Environmental groups are downplaying the significance of a Supreme Court ruling yesterday that held U.S. EPA may weigh the costs and benefits of new water regulations on power plants.
"We are disappointed, of course, that the court did not affirm the lower court's judgment in its entirety, but nonetheless pleased that the court agreed that EPA is not required to use cost-benefit analysis and left it up to EPA on remand to decide to what extent, if any, cost-benefit analysis should be used in regulating cooling water intake structures," said Alex Matthiessen, president of the New York-based environmental group Riverkeeper, which brought the lawsuit.
"We are looking forward to working with EPA's new administrator, whom we are confident will agree that the Bush EPA regulations failed to satisfy the Clean Water Act's mandate that the adverse environmental impacts of cooling water intake structures be minimized."
EPA declined to comment on the ruling. But its new administrator, Lisa Jackson, previously led the state environmental agency in New Jersey, one of six coastal states that joined the lawsuit in support of Riverkeeper and a variety of other environmental groups.
"Regardless of whether or not the Supreme Court says power plants are allowed to continue with this wasteful and unnecessary process, the EPA has the authority to require better water use," said Nancy Stoner, co-director of the Natural Resources Defense Council's water program. "EPA should do the right thing and call on power plants to use the smart water technology available to them."
The Supreme Court's majority decision reversed a 2007 ruling by the 2nd U.S. Circuit Court of Appeals, which held that no cost-benefit test could be used to determine the most environmentally friendly technology for withdrawing water from rivers and streams to cool turbines.
At issue is a 2004 rule regulating water intakes on power plants that use at least 50 million gallons of water a day to generate steam for electricity. The rule gives power-plant operators several compliance options -- not just the most expensive but the most environmentally beneficial "closed-cycle system" -- after purportedly considering the cost of the technology and environmental benefits.
Section 316(b) of the Clean Water Act requires the location, design, construction and capacity of cooling water intake structures to reflect the "best technology available for minimizing adverse environmental impact."
"The phrase 'best technology available,' even with the added specification 'for minimizing adverse environmental impact,' does not unambiguously preclude cost-benefit analysis," Justice Antonin Scalia wrote for the 6-3 majority.
In dissent, Justice John Paul Stevens -- joined by Justices Ruth Bader Ginsburg and David Souter -- argued that Congress never intended to allow a cost-benefit analysis.
"Of course, I would have preferred it if Justice Stevens' dissenting opinion had been the opinion of the court, but I'm pleased that the court's opinion is narrow in two important respects," said Washington-based attorney Christopher Wright, who filed a friend-of-the-court brief on behalf of Environment America and the Center for Biological Diversity.
"First, the court specifically recognized that EPA may require the use of 'the technology that achieves the greatest reduction in adverse environmental impacts at a cost that can reasonably be borne by the industry' -- the standard we think is most appropriate -- and we hope EPA will now adopt that standard," Wright said.
"Second, the court recognized that there are important differences between the language of the provision at issue, which governs the intake of water, and the statutory provisions governing the discharge of pollutants, so nothing in this decision should lead to an interpretation of the discharge provisions that permits greater harm to the nation's waterways."
Industry advocates hail ruling
Not everyone believed yesterday's decision in the cases -- Entergy v. EPA, 07-588; PSEG Fossil LLC v. Riverkeeper Inc., 07- 589; and Utility Water Act Group v. Riverkeeper Inc., 07-597 -- would be without a broad impact.
"While the Entergy decision rests on close analysis of the statutory language of a particular Clean Water Act provision, it is likely to be highly influential in granting EPA discretion to use cost-benefit analysis more generally when statutory language does not preclude it," said Tim Bishop, a partner in the Supreme Court and appellate practice at Mayer Brown.
"The ruling lends support to those economists, lawyers and regulators who argue that economic analysis is an important part of the equation when government mandates environmental protections -- a battle that has intensified in recent years," Bishop said.
In the majority opinion, Scalia indirectly addresses allowing federal agencies in other fields to consider more cost-effective technology when weighing potential environmental damage, unless Congress definitively bars them from doing so.
"If silence here implies prohibition, then the EPA could not consider any factors in implementing §1326(b) -- an obvious logical impossibility," Scalia wrote. "It is eminently reasonable to conclude that §1326(b)'s silence 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."
Pacific Legal Foundation attorney Steven Geoffrey Gieseler called the ruling a "victory for common sense in government rule-making."
"I am very pleased by the court's opinion," said Gieseler, who filed a friend-of-the-court brief for PLF in support of Entergy Corp. "With this opinion and the court's recent ruling in the Navy sonar case [allowing courts to consider a balancing test when weighing environmental injunctions] it is my hope that we're entering a more adult era in environmental law."
As did the environmental groups, Gieseler pointed to a recent appointment by President Obama to make his case, saying the new administration would adhere to the court's interpretation.
"If kept, President Obama's recurrent promise to put science ahead of politics in policymaking -- his pick to head the Office of Information and Regulatory Affairs, Cass Sunstein, is the legal academy's most visible proponent of cost-benefit analysis in regulation -- would be a step in the right direction," Gieseler said.
"Government decisions regarding the Endangered Species Act and other environmental laws will tell whether the president's promise, and the approach validated by this Supreme Court decision, will govern going forward," he said.