WASHINGTON – Industry and environmental groups in California are awaiting a ruling from the U.S. Supreme Court that could determine how far the state's coastal power plants must go to reduce their fish-killing intake of ocean waters used to cool generating facilities.    

The justices heard arguments on December 2 in the Bush administration's industry-backed effort to overturn a federal appeals court decision that bars the use of cost-benefit analysis to determine what power plants have to do to minimize their impact on fish and aquatic life. Environmentalists argue that a cost-benefit analysis violates the Clean Water Act's mandate that cooling-water intake structures employ the "best technology available" to reduce the fish-kills resulting from the use of river, bay or ocean waters for cooling purposes.

Environmental and industry groups in California filed friend-of-the-court briefs that took opposite sides on the legal question in the case: whether the Environmental Protection Agency (EPA) has discretion to use cost-benefit analysis in applying the statutory requirement contained in § 316(b) of the act. But the groups also disagree on the broader policy question whether the alternate cooling technologies available to minimize the collateral damage on aquatic life are needed at all and, if so, whether they are economically viable and logistically feasible.   

The Supreme Court's ruling in Entergy Corp. v. Riverkeeper, Inc., could have significant effects on the operations of the 19 electricity-generating plants that dot California's coastline and that environmentalists say take in 17 billion gallons of water a day. The California Supreme Court put on hold a challenge to operations of the Moss Landing power plant, sited at the midpoint of Monterey Bay, pending the U.S. Supreme Court's decision. (The California Supreme Court case is Voices of the Wetlands v. State Water Resources Control Board, No. H028021; see CP&DR Legal Digest, April, 2008, March 2008.)    

The plants' use of water to cool generating facilities adversely affects the marine environment by killing fish and aquatic organisms in the water itself and then discharging the water as much as 40 degrees Fahrenheit hotter than the ambient water temperature. The existing "open cycle" or "once-through" cooling systems pass water through the facility once and then release most of it back to the body of water.   

Environmentalists say the impact can be reduced by use of "closed cycle" systems that recirculate water through the facility several times or "dry cooling" systems that use air instead of water. Electric utilities say conversion to the alternate technologies is expensive – a particular problem for economically marginal, aging plants like many of those on California's coast that may be operated only for peak power demand instead of all the time.    

The Supreme Court case stems from separate challenges filed by industry and environmental groups to rules adopted by the EPA in 2004 for existing power plants. "Phase I" rules adopted three years earlier generally require closed-cycle cooling systems for new plants. But the "Phase II" rules list closed-cycle systems only as one alternative for existing plants and allow permitting authorities to weigh costs and benefits in determining the system to be used.    

Industry groups challenged the Phase II rules altogether, arguing that § 316(b) does not apply to existing power plants. At the same time, environmentalists – including the Hudson River advocacy group Riverkeeper – argued that the EPA had no discretion to use cost-benefit analysis in enforcing § 316(b).  

The Second U.S. Circuit Court of Appeals rejected the industry's argument and agreed with environmentalists. The Supreme Court agreed to review the decision solely on the cost-benefit issue.    

In urging the Supreme Court to reverse the decision, lawyers for the Bush administration and electric utilities argued that the "best technology available" requirement did not preclude the kind of cost-benefit analysis permitted by and routinely used to enforce other environmental statutes. "There is no reason to think Congress would want greater protection for fish through intake structures than for people through the discharge of pollutants," Deputy Solicitor General Daryl Joseffer told the justices.   

Representing the environmental groups, Richard Lazarus, a Georgetown law professor currently visiting at Harvard Law School, said regulators could give some weight to costs in deciding what technology is "available" or in determining whether to grant a variance to a specific plant. But the statute prohibits the agency from making a direct cost-benefit comparison, he said. "It doesn't allow them to weigh one against the other," Lazarus said.   

Lawyers for the administration encountered skeptical questioning from, among others, Justices David Souter and Anthony Kennedy. A cost-benefit analysis was inappropriate, Souter said, because "you're dealing with such incommensurables." Kennedy sharply challenged the government lawyer by depicting the "best available technology" requirement as "the most rigorous standard in the statute."   

On his side, though, Lazarus had a difficult time fending off questions from, among others, Justices Stephen Breyer and Samuel Alito Jr., who both viewed it as difficult if not impossible to completely disregard costs in enforcing the law. "Of course, you take those things into account," Breyer said. Without some comparison, Breyer said, the law could lead to "insane results."    

In California, Stanford law professor Deborah Sivas said the State Water Resources Control Board is considering rules to require closed cycle or other alternative cooling systems and some plants are moving to install alternate technologies. "Our fear is that even though you've started to see this trend on the California coast, it may reverse if the Supreme Court says you can use cost-benefit analysis," she said. As director of Stanford's environmental law clinic, Sivas is representing the challengers in the Moss Landing case and filed an amicus brief in the Riverkeeper case.   

But Robert Lucas, a consultant to the industry-backed California Council for Environmental and Economic Balance (CCEEB), said that the expense and practical difficulties of converting to closed-cycle cooling could force some plants either to close or go offline for long periods.

"If that financial viability test is not allowed and there is no other choice but to change over to closed cycle cooling, then people are playing a potentially reckless game with the stability of the California electrical grid," said Lucas, a Sacramento lawyer-lobbyist and onetime civil engineer.   

A decision in the Riverkeeper case is due before the justices take their summer recess at the end of June.

The Case:
Entergy Corp. v. Riverkeeper, Inc., No. 07-588.
The Lawyers:
For the administration: Daryl Joseffer, Office of the Solicitor General, (202) 514-2217.
For the industry: Maureen Mahoney, Latham & Watkins, (202) 637-2200.
For the environmentalists: Richard Lazarus, Harvard Law School, (617) 495-1000.

Kenneth Jost, former editor of the Los Angeles Daily Journal, is Supreme Court editor for CQ Press.