By David Jwanier and Rich Heidorn Jr.

WASHINGTON — PJM could lose as much as 7,000 MW of generation by 2018 under long-awaited cooling-water regulations approved late yesterday by the Environmental Protection Agency.

The rule will require steam generators in PJM to take steps to reduce the volume of fish and other aquatic life sucked into their cooling water intakes.

The final rule affects about 544 power plants, including nuclear-, coal-, gas- and oil-fired steam generators. More than 500 industrial sites, including pulp and paper mills; chemical, iron, steel and aluminum manufacturing plants; refineries; and food processors, are also covered by the rule.

The EPA said about 40% of affected units are already using the “best available technology” as required by the regulations, which were issued under section 316(b) of the Clean Water Act.

The EPA estimates that 2.1 billion fish, shrimp and crabs are killed annually by being pinned against cooling water intake structures (impingement) or being drawn into cooling water systems (entrainment).

Industry officials were relieved in 2011 when the EPA announced its proposed rules, which did not include a requirement that all generators install expensive closed-loop cooling systems employing cooling towers. The EPA is also delegating enforcement largely to state environmental officials. (See related stories, What’s Covered by EPA Cooling Water Rule?) 

PJM spokesman Ray Dotter said the RTO has not done any studies to evaluate the potential impact of the regulations but will review the final rule. “We did look at the proposed EPA rule and believe it provided flexibility to the states to conduct unit-specific determinations, which would minimize the impact to generation,” Dotter said.

The North American Electric Reliability Corp. published an analysis of the proposed rule in November 2011, which projected at least 25,000 MW of retirements or deratings nationwide by 2018 under a “moderate” regulation, including about 7,000 MW in PJM (1,300 MW of deratings and 5,700 MW of retirements).

The moderate case is estimated to cost $170 to $440 per gallon per minute (GPM).

The moderate case assumed only “more aggressive” states would require closed-loop systems. NERC said those states — including Delaware and New Jersey in PJM — are home to three-quarters of affected generation.

NERC projected PJM generators installing cooling towers would lose an average of 1.6% of their energy output.

NERC’s analysis, and a 2011 analysis by ReliabilityFirst Corp., assumed no nuclear plants would retire as a result of the rule, although RFC said retrofits would cut nuclear capacity by 3.5%. That, however, was before nuclear operators began threatening to shutter units because of low capacity and energy revenues.

PJM is already losing Exelon’s Oyster Creek nuclear plant by the end of 2019 — 10 years before its license expires — under a settlement with the New Jersey Department of Environmental Protection.

NERC predicted PJM would need more generation or additional demand response by 2018 under the moderate case and by 2015 under the “strict” case. The strict case, which would have required closed-loop systems and boosted generators’ costs by 25%, could have caused 35,000 MW in retirements and deratings nationwide, NERC estimated.

In its 2013 10-K filing, Public Service Enterprise Group said it was “unable to predict the outcome of this proposed rulemaking, the final form that the proposed regulations may take and the effect, if any, that they may have on our future capital requirements, financial condition or results of operations, although such impacts could be material.”

Exelon’s 2013 10-K filing, issued in February, said that under a final rule that did not require cooling towers, and allowed states’ permitting agencies to apply cost-benefit tests and consider site-specific factors, “the impact of the rule would be minimized even though the costs of compliance could be material.”

Exelon said its generators without closed-cycle recirculating systems include the Clinton, Dresden, Peach Bottom, Quad Cities, Salem, Calvert Cliffs, Nine Mile Point Unit 1 and R.E. Ginna nuclear plants in addition to Oyster Creek. Also affected in PJM are the Eddystone, Gould Street, Riverside and Schuylkill fossil fuel plants as well as the Fairless Hills plant, which burns landfill gas.