100R77101B
c •( NATIONAL POLLUTANT DISCHARGE
ELIMINATION SYSTEM
ADJUDICATORY HEARING PROCEEDINGS
DECISIONS OF THE
ADMINISTRATOR
AND
DECISIONS OF THE
GENERAL COUNSEL
VOLUME 2
JANUARY 1976 - DECEMBER 1976
INCLUDING FURTHER PROCEEDINGS WITH RESPECT TO
VOLUME 1
DECISIONS OF THE ADMINISTRATOR
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
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NATIONAL POLLUTANT DISCHARGE
ELIMINATION SYSTEM
ADJUDICATORY HEARING PROCEEDINGS
DECISIONS OF THE
ADMINISTRATOR
AND
DECISIONS OF THE
GENERAL COUNSEL
VOLUME 2
JANUARY 1976 - DECEMBER 1976
ALSO INCLUDES FURTHER PROCEEDINGS WITH RESPECT TO
VOLUME 1 DECISIONS OF THE
ADMINISTRATOR
Er- ' •
F
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INTRODUCTION
This compilation is the second volume of Decisions
of the Administrator and Decisions of the General
Counsel and includes all such Decisions issued from
January 1976 through December 1976 by the United
States Environmental Protection Agency (EPA). These
Decisions have been issued pursuant to the National
Pollutant Discharge Elimination System (NPDES) adjudicatory
hearing proceedings under section 402 of the Federal
Water Pollution Control Act, as amended, Public Law 92-500
33 U.S.C. §1251 e_t seq. (the "Act"), and corresponding
NPDES regulations, 40 CFR Part 125, as amended, July 24,
1974.
NPDES adjudicatory hearings are conducted by
Administrative Law Judges to consider material issues
of fact relating to the question of whether an NPDES
permit should be issued, denied, or modified. Under
current procedures (proposed amendments to those
procedures were published in the Federal Register on
November 18, 1976), following the hearing, the
Administrative Law Judge certifies the hearing record,
together with proposed findings and conclusions prepared
by the parties to the Regional Administrator for an
initial decision.
Issues of law arising from a request for an
adjudicatory hearing, including questions relating to
the interpretation of the Act and regulations promulgated
thereunder, are referred by the EPA Regional Administrator
or the Administrative Law Judge to EPA's General
Counsel for a decision. These Decisions of the General
Counsel are relied upon by the Regional Administrator
in reaching his initial decision.
The initial decision of the Regional Administrator
becomes the final decision of the Agency unless a party
petitions the Administrator for review of the initial
decision or unless the Administrator reviews the initial
decision on his own motion. On review, the Administrator
may affirm, modify, set aside, or remand the initial
decision for further proceedings. A petition for
review by the Administrator and a decision on that
petition are prerequisites for judical review of the
Agency's action.
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This Volume contains all Decisions of the Adminis-
trator (other than simple denials of petitions for
review) and Decisions of the General Counsel reached
under these procedures from January 1, 1976, through
December 31, 1976. This Volume also includes modifica-
tions and further proceedings concerning Volume 1,
Decisions of the Administrator Nos. 1, 2, and 6, which
were issued in 1976.
11
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TABLE OF CONTENTS
(NOTE: Decisions of the Administrator Nos. 1-9, and
Decisions of the General Counsel Nos. 1-36 may be found
in Volume 1 of this series.)
FURTHER PROCEEDINGS WITH RESPECT TO VOLUME 1
DECISIONS OF THE ADMINISTRATOR
1. Marathon Oil, et al. (known as
Offshore Cases). Cook Inlet, Alaska.
Region X. NPDES Appeal No. 75-1.
Application for Stay of Permit Pending
Circuit Court Review of Decision of
Administrator, January 5, 1976. Denial
of Application for Stay, January 27,
1976. 1
2. Shell Oil and Atlantic Richfield (known
as Shell Offshore Case). Cook Inlet,
Alaska. Region X. NPDES Appeal No. 75-2.
Application for Stay of Permit Pending
Circuit Court Review of Decision of the
Administrator, January 5, 1976. Denial
of Application for Stay, January 27, 1976. 6
3. *U.S. Pipe and Foundry Company. North
Birmingham, Alabama. Region IV. NPDES
Appeal No. 75-4. Appeal from Initial
Decision of Administrative Law Judge
Yost, May 12, 1975. 11
a. Second Modification to Decision
of the Administrator, June 24, 1976.
b. Denial of Motion for Reconsideration,
September 8, 1976.
*Decision of the Administrator, October 10, 1975,
and Modifications to Decision of the Administrator,
December 9, 1975, are published in Volume 1.
Xll
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DECISIONS OF THE ADMINISTRATOR
Page
10. Collier Carbon and Chemical Corporation.
Kenai, Alaska. Region X. NPDES Appeal
No. 75-10. 22
a. Notice of Denial of Petition for
Review and Remand to Regional
Administrator, January 7, 1976.
b. Denial of Petition of Review,
August 10, 1976.
11. National Steel Corporation. Portage,
Indiana. Region V. NPDES Appeal No. 75-15.
Denial of Petition for Review of Decision
of Regional Administrator, January 7, 1976. 32
12. Reynolds Metals Company. Sheffield,
Alabama. Region IV. NPDES Appeal No.
75-18. Denial of Petition for Review
or Stay of Permit, January 9, 1976. 43
13. Exxon Corporation Terminal Facility.
Pittsburgh, Pennsylvania. Region III.
NPDES Appeal No. 75-11. 50
a. Denial of Petition for Review,
January 19, 1976.
b. Denial of Petition for Recon-
sideration of Original Petition
for Review, April 5, 1976.
14. Exxon Corporation. Dracut Marketing
Terminal. Dracut, Massachusetts.
Region I. NPDES Appeal No. 75-16. 58
a. Denial of Petition for Review,
January 19, 1976.
b. Denial of Petition for Recon-
sideration, April 5, 1976.
IV
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DECISIONS OF THE ADMINISTRATOR
15. Sierra Pacific Power Company. Reno,
Nevada. Region IX. NPDES Appeal
No. 75-17. Denial of Petition for
Review, January 19, 1976. 68
16. Ford Motor Company, Sheffield Casting
Plant. Sheffield, Alabama. Region IV.
NPDES Appeal No. 75-19. Grant of
Petition for Review and Remand to
Regional Administrator, January 23,
1976. 73
17. United States Steel Agri-Chemical.
Crystal City, Missouri. Region VII.
NPDES Appeal No. 75-7. Appeal from
Initial Decision of Regional Administrator
Septemer 24, 1975. Partial Decision
and Remand to Regional Administrator,
February 2, 1976. 82
18. Exxon Corporation, Truck Repair Facility.
Linden, New Jersey. Region II. NPDES
Appeal No. 76-1. Denial of Petition for
Review, February 23, 1976. 98
19. United States Steel Corporation, Gary
Works Facility. Gary, Indiana. Region V.
NPDES Appeal No. 76-3. Denial of
Petition for Review, June 24, 1976. 101
20. Northern Indiana Public Service Company,
Bailly Generating Station. Region V.
NPDES Appeal No. 76-4. Denial of Petition
for Review, August 10, 1976. 106
v
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DECISIONS OF THE GENERAL COUNSEL
(in order of issuance)
Page
37. Perfect Packed Products Co., Henderson,
North Carolina. Ill
38. Evansville Materials, Inc., Evansville,
Indiana. 130
39. FMC Corporation, Nitro Industrial Chemical
Plant, Nitro Fibers Plant, Nitro, West
Virginia, and South Charleston Industrial
Chemical Plant, South Charleston, West
Virginia. 137
40. Bristol County Water Company, Warren Water
Treatment Plant, Warren, Rhode Island, and
Harrington Water Treatment Plant, Harrington,
Rhode Island. 154
41. Brunswick Steam Electric Plant, Southport,
North Carolina. 172
42. Northern Indiana Public Service Company,
Bailly Generating Station, Indiana. 187
43. Friendswood Development Company, Houston,
Texas. 194
44. Texaco, Inc., Lockport Plant, Lockport,
Illinois. 222
45. Collier Carbon and Chemical Corporation,
Kenai, Alaska. 230
46. Public Service Company of New Hampshire,
Seabrook Station, Units 1 and 2. 241
47. City of New London, New Hampshire. 262
48. City of Richmond, Virginia. 282
49. City of Boston, Boston Metropolitan
District Commission, Deer Island and Nut
Island Sewage Treatment Plants, Massachusetts. 291
VI
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DECISIONS OF THE GENERAL COUNSEL
(in order of issuance)
Page
50. Ore-Ida Foods, Inc., Burley, Idaho. 299
51. Beker Phosphate Corporation, Manatee
County, Florida. 306
52. Gainsville-Alachua County Regional Electric
Water and Sewer Facilities Board, Deerhaven
United No. 2, Gainsville, Florida. 313
53. City of Phoenix, Arizona. 319
54. Armco Steel Corporation, Houston, Texas. 338
vzi
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FURTHER PROCEEDINGS WITH RESPECT TO
VOLUME 1
DECISIONS
OF THE
ADMINISTRATOR
DECISION NUMBERS 1, 2 AND 6
(SEE VOLUME 1 FOR TEXT OF ORIGINAL DECISIONS 1, 2 AND 6)
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BEFORE THE ADMINISTRATOR
U. S. ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D. C.
IN THE MATTERS OF: )
)
National Pollutant Discharge ) NPDES Appeal No. 75-1
Elimination System }
) Consolidated No. X-74-17C
Permits For ) and Case Nos. X-74-2
) X-74-3
Marathon Oil Company, Union Oil ) X-74-4
Company of California, Atlantic ) X-74-6
Richfield Company, and Mobil Oil ) X-74-9
Corporation, )
Permittees. )
DENIAL OF APPLICATION
FOR STAY
On January 5, 1976, Marathon Oil Company, Union Oil Company
of California, Atlantic Richfield Company, and Mobil Oil Corporation
("Permittees") filed an Application for Stay of the issuance of
National Pollutant Discharge Elimination System permits for the
Marathon "Dolly Varden" Platform, the Union "Grayling" and "Monopod"
Platforms, the Atlantic Richfield "King Salmon," "Spark," and "A"
Platforms, and the Mobil "Granite Point" Platform, pursuant to
Rule 18 of the Federal Rules of Appellate Procedure, pending review
by the United States Court of Appeals for the Ninth Circuit of the
Decision of the Administrator dated September 25, 1975.
In the alternative, Permittees seek a stay of both civil
and criminal enforcement by the Agency of the permit provisions
establishing oil and grease limitations for deck drains and produced
water and domestic waste limits pending appellate review.
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In their Memorandum in Support of Stay, Permittees assert the
following points in support of their application:
(1) The Decision set absolute poundage figures of 9.25 pounds
per day daily maximum and 5 pounds per day daily average for deck
drains, without regard to the various sizes and activities of the
platforms and the consequent varying volumes of water used on the
platforms, the effect of which is to contradict best practicable control
technology limitations expressed in terms of milligrams per liter
(65 mg/1 daily average and 90 mg/1 daily maximum). The result of
applying the poundage limitation would be to require curtailment
of production (up to 90% in some cases) at several of the platforms.
(2) The Decision does not indicate the method of statistical
analysis used in analyzing Shell or Mobil data, nor the rationale
used in selecting the method of statistical analysis, to set oil and
grease effluent limitations for deck drains at 65 mg/1 daily average
and 90 mg/1 daily maximum.
(3) The Decision does not indicate what data points were used,
nor the statistical method employed and the rationale for
selection of the method used, to set oil and grease effluent
limitations for produced water at 48 mg/1 daily average and 72 mg/1
daily maximum.
(4) The Decision relies upon facts outside the record and the
Administrator has failed to disclose such facts relied upon in setting
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deck drain and produced water effluent limitations, resulting in
the denial of a fair hearing under the Fifth Amendment.
(5) The Administrator, in setting oil and grease effluent
limitations for deck drains, failed to consider the entire record,
especially data associated with normal and necessary drilling
activities aboard the platforms.
(6) The Administrator failed to make allowances for start-up,
malfunction, maintenance and repair of equipment, which will
require Permittees to shut in wells when these events occur and
thereby damage well productivity; whereas, to not shut in the wells
during such events would subject Permittees to criminal sanctions.
(7) In the event of mechanical malfunctions or upsets, (despite
prudent operation and maintenance) Permittees will be subject to
civil penalties, since the Administrator has no enforcement
discretion under the Act, but must take action if he finds a
violation. Permittees also would be subject to citizen suits, as
would the Administrator if he failed to perform a non-discretionary
act or duty.
(8) The requirements of the permits are impossible to meet,
since Permittees are forced to choose between civil or criminal
penalties or a permanent loss of oil, which is arbitrary and
constitutes a taking of property without due process.
(9) The Administrator has not followed the statutory standard
of best practicable control technology currently available, since he
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has made no allowance for mechanical malfunctions, biological
upsets, start-ups and shut-downs for maintenance, or other
by-pass situations, and has set limits which will be exceeded
despite prudent operation, maintenance and repair.
Without in any manner accepting or acknowledging the
characterization or validity of any of the foregoing points set
forth by Permittees, I have carefully examined each of the
contentions made by Permittees in light of the record in this
proceeding and am unable to conclude that a stay in the issuance
of the subject permits is justified. Permittees have not
demonstrated that issuance of the subject permits will be likely
to cause irreparable harm during the period required for judicial
review. Moreover, Permittees' alternative request for stay of the
Agency's civil and criminal enforcement responsibilities with
respect to the subject permits cannot be granted.
Accordingly, Permittees' Application for Stay of the issuance
of the subject permits or, in the alternative, stay of the Agency's
enforcement responsibilities, is hereby denied.
Daed: January 27, 1976
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CERTIFICATE OF SERVICE
The foregoing is a true and correct copy of a Denial Of
Application For Stay, dated January 27, 1976, deposited in the
U.S. Mail, certified mail, at Washington, D.C. addressed to the
following:
Clifford V. Smith, Jr.
Regional Administrator
U.S. Environmental Protection Agency
Region X
1200 Sixth Avenue
Seattle, Washington 98101
John A. Hamill, Esq.
U.S. Environmental Protection Agency
Region X
1200 Sixth Avenue
Seattle, Washington 98101
Regional Hearing Clerk
U.S. Environmental Protection Agency
Region X
1200 Sixth Avenue
Seattle, Washington 98101
John H. Bradbury, Esq.
and K.E. Barker, Esq.
Nosek, Bradbury & Wolf, Inc.
1026 West Fourth Avenue
Anchorage, Alaska 99501
Jack T. Akin, Esq.
Mobil Oil Corporation
Post Office Box 900
Dallas, Texas 75221
J. W. Sedwick, Esq.
Burr, Pease & Kurtz, Inc.
825 West Eighth Avenue
Anchorage, Alaska 99501
C. Deming Cowles, IV, Esq.
Atlantic Richfield Company
711 W. 8th Avenue
Post Office Box 360
Anchorage, Alaska 99501
Dated: January 47 1976
n chare I K. Glenn
Chief Judicial Officer
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BEFORE THE ADMINISTRATOR
U. S. ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D. C.
IN THE MATTER OF: )
)
National Pollutant Discharge )
Elimination System ) NPDES Appeal No. 75-2
) Case No. X-74-5
Permit For )
Shell Oil Company (Shell),
Permi ttee,
)
and )
)
Atlantic Richfield Company )
(Atlantic Richfield, )
Intervenor. )
DENIAL OF APPLICATION
FOR STAY
On January 5, 1976, Shell Oil Company ("Permittee") and
Atlantic Richfield Company (Intervenor) filed an Application for
Stay of the issuance of National Pollutant Discharge Elimination
System permits for the Shell "A" and "C" Platforms, pursuant to
Rule 18 of the Federal Rules of Appellate Procedure, pending
review by the United States Court of Appeals for the Ninth
Circuit of the Decision of the Administrator dated September 25,
1975.
In the alternative, Permittee seeks a stay of both civil
and criminal enforcement by the Agency of the permit provisions
establishing oil and grease limitations for deck drains and
domestic waste limits pending appellate review. In its Memorandum
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in Support of Stay, Permittee asserts the following points
in support of its application:
(1) The Decision set absolute poundage figures of 9.25 pounds
per day daily maximum and 5 pounds per day daily average for deck
drains, without regard to the various sizes and activities of the
platforms and the consequent varying volumes of water used on the
platforms, the effect of which is to contradict best practicable
control technology limitations expressed in terms of milligrams per
liter (65 mg/1 daily average and 90 mg/1 daily maximum). The result
of applying the poundage limitation would be to require curtailment
of production.
