Reversing a lower court opinion, the 5-1-3 ruling upheld the EPA's decision as reasonable to allow CBA to determine the best technology available to maintain national environmental standards.
Entergy owns and operates both nuclear and fossil fuel power plants generating an aggregated 30,000 megawatts of electrical capacity.
Indian Point Energy Center is a subsidiary of Entergy Corporation operating a three-unit nuclear power plant in Buchanan, New York, the facility at issue in this case.
Over the past four decades Riverkeeper has been successful as the public's watchdog in bringing hundreds of pollution violations to justice and protecting drinking water for local communities.
This new interpretation of the statute allows for cost to influence the choice of "best technology available" lowering the standard reduction of "adverse environmental impact.
They challenged the Second Circuit decision that cost benefit analysis cannot be used in the interpretation of the Clean Water Act in determination of the national performance standard and best available technology for existing power plants.
[1] The respondents supported the Second Circuit's finding that the EPA's decision of site-specific cost–benefit variance provision and the use of CBA to determine national performance standard and best available technology for existing facilities is not within the statute and remand the regulations to the agency for clarification.
In light of these findings, when congress amended the Clean Water Act in 1972, it directed the EPA to regulate these systems so as to "minimize adverse environmental impact".
[7] Three Phases (rules) have been created over the years by the EPA in response from industry, environmental groups and judicial review to clarify exactly what is needed to meet the statute.
The National Performance Standard (NPS), set by the EPA for new facilities is closed-cycle cooling systems, which can reduce impingement and entrainment by up to 98%.
"[1] In Phase II the EPA declined to specifically mandate closed-cycle cooling systems as BAT for existing facilities due to the compliant cost, which could be nine times the amount of other methods of reduction approaching the same standard.
[9] Phase II update: In 2007 "EPA suspended the Cooling Water Intake Structure Regulations for existing large power plants as an unreasonable interpretation of the statute.
[1] The main issue for the court was to decide if the Clean Water Act statute language is unambiguous or not and whether the EPA interpretations (rules - see below) were reasonable.
At the heart of the issue is if the EPA is authorized to consider CBA in determining BAT when meeting the NPS to "minimize adverse environmental impact."
While the BADT test was applicable to new point sources and was aimed to advance the strategy of "where practicable", a standard allowing no pollutant discharges.
Although Justice Breyer agrees with the Court concerning the use of a cost–benefit analysis in determining environmental standards for water-intake systems, he also admonished the EPA for changing its stance on granting variances.
It may delay regulatory process, undervalue the true cost benefit of environmental externalities, and may reduce market incentives to developing advanced treatment technologies.
However, on the other hand, forbidding CBA may lead to "irrational results" and since every "real choice" requires a comparison, an absolute prohibition would be difficult to enforce.
Justice Stevens believed that Section 316(b) of the CWA prohibited the use of cost-benefit analysis based on the language and stated that Congress' intent was to play a temporal role for existing power plants until a more ambitious standard could be set.