Supreme Court Allows EPA to Consider Cost to Utilities in Cooling Water Rules
On April 1, 2009, the U.S. Supreme Court held in a 5-4 decision that it is permissible for utility companies and regulators to apply a cost-benefit analysis under the Clean Water Act (CWA) in deciding what technology is needed to protect fish from being killed by large industrial cooling water intake structures.
Writing for the majority, Justice Scalia stated that the fact that the CWA does not expressly authorize a cost-benefit analysis does not show “an intent to forbid its use.” The majority held that it was reasonable to conclude that the silence in the CWA on use of cost-benefit analysis in cooling tower regulatory cases “is meant to convey nothing more than a refusal to tie the agency’s hands as to whether cost-benefit analysis should be used, and if so to what degree.”
At issue was a rule EPA issued in 2004 under the CWA that required existing power plants and other industrial facilities to use the best available technology to prevent fish and other aquatic life from being pulled into cooling water intake structures. In 2007, the Second Circuit held that comparisons of economic costs and environmental benefits were severely restricted under cooling tower intake structure rules. The Supreme Court granted review of the Second Circuit decision on the issue of whether Section 316(b) of the CWA authorized EPA to compare costs with benefits in determining the best technology available for minimizing adverse environmental impacts at cooling water intake structures.
Justice Stevens, writing for the dissent, found that Congress directly foreclosed the use of cost-benefit analysis in enacting this provision of the CWA, stating that the majority’s opinion “unsettles the scheme Congress established” and that the Court “should not treat a provision’s silence as an implicit source of cost-benefit authority.” Entergy Corp. v. Riverkeeper Inc. (April 1, 2009).
A copy of this decision is available at http://www.supremecourtus.gov/opinions/08pdf/07-588.pdf.