(2) The Decision does not indicate the method of statistical
analysis used in analyzing Shell or Mobil data, nor the rationale
used in selecting the method of statistical analysis, to set oil
and grease effluent limitations for deck drains at 65 mg/1 daily
average and 90 mg/1 daily maximum.
(3) The Decision relies upon facts outside the record and the
Administrator has failed to disclose such facts relied upon in
setting deck drain effluent limitations, resulting in the denial
of a fair hearing under the Fifth Amendment.
(4) The Administrator, in setting oil and grease effluent
limitations for deck drains, failed to consider the entire record,
especially data associated with normal and necessary drilling
activities aboard the platforms.
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(5) The Administrator failed to make allowances for
start-up, malfunction, maintenance and repair of equipment,
which will require Permittee to shut in wells when these events
occur and thereby damage well productivity; whereas, to not shut
in the wells during such events would subject Permittee to
criminal -sanctions.
(6) In the event of mechanical malfunctions or upsets,
(despite prudent operation and maintenance) Permittee will be
subject to civil penalties, since the Administrator has no
enforcement discretion under the Act, but must take action if he
finds a violation. Permittee also would be subject to citizen
suits, as would the Administrator if he failed to perform a
non-discretionary act or duty.
(7) The requirements of the permits are impossible to meet,
since Permittee is forced to choose between civil or criminal
penalties or a permanent loss of oil, which is arbitrary and
constitutes a taking of property without due process.
(8) The Administrator has not followed the statutory
standard of best practicable control technology current available,
since he has made no allowance for mechanical malfunctions,
biological upsets, start-ups and shut-downs for maintenance, or
other by-pass situations, and has set limits which will be
exceeded despite prudent operation, maintenance and repair.
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Without in any manner accepting or acknowledging the
characterization or validity of any of the foregoing points set
forth by Permittee, I have carefully examined each of the
contentions made by Permittee in light of the record in this
proceeding and am unable to conclude that a stay in the issuance
of the subject permit is justified. Permittee has not
demonstrated that issuance of the subject permit will be likely
to cause irreparable harm during the period required for judicial
review. Moreover, Permittee's alternative request for stay of
the Agency's civil and criminal enforcement responsibilities with
respect to the subject permits cannot be granted.
Accordingly, Permittee's Application for Stay of the issuance
of the subject permits or, in the alternative, stay of the Agency's
enforcement responsibilities, is hereby denied.
Dated: January 27, 1976
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CERTIFICATE OF SERVICE
The foregoing is a true and correct copy of a Denial Of
Application For Stay, dated January 27, 1976, deposited in the
U.S. Mail, certified mail, at Washington, D.C. addressed to the
following:
Clifford V. Smith, Jr.
Regional Administrator
U.S. Environmental Protection Agency
Region X
1200 Sixth Avenue
Seattle, Washington 98101
John A. HamiH Esq.
U.S. Environmental Protection Agency
Region X
1200 Sixth Avenue
Seattle, Washington 98101
Regional Hearing Clerk
U.S. Environmental Protection Agency
Region X
1200 Sixth Avenue
Seattle, Washington 98101
C. Deming Cowles, IV, Esq.
Atlantic Richfield Company
Legal Division
Post Office Box 360
Anchorage, Alaska 99501
W. D. Maer, Esq.
Shell Oil Company
Legal Division
One Shell Plaza
Post Office Box 2463
Houston, Texas 77001
Michael K. Glenn
Chief Judicial Officer
Dated: January ty 1976
10
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BEFORE THE ADMINISTRATOR
U.S. ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C.
IN THE MATTER OF: )
)
National Pollutant Discharge ) NPDES Appeal No. 75-4
Elimination System )
)
) (NPDES Docket No. AHAL 002)
Permit For: )
)
U.S. Pipe and Foundry Company )
North Birmingham Complex )
NPDES No. AL 0003247 )
Permittee. )
SECOND MODIFICATION TO
DECISION OF THE ADMINISTRATOR
I am today modifying my Decision of October 10, 1975 (as modified
on December 9, 1975) in the above-captioned matter in order to correct
an erroneous legal interpretation. This correction will require a
modification to certain terms of the above-captioned permit, as explained
below.
Background
My October 10 Decision upheld on appeal the Initial Decision of the
EPA Regional Administrator, Region IV, which affirmed the terms of the
above-captioned permit (the "Permit") issued under Section 402 of the
Federal Water Pollution Control Act, P.L. 92-500 (the "Act"). One part
of my Decision specifically upheld terms of the Permit which deferred
achievement of certain water quality-based effluent limitations until
July 1, 1979.
11
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On May 14, 1976, EPA's General Counsel and EPA's Assistant Admini-
strator for Enforcement filed a joint "Petition for Reconsideration of
Administrator's Decision" in this matter. They asked that I reconsider
that portion of my October 10 Decision which upheld the 1979 achievement
date for water quality-based limitations.
In an Order dated May 18, 1976, my Deputy announced that I would
reconsider the issue and invited all parties to submit briefs. Permitee
U.S. Pipe and Foundry Company filed pleadings opposing the Petition.
The Alabama Conservancy filed pleadings (on behalf of itself and numerous
other parties) supporting the Petition. EPA's Region IV filed a pleading
supporting the Petition. The General Counsel and the Assistant Admini-
strator for Enforcement filed a Response to Permittee's pleadings.
Region IV supported this Response. I have considered all of these
pleadings in reaching my decision today.
Disposition of Petition
The statutory provision at issue here is Section 301(b)(l)(C) of
the Act, which provides in pertinent part:
[Tjhere shall be achieved ... (C) not later than July 1. 1977, any
more stringent limitation, including those necessary to meet water
quality standards ... established pursuant to any State law or
regulations ... or any other Federal law or regulation, or required
to implement any applicable water quality standard established
pursuant to this Act. (Emphasis added.)
I have underscored above the key words and phrases bearing on the issue
before me.
In my October 10 Decision, I indicated my agreement (at pp. 11-13)
with the analysis in the Initial Decision which drew a sharp and
12
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significant distinction between the words "meet" and "implement" as
quoted above. The reasoning of the Initial Decision was that water
quality standards adopted prior to the 1972 Act amendments had to be
completely met by July 1977 while water quality standards established
pursuant to Section 303 of the 1972 Act amendments, because of the
verb "'implement," need only be subject to requirements by July 1977
which would "lead to the meeting of the standards." Since certain
Alabama water quality standards were established under the 1972 Act
amendments, the Initial Decision reasoned, the Permit limitations pro-
viding for achievement of such standards in 1979 were acceptable.
Neither the Initial Decision nor my October 10 Decision cited any
legislative history, case law, or other authority for the "meet-implement"
distinction. The Initial Decision reasoned at page 32: "Obviously
Congress must have intended in the use of these two different words to
require different actions." My Decision outlined briefly some different
"commonly understood" connotations to the two words.
Upon review of all of the pleadings now before me, I am convinced
that my prior reliance on whatever difference in connotation there may
be between "meet" and "implement" was misplaced. Upon consideration of
the clear and convincing legislative history and upon further reflection
on the statutory language itself, I must conclude that Section 301(b)(l)(C)
demands that water quality standards, including those established pur-
suant to Section 303 of the 1972 Act amendments, be fully achieved not
later than July 1, 1977.
13
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Turning first to the statutory language itself, it appears that my
prior focus on the distinction between "meet" and "implement" caused me
to overlook the primary verb of the statutory sentence in question:
"achieved." Section 301(b)(l)(C) clearly states that effluent limita-
tions, whether necessary to "meet" or "implement" water quality standards,
"shall be achieved not later than July 1, 1977." Thus, considering the
sentence in its entirety, whatever fine distinction might exist between
"meet" and "implement" loses its importance.
Moreover, the legislative history greatly fortifies my reconsidered
statutory construction. The statutory language in question, including
the "meet-implement" juxtaposition, appeared first in the House bill,
H.R. 11896. The Committee Report accompanying H.R. 11896 makes explicit
that both basic variations of water quality standards addressed in the
Initial Decision (those established prior to the 1972 amendments and
those established under Section 303 of the 1972 amendments) are to be
met by July 1977:
Subsection (b)(l)(C) of section 301 requires that any more
stringent limitation than that established under section 301(b)(l)(A)
and (B), including any necessary to meet water quality standards,
treatment standards, or schedules of compliance established pur-
suant to any other State or Federal law or regulation or any required
to implement any applicable water quality standards established
pursuant to section 303 of this Act shall be met by Jaliuary 1, 1976.
The Committee intends that the water quality standards established
pursuant to subsection (c) of section 10 of the existing Federal
Water Pollution Control Act be complied with prior to January 1,
1976, in accordance with the implementation plans that are parts of
such standards, or any revision of these standards made pursuant to
14
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section 303 of this Act, and that there be appropriate phased
compliance with revised or new standards adopted pursuant to
section 303(c) of this Act, not later than January 1, 1976.*
H.R. Rep. No. 92-911, 92d Cong. 2d Sess. (1972), as reprinted in
A Legislative History of the Mater Pollution Control Act Amend-
ments of 1972, Library of Congress, Serial No. 93-1 (1973), at p.
788 (emphasis added).**
In light of the foregoing, my October 10 Decision must be modified.
Specifically, the section construing Section 301(b)(l)(C) of the Act at
pp. 11-13 shall, to the extent inconsistent with today's Decision, be
considered superseded by today's Decision. Conclusions 5 and 6 on page
14 of the October 10 Decision are hereby revoked and the following Con-
clusion 5 should be substituted for them:
"5. The requirements of Section 301(b)(l)(C) are not fully
satisfied by the subject permit, in that it contains effluent
limitations which defer achievement of water quality standards
beyond the statutory deadline of July 1, 1977. The initial
decision erred in ruling that water quality standards established
pursuant to Section 303 of the Act are not required by Section
301(b)(l)(C) to be met or fully complied with by July 1, 1977."
The Order on page 14 of my October 10 Decision is also revoked to
the extent it is inconsistent with the Order which follows. Moreover,
any statements in my December 10 modification which are inconsistent
with today's Decision (i.e., bottom of p. 3, top of p. 4) shall be
considered superseded.
* The compliance date was changed to July 1, 1977 by the conference
committee.
** Equally persuasive legislative history may be found at pp. 246 and
777 of the same volume.
15
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ORDER
This matter is hereby remanded to the EPA Regional Administrator,
Region IV, with instructions to modify, as expeditiously as practicable,
the Permit to specify a final achievement date of July 1, 1977 in any
case where the Permit now specifies a later final achievement date for
effluent limitations based upon any water quality standards.
/
Dated: JUN 2 4 1976
16
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Certificate of Service
I hereby certify that copies of the foregoing Decision and Order
were mailed this date to all parties who were served with copies of the
Petition for Reconsideration referenced on page 2, to EPA's General
Counsel, and to EPA's Assistant Administrator for Enforcement.
^5 Richard G. Stoll, Jr.
Acting Judicial Officer
17
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BEFORE THE ADMINISTRATOR
U.S. ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, B.C.
IN THE MATTER OF: )
)
National Pollutant Discharge ) NPDES Appeal No. 75-4
Elimination System )
)
) (NPDES Docket No. AHAL 002)
Permit For: )
)
U.S. Pipe and Foundry )
Company )
North Birmingham Complex )
NPDES No. AL 0003247 )
Permittee. )
DENIAL OF MOTION FOR RECONSIDERATION
Background
The Administrator's Decision of October 10, 1975 (as
modified on December 9, 1975) in the above-captioned matter
upheld on appeal the Initial Decision of the EPA Regional
Administrator, Region IV. The Initial Decision had affirmed
the original terms of the above-captioned permit (the "Permit")
issued under Section 402 of the Federal Water Pollution
Control Act, P.L. 92-500.
On May 14, 1976, EPA's General Counsel and EPA's Assistant
Administrator for Enforcement ("GC & AAE") filed a joint
"Petition for Reconsideration of Administrator's Decision"
in this matter. They asked that the Administrator reconsider
that portion of his October 10 Decision which upheld the
Permit's 1979 achievement date for certain water quality-
based limitations.
18
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In an Order dated May 18, 1976, the Deputy Administrator
announced that the Administrator would reconsider the issue
and invited all parties to submit briefs. Permittee filed
pleadings opposing the Petition. The Alabama Conservancy
filed pleadings (on behalf of itself and numerous other
parties) supporting the Petition. EPA's Region IV filed a
pleading supporting the Petition. The GC & AAE filed a
joint Response to Permittee's pleadings.
On June 24, the Administrator issued the "Second
Modification to Decision of the Administrator" in this
matter. In the Second Modification, the Administrator
determined that the portion of his October 10 Decision which
upheld the 1979 achievement dates was legally incorrect. He
accordingly ordered the Regional Administrator (Region IV)
to modify the Permit to specify a final achievement date of
July 1, 1977 in any case where the Permit had specified a
later final achievement date for effluent limitations based
upon any water quality standards.
On July 22, Permittee filed a "Motion for Reconsidera-
tion" of the Second Modification. The GC & AAE filed a
joint Response opposing Permittee's Motion on August 25. On
August 27, Permittee filed a reply to the joint Response.
Disposition of Motion
Since there is no regulatory basis for granting motions
for reconsideration of the Administrator's NPDES decisions,
such motions should be granted only in extraordinary circum-
19
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stances. Permittee has not in my judgment raised issues
which warrant further action by the Administrator in this
already-prolonged administrative proceeding.
First, Permittee argues that it should have had the
opportunity for a hearing prior to the modification of its
Permit. Yet there would have been no purpose in holding
such a public hearing, since the Administrator concluded the
final achievement dates must be set at July 1, 1977 as a matter
of law and the Order of June 24 left the Regional Administrator
no discretion in this regard.
Second, Permittee argues that the Permit is not based
upon the appropriate water quality standards. This issue
was not even discussed in the Second Modification; the
Administrator issued his clarification on this issue in his
Modification of December 9, 1975. At any rate, Permittee
fails to show any error in the December 9 Modification.
For the foregoing reasons, Permittee's Motion for
Reconsideration is hereby DENIED.
/
'Richard G. Stoll, Jr.
Acting Judicial Officer
Dated: September 8, 1976
T/Denial of Petition for Reconsideration, NPDES Appeal
No. 75-16 (Exxon Corporation), April 5, 1976, p. 1.
20
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Certificate of Service
I hereby certify that copies of the foregoing Denial
were mailed this date to all parties, to EPA's General
Counsel, and to EPA's Assistant Administrator for Enforce-
ment . ^
Richard G. Stoll, Jr.
Acting Judicial Officer
Dated: September 8, 1976
21
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DECISIONS
OF THE
ADMINISTRATOR
JANUARY 1976 - DECEMBER 1976
-------
BEFORE THE ADMINISTRATOR
U. S. ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D. C.
IN THE MATTER OF: ) NpDES Appeal NQ_ ?5_1Q
National Pollutant Discharge )
Elimination System ) Docket No. X-WP-75-4
) and
Permit For ) X-75-02-02-402
) (Proceeding to Determine Whether
Collier Carbon and Chemical ) A Variance Should be Granted)
Corporation, )
(Permit No. AK-000050-7), )
)
Permittee.)
NOTICE OF DENIAL
AND REMAND TO REGIONAL ADMINISTRATOR,
REGION X
On September 30, 1975, a Petition to the Administrator
referencing the above-designated proceedings was brought to the
attention of the Administrator. The petition, dated September 12,
1975, submitted by counsel for Collier Carbon and Chemical
Corporation (hereafter "Collier" or "Petitioner"), raises
several issues relating to actions taken by the Regional
Administrator, Region X, in: (1) denying Collier's request for
an adjudicatory hearing with respect to (a) whether Collier's
Kenai facility is "fundamentally different" from facilities studied
in conjunction with regulations under 40 C.F.R., Part 418, for the
fertilizer industry, and (b) whether the receiving water quality
of Cook Inlet should be a factor in determining the effluent
limitations contained in the referenced permit; (2) convening a
"variance panel" to determine whether a variance from the
22
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40 C.F.R., Part 418 regulations is justified; and (3)
adopting the findings of the variance panel in issuing his
decision, dated August 25, 1975, which denied an adjudicatory
hearing as to the matters referred to in item (1) above. An
adjudicatory hearing was granted as to other issues raised in
Collier's request for an adjudicatory hearing.
