1. 1 2004 Hunton & Williams EPA’s New Rule for Cooling Water Intake Structures at “Existing” (Phase II) Facilities Kristy A.N. Bulleit Hunton & Williams 1900 K Street, N.W. Washington, DC 20006 202-955-1547 kbulleit@hunton.comkbulleit@hunton.com James N. Christman and Elizabeth E. Aldridge Hunton & Williams Riverfront Plaza, East Tower, 951 East Byrd Street Richmond, VA 23219 804-788-8368 jchristman@hunton.comjchristman@hunton.com 804-788-8549 ealdridge@hunton.comealdridge@hunton.com

2. 2 2004 Hunton & Williams 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

3. 3 2004 Hunton & Williams 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.

4. 4 2004 Hunton & Williams 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power for sale to a different entity for transmission Has a total design intake flow  50 MGD Uses  25% of water withdrawn exclusively for cooling purposes Commenced construction on or before January 17, 2002

5. 5 2004 Hunton & Williams 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

6. 6 2004 Hunton & Williams 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

7. 7 2004 Hunton & Williams 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80-90% from baseline  Also reduce entrainment 60-90% if Capacity utilization  15% (not a peaking unit) and either: Withdrawn water from tidal river, estuary, ocean, or Great Lakes or Design intake flow withdraws 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

8. 8 2004 Hunton & Williams 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.

9. 9 2004 Hunton & Williams Capacity Utilization Rate (cont’d)  Measured over representative 5 year period, unless plant commits to remain below 15%  Only applies to steam units

10. 10 2004 Hunton & Williams 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%

11. 11 2004 Hunton & Williams 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)

12. 12 2004 Hunton & Williams 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)

13. 13 2004 Hunton & Williams 5.Site-specific requirements under the cost-cost or cost-benefit test Five Ways to Comply (cont’d)

14. 14 2004 Hunton & Williams 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.

15. 15 2004 Hunton & Williams 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.

16. 16 2004 Hunton & Williams Special Provisions for Lakes 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”

17. 17 2004 Hunton & Williams Interpreting the Performance 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)

18. 18 2004 Hunton & Williams 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

19. 19 2004 Hunton & Williams 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

20. 20 2004 Hunton & Williams 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

21. 21 2004 Hunton & Williams 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.

22. 22 2004 Hunton & Williams 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

23. 23 2004 Hunton & Williams Benefits Valuation Study Requirments Describe methodology Develop valuation estimates Document assumptions Analyze sources of uncertainty Arrange for peer review (consulting resource agencies about peer reviewers) Describe non-monetized benefits

24. 24 2004 Hunton & Williams 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

25. 25 2004 Hunton & Williams 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

26. 26 2004 Hunton & Williams Restoration  Restoration 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.

27. 27 2004 Hunton & Williams 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).

28. 28 2004 Hunton & Williams 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

29. 29 2004 Hunton & Williams 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 include oDesign and Construction Technology Plan oTechnology Installation and Operation Plan

30. 30 2004 Hunton & Williams TIOP The 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.

31. 31 2004 Hunton & Williams 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)

32. 32 2004 Hunton & Williams 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

33. 33 2004 Hunton & Williams 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

34. 34 2004 Hunton & Williams 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

35. 35 2004 Hunton & Williams 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

36. 36 2004 Hunton & Williams Trading  State may adopt trading programs  Must be within the same watershed  May trade fish for fish but not pollutants for fish

37. 37 2004 Hunton & Williams Nuclear Safety If the EPA rule would conflict with an NRC safety requirement, you can have site- specific requirements