The Supreme Court and Best Environmental Practices

By Michael C. Dorf

Pages: 1 2 3

Last March, in Entergy Corp. v. Riverkeeper Inc., [PDF] the U.S. Supreme Court rejected a challenge to the Environmental Protection Agency’s use of cost-benefit analysis in regulating water pollution by power plants. Writing for the court, Justice Antonin Scalia said that the EPA acted reasonably in weighing the costs and benefits of various technologies when it promulgated regulations under Section 316(b) of the Clean Water Act. That law requires that power plants employ “the best technology available for minimizing [their] adverse environmental impact.”

Most of the back-and-forth among the Justices in Entergy Corp. concerned issues of statutory construction and administrative law. Yet, as I shall explain in this column, Entergy Corp. is also a very significant case for what it may portend for so-called “best-practice standards” (a term which I shall define and explain below).

The majority in Entergy Corp. appears to treat this form of regulation as a license for regulatory agencies to promulgate lax rules and standards for industry. Yet, properly implemented, best-practice standards actually hold out the promise of stricter and more effective regulation. As the United States and the world enter a period of renewed belief in the need for regulation in a variety of domains, it would be unfortunate if best-practice standards were unfairly discredited as a cover for lax regulation.

The Statute and Regulations at Issue

Coal-fired (and other) power plants generate heat as a by-product of their activity. To prevent overheating, such plants use enormous volumes of cooling water, which they typically obtain from nearby natural bodies of water. Doing so is hazardous to the fish and other aquatic life forms that live in these bodies of water, and so Congress has, over the years, required that power plants take various measures to mitigate the harm they thereby cause.

Section 316(b) of the Clean Water Act is one such measure. For new power plants, the EPA regulations require the use of any technology at least as effective as a “closed-cycle cooling system,” which re-uses the same water, thereby substantially reducing the amount of water used, and thus diminishing the impact of new power plants on fish and other aquatic life. However, because it is much cheaper to build a closed-cycle cooling system into the original design of a power plant than it is to retrofit an existing plant with such a cooling system, the EPA regulations exempt old plants from this requirement.

Under the challenged EPA regulations at issue in Entergy Corp., an old power plant will not be subject to the closed-cycle-cooling-system-or-its-equivalent requirement if it can show either that the cost of retrofitting would be significantly greater than the EPA assumed in setting the standard for new plants, or that compliance costs “would be significantly greater than the benefits of complying with the applicable performance standards.” Such a showing then subjects the existing plant to a requirement to use alternative technologies that produce results “as close as practicable to” the results of closed-cycle cooling.

The key weasel-word there is “practicable.” In practice, the EPA exemption for old plants means that while new power plants must use technology that reduces environmental impact by about 98 percent, old plants are subject to standards that require reductions that are only in the range of 80 to 95 percent, or in some instances, even lower.

Pages: 1 2 3