The subject petition also raises an issue concerning
whether the Administrator has jurisdiction to consider an appeal
from the foregoing actions of the Regional Administrator, and
takes the position that, in the view of Petitioner, no such juris-
diction exists under the applicable regulations. The petition,
therefore, appears to be submitted primarily for the purpose
of protecting any rights to judicial review which Collier may
have under 5 U.S.C. 704 or Section 509 of the Federal Water
Pollution Control Act Amendments of 1972.
The applicable regulations (40 C.F.R. §125.36(n)) specify
the circumstances under which a party may petition for the
Administrator's review of decisions of the Regional Administrator
in adjudicatory hearings. These circumstances do not include the
denial, or partial denial, by a Regional Administrator of an
adjudicatory hearing request. Accordingly, to the extent the
petition seeks review of the action of the Regional Administrator
in denying (in part) Petitioner's request for an adjudicatory
hearing, it is hereby denied.*
The Administrator may, in his discretion, review any decision of the
Regional Administrator, whether or not review is specifically authorized,
A party need not, however, request the Administrator to exercise such
power in order to exhaust available administrative remedies.
23
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Petitioner also seeks review of the action of the Regional
Administrator in adopting the findings of a "variance panel" which
was convened to make recommendations to the Regional Administrator
concerning certain factual and legal issues relating to Petitioner's
variance request. It is my view that where an applicant's request
for a variance raises "material issues of fact" such questions may
be "relevant to the questions of whether a permit should be issued,
denied, or modified." Accordingly, an adjudicatory hearing would
be the appropriate forum to review a Regional Administrator's denial
of a variance request.
A Regional Administrator may choose, if he wishes, to rely
upon the recommendations of a "variance panel" in denying a variance
request, but the applicable regulations do not authorize him
thereafter to deny a request for an adjudicatory hearing to
reconsider such a denial if the adjudicatory hearing request
otherwise meets the requirements of 40 C.F.R. 125.36(c).
In the case at hand, the procedure employed by Region X was
to, in effect, substitute the decision of the "variance panel" for
an initial decision of the Regional Administrator following an
adjudicatory hearing with regard to material issues of fact. As
such, I find the procedure to be an unauthorized departure from
the procedures spelled out in the regulations for resolving material
factual issues. Accordingly, I find that the issues raised by
24
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Petitioner should be remanded to the Regional Administrator,
Region X, for consideration and resolution in accordance with the
regulations, as outlined above.*
The decision of the Regional Administrator dated August 25,
1975, denying Collier's request for a variance, is hereby vacated.
The matter is remanded to the Presiding Officer to determine if
such request raises issues appropriate for consideration in the
adjudicatory hearing granted by the Regional Administrator,
Region X, on August 25, 1975.
Russell E. Train
Dated: January 7, 1976
* I have issued a memorandum to all Regional Administrators setting
forth certain procedural guidelines dealing with the relationship
between variance requests and adjudicatory hearing requests, as
well as the authority of Regional Administrators to grant and deny
adjudicatory hearings in part. The guidelines set forth in the
memorandum shall be applicable to this proceeding on remand to
Region X.
25
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CERTIFICATE OF MAILING
The foregoing is a ture and correct copy of a Notice of
Denial And Remand To Regional Administrator, Region X, dated
January 7, 1976, deposited in the U.S. Mail, certified mail, at
Washington, D.C., addressed to the following:
John W. Sedwick, Esq.
Attorney for Collier Carbon and
Chemical Corporation
Burr, Pease, and Kurtz, Inc.
825 West Eighth Avenue
Anchorage, Alaska 99501
Claudia Connor
Hearing Clerk
U.S. Environmental Protection Agency
Region X
1200 Sixth Avenue
Seattle, Washington 98101
Clifford V. Smith
Regional Administrator
U.S. Environmental Protection Agency
Region X
1200 Sixth Avenue
Seattle, Washington 98101
John A. Hamill, Esq.
U.S. Environmental Protection Agency
Region X
1200 Sixth Avenue
Seattle, Washington 98101
v Michael K. Glenn
Chief Judicial Officer
Dated: January 7, 1976
26
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BEFORE THE ADMINISTRATOR
U.S. ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C.
IN THE MATTER OF: )
)
National Pollutant Discharge ) NPDES Appeal No. 75-10
Elimination System )
) (Docket No. X-WP-75-4)
Permit For: )
)
Collier Carbon and Chemical Corporation )
NPDES No. AK-000050-7 )
DENIAL OF PETITION FOR REVIEW
On July 2, 1976, Collier Carbon and Chemical Corporation
("Petitioner") filed a Petition asking that I review a decision of the
General Counsel dated June 23, 1976 in the above-referenced matter.
I am today denying the Petition.
Background
In the above-captioned proceedings, EPA's Region X is in the
process of issuing a discharge permit to Petitioner under the National
Pollutant Discharge Elimination System established pursuant to the
Federal Water Pollution Control Act, P.L. 92-500. The Presiding
Officer below certified one issue of law to EPA's General Counsel
for decision pursuant to 40 CFR 125.36(m).
The issue was: "Where it is impossible, despite the exercise
of all reasonable diligence, for a Permittee to complete construction
and installation of treatment facilities necessary to achieve effluent
limitations representing BPT by July 1, 1977, but where the Permittee
27
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can achieve such limitations no later than November 1, 1977, may a
Regional Administrator extend a compliance schedule beyond July 1, 1977,
which schedule would require achievement of BPT effluent limitations by
November 1, 1977?" On June 23, 1976, the General Counsel answered the
question in the negative in "Decision of the General Counsel on Matters
of Law Pursuant to 40 CFR 125.36(m)--No. 45." This document shall here-
inafter be referred to as "the Decision."
Petitioner argues that the Decision is clearly erroneous because
it calls into question the constitutionality of a statutory provision
which is open to another interpretation which would preserve its con-
stitutionality. Petitioner argues further that the Decision raises a
matter "of considerable importance" which I should review.
Petitioner notes that it has filed its Petition directly from the
General Counsel's Decision. This is because of Petitioner's understanding
that "further involvement of the Regional Administrator in this matter
will not take place" in light of a stipulation agreed to by the
I/
parties.
]_/ 40 CFR 125.36(n) implies that petitions for review of General
Counsel decisions should be filed only upon issuance of the
Regional Administrator's Initial Decision. Nevertheless, because
the Regional Administrator apparently does not intend to issue an
Initial Decision here, I will exercise my inherent discretion to
entertain the instant Petition. See my Denial of Petition for
Review in NPDES Appeal No. 76-4 (Northern Indiana Public Service
Company), issued today, page 3.
This Petition, along with the petition in No. 76-4 cited
above and other cases of which I am aware, raises the issue of
whether regulatory amendments (or perhaps an EPA headquarters
memorandum) are needed to insure regional consistency in NPDES
proceedings where the facts are stipulated and a decision of
the General Counsel is the only contested issue. If the intent of
40 CFR 125.36(n) is to allow petitions for review of General
Counsel decisions only after an Initial Decision, then it seems
(continued)
28
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Disposition of Petition
The Decision concluded that P.L. 92-500 gives EPA no discretion
to issue an NPDES permit which defers achievement of limitations based
upon best practicable control technology beyond July 1, 1977. The
Decision is based upon statutory language, legislative history, case
law, and administrative decisions.
The Petition fails to convince me that the Decision is clearly
erroneous. On the question of statutory interpretation, the Decision
is clearly correct. Public Law 92-500 cannot in my opinion be reasonably
!/
interpreted in a manner at variance with the Decision. With regard to
Petitioner's assertion that the constitutionality of Public Law 92-500
is called into question, I concede this may be an "important" question.
I am powerless, however, to declare an Act of Congress unconstitutional;
I/
this issue must be left with the Courts.
]_/ (continued)
that the Regional Administrators should be required to issue a
clearly identifiable Initial Decision even where there has been a
factual stipulation. (40 CFR 125.36(1)(3) could be read to require
this, but it apparently has not been so interpreted in all regions.)
I direct the Office of Water Enforcement to consider whether better
guidance to the regions is needed.
2/ See, e.g., Decision of the Administrator, NPDES Appeal No. 75-9
(Bethelehem Steel), September 30, 1975; Second Modification to.
Decision of the Administrator, NPDES Appeal No. 75-4 (U.S. Pipe
and Foundry), June 24, 1976.
3_/ This is not to imply that I question the constitutionality of
Public Law 92-500 as interpreted by the Decision.
29
-------
Since the Petition has made no showing that the Decision is
clearly erroneous or contains an important policy question which I
can review, I hereby deny the Petition. )
Dated: August 10, 1976
30
-------
Certificate of Service
I hereby certify that copies of the foregoing Denial were mailed
this date to EPA's Region X Hearing Clerk and to the parties of record
in the proceeding below. f
Richard G. Stoll, Jr.
Acting Judicial Officer
Dated: August 10, 1976
31
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BEFORE THE ADMINISTRATOR
U. S. ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D. C.
IN THE MATTER OF: )
)
National Pollutant Discharge ) NPDES Appeal NO. 75-15
Elimination System )
Permit For ) Case No. NPDES-V-024(AH)
)
National Steel Corporation,
Midwest Steel Division,
(Permit No. IN-0000337), )
Permittee. )
NOTICE OF DENIAL OF PETITION FOR
REVIEW OF DECISION OF REGIONAL
ADMINISTRATOR, REGION V
On October 31, 1975, the Porter County Chapter of the Izaak
Walton League of America, Inc.; Save the Dunes Council, Inc.;
Florence Broady; William Hankla; and Herbert P. Read ("Petitioners")
through their technical consultant, Herbert P. Read, filed a
Petition for Administrator's Review of Decision of Regional
Administrator, Region V, issued through the Director of the
Enforcement Division, Region V, on October 1, 1975. The October 1
decision, in approving a Stipulation certified by the Administrative
Law Judge to resolve the above captioned matter and conform the
permit to the terms of the Stipulation, as well as in approving
the dismissal of issues and inquiries raised by Petitioners,
terminated the adjudicatory proceeding in this matter prior to
hearing.
Petitioners take exception to the Regional Administrator's
decision in the following particulars:
32
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(1) Approval of a Stipulation to resolve the above
referenced matter certified by the Administrative Law Judge and
in which the Petitioners had not concurred;
(2) Denial of the Petitioners' Petition to invoke the
Supervisory Authority of the Regional Administrator, Region V,
filed July 30, 1975;
(3) Conforming the permit to the terms of the Stipulation;
and
(4) Terminating the adjudicatory proceedings in this
matter.
More specifically, Petitioners state that the Regional
Administrator's decision of October 1, 1975, should be reviewed
because he erroneously: (1) approved an Order of the Administrative
Law Judge improperly dismissing issues and inquiries raised by
Petitioners, allegedly in violation of 40 CFR 125.36(h)(4)(viii);
(2) approved findings and conclusions of the Administrative Law
Judge declaring Public Law 89-298 concerning sources of pollution
in the vicinity of Burns Waterway Harbor to be of no relevance or
materiality to the issues present in this proceeding, allegedly in
violation of 40 CFR 125.36(h)(4)(ii) and 125.36(m), which require
the referral of legal issues to the Assistant Administrator for
Enforcement and General Counsel for resolution; (3) relied upon
the Order of the Administrative Law Judge, which contains factual
allegations allegedly not taken from the record but from the
Permittee's unverified motion to dismiss, in violation of the
33
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Administrative Procedure Act (5 U.S.C. 556(d)) (hereafter "APA");
(4) approved allegedly unlawful sanctions against Petitioners,
depriving them of their right to a full and fair hearing, in
violation of 554(c)(l) and (2), 556, and 558 of the APA; (5)
violated the APA by approving alleged violations of EPA regulations
by the Administrative Law Judge; and (6) acted contrary to the
intendment of the Act by approving the Administrative Law Judge's
allegedly arbitrary and unjustified sanction of dismissal and striking
of Petitioners' issues and inquiries, thereby cutting off effective
public participation in this proceeding in violation of 33 U.S.C.
1251(e).
At the root of these various contentions by Petitioners is
the central issue of whether the findings and conclusions contained
in t!r July 9, 1975, Order of the Administrative Law Judge are
supported by the record and conform with EPA regulations or, on
the other hand, whether they are arbitrary and unjustified, as
Petitioners contend. A brief chronology is helpful.
On October 31, 1974, Region V notified National Steel
Corporation of a determination to issue an NPDES permit
for its Midwest Steel Division (hereafter "Midwest" or "Permittee")
located at Portage, Indiana. On November 18, 1974, Midwest submitted
a request for an adjudicatory hearing. By letter dated December 2,
1974, Midwest's request was granted and public notice of .the
adjudicatory hearing was issued on December 20, 1974. On January 8,
1975, Administrative Law Judge Marvin E. Jones notified all parties
34
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then of record that a prehearing conference would be held on
March 20, 1975, and ordered each party to comply with the
requirements of 40 CFR 125.36(h) by March 13, 1975 [statement
of issues, positions, and testimony].
On January 29, 1975, Petitioners filed a request for party
status pursuant to 40 CFR 125.36(d), which request was granted by
Region V on February 18, 1975. [Petitioners contend that they
did not receive notice of this action until March 6, 1975, at which
time they were also given copies of the January 8 notice issued by
Judge Jones and a letter dated February 24, 1975, from Judge Jones
to the Porter County Chapter of the Izaak Walton League notifying
them of the January 8 notice requirements.] On March 10, 1975,
Petitioners filed a motion to extend their time for compliance with
the January 8 notice. In an Order dated March 24, 1975, Judge
Jones extended the time for compliance by Petitioners to April 17,
1975.
The dates and events noted above are certain, but what
transpired at the March 20 prehearing conference and thereafter
is a source of some dispute among the parties. Some time prior to
the prehearing conference, Region V circulated to the parties of
record a draft Stipulation. At the March 20 conference, Mr. Read,
representing the Petitioners, discussed a number of issues raised
by Petitioners and the terms of the draft Stipulation. There is
some dispute about how extensively the issues and terms of the
Stipulation were discussed at that time. It is clear, in any
35
-------
event, that Mr. Read at that time requested considerable additional
information from Permittee and EPA regarding discharge points,
sources of effluent and effluent characteristics, settling pond
discharges, responsibility for discharges by satellite companies
occupying buildings on Permittee's land, and the applicability
of Public Law 89-298. Mr. Read apparently stated at the March 20
meeting that such additional information was essential to the
resolution of the issues raised by Petitioners. Apparently, both
Permittee and EPA agreed to furnish the additional information
requested.
Following the prehearing conference, on March 24, 1975, Judge
Jones entered an Order reporting on the conference, including a
reference to the fact that "personnel of the Permittee and EPA
volunteered to furnish the information required by Mr. Read,"
without specifying what information had been provided verbally
at the conference and what additional information remained to be
furnished. The March 24 Order also required that each party
indicate its position regarding the draft Stipulation by April 3,
1975.
On March 31, 1975, Mr. Read participated in a meeting with
Midwest, EPA, and the State of Indiana. Midwest apparently furnished
verbally some further information requested by Petitioners. The
terms of a Stipulation [presumably that dated March 26, 1975] were
discussed and Petitioners acknowledged agreement with some of the
36
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provisions, but requested time to consult with legal and
technical advisors regarding others. Judge Jones was not present
at the March 31 meeting, but Petitioners apparently understood
he would be advised of the results by EPA.
By letter dated April 28, 1975, Petitioners confirmed their
position on the outstanding issues and reaffirmed the necessity
of a written record of the prehearing conference and the March 31
meeting. Subsequently, on May 28, 1975, Petitioners again stressed
the necessity of a written record of the issues and their proposed
resolution. In the interim, on May 2, 1975, Midwest, EPA, the
State of Indiana, and the City of Chicago entered into a formal
Supplemental Stipulation. This, together with the March 26
Stipulation, apparently, in the view of Midwest and others except
Petitioners, resolved all issues previously existing between the
parties.
On June 6, 1975, Permittee filed a motion to dismiss
Petitioners as parties with prejudice on the grounds that they had
willfully failed to comply with Judge Jones' January 8 Order, as
amended by the Order of March 24, failed to appear prepared to
discuss with particularity the issues they raised in this proceeding
at the prehearing conferences, and failed to proceed in good faith.
