REGULATION:

EPA water intake rules fall short of the disaster scenario

For many months, the nuclear power industry has been warning of an impending "train wreck" caused by the new regulations over air emissions, greenhouse gases and cooling water systems at existing reactor plants being prepared by U.S. EPA.

The proposed water intake regulations arrived, issued by EPA last week in a still-unofficial form. But that train wreck didn't happen, according to a range of experts on various sides of the controversy.

Instead of mandating the construction of $700 million cooling towers at the nearly 60 U.S. nuclear plants that lack them, as EPA critics predicted, the agency has proposed a complex case-by-case assessment of how each plant should achieve protection standards for fish, shellfish and the small aquatic organisms that make up the bottom layers of the marine food chain.

The proposed regulations, which also affect large coal-fired power plants and factories covered by the rule, will be the subject of a 90-day public comment period before EPA's court-set deadline for final action, on July 27, 2012. Lengthy investigations will follow into the interaction of specific water intake and cooling systems at each plant and the marine environment where its cooling water comes from, said Christine Tezak, a senior research analyst with Robert W. Baird & Co. Inc.

Only then, under EPA's plan, would regulators decide which protective strategy should be required. And in nearly all of the United States, those regulators would be state officials who are delegated to handle water permits under the federal Clean Water Act. Regulators in different states see this duty in very different ways, Tezak said.

The EPA proposal, if it becomes final, would create a process for handling water intake issued after decades of debate and litigation. But every nuclear plant operator will have to calculate the cost of compliance and weigh that against other options.

The result could be more uncertainty for an electric power industry whose future is clouded already by unresolved policy issues on high-voltage transmission, nuclear power financing, a proposed national renewable energy standard, the future of shale gas production and the "smart grid." "There is a lot in this rule that is not yet definitive," Tezak said.

Protecting underwater life

The EPA proposal authorizes options for protecting fish from being killed or mortally weakened by impingement -- when fish and shellfish are trapped against screens at the entrances to water intake systems of large facilities -- or entrainment, when larvae and other small organism are sucked into water systems and perish.

EPA estimates that 559 electric generators would be affected by the proposed rule, representing about 45 percent of total U.S. generating capacity. The agency fixes the cost of its proposal at $384 million annually and asserts that the benefits of the rule would be greater, although it doesn't document them. Since 40 percent of the fresh water withdrawn from U.S. rivers, lakes and bays is pumped through cooling systems, the impact of protective regulation is obvious, environmental organizations say.

Some older nuclear plants may be ordered to build cooling towers, in order to reduce the flow of cooling water through their reactors. Some plant owners may opt to retire the plants instead, as Exelon Corp. has done with its Oyster Creek nuclear plant on New Jersey's Barnegat Bay. Faced with a state order to build a cooling tower, Exelon negotiated an agreement to close the plant on Dec. 31, 2019 -- 10 years before the plant's operating license expires.

But other nuclear plant owners may be able to show state permit writers that their water intake systems aren't pushing marine life mortality above regulated limits; that less expensive changes could serve the purpose, such as extending a water intake pipe farther into a lake or bay; or that modified operations could protect organisms during the most critical spawning periods, Tezak said.

Significantly, the EPA proposal would not require cooling tower installation when existing nuclear power plants are uprated or modified to increase their power output. (Nuclear plant operators are seeking approval to add 3,000 megawatts of uprates by 2014.) And the rule does not affect new nuclear plants, which already are required to provide cooling towers.

"This proposal establishes a strong baseline level of protection and then allows additional safeguards for aquatic life to be developed through a rigorous site-specific analysis, an approach that ensures the most up to date technology available is being used. It puts implementation analysis in the hands of the permit writers, where requirements can be tailored to the particular facility," said Nancy Stoner, acting assistant administrator for EPA's Office of Water, in a statement last week.

NEI, the nuclear industry's chief trade association, kept its alarms ringing after EPA released the proposed rule. "A one-size-fits-all approach to environmental issues isn't in keeping with sound scientific analysis and will have severe and unnecessary regional economic impacts," NEI President Marvin Fertel said in a statement. "A blanket requirement to force the installation of cooling towers is unnecessary and will put regional economies and tens of thousands of jobs at risk by potentially forcing scores of power plants to shut down over the next decade."

Enviros accuse EPA of 'caving in' to industry

But Exelon, the largest U.S. nuclear plant owner, had a more measured response.

"Rumors of a 'train wreck' caused by new EPA regulations are simply false," said Joseph Dominguez, senior vice president of federal regulatory affairs, public policy and communications for Exelon. "While each utility may have a different regulatory focus, we all generally agree that regulatory certainty is critical to how we plan for the future. EPA has done a good job listening to the industry and moving the ball forward."

The Edison Electric Institute, representing major utilities, also saw pluses and minuses based on its first look at the proposal: "We are pleased that EPA has chosen not to establish a blanket requirement that cooling towers be installed at all existing facilities. We're also encouraged that the agency appears not to be mandating cooling tower retrofits on existing facilities when modified." But EEI said the proposed rule is slanted to favor cooling towers as protection for small organisms pulled into cooling systems. The result could be "premature plant retirements," power shortages and higher consumer costs, EEI said.

The environmental organizations that have fought for a strong water intake rule say EPA knuckled under to industry pressure, producing a policy that falls far short of the need. Steve Fleischli, senior attorney in the Natural Resources Defense Council's water program, said, "EPA has chosen the path of least resistance by caving into industry pressure and punting this issue to state agencies that too often lack the resources and the will to stand up to industry on this issue."

Reed Super, attorney for Riverkeeper, a New York environmental organization, who represents environmental organizations in litigation over the issue, said EPA has the authority to set national standards but abdicated its responsibility, leaving it to the states. Energy companies "make it enormously difficult" for EPA and the states to effectively regulate water use, he said. "The states have proven they don't have the resources and revenue to make these rules effective. The states have said, 'We can't do this on our own.' If the rule goes through, there will be bureaucratic paralysis, with plants continuing to operate on expired [water intake] permits," he said.

EPA argues that its proposal will create a clear policy at last. EPA Administrator Lisa Jackson wrote to Rep. Fred Upton (R-Mich.) in December, "By the time the agency takes final action in July 2012, industry will have been waiting nearly twenty years for the regulatory certainty that facilitates sound investment decisions," she wrote. "The public will have been waiting just as long for reassurance that the aquatic environment is being protected. I do not want to delay any longer," she said.

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