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Table of Contents
Water Quality
Under the Clean Water Act, NPDES permits for discharges into waterways are required to be obtained from the EPA or from the state
environmental agency to which the permit program has been delegated and must be renewed periodically. Certain of Generation’s power generation
facilities discharge industrial wastewater into waterways and are therefore subject to these regulations and operate under NPDES permits or
pending applications for renewals of such permits after being granted an administrative extension. Generation is also subject to the jurisdiction of
certain other state and regional agencies and compacts, including the Delaware River Basin Commission and the Susquehanna River Basin
Commission.
Section 316(b) of the Clean Water Act. Section 316(b) requires that the cooling water intake structures at electric power plants reflect the
best technology available to minimize adverse environmental impacts, and is implemented through state-level NPDES permit programs. All of
Generation’s power generation facilities with cooling water systems are subject to the regulations. Facilities without closed-cycle recirculating
systems (e.g., cooling towers) are potentially most affected by changes to the existing regulations. For Generation, those facilities are Calvert
Cliffs, Clinton, Dresden, Eddystone, Fairless Hills, Ginna, Gould Street, Handley, Mountain Creek, Mystic 7, Nine Mile Point Unit 1, Oyster Creek,
Peach Bottom, Quad Cities, Riverside, Salem and Schuylkill.
On October 14, 2014, the EPA’s final Section 316(b) rule became effective. The rule requires that a series of studies and analyses be
performed to determine the best technology available to minimize adverse impacts on aquatic life, followed by an implementation period for the
selected technology. The timing of the various requirements for each facility is related to the status of its current NPDES permit and the
subsequent renewal period. There is no fixed compliance schedule, as this is left to the discretion of the state permitting director.
Until the compliance requirements are determined by the applicable state permitting director on a site-specific basis for each plant,
Generation cannot estimate the effect that compliance with the rule will have on the operation of its generating facilities and its future results of
operations, cash flows, and financial position. Should a state permitting director determine that a facility must install cooling towers to comply with
the rule, that facility’s economic viability would be called into question. However, the potential impact of the rule has been significantly reduced
since the final rule does not mandate cooling towers as a national standard and sets forth technologies that are presumptively compliant, and the
state permitting director is required to apply a cost-benefit test and can take into consideration site-specific factors.
New York Facilities. In July 2011, the New York Department of Environmental Conservation (DEC) issued a policy regarding the best
available technology for cooling water intake structures. Through its policy, the DEC established closed-cycle cooling or its equivalent as the
performance goal for all existing facilities, but also provided that the DEC will select a feasible technology whose costs are not wholly
disproportionate to the environmental benefits to be gained and allows for a site-specific determination where the entrainment performance goal
cannot be achieved. The Ginna and Nine Mile Point Unit 1 power generation facilities received renewals of their state water discharge permits in
2014.
Salem. In June 2001, the NJDEP issued a renewed NPDES permit for Salem, expiring in July 2006, allowing for the continued operation of
Salem with its existing cooling water system. In February 2006, PSEG filed a renewal application with the NJDEP allowing Salem to continue
operating under its existing NPDES permit until a new permit was issued. On June 30, 2015, NJDEP issued a draft NPDES permit for Salem. The
draft permit does not require installation of cooling towers and allows Salem to continue to operate utilizing the existing once-through cooling water
system with certain required system modifications. The draft permit was subject to a public notice and comment period and the NJDEP may make
revisions before issuing the final permit expected during the first half of 2016.
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Source: BALTIMORE GAS & ELECTRIC CO, 10-K, February 10, 2016 Powered by Morningstar® Document Research℠
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