On June 19, 1975, Petitioners filed a partial response to the
motion to dismiss, and on July 7, 1975, filed a supplemental
opposition to the motion. Petitioners' responses alleged errors
37
-------
of fact in the statements set forth in Permittee's motion. Most
importantly, however, they asserted that the failure of Midwest
and EPA to furnish in writing the information requested by
Mr. Read at the prehearing conference prevented Petitioners from
complying with the above Orders, i.e. determining the witnesses,
exhibits, and testimony, if any, that would be required for
presentation at the hearing.
On July 9, 1975, Judge Jones entered the Order noted above
granting Permittee's motion, dismissing Petitioners as parties,
and striking the issues and inquiries raised by Petitioners in
this proceeding. Thereafter, on October 1, 1975, the Regional
Administrator, Region V, considered Petitioners' Petition to
Invoke Supervisory Authority and approved the disposition of this
proceeding as certified by the Administrative Law Judge.
After a careful review of the Petition for Administrator's
Review, together with the supporting documentation furnished by
Petitioners and additional documentation forwarded by Permittee on
November 10, 1975 (including copies of Permittee's motion to
dismiss and its Memorandum in Opposition to Petition to Invoke
Supervisory Authority), it appears that Petitioners have
not shown that the decision of the Regional Administrator
"contained a finding of fact or a conclusion of law which is
clearly erroneous or an exercise of decision or policy which is
important and which the Administrator should, in his discretion,
review" (40 CFR 125.36(n)(3)).
38
-------
The factual circumstances surrounding Petitioners'
appearances as a party in this proceeding, including partici-
pation in the March 20 prehearing conference and the March 31
meeting, are somewhat blurred by conflicting statements as
to actually what transpired during those sessions. It appears
that there was a certain amount of reluctance on both sides—by
Permittee, as well as Petitioners—to move with dispatch and
forthrightness. Clearly, the Administrative Law Judge was in
the best position at that stage of the adjudicatory proceeding
to make an impartial assessment of compliance with his Orders.
To attempt to substitute the Administrator's judgment for that
of the presiding officer on these factual questions, based on the
petitions presented, would be unwise in the absence of a clearly
erroneous factual finding. No such clearly erroneous factual
finding is apparent from the documentation presented.
A somewhat different question is raised concerning the
disposition of the issue of the applicability of Public Law 89-298.
Petitioners contend that this is a legal issue which should have
been referred to the Assistant Administrator for Enforcement and
General Counsel [now the Office of General Counsel] for
resolution, in accordance with 40 CFR 125.36(m). The above cited
provision of the EPA regulations does provide that "issues of law"
39
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shall be referred to the General Counsel and shall not be
considered at the adjudicatory hearing. Paragraph (2) of 125.36(m)}
however, provides that, "The Presiding Officer shall determine
which issues, if any, submitted by the parties fall into the
category specified in paragraph (m)(l) of this section ..."
Paragraph (m)(l) specifies, as "issues of law" referable to the
General Counsel, "questions relating to the interpretation of
provisions of the Act, and the legality and interpretation of
regulations promulgated pursuant to the Act." While this
specification of issues of law referable to the General Counsel
is not exclusive of other legal issues, it is evident that the
purpose behind 125.36(m) is to achieve Agency-wide consistency
in the interpretation of the Act and EPA regulations issued
thereunder. Other legal issues may or may not fall within the
category of issues appropriate for resolution by the General Counsel.
That is a decision for the Presiding Officer to make in the first
instance. Presumably, if on review the Administrator determines that
an error was made in this regard, he may exercise his discretion
to review the Presiding Officer's determination.
Accordingly, I find that it was within the discretion of the
Administrative Law Judge to determine, in the first instance,
whether this issue was one which should have been referred to the
40
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General Counsel for resolution. Moreover, I find that his
decision to consider and resolve the issue within the prehearing
stage of the adjudicatory hearing process (as opposed to referral to
the General Counsel) was not in error. The issue involved is not
one of Agency-wide applicability or importance. While there is
some dispute regarding the viability of Public Law 89-298 and recent
actions (or the lack thereof) taken thereunder, it does not appear
that the Administrative Law Judge was in error in ruling as he did
on the applicability of Public Law 89-298 law to the issues present
in this proceeding.
In view of the foregoing, it is determined that Petitioners
have not shown that the decision of the Regional Administrator
contained a finding of fact or conclusion of law which is clearly
erroneous or an exercise of decision or policy which is important
and which the Administrator should, in his discretion, review.
Accordingly, the petition is denied. The decision of the
Regional Administrator, Region V, approving the Stipulation and
disposition of this proceeding as certified by the Administrative
Law Judge, is hereby affirmed and the subject permit shall take
effect immediately with the issuance of this decision.
Dated: January 7, 1976
41
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CERTIFICATE OF MAILING
The foregoing is a true and correct copy of a Notice Of
Denial Of Petition For Review Of Decision Of Regional
Administrator, Region V, dated January 7, 1976, deposited in
the U.S. Mail, certified mail, at Washington, D.C., addressed to
the following:
Herbert P. Read
M.R. Box 438
Chesterton, Indiana
46304
Ms. Charlotte J. Read, President
Porter County Chapter
Izaak Walton League of America, Inc.
M.R. Box 488
Chesterton, Indiana 46304
Save the Dunes Council, Inc.
Chesterton, Indiana 46304
Florence Broady
Portage, Indiana
William Hank!a
Portage, Indiana
Chester R. Babst, Esq.
Throp, Reed & Armstrong
2900 Grant Building
Pittsburgh, Pa. 15219
Ms. Oanet Mason
Regional Hearing Clerk
U.S. Environmental Protection Agency
230 South Dearborn Street
Chicago, Illinois 60604
David Ullrick, Esq.
Attorney, Enforcement Division
j.S. Environmental Protection Agency
230 South Dearborn Street
Chicago, Illinois 60604
Marvin E. Jones
Administrative Law Judge
U.S. Environmental Protection Agency
Region VII
1735 Baltimore Street
Kansas City, Missouri 64108
Mr. Oral Hert
Technical Secretary
Indiana Stream Pollution Control
Board
1330 West Michigan Street
Indianapolis, Indiana 46206
Mr. Richard A. Pavia
Acting Commissioner
Department of Water and Sewers
City of Chicago
Room 403, City Hall
Chicago, Illinois 60602
Zarko Sekerez, Esq.
Attorney at Law
1000 East 80th Place
Merrillville, Indiana 46410
Michael \. "Glenn"
Chief Judicial Officer
Dated: January 7, 1976
42
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BEFORE THE ADMINISTRATOR
U. S. ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D. C.
IN THE MATTER OF: ) NPDES APPeal No' 75-18
National Pollutant Discharge
Elimination System ) NOTICE OF DENIAL OF PETITION FOR
) REVIEW OR STAY OF PERMIT
Permit For )
)
Reynolds Metals Company, )
Sheffield, Alabama )
(Permit No. AL 0000035), )
)
_ Permi ttee . _ )
On November 28, 1975, Reynolds Metals Company (hereafter "Reynolds"
or "Petitioner") filed a Petition for Review of Initial Decision of
Regional Administrator, Region IV, seeking review of the denial of its
request for an adjudicatory hearing or, in the alternative, a stay of
the affected portions of the above-referenced permit covering
discharges from Petitioner's plant located in Sheffield, Alabama. The
denial by the Regional Administrator was issued on November 19, 1975,
following the filing of a request for adjudicatory hearing by Petitioner
on October 6, 1975. The subject permit was issued by Region IV on
September 25, 1975 (effective October 25, 1975), for a term of five
years.
The only issue as to which Petitioner requested an adjudicatory
hearing concerns Petitioner's objection to the "Fish and Wildlife"
designation of Pond Creek, which is the receiving water for discharges
from Petitioner's plant. Petitioner also notes objection to the special
requirements (e.g. , maintenance of dissolved oxygen levels of 5.0 mg/1 or
more) derived from the fish and wildlife classification.
43
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Petitioner seeks a reversal of the Regional Administrator's denial
of its request for an adjudicatory hearing so that it may address the
factual question of "whether Pond Creek is capable of supporting
significant aquatic life and is therefore properly placed in the Fish
and Wildlife classification," and the mixed factual and legal question
of whether Pond Creek (referred to by Petitioner as "Pond Ditch") is
a "navigable water" within the meaning of the Federal Water Pollution
Control Act, as amended, and therefore the question of whether the
receiving water is properly identified as Pond Creek rather than the
Tennessee River into which it empties.
In the alternative, if the above relief is denied, Petitioner seeks
a determination that the affected portions of the subject permit be
stayed in order to permit Reynolds to petition the Regional Administrator
for an exception to "classifications and/or criteria" pursuant to 40
CFR 120.11. Petitioner notes that it had intended to present evidence
on this matter at the adjudicatory hearing as well. Petitioner also
notes that a stay is appropriate in light of judicial proceedings
currently underway to review Alabama's "Fish and Wildlife" stream
classification under 40 CFR 120.11.
The applicable EPA regulations governing requests for adjudicatory
hearings (40 CFR 125.36) do not provide for review by the Administrator
of a Regional Administrator's denial of a request for an adjudicatory
hearing. The regulations provide, in 125.36(c)(2), that, "If the
Regional Administrator determines that the request fails to meet the
44
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requirements of paragraph (c)(l) of this section [i.e., the request
is not timely or does not include the various items described in
subsection (b), Łr does not set forth "material issues of fact
relevant to the questions of whether a permit should be issued, denied,
or modified"], he shall deny the request." Subsection (n) of 125.36,
which governs appeals to the Administrator, however, applies only in
the case of an "initial decision" of the Regional Administrator (which,
under 125.36(1), results from an adjudicatory hearing) or a decision of
the Assistant Administrator for Enforcement and General Counsel (now
the Office of General Counsel) on issues of law relied upon by the
Regional Administrator in rendering the initial decision.
Since neither of the foregoing conditions pertains in this
proceeding, however, the applicable EPA regulations do not provide
a procedure for review by the Administrator of the November 19, 1975
denial of Petitioner's request for an adjudicatory hearing.
Accordingly, there is no authority in 40 CFR, Part 125 for the
review requested by Petitioner. While the Administrator may have
inherent authority to review the actions of any Regional Administrator,
it does not appear that the decision of the Regional Administrator
in this case is clearly erroneous or involves an exercise of decision
or policy which is important and which the Administrator should, in
his discretion, review.
As noted by Petitioner, the Alabama "Fish and Wildlife" stream
classification is currently under review in a suit brought by Associated
45
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Industries of Alabama, Inc., et al. against EPA.* That, it would
appear, is the appropriate forum for the resolution of legal issues
also raised by Petitioner. Petitioner apparently is a member of the
Associated Industries of Alabama, Inc., although it apparently is not
formally a party in that proceeding. Pending the results of that
litigation and further clarification of the legal standing of the
Alabama stream classification, it would appear inadvisable (even if the
authority to do so clearly existed) to attempt to second-guess the
determinations made by the Regional Administrator.
In view of the foregoing judicial proceeding and Petitioner's
expressed intent to petition the Regional Administrator for an exception
pursuant to 40 CFR 120.11 (if an adjudicatory hearing is not granted),
Petitioner has requested, in the alternative, a stay of the affected
portions of the subject permit in order to so petition the Regional
Administrator. In order to be granted an exception under 40 CFR 120.11,
Petitioner must demonstrate "that maintenance of water quality necessary
for preservation and propagation of desirable or indigenous species of
aquatic biota and secondary contact recreation is not attainable."
A case-by-case analysis of the specific stream segment involved must show
"that the necessary water quality cannot be achieved due to technological
limitations and/or naturally occurring poor water quality."
*Civil Action No. 75 M 0092 M, United States District Court for the
Northern District of Alabama (Middle Division).
46
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The question of whether a stay of the subject permit should be
granted pending the disposition of a petition under 40 CFR 120.11
(if such a petition is filed) depends on whether it can be found that
Reynolds has been timely in availing itself of an opportunity to
secure a determination under 40 CFR 120.11 and whether there is a
substantial likelihood that irreparable harm will occur if a stay
is not granted.
The "exception" provision of 40 CFR 120.11 has been in effect
since November 1974. Presumably, Reynolds has been aware of its
existence since that time. It is possible, however, that Petitioner
assumed it might be able, in the course of obtaining its permit
(with or without an adjudicatory hearing), to secure satisfactory
permit terms and conditions without the necessity of petitioning the
Regional Administrator under 40 CFR 120.11. The facts in this regard
are not adequately set forth in Reynolds' petition, nor does Reynolds'
petition adequately address the question of whether irreparable injury will
occur in the absence of a stay of the effectiveness of the permit.
In view of the foregoing, and in the absence of unusual or
extenuating circumstances having been shown, Petitioner's request
for a stay of the affected portions of the subject permit is not
warranted at this time. Petitioner may, in conjunction with a petition
to the Regional Administrator, Region IV, for an exception under 40 CFR
47
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120.11, request a stay of the affected portions of the subject permit
pending a determination on its petition for an exception.
Accordingly, the petition for review or stay of the subject
permit is denied.
Dated: January 9, 1976
48
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CERTIFICATE OF MAILING
The foregoing is a true and correct copy of a Notice of
Denial of Petition for Review Or Stay Of Permit, dated January 9,
1976, deposited in the U.S. Mail, certified mail, at Washington,
D.C., addressed to the following:
Gary H. Baise, Esq.
Attorney for Reynolds Metals Company
Ruckelshaus, Beveridge, Fairbanks & Diamond
One Farragut Square South
Washington, D.C. 20006
Lawrence E. Tropea, Jr.
Director of Environmental Control
Reynolds Aluminum
Reynolds Metals Company
Richmond, Virginia 23261
Jack E. Ravan
Regional Administrator, Region IV
U.S. Environmental Protection Agency
1421 Peachtree Street, NE
Atlanta, Ga. 30309
-, ,,
...Michael K. ''Gle'nn
Chief Judicial Officer
Dated: January 9, 1976
49
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BEFORE THE ADMINISTRATOR
U.S. ENVIRONMENTAL PROTECTION AGENCY
Washington, D. C.
IN THE MATTER OF: )
)
National Pollutant Discharge ) NPDES Appeal No. 75-11
Elimination System )
)
Permit For: ) (Region III Docket No. 141-30(W))
Exxon Corporation Terminal )
Facility )
Pittsburgh, Pennsylvania )
NPDES No. PA003464 )
DENIAL OF PETITION FOR REVIEW
On December 15, 1975, William A. Speary, Jr., Counsel for
Exxon Corporation, petitioned the Administrator, pursuant to 40 CFR
§125.36(m) to review the decision of the Regional Administrator,
EPA Region III, denying Exxon Corporation's ("Permittee") request
for an adjudicatory hearing in the above-captioned permit proceeding.
The draft permit issued by Region III with respect to this
facility contained, inter alia, a daily maximum oil and grease
effluent limitation of 15 mg/1. In a letter dated May 6, 1975,
the Commonwealth of Pennsylvania Department of Environmental
Resources informed the Permits Branch of EPA Region III, in
its certification pursuant to section 401 of the Federal Water
Pollution Control Act, that the permit should be conditioned by a
requirement that "oil and grease shall not exceed 10 mg/1 as a
50
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maximum at any time." Permittee received the final NPDES permit
from EPA on June 20, 1975, which contained the 10 mg/1 limitation
for oil and grease.
Permittee requested an adjudicatory hearing with EPA seeking to
raise the issue of whether the effluent limitations were more stringent
than necessary to meet water quality standards or other lawfully adopted
State requirements. Permittee sought to show that such standards could
not be "practicably attained" and that they were not required in order
to meet "any legislatively prescribed or lawfully adopted water
quality standards, pretreatment standards or effluent standards."
The Regional Administrator denied the request on August 27, 1975,
because the issue was based on a State certification which the
Presiding Officer and the Regional Administrator lacked jurisdiction
to change.
Permittee presents the following questions to the Administrator:
Whether the decision of the Regional Administrator denying
the request for an adjudicatory hearing on the principal issues
as to the discharge permit should be reviewed at this time.
Whether the Regional Administrator erred in denying Exxon's
request for an adjudicatory hearing on the issue of whether
the effluent limitation of 10 mg/1 oil and grease is more
stringent than limitations required to meet water quality
standards duly and lawfully adopted pursuant to State or
Federal Laws.
Whether the Regional Administrator erred in refusing to grant
to Exxon an adjudicatory hearing on the issue of whether the
10 mg/1 effluent limitation in the permit is more stringent
than the limits which can be reasonably attained by the applica-
tion of the best practicable control technology currently available
determined in accordance with the criteria of the FWPCA.
