Clean Water Act 316(b): Forecasting Power Generation Industry Impacts. Dave Bailey RFF Modeling Workshop July 19, 2011

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1 Clean Water Act 316(b): Forecasting Power Generation Industry Impacts Dave Bailey RFF Modeling Workshop July 19, 2011

2 Final Rule Delayed EPA announced yesterday that an agreement has been reached with the Riverkeeper for a one year delay in the 316(b) Final Rule New Date is July 27,

3 Overview EPA Considered four Regulatory Options any could be selected for the 316(b) Final Rule For Proposed Rule and NODA: Entrainment to be decided on a sitespecific basis Impingement, based on NODA has six possible compliance alternatives Outcomes in terms of potential premature unit retirements highly dependent on: 1. EPA option selected 2. Impingement mortality reduction requirements 3. Region of the U.S. 4. Waterbody type EPA Staff touring Chalk Point Cooling Towers 3

4 Inventory of Potentially Affected Units Any facility having at least one once-through cooling unit and using >50 million gal/day Surveyed potentially impacted facilities for unit specific MW, flow and capacity info Responses returned by 75% of fossil units 95% of nuclear units # Facilities # Units MW Fossil ,392 Nuclear ,931 Total ,323 4

5 EPA Considered Four Options All options required IM reductions: 3 options required for design flows >2 MGD 1 option required for design flows >50 MGD For entrainment two options required closed-cycle cooling: One option required for all facilities >2 MGD One option required for facilities >125 MGD Entrainment for other two options sitespecific All options required closed-cycle cooling for new units at existing facilities 5

6 Estimated Retrofit Cost (includes capital cost, O&M, extended outages, heat rate and energy penalties) Cost (Billions) Nuclear Fossil Total Net Present Value 1 $31.9 $63.3 $95.2 Annualized Cost $2.3 $4.7 $7.0 1 Assumes a 30 year system life. 6

7 Summary of Units and Capacity at Risk of Premature Retirement if Closed-cycle Cooling Retrofits Designated as BTA (EPRI Technical Report ) Region All Waterbody Types Units at Risk MWs at Risk PJM 21 3,250 ERCOT 25 5,458 ISO-NE 12 2,561 Midwest ISO NYISO 11 3,325 SERC 38 3,044 FRCC 21 2,196 SPP 20 1,475 WECC 18 2,699 MRO RFC Totals ,058 Note EPRI estimates an additional 15,600 MW may be lost due to inadequate space to retrofit or permitting issues for a total of ~42,000MWs at risk 7

8 Basic Requirements for Entrainment Control Required for all facilities using >2 MGD; however, information requirements apply only to facilities that use >125 MGD actual intake flow Compliance determined by permitting authority on a caseby-case basis and may range from: existing intake is BTA, to closed-cycle cooling 8

9 Facilities Most Likely to Be at Risk of Closed- Cycle Cooling Retrofit for Entrainment Facilities in the Northeast (ex. Massachusetts, New York, New Jersey, New Hampshire, Connecticut, Delaware,) Facilities withdrawing from oceans, estuaries, tidal rivers and some Great Lakes (due to commercial fisheries and depressed populations for some species) Only those facilities using >125 MGD AIF required to submit entrainment studies BTA Considerations include: Cost-benefit Energy system impacts Environmental impacts of retrofits Adequate land availability 9

10 Based on NODA Six Compliance Alternatives Now Under Consideration for Impingement Direct biological monitoring with traveling water screens (88% annual and 69% monthly reduction in impingement mortality required) Reducing through screen velocity to not exceed 0.5 fps Streamlined (pre-approved) approach based on modified traveling water screens (NEW) Use of a defined technology closedcycle cooling or velocity cap (NEW) Site-specific approach same approach used for entrainment either generally or based on a demonstration (NEW) Exemption for low levels of impingement (NEW) 10

11 Cost of Meeting Impingement Mortality Reduction Requirements EPRI has evaluated 18 intakes in terms of compliance cost based on the proposed rule and NODA: $8.7 million avg. cost of modified traveling water screens $47.5 million avg. cost to expand intake to not exceed 0.5 fps $19.5 million avg. cost of wedgewire screens to not exceed 0.5 fps $1.9 million avg. cost for barrier nets to achieve 0.5 fps (only practical for 50% of facilities evaluated and many require a pilot study) Majority of evaluated facilities on freshwater 11

12 Questions? Dave Bailey Doug Dixon