefit test only)

• Site-specific Technology Plan

Verification Monitoring Plan (including proposal for identifying moribund fish)

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When Must You Comply?

Submit the information with the next permit application

If your permit expires < 4 years after publication, you may ask to submit the information up to 3 ½ years after publication of the rule in the Federal Register

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Permit Renewals After the First

In permit terms after the first, you may ask that compliance and restoration be based on compliance with the Technology Installation and Operation Plan and Restoration Plan

One year before permit expiration, if you are in compliance with your TIOP and/or performance standards, you may request reduced data requirements for permit renewal.

Permit writer may change requirements at each permit renewal

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Cooling Ponds

EPA does not intend to change the regulatory status of cooling ponds

Cooling ponds are “waters of the U.S.” if they meet the definition

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State-Approved Alternatives and Reserve State Authority

State may have “functionally equivalent” program• Must produce results “comparable” to EPA’s

performance standards

Permit writer may establish more stringent requirements if EPA’s rule would not meet the requirements of state law or other federal law

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Trading

State may adopt trading programs

Must be within the same watershed

May trade fish for fish but not pollutants for fish

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Nuclear Safety

If the EPA rule would conflict with an NRC safety requirement, you can have site-specific requirements