51
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Permittee is seeking to have the have the Administrator
review the denial of adjudicatory hearing. ERA's regulations
in 40 CFR Part 125 make no provisions for review by the Administrator
of a denial of an adjudicatory hearing. This has been emphasized
in other decisions of the Administrator.-^ While the Administrator
may retain inherent discretionary authority to review such a denial,
the circumstances presented here are not so extraordinary as to
justify his exercising that authority.
The specific issue which Permittee seeks to address in the
adjudicatory hearing goes to the certification by the State and the
subsequent application of the certification conditions in the permit
issued by the Region. On several occasions the General Counsel has
determined that §401(d) and §3Cl(b)(l)(C) of the FWPCA require the
inclusion of State-certified requirements as a condition of a Federal
NPDES permit.—' There is no authority for the Regional Administrator
to go behind the certification to determine the practicability or
appropriateness of the .State requirement. The clear language of the
statute leads to that interpretation and Permittee has set forth no
convincing reasons why it should be changed.
]_/ In the Matter of Reynolds Metal Company, NPDES Permit No. AL0000035,
Administrator's Denial of Petition for Review or Stay of Permit. January 9,
1976.
2/ See, e.g., Decision of the General Counsel on Matters of Law,
No. 25, July 22, 1975.
52
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Permittee suggests that there is no evidence in the letter
purporting to be the certification that the certifying official was
authorized to make the State certification required by section 401 or
that the limitation contained in the letter had been appropriately
adopted as a matter of State law. Review of the Department of
Environmental Resources' letter reveals a strong appearance of
regularity; it is certainly described as a certification and contains
a specific paragraph authorizing the company to appeal the certification.
Permittee has availed itself of that opportunity and that appeal is
presently pending in the State. While there might be situations
where a purported State certification were so patently outside
of the normal State procedures that a Regional Administrator
should question the propriety or validity of the certification, that
clearly is not the case here. Permittee is challenging the certifi-
cation in a State proceeding which is the appropriate forum for such
a challenge; an adjudicatory hearing before the Regional Administrator
is clearly inappropriate.
For all the above reasons, Permittee's request for review of
the Regional Administrator's denial of the adjudicatory hearing
is hereby denied.
G. WiMiam Frick
Judicial Officer
53
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CERTIFICATE OF MAILING
The foregoing is a true and correct copy of a Notice of
Denial of Petition for Review, dated January 19, 1976, deposited
in the U.S. Mail, certified mail, at Washington, D.C., addressed
to the following:
William A. Speary, Jr., Esq.
Counsel, Exxon Corporation
Exxon Company
Hutchinson River Parkway
Pel ham, New York 10803
Daniel J. Snyder III
Regional Administrator, Region III
U.S. Environmental Protection Agency
Curtis Bldg. - 6th and Walnut Streets
Philadelphia, Pennsylvania 19106
~J Q#^L*J-
G. William Frick
Judicial Officer
Dated: January 19, 1976
54
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BEFORE THE ADMINISTRATOR
U.S. ENVIRONMENTAL PROTECTION AGENCY
Washington, D. C.
IN THE MATTER OF: )
)
National Pollutant Discharge ) NPDES Appeal No. 75-11
Elimination System )
Permit For: ) (Region III Docket No. 141-30(W))
Exxon Corporation Terminal )
Facility )
Pittsburgh, Pennsylvania )
NPDES No. PA003464 )
DENIAL OF PETITION FOR RECONSIDERATION OF
ORIGINAL PETITION FOR REVIEW
Exxon Corporation on February 26, 1976 requested reconsideration
of the January 19, 1976, denial of their Petition for Review of the
Regional Administrator's denial of its request for an adjudicatory
hearing in the above-captioned permit proceeding. EPA's procedures
do not provide for a reconsideration of decisions of the Administrator.
Moreover, as discussed" below, Petitioner has raised no new additional
factors v;hich suggest that there is any basis to question the original
decision. For these reasons, the Petition for Reconsideration is
hereby denied.
Petitioner's request is based upon its argument that the
State certification involved here was sent to EPA by the State
rather than being obtained by the applicant from the State directly.
55
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Petitioner argues that section 401 of the FWPCA provides that the
"applicant" is to obtain the certification, not the permitting
agency. This scheme is necessary, it claims, in order to provide
the applicant with full due process rights to challenge the State
certification prior to its being included in a Federal permit.
Petitioner's concern with this issue of law at this point is
somewhat surprising since it was not raised by them either to
the Regional Administrator or to the Administrator on their appeal;
it has only appeared in this motion for reconsideration. Moreover,
Petitioner cites no authority for the proposition that due process in
any v/ay requires that they be given the opportunity to exhaust all of
their remedies at State law before a State requirement is placed in a
Federal permit. Such an approach would provide an unlimited opportunity
for delay in the issuance of final permits that is not warranted
by the Act or by due process. Finally, it should be noted that the
issue which they actually seek to challenge is an issue of law,
principally a question of constitutional law, and does not present
issues which require an evidentiary hearing.
Petitioner's narrow interpretation of section 401, only now
being raised, sets forth no compelling reasons for reassessing EPA's
regulations in 40 CFR Part 125 pursuant to this motion for reconsidera-
tion.
Dated:
G. V.'illiam Frick
Judicial Officer
56
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CERTIFICATE OF MAILING
The foregoing is a true and correct copy of a Notice of
Denial of Petition for Reconsideration of Original Petition for
Review, dated April<5^ 1976, deposited in the U.S. Mail,
certified mail, at Washington, D. C., addressed to the following:
William A. Speary, Jr., Esq.
Counsel, Exxon Corporation
P.O. Box 222
Linden, New Jersey 07036
Daniel J. Snyder III
Regional Administrator, Region III
U.S. Environmental Protection Agency
Curtis Bldg. - 6th and Walnut Streets
Philadelphia, Pennsylvania 19106
J
s - •
G. William Frick
Judicial Officer
57
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BEFORE THE ADMINISTRATOR
U.S. ENVIRONMENTAL PROTECTION AGENCY
Washington, D. C.
IN THE MATTER OF:
National Pollutant Discharge ) NPDES Appeal No. 75-16
Elimination System i
Permit For:
Exxon Corporation )
Dracut Marketing Terminal )
Dracut, Massachusetts )
NPDES Permit No. MA0022225 )
DENIAL OF PETITION FOR REVIEW
On November 13, 1975, William A. Speary, Jr., attorney for
Exxon Corporation, petitioned the Administrator, pursuant to
40 CFR §125.36(n), to review the order of the Regional Administrator
vacating a prior order granting a request for adjudicatory hearing
in the above-captioned permit proceeding.
The Exxon Corporation ("Permittee") received a joint NPDES
permit for its petroleum marketing terminal in Dracut, Massachusetts,
from the Environmental Protection Agency Region I and the
Commonwealth of Massachusetts Division of Water Pollution Control.
In accordance with an agreement dated March 18, 1973, between
EPA Region I and the Commonwealth of Massachusetts, a single permit
is jointly issued to dischargers by the two government entities;
58
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the permit is designed to satisfy the requirements of Federal and
State law. Permittee requested on March 10, 1975, adjudicator/
hearings before the EPA and the Commonwealth of Massachusetts.
The EPA Regional Administrator granted Exxon's request on
March 24, 1975, but the Commonwealth of Massachusetts denied the
request on August 26, 1975. Subsequently, on October 31, 1975,
the Regional Administrator vacated his earlier order which
had granted the request for an adjudicator/ hearing.
Permittee presents three issues to the Administrator for
decision:
Whether the Regional Administrator has authority to
vacate, sua sponte, a prior order granting a request
for an adjudicatory hearing.
Whether the Regional Administrator erred in vacating
his order granting Exxon's request for an adjudicatory
hearing on the grounds that the Massachusetts Division
of Water Pollution Control had denied Exxon's request
for an adjudicatory hearing.
Whether the Regional Administrator erred in vacating
his order granting Exxon's request for an adjudicatory
hearing on the grounds that the Massachusetts Division
of Water Pollution Control's decision to deny Exxon's
request for a hearing was dispositive of all the issues.
It has previously been stated that EPA's regulations
in 40 CFR Part 125 do not provide for review by the Administrator
of denials of requests for adjudicatory hearings.!/ While he may
I/ In the Matter of Reynolds Metal Company, NPDES Permit No. AL0000035,
Administrator's Denial of Petition for Review or Stay of Permit,
January 9, 1976.
59
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retain a general residual authority to review decisions of Regional
Administrators, the circumstances of this particular case are not
so extraordinary as to justify his exercising such discretionary
review. Accordingly, for the reasons set forth below, Permittee's
request for review is denied.
Permittee's first allegation is that a Regional Administrator,
once he grants an adjudicatory hearing, is without authority to sua
sponte revoke that decision. While it appears that the Regional
Administrator's action in this case was somewhat unusual, it does
not appear to be outside of his authority. The Regional Administrator's
original decision on a request for an adjudicatory hearing must be
based on the criteria set forth in 40 CFR §125.36(c). That basic
authority underlies the adjudicatory hearing throughout its
pendency and the Regional Administrator thus retains authority
to reconsider that decision at any time. In this case, no
presiding officer had been appointed and no action had been taken
with respect to the proceeding by either of the parties.
While the authority to vacate the decision sua sponte would appear
to exist as a legal matter, the actual exercise of that authority
presents certain problems. Once the adjudicatory hearing is
granted, an adversary proceeding has been instituted between the
EPA regional staff and the Permittee,with the Regional Administrator
60
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the final decision maker. Because of this, it would appear more
appropriate that such a decision be made either on a motion to
dismiss or after an opportunity for briefing the issue is provided
the parties involved to insure the fairness of the decision. Thus,
were it not for the peculiar facts of this situation, it might have
been appropriate to remand the decision to the Regional Adminiatrator
with instructions to provide an opportunity for both sides to state
their positions on whether the adjudicatory hearing should proceed.
Here, however, the only issues sought to be adjudicated relate
to the practicability and propriety of the State requirements. These
were placed in the Federal permit pursuant to a State certification
provided in accordance with section 401 of the FWPCA. It has been
stated on several occasions by the General Counsel that the Regional
Administrator may not go behind a state certification to question
the validity of conditions certified by the State; thus there is
no question of fact appropriate for adjudication in an adjudicatory
2/
hearing.-7 Moreover, no persuasive reasons have been advanced
indicating that this position is incorrect. Since those were the
issues sought to be raised by the Permittee, it appears that the
original granting of the adjudicatory hearing was inappropriate.
Permittee has presented no additional information which would
2/ See, e.g., Decision of the General Counsel on Matters of Law
."25", July 22, 1975.
61
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indicate that there are other issues to be adjudicated other than
those relating to the State certification. Accordingly, to the
extent that the Regional Administrator should have allowed additional
comment on the decision to vacate the order granting an adjudicatory
hearing, such error was not prejudicial.
Permittee alleges that the conditions were not in fact necessarily
set forth in a valid State certification. This allegation is based
upon the following statement by the Acting Director of the State
Division of Water Pollution Control of the Water Resources Commission
in the August 26, 1975 denial of the request for a State adjudicatory
hearing: "This effluent limitation is a provision of a properly
issued state discharge permit, and is not a condition of any
certification pursuant to §401 of the Federal Act." This statement
is rather confusing in light of the August 5, 1974, letter from
that Department which was clearly established as a certification
that the oil and grease limitations be 15 mg/1. The confusion
apparently stems from the fact that this is a jointly issued permit
and the Permittee requested the adjudicatory hearing from both
governmental units in the same letter. The August 26, 1975, letter
was clearly addressing only the request for an adjudication of the
State permit. Certainly, insofar as the permit was a State permit,
the limitation was solely the result of State law and had nothing
to do with the Federal certification. The statement would, accordingly,
62
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be correct. The question of certification only arises with respect
to the permit as a Federal permit. Moreover, there appears to be
no basis for assuming that the State was withdrawing its certification.
Finally, Permittee argues that it was inappropriate for the
Regional Administrator to vacate his order solely on the grounds
that the State had denied an adjudicatory hearing. That is too
narrow a reading of the Regional Administrator's action. The
decision by the State confirmed the existence of a State require-
ment of 15 mg/1 daily maximum for oil and grease. That made it
clear that there was no action that the Regional Administrator
could take to change that number because of §§401(d) and 510 of
the FWPCA. That decision indicated that there were no issues of
material fact justifying an adjudicatory hearing. Thus, the
Regional Administrator's decision not to hold the adjudicatory
hearing was appropriate.
Accordingly, for the reasons set forth above, Permittee's
request for review of the Regional Administrator's action is
hereby denied.
G. WTmam Frick
Judicial Officer
63
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CERTIFICATE OF MAILING
The foregoing is a true and correct copy of a Notice of
Denial of Petition for Review, dated January /^ 1976, deposited
in the U.S. Mail, certified mail, at Washington, D. C., addressed
to the following:
William A. Speary, Jr., Esq.
Attorney for Exxon Corporation
Hutchinson River Parkway
Pel ham, New York 10803
Mr. John A.S. McGlennon
Regional Administrator, Region I
U.S. Environmental Protection Agency
Room 2203, John F. Kennedy Federal Building
Boston, Massachusetts 02203
XY. ^1-
'" G. William Frick
Judicial Officer
Dated: January rf J/11&
64
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BEFORE THE ADMINISTRATOR
U.S. ENVIRONMENTAL PROTECTION AGENCY
Washington, D. C.
IN THE MATTER OF: )
)
National Pollutant Discharge )
Elimination System ) NPDES Appeal No. 75-16
Permit For: )
)
Exxon Corporation )
Dracut Marketing Terminal )
Dracut, Massachusetts )
NPDES Permit No. MA0022225 )
DENIAL OF PETITION FOR RECONSIDERATION
Exxon Corporation filed a motion with the Administrator
dated March 5, 1976 requesting reconsideration of the January 19,
1976, Denial of Petition for Review of the EPA Region I Regional
Administrator's denial of an adjudicatory hearing in the above-
captioned permit proceeding.
EPA's regulations regarding appeals do not provide procedures
for reconsideration of the Administrator's actions. Thus, there is
no regulatory basis for granting the Petitioner's request. Moreover,
Petitioner has not alleged any additional extraordinary circumstances
justifying its request. Petitioner's argument is that the State
certification is unreasonable on its face because it establishes
an "effluent limitation" of 15 mg/1 for oil and grease to meet
65
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a "water quality standard" which is a concentration standard of
15 mg/1 for oil and grease. Petitioner suggests that an effluent
limitation established at the same level as a water quality standard
is on its face irregular.
To make such a determination, however, EPA would have
to examine the calculations of the State in which it determined
that the effluent limitation should be at that level. The Petitioner
argues that this is an appropriate issue for consideration in the
Environmental Protection Agency's adjudicatory hearing. In fact,
it is this particular type of issue which indicates why EPA should
not independently question State decisions. This is obviously an
issue which would be handled at the State level between the
Permittee and the State. It should be noted that the State has
already rejected Petitioner's arguments on this point. There is
no reason to question the original denial of the Petition for
Review and the Petitioner's request for reconsideration is hereby
denied.
J
. ,
G. William Frick
Judicial Officer
Dated:
66
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CERTIFICATE OF MAILING
The foregoing is a true and correct copy of a Notice of
Denial of Petition for Reconsideration, dated April & 1976,
deposited in the U.S. Mail, certified mail, at Washington, D.C.,
addressed to the following:
William A. Speary, Jr., Esq.
Attorney for Exxon Corporation
P.O. Box 222
Linden, New Jersey 07036
Mr. John A.S. McGlennon
Regional Administrator, Region I
U.S. Environmental Protection Agency
Room 2203, John F. Kennedy Federal Building
Boston, Massachusetts 02203
f>
G. William Frick
Jud-icial Officer
67
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BEFORE THE ADMINISTRATOR
U.S. ENVIRONMENTAL PROTECTION AGENCY
Washington, D.C.
IN THE MATTER OF: )
)
National Pollutant Discharge ) NPDES Appeal No. 75-17
Elimination System )
j Docket No. 141.30(W)
Permit For:
Sierra Pacific Power Company
NPDES Permit Nos. MV0020095 and )
NV0020109 )
DENIAL OF PETITION FOR REVIEW
On November 17, 1975, Sierra Pacific Power Company ("Permittee")
petitioned the Administrator, pursuant to 40 CFR §125.36(n), to review
the initial decision of the Regional Administrator and the decision of
the General Counsel relied upon the Regional Administrator in rendering
the initial decision in the above-captioned permit proceeding.
