The Environmental Protection Agency’s use of a problematic  survey regarding the public’s willingness to pay additional costs for further reductions in fish losses associated with utility cooling water intake structures is severely flawed and must not be part of the agency’s cooling water intake rulemaking, the Edison Electric Institute said today.

The agency’s “willingness-to-pay” (WTP) survey is intended to determine the so-called non-use benefit of cooling water intake regulation—in this case, the price that people hypothetically would assign to having a healthy fish population from which they would gain no direct benefit.

The rulemaking, as required under section 316(b) of the Clean Water Act, is designed to provide protection for small aquatic organisms near intake structures. The agency last week issued a separate Notice of Data Availability (NODA) seeking additional comment on its proposed rule. EEI President Tom Kuhn said he was pleased that last week’s NODA raised key issues that needed to be resolved in order to produce a sound final rule. But he called the agency’s willingness-to-pay survey “deeply flawed.”

“The very premise of the survey is misleading to the public,” Kuhn said. “It infers without any solid justification that improvements in fish populations and aquatic ecosystems can result from regulating cooling water intake structures.”

The Electric Power Research Institute reported last year, “Despite more than 40 years of extensive study of generation facility impacts on fish, there exists little substantial evidence that reducing impingement and entrainment by regulating cooling water intakes will result in measurable improvements in recreational or commercial fish populations or ecological services.”

Many in the economic mainstream also have concluded that there are very few instances in which such a complicated and subjective tool can be used with any degree of reliability. A Nobel laureate economist has noted, “many departures from the guidelines or even a single serious deviation would, however, suggest unreliability prima facie.”  The guidelines for WTP studies require that a survey must be well designed, thoroughly peer-reviewed and subject to reliability testing.  EPA’s survey falls well short of this standard.

EPA has estimated that the annualized cost of its rulemaking outweigh the benefits by 21:1 -- $384 million in costs, and $18 million in benefits, based on a power plant 50-year operating life.  EEI believes that actual compliance costs will be even higher.

“The bottom line is that this type of survey is unnecessary—and in this case misleading—in assessing the expected benefits of a national rule governing cooling water intake structures,” Kuhn said.  “It sets a bad precedent for federal regulatory policy and contains serious methodological flaws.  EEI believes that it would be a mistake for this survey to be considered guidance or used by regulators to determine the best available technology when permitting cooling water intake facilities.”