1. EPA Cooling System Regulations Hall of States Briefing February 22, 2011

2. What is Clean Water Act Section 316(b)?  CWA Section 316(b) requires that cooling water intake structures (CWIS) reflect the best technology available (BTA) for minimizing adverse environmental impact  Calls for national technology-based performance requirements to govern the location, design, construction, and capacity of CWIS

3. What Is EPA Doing?  Promulgating proposed rule for existing electric generating (all fuels) and industrial facilities – Proposed March 2011; Final July 2012  New facilities rule completed in 2001  New rules would replace the site-specific “best professional judgment” exercised by state permit writers since 1977

4. EPA Stated Objective  Uniform, consistent, “easy” to implement regulation of cooling water intake structures  Favor cooling towers (flow reductions) as most effective technology – assumes 100 percent mortality of any entrained or impinged organisms.  EPA believes that it is reasonable only to consider the loss of aquatic organisms due to impingement and entrainment as “adverse environmental impact”. – Magnitude?

5. Utility Concerns in 316(b)  > 400 steam electric generating facilities affected by proposed rule  Approx 40% of existing fleet subject to proposal (312GW) – 60% nuclear capacity; 23% fossil capacity  Revised regulations may require plants to be re-engineered to replace once-through cooling systems with cooling towers when alternative technologies are available  Implementation problematic: Each power plant configuration and location is unique – as is the adjacent water body and its aquatic resources. Site-specific analysis and cost-benefit analysis is crucial

6. Once Through Plants

8. Adverse Consequences Of Retrofit Requirement  Affects ALL steam electric facilities  Cost—$95 billion total, or $305 per person, $1220 for family of four  Grid Reliability—national average reserve margin reduced 33% due to less efficient cooling towers and premature plant shutdowns (NERC) – Agency studies conclude reliability impacts (NETL, NERC, DOE) 2008 DOE / NERC study found that 39,500 Mw would be prematurely closed due to retrofit mandate Retrofits result in 2-4% lost capacity  Over-Regulation—scientific studies at power plants show once- through systems have little or no adverse impact on fish populations (NPDES permits)

9. Cooling Tower Potential Impacts  Cost: Towers are prohibitively expensive; difficult to retrofit  Affects plant economics, efficiency and electricity prices  Water Use: Towers consume more water than once-through systems (2x)  Emissions: Additional GHG, particulate emissions and salt drift – Permitting: Increase in particulate emissions may preclude permitting  Efficiency: Less efficient, reducing electricity output, requiring more power plants  Other environmental concerns: fogging, icing, space consideration, noise, aesthetics

10. Energy & Price Consequences  Energy – Capacity reduction due to efficiency losses (2-4%) – Extended outages – vary, some companies report 40+ months – Resource margin adequacy, reliability difficulties, load balancing concerns – NY ISO forecast 1/5 of generation resources may retire – Insufficient compliance time may not allow for development of replacement capacity  Price increases – – CA: 6-9% increases

11. Preferred Regulatory Approach  Site-specific analysis to determine whether adverse environmental impact is actually occurring, considered at the fish population level  Range of proven fish protection technologies – e.g., fine mesh screens, fish return systems, barrier nets, wedgewire screens, etc. as compliance options  Meaningful cost-benefit test. Includes: 1.Demonstration that technology is “effective” at site 2.Determine technology is “affordable” at site 3.Cost-benefit calculation to determine benefits exceed costs (or is not “wholly disproportionate”)