These two permits were issued to the Sierra Pacific Power
Company on January 3 and January 9, 1975. The company requested
adjudicatory hearings on the permits to assert that the effluent
limitations designed to meet water quality standards should
provide for a reasonable mixing zone, as provided in section 4.2.5
of the Nevada State Water Pollution Regulations, which was amended
by the Nevada Environmental Commission on January 10, 1975. The
Regional Administrator denied the request for adjudicatory hearing
on grounds that it did not state a material issue of fact for
68
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determination. The Regional Administrator did certify to the
General Counsel the issue of "whether EPA has legal authority to
modify a permit that it has issued so as to include in the permit
a provision for a 'zone mixing1, when the state in which the
permittee is located has adopted a regulation that permits the
state to grant 'zones of mixing1."
At the time the permits were issued, the state water
quality standards approved by EPA pursuant to section 303 of the
Federal Water Pollution Control Act, as amended, established
standards which did not include mixing zones. On January 10, 1975,
the state apparently passed a regulation which would allow mixing
zones to be established. The state has not established procedural
regulations for determinations, on a case by case basis, of what
are appropriate mixing zones nor has it submitted the January 10
amendment to section 4.2.5 to the Administrator for approval
pursuant to section 303 of the FWPCA. Thus, as far as the approved
water quality standards are concerned, there are no provisions for
mixing zones.
The General Counsel ruled that the Regional Administrator
did not have authority to vary the terms of the existing approved
water quality standards. The mixing zone provision is an exception
to the otherwise applicable standards but since it has not been
submitted to EPA for approval there is no authority for EPA
69
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to utilize this exception procedure. The Regional Administrator
apparently affirmed his earlier denial of an adjudicatory hearing on
the basis of this legal opinion.
Permittee submits that the Administrator should grant review
because the decision requires that the Federal EPA issue permits
which may be more stringent than the present provisions of state
law. Moreover, Permittee suggests that the Regional Administrator's
decision fails to include a statement of relevant and essential
findings and conclusions as required by 40 CFR §125.36(1)(2).
Permittee's request does not set forth issues which justify
review by the Administrator. The General Counsel's opinion is based
on §§301(b)(l)(C) and 510 of the Federal Water Pollution Control Act
which require the Administrator to issue permits which comply with any
more stringent requirements of state law. Water quality standards
approved by the Administrator and applicable to this discharge remain
in effect. The only provision of state law which is not presently
approved is the exception procedure. Thus, the only requirement of
state law of which the Regional Administrator may take cognizance is
the state water quality standard; he may not exercise a modification
procedure which has not been yet approved nor even submitted for
approval. Accordingly, there is no reason to question the decision
of the General Counsel.
70
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With respect to the failure of the Regional Administrator
to set forth findings and conclusions, that provision is applicable
where an adjudicatory hearing has been held. In this particular
case the adjudicatory hearing was denied and only the issue of
law was certified to determine whether Permittee had a legal right
to raise certain other issues at the adjudicatory hearing. In view
of the negative conclusion by the General Counsel, the Regional
Administrator's initial determination that there were no issues
appropriate for an adjudicatory hearing was reaffirmed. The
provision of the regulations does not apply to that situation and
under the circumstances it would be meaningless for the Regional
Administrator to go into detail about the issues which Permittee
lists in its application since a resolution of the issue of law
determined how the permit must be issued.
Because the questions are not of sufficient merit to warrant
review by the Administrator, Permittee's petition is hereby denied.
' '7
; / -*- (A
G. William prick
Judicial Officer
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CERTIFICATE OF MAILING
The foregoing is a true and correct copy of a Notice of
Denial of Petition for Review, dated January /"f/Łl976, deposited
in the U.S. Mail, certified mail, at Washington, D.C.,
addressed to the following:
Joe L. Gremban
President
Sierra Pacific Power Company
Reno, Nevada
Mr. Paul DeFalco, Jr.
Regional Administrator
Environmental Protection Agency
Region IX, ENCMR
100 California Street
San Francisco, California 94111
Mr. Ernest Gregory
Department of Human Resources
Bureau of Environmental Health
1209 Johnson Street
Carson City, Nevada 89701
G. William Frick
Judicial Officer
Dated: January /*,/*
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BEFORE THE ADMINISTRATOR
U. S. ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D. C.
IN THE MATTER OF:
National Pollutant Discharge ) NPDES Appeal No. 75-19
Elimination System )
Permit For ) Notice of Granting Petition
) For Review And Remand To
The Ford Motor Company, ) Regional Administrator,
Sheffield Casting Plant, ) Region IV
Sheffield, Alabama )
(Permit No. AL 0000329), )
Permittee.
On December 4, 1975, The Ford Motor Company (hereafter "Ford"
or "Permittee") filed, pursuant to 40 CFR 125.36(n), an Appeal of
Decision of the Regional Administrator Denying a Request for a
Hearing, seeking review of the denial of an adjudicatory hearing with
respect to the above-referenced permit covering discharges from
Permittee's aluminum casting plant located in Sheffield, Alabama.
The denial by the Regional Administrator was issued on November 19,
1975, following the filing of a request for adjudicatory hearing by
Permittee on October 9, 1975. The subject permit was issued by
Region IV on September 25, 1975 (effective October 25, 1975), for
a term of five years.
The issues as to which Permittee requested an adjudicatory
hearing included, principally, the final effluent limitations for
BOD and the schedule of compliance for attainment of the effluent
limitations, including both interim and final compliance dates.
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The subject permit requires that Permittee complete
construction of treatment facilities by January 1, 1976, and
achieve daily average BOD effluent limits of 55 pounds per day
by May 1, 1976.
Permittee contends that the BOD effluent limitations "are
more stringent than necessary and may not be consistently
achievable." Petitioner also contends that the compliance
schedule unreasonably requires the achievement of effluent
limitations under Section 301(b)(l) of the Federal Water Pollution
Control Act, as amended (hereafter "the Act") before the statutory
compliance date of July 1, 1977, and otherwise sets unrealistic
time requirements, as to which it has objected throughout the
comment periods on the draft permit and final permit.
The crux of Permittee's petition is that the Regional
Administrator's denial of Permittee's request for an adjudicatory
hearing failed to set forth adequately the factual bases and legal
grounds in support of the conclusion that Permittee's request did
not "set forth material issues of fact relevant to the question
of whether this permit should be issued, denied, or modified."
As a general proposition, the applicable EPA regulations
governing adjudicatory hearings (40 CFR 125.36) do not provide for
review by the Administrator of a Regional Administrator's denial of
a request for an adjudicatory hearing. The regulations provide, in
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125.36(c)(2), that, "If the Regional Administrator determines
that the request fails to meet the requirements of paragraph (c)(l)
of this section [i.e;, the request is not timely or does not
include the various items described in subsection (b), p_r does not
set forth 'material issues of fact relevant to the questions of
whether a permit should be issued, denied, or modified1], he shall
deny the request." Subsection (n) of 125.36, which governs appeals
to the Administrator, however, applies only in the case of an
"initial decision" of the Regional Administrator (which, under
125,36(1), results from an adjudicatory hearing) or a decision of
the Assistant Administrator for Enforcement and General Counsel (now
the Office of General Counsel) on issues of law relied upon by the
Regional Administrator in rendering an initial decision.
In view of the foregoing, in prior permit appeals involving
the denial of a request for an adjudicatory hearing, petitions for
review have been denied in the absence of extraordinary circumstances
which might justify the exercise of a general residual authority
I/
of the Administrator to review decisions of Regional Administrators.
The specific issues which Permittee seeks to address in an
adjudicatory hearing apparently relate to the application by the
]_/ E.g., In the Matter of Reynolds Metals Company (NPDES Permit No.
AL0000035), NPDES Appeal No. 75-18 (January 9, 1976); In the Matter
of Exxon Corporation (NPDES Permit No. PA003464), NPDES Appeal No. 75-11
(January 19, 1976).
75
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Regional Administrator of water quality standards for the State
of Alabama and the adoption by the Regional Administrator of a
compliance schedule approved by the Alabama Water Improvement
Commission. Thus, in effect, Permittee seeks to address the
bases for and appropriateness of the Regional Administrator's
reliance upon "requirements" of the State of Alabama in specifying
the terms and conditions of the subject permit.
With respect to the contested BOD effluent limitation, Permittee
asserts that the Regional Administrator's statement that "the
effluent limitation for BOD is consistent with and required by
the Water Quality Standards," does not adequately apprise Permittee
of the factual or legal basis for the BOD requirements in the permit.
As a result, Permittee contends it is not able to determine whether
the BOD effluent limitation is based on the achievement of best
practicable control technology currently available under
Section 301(b)(l)(A) of the Act or upon Alabama state water quality
standards. If based on the latter (which would appear to be the
case), Permittee contends that certain issues are presented as to
the standards applicable to the facility in question, such that
an adjudicatory hearing on these issues is required.
One of the water quality-related issues alluded to by Permittee
involves the classification of Pond Creek, into which Permittee
discharges. Permittee contends that Pond Creek is an industrial
drainage ditch which, to Permittee's knowledge, has no natural
stream flow and, accordingly, it would appear appropriate to
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determine compliance with state water quality standards at the
point where the discharges (those of Permittee's plant and
other industrial facilities) from the ditch enter the Tennessee
River. Because of the dilution of waters entering the ditch from
several sources before it empties into the Tennessee River,
Permittee contends that measuring compliance with state water
quality standards at the mouth of the ditch would result in a
relaxation of any water quality-related effluent requirements.
It should be noted that a similar issue involving the
classification of Pond Creek was involved in an NPDES appeal
proceeding captioned In the Matter of Reynolds Metals Company,
y
Sheffield, Alabama, in which a petition for review of a denial
of a request for an adjudicatory hearing or, in the alternative, a
stay of the effectiveness of the permit, was denied. It was noted
in that proceeding that the Alabama "Fish and Wildlife" stream
classification is currently under review in a suit brought by
H
Associated Industries of Alabama, Inc., et al. against EPA. In
denying Reynolds' petition for review, it was stated that, at least
in part due to the pending court proceeding, it would be inadvisable
to second-guess the determination made by the Regional Administrator
regarding the Alabama water quality standard. But for a second
issue raised by Ford, the same result might be reached with respect
to Ford's petition for review.
2/ Permit No. AL0000035, NPDES Appeal No. 75-18 (January 9, 1976).
3/ Civil Action No. 75 M0092, United States District Court for the
Northern District of Alabama (Middle Division).
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With respect to the second principal issue—the schedule of
compliance—Permittee asserts that the Regional Administrator's
denial of its request for an adjudicatory hearing as to this
issue is grounded solely on the statement in the subject permit
that the May 1, 1976, compliance date is based upon a plan
approved by the Alabama Water Improvement Commission. Permittee
contends that the Act does not require compliance before July 1,
1977. Permittee does not appear, however, to challenge the statement
made by the Regional Administrator in his November 19, 1975 denial
of its hearing request that Permittee received actual notice of
this compliance schedule when it was adopted by the Alabama Water
Improvement Commission in September 1974. Permittee does contend
that it has repeatedly (in its August 22, 1975 and October 9, 1975
comments) pointed out the unreasonableness of requiring construction
of facilities within four months after the effective date of the
permit. Permittee also notes that it has testing currently underway
to develop a substitute hydraulic fluid which may eliminate the
need to construct a biological treatment facility to meet the
applicable BOD effluent limitations.
The difficulty involved in assessing this issue is that it is
unclear whether the Regional Administrator's reliance on the
Alabama-adopted compliance schedule is based on a certification by
the State of Alabama under Section 401 of the Act or on other
considerations. If the former is the case, the Regional Administrator
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would lack authority to go behind the certification to determine
the appropriateness of the State requirements and would be bound to
I/
include State certified provisions in the permit. If, instead,
the Regional Administrator's determination of the schedule of
compliance is based on other considerations, it appears likely that
such considerations would present "material issues of fact relevant
to the question of whether the permit should be issued, denied, or
modified," particularly in view of the comments and objections
asserted by Permittee.
In view of the foregoing lack of clarity in the Regional
Administrator's disposition of Permittee's request for an adjudicatory
hearing, the petition for review is hereby granted and this
proceeding is remanded to the Regional Administrator, Region IV, for
findings and conclusions regarding the schedule of compliance issue.
If an adjudicatory hearing is necessary to determine the factual
issues presented, the regional office shall conduct a hearing as
expeditiously as possible. If, however, the record of this
proceeding supports findings and conclusions which can be determined
without an adjudicatory hearing, such findings and conclusions shall be
specifically set forth in an appropriate disposition of Permittee's
request for a hearing.
4/ See, e.g., Decision of the General Counsel on Matters of Law,
No. 25, July 22, 1975.
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The Administrator shall retain jurisdiction of this matter
pending further action by the Regional Administrator, Region IV,
in accordance with this Notice.
Michael K. Glenn
Chief Judicial Officer
Dated: January 23, 1976
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CERTIFICATE OF SERVICE
The foregoing is a true and correct copy of a Notice of
Granting Petition For Review and Remand To Regional Administrator,
Region IV, dated January 23, 1976, deposited in the U.S. Mail,
certified mail, at Washington, D.C., addressed to the following:
Theodore L. Garrett, Esq.
Covington & Burling
888 Sixteenth Street, NW
Washington, D.C. 20006
A.B.M. Houston, Manager
Compliance and Liaison Department
Stationary Source Environmental Control
Ford Motor Company
1 Parklane Boulevard
Dearborn, Michigan 48126
Jack E. Ravan
Regional Administrator, Region IV
U.S. Environmental Protection Agency
1421 Peachtree Street, NE
Atlanta, Georgia 30309
James W. Warr
Alabama Water Improvement Commission
3515 Interstate Court
Perry Hill Office Park
Montgomery, Alabama 36109
Michael K. Glenn
Chief Judicial Officer
Dated: January 23, 1976
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BEFORE THE ADMINISTRATOR
U.S. ENVIRONMENTAL PROTECTION AGENCY
Washington, D.C.
IN THE MATTER OF: )
)
National Pollutant Discharge )
Elimination System )
) NPDES Appeal No. 75-7
Permit For: ) Case No. NPDES - VII-003(AH)
U.S.S. Agri-Chemicals
Crystal City, Missouri Plant
(Permit No. MO 0000817)
United States Steel Corporation
Permittee )
)
PARTIAL DECISION AND REMAND TO THE REGIONAL ADMINISTRATOR,
REGION VII
On September 24, 1975 the Chief Judicial Officer granted
review of four issues raised by the United States Steel Corporation
("Permittee") in a petition for review of an initial decision issued
July 16, 1975 by the Regional Administrator, Region VII. Briefs
have been received from both the Regional staff and the Permittee
and have been carefully considered.
FACTS
Permittee operates a nitrate fertilizer plant in Crystal City,
Missouri. Permittee applied for and received a final NPDES permit
from Region VII on June 4, 1974. Permittee requested an
adjudicatory hearing to present objections to certain provisions
of the permit; the hearing was granted by the Regional Administrator
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on July 9, 1974. A prehearing conference was held with Administrative
Law Judge Marvin Jones on September 17, 1974. At that conference, a
number of issues were settled by stipulation and it was agreed that
three legal issues would be certified to the General Counsel for
decision.
The principal issue of law related to whether the effluent
limitations in the permit should be stayed pending judicial review
of the effluent limitations guidelines pursuant to section 509 of the
Federal Water Pollution Control Act, as amended (hereinafter "the
Act") where those standards were the basis for the limitations in
the permit. Another issue related to whether the permit should provide
that it would be modified if judicial review resulted in a modification
of the effluent limitations guidelines. The third issue, which is
most pertinent here, was stated as follows:
Assuming the answer to question 1 is that
the point source category effluent limitations
based on the guidelines presently subject to
judicial review may be incorporated into an
individual permit, should the applicant be
entitled to an adjudicatory hearing with regard
to the effluent standards incorporated in the
permi t?
The General Counsel ruled that the sole forum for review of
effluent limitations guidelines was the court of appeals and
that the basis of those guidelines could not be challenged in
adjudicatory hearings at the permit issuance stage. With regard to
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the question of whether an adjudicatory hearing could be held on
the effluent standards in the permit, the General Counsel ruled
that
"[a] permit applicant is clearly entitled to
challenge the applicability of a promulgated
regulation to his facility and his particular dis-
charge. . . At an adjudicatory hearing considering
the issuance of a permit, the applicant may adduce
and introduce evidence concerning the discharge
limitations in his permit as derived from the
regulations. A permit applicant may show, at an
adjudicatory hearing, facts which would lead to the
conclusion that the regulations are not applicable
to its facility, but the applicant may not elicit or
produce evidence alleging a lack of foundation for
those regulations."
