Section 1326(b) of the Clean Water Act concerns the design and construction of cooling facilities of power plants. These facilities threaten aquatic life because they squash or suction in aquatic animals that live in the water sources necessary for the cooling facilities. Section 1326(b) provides that the design and construction of cooling facilities “reflect the best technology available for minimizing adverse environmental impact.” The Environmental Protection Agency (EPA) promulgated regulations under this section. The EPA first adopted regulations for new larger, cooling facilities, which, inter alia, mandated closed-cycle cooling systems, which it found reduced the killing of wildlife by 98 percent. Then the EPA adopted the so-called “Phase II” rules which are at issue here. The Phase II rules apply to existing facilities. The EPA declined to mandate closed-cycle cooling systems in the Phase II rules because the cost of converting existing facilities to this type of system was extremely high. It instead provided rules that it estimated would result in a 80 to 95 percent reduction of killing of wildlife. Environmental groups (plaintiffs) challenged the standard, arguing that the EPA should not have taken the cost into account when setting the Phase II standards. The United States Court of Appeals for the Second Circuit agreed. The operators of powerplants appealed.