Washington (Platts)--14Apr2008

The US Supreme Court on Monday said it will hear the electric power
industry's lawsuit against a federal clean-water rule that the industry says
could cost tens of billions of dollars if it is not modified or overturned.

The case revolves around an Environmental Protection Agency rule that
requires coal and nuclear power plants to retrofit their cooling-water intake
systems to protect fish and other aquatic organisms. Specifically, the rule
requires plants to upgrade the systems using the "best technology available
for minimizing adverse environmental impact."

Several electric utilities, led by Entergy, say the rule goes far beyond
Clean Water Act requirements. The utilities say the power sector would have to
shell out as much as $66 billion to comply with the rule and power plants also
would have to shut down for long periods while upgrading their water-intake
systems, they said.

Entergy and other utilities asked the Supreme Court to review the rule
after the 2nd US Circuit Court of Appeals upheld the measure's main
provisions. The Supreme Court said it would review the decision regarding
whether EPA can take costs and benefits into account when determining what
type of technology electric utilities need to install on their cooling-water
intake systems to protect fish and other aquatic organisms.

The utilities argued that EPA must be required to conduct a cost-benefit
analysis, or power plants could be forced to spend billions of dollars to keep
just a single fish larvae from being killed in their water-intake systems.

They also asked the court to consider other aspects of the rule, such as
whether they could restock the fish supply to make up for harm that their
water-intake systems caused, but the court said it only would consider the
cost-benefit question.

The US Department of Justice, which represents EPA in the case, urged the
Supreme Court not to hear the industry lawsuit, but in a motion filed earlier
this month, DOJ said it would side with the industry on the cost-benefit
question if the Supreme Court agreed to hear the case.

Riverkeeper, a New York-based environmental group that Robert Kennedy Jr.
heads, also is a party to the case. The group is expected to argue that
the environmental effectiveness of power-plant water-intake systems should not
be based on a government cost-benefit analysis.

The Supreme Court will hear the power-sector case as part of its term
that begins October 6.

--Brian Hansen, brian_hansen@platts.com