Following the receipt of this decision of the General Counsel,
the Administrative Law Judge scheduled a hearing for May 20, 1975, and
asked both sides to identify the witnesses which they would call at
the hearing. On the same date, Mr. Henry Rompage, an enforcement
attorney in Region VII, delivered a memorandum to the Administrative
Law Judge indicating that it was the Region's position that no issues
remained for adjudication, that all issues had been resolved by the
stipulation and the ruling of the General Counsel. This memorandum
was apparently requested by the Administrative Law Judge to secure
the Region's view of the status of the proceeding. No copy was
forwarded by Region VII to the attorneys for Permittee. Judge Jones
did, however, send a copy to the attorneys for Permittee asking for
their comments. On April 18, 1975, Permittee advised Judge Jones
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that it was "currently reviewing its position on this matter, but
at the present time believes that there are still issues to be
resolved and that an adjudicatory hearing is necessary." A second,
more detailed memo was sent by Mr. Rompage to Judge Jones on
April 29; again, no copy was provided to Permittee. This memo
reiterated the Region's position that no issues remained for adjudica-
tion. Permittee alleges that it did not receive a copy of this memo
until October 9.
On May 8 and 9, Permittee and EPA Region VII filed their
witness lists. At that time, Permittee indicated that it wished
to present evidence that the guidelines had been improperly applied
to its facility, viz., that there were sources at the Crystal City
facility which were not covered by the effluent guidelines and,
accordingly, additional effluent in excess of the amounts authorized
by the guidelines should be permitted. On May 12, EPA filed a motion
to dismiss the adjudicatory proceeding based on Permittee's failure
to raise this issue previously. Permittee responded on May 19.
On May 20, Judge Jones ruled that he would not hear issues which
had not been previously raised; he determined that this issue had
not been raised until just before the hearing and therefore dismissed
the proceeding. At that time he also denied Permittee's request to
amend their application for an adjudicatory hearing.
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ISSUES
The issues which have been briefed for decision by the
Administrator are as follows:
1. Whether the Regional Administrator erred in affirming
the ruling of the presiding Administrative Law Judge that the
issue of the application of point source category effluent guide-
lines was not properly raised in this proceeding.
2. Whether the Regional Administrator erred in affirming the
ruling of the presiding Administrative Law Judge which refused
Permittee's request to amend the adjudicatory hearing request to
conform to the issues raised in prehearing proceedings.
3. Whether the Regional Administrator erred in affirming
the ruling of the presiding Administrative Law Judge which refused
to accept evidence showing error in the application of point source
category effluent guidelines.
4. Whether Permittee was prejudiced and denied due process
by ex parte communications between the counsel for the Region and
the Administrative Law Judge pertaining to the issue of application
of point source category effluent guidelines in this proceeding.
DECISION
Permittee's basic argument can be summarized as follows:
By requesting an adjudicatory hearing on the final effluent
limitations in the permit, Permittee submits that it properly
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raised for adjudication all issues relevant to those final
limitations, including (1) a challenge to the guidelines them-
selves (had the General Counsel ruled differently) and (2) the
applicability of those guidelines to its facility. Since the
overall issue had been properly raised, it submits that the
requirements of 40 CFR Part 125 had been satisfied. Furthermore,
even if it can be argued that the issue was not stated with
sufficient particularity, the circumstances are such that there
was no reason for the Administrative Law Judge not to permit an
amendment of its request so that the issue could be adjudicated.
Finally, Permittee argues that the ex parte communications between
the attorney for Region VII and the Administrative Law Judge
prejudiced the Judge's decision on the matter and denied Permittee
adequate opportunity to present its case, on the assumption that
had it known of the Region's position at the time the memos were
written, it would have clarified its position earlier in the
proceeding.
With respect to Permittee's claim that the original statement
of issues was sufficient to indicate their desire to litigate whether
there were portions of the Crystal City facility not covered by
the guidelines and for which effluent limitations pursuant to
section 402(a) of the Act should have been established, a careful
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analysis of the papers and the actions of the Permittee strongly
suggests that this was not the original intent of their request
for an adjudicatory hearing. First, Issue C primarily focussed on
the Permittee's objections to the fertilizer industry guidelines
and the company's desire to file suit to overturn those regulations.
Permittee originally phrased the question of the scope of the hearing
as follows: "Assuming that said guidelines may be now incorporated
into said permit, is Permittee entitled to an adjudicatory hearing
whereby factual evidence can be presented bearing on the practica-
bility of implementing said effluent standards." The only logical
interpretation of that language is that Permittee sought to present
evidence showing that it could not meet the effluent standards, i.e.,
those standards established by the guidelines. Questioning the
practicability of achieving the guideline numbers is a substantially
different question than protesting that the guidelines have been
applied to facilities which were not intended to be within the
coverage of the guidelines. It appears that Permittee's statement
of issues contained no suggestion that it sought to question the
breadth of the guidelines application, but only the feasibility of
the numbers which the guidelines would require.
The legal question set forth above as certified by the
Administrative Law Judge changes the structure of the issue, putting
it in terms of whether there may be an adjudicatory hearing on the
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effluent limitations even though they may be established by effluent
limitations guidelines.- The General Counsel correctly determined
that while there could be no adjudicatory hearing on the rationale
and data underlying the guideline numbers, there certainly could be
questions raised about their applicability to a particular facility.
It certainly cannot be inferred from that, however, that the General
Counsel was making any judgment that such issues had been raised in
this particular proceeding. Clearly there are a variety of issues
which could be adjudicated regarding application of guidelines in
addition to whether a particular facility or portion of a facility
were covered by the guidelines. Thus, it is apparent from looking
at all of Permittee's objections to the proceedings that it sought
to challenge the standards in the guidelines and gave no indication
it was complaining that there were portions of the facility for which
effluent limitations should be established independent of the
guidelines.-'
!_/ It is significant that in a September letter to Judge Jones, the
Permittee requested that the legal question not be restated.
2/ This is made even more clear by the fact that Permittee did
mention the possibility of a variance; again, this suggests
that they were challenging the guideline limits and not the
scope of the guideline application.
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It is also significant that when the Administrative Law Judge
forwarded a copy of the regional attorney's memorandum suggesting
that there were no issues remaining for resolution, Permittee's
response was only that it was reviewing the situation but
believed there were still issues to be resolved. If the issue
were so clear cut and had been present from the beginning, it is
difficult to understand why Permittee did not state their position
more emphatically at that time. Moreover, it was not spelled out
until the May 9 submittal to the Administrative Law Judge and in
Permittee's response to the Region's motion to dismiss. The
Region apparently had not heard of this issue until that time even
though they had worked on the permit extensively with the Permittee,
and had discussed all of the issues at the prehearing conference.
This issue being so distinct from the question of challenging
the effluent limitations imposed by the guidelines, it must be
concluded that Permittee did not articulate it and that
Permittee did not state the issues to be adjudicated with
"particularity" as required by 40 CFR §125.36(b)(2)(vi).
Reaching that conclusion does not, however, determine the
results of this appeal. Whether restrictions derived from an
effluent limitations guideline have been improperly imposed upon a
facility, or a portion of a facility, which was not of the type
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considered in the development of those nationwide uniform guidelines
is a significant issue and certainly could have serious implications
for the particular facility. The question is whether this issue,
despite its possible significance, should be adjudicated in this
case when it was not raised by the Permittee until just prior to
the hearing.
The Region argues that the Permittee is barred from raising this
issue because of the requirement that it state with particularity
the issues it seeks to adjudicate at the time it requests the
hearing; it cannot raise additional issues later. The Region bases
its position not only on the language of the regulation but also on
the theory that such a requirement is needed to insure the integrity
of the public notice on the adjudicatory hearing, arguing that if the
Permittee could raise additional issues, the public would not have
been properly apprised of them. While this is the literal reading
of the regulations and is certainly a requirement to which Permittees
should be required to adhere, it cannot be read to be an absolute
bar to a permit holder raising additional issues for good cause
subsequent to the publication of the notice. The Permittee here
properly points out that intervenors are allowed to assert additional
>
issues yet such issues would not have been in the notice of the
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adjudicatory hearing. Thus, there must be authority to allow that
request to be amended where persuasive reasons are presented for
the delay in raising them.
Whether such reasons exist here is a very difficult question.
Permittee argues that it thought it had properly raised the problem
in its initial pleadings and the issue had been implicit in all
discussions throughout the proceeding. The decision by the
Administrative Law Judge and by the Regional Administrator on the
other hand is based on their conclusion that the request for an
adjudicatory hearing cannot be amended. There was no decision
made by either of them whether the arguments of the Permittee
justified their allowing the issues to be raised as a matter of
discretion. Pages 14 and 15 of the Regional Administrator's
initial decision indicate that both of them considered the question
to be jurisdictional, i.e., that the Administrative Law Judge
lacked authority to allow additional issues to be raised where they
were not set forth in the original request.
As discussed above, the Administrative Law Judge and the
Regional Administrator had authority to allow the issues to be
raised. To the extent that the Administrator must determine
whether there was an abuse of discretion by the Regional
Administrator in not allowing the issues to be raised, no judgment
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can be made on the Regional Administrator's actions because,
considering he felt he had no authority to grant it, he did not
address that issue. Even though there may be reasons, based upon
Permittee's actions as described above, which would justify the
Regional Administrator's decision not to grant Permittee's request,
no analysis of that decision can be made until the Regional
Administrator consciously determines that he will not as a matter
of discretion allow the issues to be heard.
This matter, therefore, shall be remanded to the Regional
Administrator for a determination on whether the Permittee should
be allowed to amend its request and present evidence on this issue
despite its failure to specifically identify it in the request for an
adjudicatory hearing. This remand is made reluctantly because of the
extreme amount of delay which has occurred in finalizing this permit.
It is recognized that this delay is due in great part to the amount
of time that it has taken for decisions to be made on the question
of law and on this appeal. Such delays are certainly unfortunate
and regrettable. It is also done reluctantly because neither party
to this proceeding appears to have acted in a manner most designed
to reach a prompt resolution. The Permittee has been unexplainably
obtuse in its identification of the issues it sought to have heard.
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The Region, on the other hand, has attempted to hide behind a very
technical defense. Certainly, greater communication on the part
of both parties would have speeded this process along.
It appears, however, that the issues which Permittee seeks to
address, if meritorious, are extremely significant and may have a
substantial impact on the final limitations imposed in the permit.
It may be best to resolve them at this point rather than through adminis-
trative and judicial appeals which might delay finalization of the
permit even longer. It cannot be said, of course, on the record as it
presently exists that there is any substance to the issue because
the Regional Administrator has not addressed it. The Regional
Administrator may very well find there is no basis for the claims and
again deny Permittee's request.
To expedite resolution of this matter, this remand is being
made with certain time constraints, viz., that the Regional
Administrator (or if he so desires, the Administrative Law Judge)
shall accept briefs and, if appropriate, testimony on the question
of whether Permittee should be allowed to amend its complaint and
reach a decision within 40 days from the date of this remand. That
decision should be made with a full explanation of the Regional
Administrator's reasons for granting or denying Permittee's request.
Although it is not necessary here to decide whether in every case
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where a Regional Administrator denies a request for discretionary
relief there must be a detailed articulation of the reasons behind
the failure to exercise that discretion, it is not only appropriate
but necessary to the prompt resolution of this matter that there
be such a statement.
The final issue for determination is whether the ex parte
communications between the regional attorney and the Administrative
Law Judge so prejudiced the position of Permittee that the decision
should be reversed. Certainly it was highly inappropriate that the
attorney for the Region submitted papers, regardless of the request
of the Administrative Law Judge, to the presiding officer without
mailing a copy of such papers to the opposing counsel. No statement
has been made on why it was impossible or inappropriate to
provide a copy to the other side, and steps should be taken by the
Regional office to insure that there are no future occurrences of
this type. It does not appear, however, that these particular ex parte
communications were so inappropriate as to prejudice the position
of Permittee. The first ex parte communication was immediately
forwarded by the Administrative Law Judge to the counsel for
Permittee. The first memorandum set forth the Region's position
that no issues of fact remained yet the only response was that
Permittee was looking at its position but still believed there
were outstanding issues. Permittee implies that it was laboring
under the impression that everyone realized this was an issue and
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that it would have moved immediately to remedy the situation when
it discovered the misconception. The April 18 letter belies this
position.
Moreover, Permittee was given the opportunity to respond to
the position of the Region when the motion to dismiss was filed
only a short time later on May 12. Permittee was allowed to make
an offer of proof to the Administrative Law Judge and it was allowed
to request an amendment of its request for an adjudicatory hearing.
There is no evidence that if it had been given more time it would
have presented a more persuasive case to the Administrative Law
Judge. Thus, while the ex^ parte communications were improper,
on the facts of this case it cannot be concluded that a reversal
is required.
CONCLUSIONS
For the reasons set forth above, the initial decision of the
Regional Administrator is remanded to the Regional Administrator for
further consideration of Permittee's request to adjudicate issues
which were not raised in its original adjudicatory hearing request.
Such reconsideration by the Regional Administrator shall be made
in a manner consistent with the findings and time schedule set
forth in this decision.
' G. William Frick
Judicial Officer
Dated: February 2, 1976
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CERTIFICATE OF MAILING
The foregoing is a true and correct copy of a Notice of
Partial Decision and Remand to the Regional Administrator,
Region VII, dated February 2, 1976, deposited in the U.S. Mail,
certified mail, at Washington, D.C., addressed to the following:
Jerome H. Svore
Regional Administrator, Region VII
U.S. Environmental Protection Agency
1735 Baltimore Avenue
Kansas City, Missouri 64108
John McN. Cramer
Reed, Smith, Shaw & McClay
Post Office Box 2009
Pittsburgh, Pennsylvania 15230
John A. Hammerschmidt
United States Steel Corporation
600 Grant Street
Pittsburgh, Pennsylvania 15230
G. William Frick
Judicial Officer
Dated: February 2, 1976
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BEFORE THE ADMINISTRATOR
U.S. ENVIRONMENTAL PROTECTION AGENCY
Washington, D.C.
IN THE MATTER OF:
National Pollutant Discharge
Elimination System
NPDES Appeal No. 76-1
Permit For:
Exxon Corporation
Truck Repair Facility
Linden, New Jersey
(Permit No. NJ 0024236)
DENIAL OF PETITION FOR REVIEW
On January 9, 1976, Exxon Corporation filed an appeal in the
above-captioned matter requesting the Administrator to review the
denial by the Regional Administrator, Region II, of an adjudicatory
hearing on certain monitoring requirements contained in the NPDES
permit issued to the Linden, New Jersey Truck Repair Facility of
Exxon Corporation. On January 28, the Judicial Officer wrote to
the Regional Office requesting clarification of whether the issue
had been omitted from the notice of the adjudicatory hearing
intentionally or by oversight. In a letter dated February 6, 1976,
Meyer Scolnick, Director of the Enforcement Division of Region II,
indicated that the issue relating to the monitoring requirements had
been left out of the notice of the adjudicatory hearing by oversight
and that the Regional Office intended to allow this issue to be
adjudicated. His letter also indicated that the appeal was filed by
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Exxon as a precautionary measure and that the attorney for Exxon
Corporation, in view of the commitment by the Regional Office to
include this issue in the adjudicatory hearing, intended to have
the notice of appeal withdrawn.
Based upon the information contained in this letter and the
determination by the Permittee that further processing of this appeal
is not warranted at this time, the petition is hereby denied.
G. William Frick
Judicial Officer
Dated: February 23, 1976
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CERTIFICATE OF MAILING
The foregoing is a true and correct copy of a Notice of
Denial of Petition for Review, dated February^3 , 1976, deposited in
the U.S. Mail, certified mail, at Washington, D. C., addressed to
the following:
William A. Speary, Jr., Esq.
Attorney - Exxon Corporation
P.O. Box 222
Linden, New Jersey 07036
Mr. Gerald M. Hansler
Regional Administrator
Region II
Environmental Protection Agency
26 Federal Plaza, Room 1009
New York, New York 10007
G. William Frick
Judicial Officer
Dated: February 23, 1976
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BEFORE THE ADMINISTRATOR
U.S. ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C.
IN THE MATTER OF: )
)
National Pollutant Discharge ) NPDES Appeal No. 76-3
Elimination System )
)
Permit For: )
)
United States Steel Corporation )
Gary Works Facility, Gary, )
Indiana )
NPDES No. IN 0000281 )
DENIAL OF PETITION FOR REVIEW
On May 21, 1976, United States Steel Corporation ("USSC") filed a
"Petition for Review of the Decisions of the Regional Administrator and
of the General Counsel" in the above-captioned matter pursuant to 40 CFR
125.36(n). I am today denying USSC's Petition pursuant to 40 CFR 125.36
Background
USSC's integrated steel mill at Gary, Indiana (the "Gary Works")
discharges contaminated water into the east branch of the Grand Calumet
River and into Lake Michigan. USSC has applied to EPA's Region V for a
National Pollutant Discharge Elimination System (NPDES) permit for its
discharges, as required by the Federal Water Pollution Control Act, P.L.
92-500.
Region V issued NPDES Permit No. IN 0000281 (the "Permit") for the
Gary Works on October 31, 1974. USSC then filed a request for an
adjudicatory hearing to contest certain terms and conditions of the
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Permit. In response to USSC's request, Region V conducted an adjudi-
catory hearing August 5-21, 1975.
On January 30, 1976 the Regional Administrator of Region V issued
a limited remand order which required the re-convening of the adjudica-
tory hearing. The remand hearing was held on March 16, 1976.
The Regional Administrator issued his Initial Decision pursuant to
40 CFR 125.36(1) on May 11, 1976. The Initial Decision, which is 95
pages long, basically sustained the Permit as issued on October 31,
1974.
USSC's instant Petition, which is 75 pages long, raises 73 issues
and sub-issues. USSC challenges the Initial Decision, the Decision of
the General Counsel on Matters of Law No. 18 (June 25, 1975), and a
letter from the General Counsel to the Regional Administrator (October
24, 1975).
Disposition of Petition
Upon review of the Initial Decision, the General Counsel pronounce-
ments in issue, and USSC's Petition, I perceive no finding of fact or
conclusion of law below which is clearly erroneous. Nor do I find a
policy expressed below which I should reverse or further elaborate.
Accordingly, the Petition has not made a sufficient showing under 40 CFR
125.36(n)(3) that my review in this matter is warranted. Though I need
not state any reasons for my denial (40 CFR 125.36(n)(4)), I will respond
briefly to a few of USSC's most basic points.
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(a) A common thread running through many of USSC's arguments
is the contention that an "adjudieatery hearing" under 40 CFR 125.36 is
a formal adjudication governed by the requirements of Sections 7 and 8
of the Administrative Procedure Act (5 U.S.C. sees. 556 and 557). I
rejected this contention in Marathon Oil Company, et al., NPDES Appeal
No. 75-3 (September 25, 1975), and nothing in USSC's Petition convinces
me that my rejection was erroneous.
(b) USSC, citing United States v. GAP. 7 ERC 1581 (S.D. Tex.,
1975), contends that Decision of the General Counsel No. 18 was erroneous
The General Counsel specifically took the GAP case into consideration in
Decision No. 18,* however. I find no error in the General Counsel's
decision.
(c) USSC argues that its permit should specify a compliance
date later than July 1, 1977. The Initial Decision correctly holds,
however, that EPA has no authority to extend the statutorily-imposed
deadline. I have today modified my decision of October 10, 1975 in
U.S. Pipe and Foundry Company (NPDES Appeal No. 75-4) in response to a
petition for reconsideration. Therefore, any potential conflict between
that decision and the Initial Decision below has been resolved.
In light of the foregoing, the Initial Decision of the Regional
Administrator in Case No. NPDES-V-027(AH), May 11, 1976, hereby becomes
* Decision of General Counsel No. 6, upon which No. 18 is based, also
dealt specifically with the GAP case.
103
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my final decision and NPDES Permit No. IN 0000281, as modified by the
Initial Decision, shall become effective immediately.
Dated: JUN 2 4 1575
104
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Certificate of Service
I hereby certify that copies of the foregoing Denial were mailed
this date to all parties of record in the proceeding below.
ichard G. Stoll, Jr.
Acting Judicial Officer
Dated: JUN 2 4 1976
105
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BEFORE THE ADMINISTRATOR
U.S. ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C.
IN THE MATTER OF:
National Pollution Discharge
Elimination System
Permit For:
)
NPDES Appeal No. 76-4
(NPDES-V-055(AH))
Northern Indiana Public Service Company )
Bailly Generating Station )
NPDES No. IN 0000132 _ )
DENIAL OF PETITION FOR REVIEW
On July 6, 1976, the Porter County Chapter of the Izaak Walton
League of America, Inc. (hereinafter referred to as "Petitioner") and
others filed a Petition asking that I review a portion of the decision
of the General Counsel dated June 9, 1976 in the above-referenced
matter. I am today denying the Petition.
Background
In the above-captioned proceedings, EPA's Region V is in the
process of issuing a discharge permit under the National Pollution
Discharge Elimination System established pursuant to the Federal Water
Pollution Control Act, P.L. 92-500. The Presiding Officer below
certified two issues of law to EPA's General Counsel for decision
pursuant to 40 CFR 125.36(m).
The first issue was: "Whether the Permittee should be required
to comply with the requirements of Public Law 89-298, Title III--Rivers
and Harbors, Section 301, Navigation, paragraph captioned Burns
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Waterway Harbor, Indiana?" On June 9, 1976, the General Counsel answered
the question in the negative in "Decision of the General Counsel on
Matters of Law Pursuant to 40 CFR 125.36(m)--No. 42." The portion of
this document dealing with the above-quoted issue shall hereinafter be
referred to as "the Decision." (Petitioner does not challenge the
General Counsel's resolution of the second issue.)
Petitioner argues that the Decision is inconsistent with the legis-
lative history of Public Law 89-298, and is clearly erroneous; that the
Permittee's facility borders on waters which are susceptible to severe
ecological damage; and that an important decision or policy is therefore
involved which warrants my review. The Petition has been filed pursuant
to 40 CFR 125.36(n).
On July 19, 1976, the Enforcement Division of Region V filed a
Memorandum arguing that I should deny the Petition without prejudice on
the grounds that it is not ripe. The Enforcement Division Memorandum
states that a stipulation in resolution of all factual issues has been
executed by all parties, and that following certification by the Pre-
siding Officer, the stipulation and the Decision will be submitted to
the Regional Administrator for use in rendering an Initial Decision.
The Enforcement Division Memorandum argues that my review authority
under 40 CFR 125.36(n) "arises only after the Regional Administrator's
Initial Decision." This argument is based upon 40 CFR 125.36(m)(4),
which provides that General Counsel decisions "shall be relied upon by
the Regional Administrator in rendering the Initial Decision", and 40
CFR 125.36(n)(l), which allows appeal of a General Counsel decision
"relied upon by the Regional Administrator in rendering the Initial
Decision."
107
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Disposition of Petition
Although 40 CFR 125.36 fails to provide explicit guidance on this
I/
point, I agree with Region V's Enforcement Division that an appeal of
a General Counsel decision should not be filed until the Regional
Administrator has issued an Initial Decision. I will nevertheless
exercise my inherent discretion to entertain the instant Petition now,
since Petitioner has taken the time and trouble to file it, since the
provisions of 40 CFR 125.36(n) leave some room for interpretation, and
since the Decision for which review is sought will undergo no further
2/
refinements prior to the Initial Decision.
Turning to the merits of the substantive issue presented, the
General Counsel concluded after a well-reasoned analysis that Public Law
89-298 has no applicability in establishing effluent limitations for the
NPDES permit at issue here. I can perceive no flaw in the analysis of
the Decision; indeed, it seems that the relevant terms of Public Law 89-
298 permit no reasonable construction other than that reached in the
Decision.
I/ A regulatory provision not cited in the Enforcement Division
memorandum, 40 CFR 125.36(n)(3), further implies that 40 CFR 125.36
contemplates petitions for review after an Initial Decision.
2J I hereby direct the Office of Water Enforcement to consider whether
amendments to 40 CFR 125.36(n) would be appropriate to provide
clearer notice that decisions of the General Counsel should be
appealed only upon issuance of an Initial Decision. The confusion
on this point seems to be largely caused by the failure of some EPA
regions to issue a clearly identifiable "Initial Decision" after
parties have executed a stipulation of facts. See my Denial of
Petition for Review in NPDES Appeal No. 75-10 (Collier Carbon and
Chemical Corporation), issued today, pages 2-3.
108
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Since the Petition has made no showing that the Decision is clearly
erroneous or contains an important policy question warranting my review,
I hereby deny the Petition.
' . /
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Certificate of Service
I hereby certify that copies of the foregoing Denial were mailed
this date to EPA's Region V Hearing Clerk, the Administrative Law Judge,
and to all parties of record in the proceeding below. t
<" ?
i • \
Richard G. Stoll, Jr.
Acting Judicial Officer
Dated: August 10, 1976
110
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DECISIONS
OF THE
GENERAL COUNSEL
NUMBERS 37 THROUGH 54
JANUARY 1976 - DECEMBER 1976
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
DECISION OF THE GENERAL COUNSEL ON MATTER OF
LAW PURSUANT TO 40 CFR §125.36(m)
No. 37
In the matter of NPDES Permit NC0001686, Docket No. NC505N, for
Perfect Packed Products Co., Henderson, N.C. (the Company), a legal
issue has been referred to the General Counsel for decision pursuant
to 40 CFR §125.36(m) (39 FR 27078, July 24, 1974). The parties
having had the opportunity to provide written briefs in support of
their respective positions, present the following issue:
Question Presented
Does it remain the interpretation of the U.S. Environmental
Protection Agency that the requirement of meeting water quality
standards exists independently of Section 302, and that accordingly,
effluent limitations designed to meet water quality standards, even
where such limitations are more stringent than those representing
the best available technology economically achievable, are not
subject to the cost-benefit analysis of Section 302 of the Federal
Water Pollution Control Act (FWPCA)?
Answer
Yes.
Discussion
Neither the letter from the Administrative Law Judge referring
this question nor the briefs of the parties disclose whether or not
the limitations at issue, described by the Regional Office as based
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upon a wasteload allocation adopted by the State, were Included in
a certification issued by the State. If so, the inquiry ends here,
because the Regional Administrator has no authority to refuse to
apply effluent limitations included in a State certification issued
according to Section 401 of the FWPCA and 40 CFR Part 123. See
Opinion of the General Counsel No. 13, May 19, 1975; No. 14, May 21,
1975; No. 17, June 16, 1975. This opinion will proceed on the
assumption that no such certification exists, and that the Regional
Administrator is applying water quality standards in accordance with
§§402(a)(l) and 301(b)(l)(C) of the FWPCA.
Section 301(b)(l)(C) requires the achievement,
not later than July 1, 1977, [of]
any more stringent limitations, in-
cluding those necessary to meet
water quality standards, treatment
standards, or schedules of compliance,
established pursuant to any State
law or regulations (under auth-
ority preserved by section 510)
or any other Federal law or
regulation, or required to imple-
ment any applicable water quality
standard established pursuant to
this Act.
In a letter (hereafter "the Kirk letter") dated December 18, 1974
(attached), Alan G. Kirk, then Assistant Administrator for Enforce-
ment and General Counsel, set forth his view that the FWPCA requires
water quality standards to be achieved by 1977, without regard to the
cost-benefit balancing required under §302. This view was, in effect,
112
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adopted by the Administrator in a memorandum (attached) to the
Regional Administrators dated December 26, 1974.
The Company urges reconsideration of this view, and offers
several additional arguments in support of its view that §302 of
the FWPCA amends §301(b)(1)(C) by requiring the Administator to
follow the cost-benefit balancing procedure set forth in §302 before
imposing upon a discharger limitations based upon water quality
standards, where such limitations are more stringent than those
attained after application of the best available technology eco-
nomically achievable (BAT) under §301(b)(2)(A).
The Company argues that EPA's position constitutes "circumvention"
of the provisions of §302. But the establishment of effluent limi-
tations based upon water quality standards, under §301(b)(1)(C), no
more "circumvents" the requirements of §302 than the establishment of
a vessel waste no-discharge zone under §312(f)(3) of the Act (where
adequate pumpout facilities are available) "circumvents" the require-
ments for establishing a no-discharge zone under §312(f)(4) (where
required to protect water quality). The two authorities, in each
case, are parallel but independent; the requirements imposed in one
case do not apply in the other.
The interconnection which the Company seeks to establish
between §§301(b)(1)(C) and 302 does not survive analysis. By its
own terms, §302 only applies when water quality meeting the 1983
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"fishable and swimmable" goal is sought. But few water quality
standards have been set precisely to meet the 1983 goals. For
example, a water quality standard may seek to protect fishing rather
than swimming; or seek to protect swimming rather than fishing; or
seek to protect only some other use. In such a case, if §302 is to
be applied (as the Company urges), that section would require a
hearing to set limitations designed to attain the "fishable and
swimmable" water quality required for 1983. Thus, by the Company's
own reading, whenever the application of any water quality standards
to a source would require a greater degree of treatment than BAT,
the Administrator must immediately accelerate the 1983 water quality
goal to be applied to that source. I prefer the view in the Kirk
letter (at p. A) that,
where waters have been individually
examined and designated for partic-
ular uses, criteria adequate to those
uses must be attained without further
consideration of costs or benefits.
Section 302(c)* puts to rest the claim that §302 somehow
requires that §301 (b)(1)(C) be construed as if it had a proviso
prohibiting its application where the resulting limitations would
be more stringent than BAT limits. As the Kirk letter notes at p. 4:
* "(c) The establishment of effluent limitations under this section
shall not operate to delay the application of any effluent limitation
established under section 301 of this Act."
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Section 302(c) provides that the
"establishment of effluent limita-
tations under this section shall not
operate to delay the application of
any effluent limitation established
under section 301 of this act."
(Emphasis supplied.) Such limita-
tions include those required to meet
water quality standards. The inde-
pendence of such limitations from
§302 procedures, and the requirement
that they be applied irrespective of
any proceedings under §302, is thus assured.
The Company now suggests that §302 modifies §301(b)(1)(C) just as
§301(c) modifies §301(b)(2)(A). The obvious difficulty with this
analogy, however, is that while §301(c) authorizes the Administrator to
"modify the requirements of subsection (b)(2)(A) of [section 301],"
the above-quoted language from §302(c) prohibits such modification.
Indeed, the language and structure of §301(c) strongly suggest that
Congress knew how to modify a regulatory provision so as to soften
anticipated severe impacts by enacting another provision specifically
modifying the first. The absence of any such modifying provision in
§302, and the "savings clause" of §302(c), together indicate a
deliberate decision by the Congress not to tamper with the require-
ments of water quality standards.
I find unsatisfactory the Company's suggestion that §302(c)
refers only to the technology-based limitations established under
§301(b)(1)(A) and (b)(2)(A) and not to limitations required to
meet water quality standards under §301(b)(1)(C). Again, had
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Congress wished to so limit the applicability of §302(c), they
could have done so by identifying in §302(c) only the affected
subsection.
The Company argues that §301(c) does not preserve §301(b)(1)(C)
because effluent limitations to meet water quality standards are
really "established" under §303. It does violence to the language of
§301(b)(1)(C) to read it as the Company does, as if it did not itself
"establish" effluent limitations. This argument is even less
persuasive than the argument that technology-based effluent limitations
are not "established" under §§301(b)(1)(A) and (b)(2)(A) because §§304
and 402 are other integral elements of the regulatory framework for
their establishment.* Moreover, the position of §301(b)(1)(C)
following two other subparagraphs which clearly establish effluent
limitations favors a construction of subparagraph (c) by which it
also "establishes" effluent limitations. Finally, although §301
(b)(1) (C) does refer to limitations "established pursuant to any
State law or regulation," it also requires achievement of "any
more stringent limitation . . . required to implement any appli-
cable water quality standard established pursuant to this Act."
Thus, although the water quality standard is established elsewhere
(under §303, or §10(c) of the prior Act), the limitation is established
in §301(b)(l)(C).
* This latter argument has been rejected by two of the three Courts of
Appeals which have considered the question. See American Iron and Steel
Institute v. EPA, 8 ERC 1321 (3rd Cir. 1975); American Meat Institute v.
EPA, 8 ERC 1369 (7th Cir. 1975); contra, CPC International v. Train,
515 F.2d 1032 (8th Cir. 1975).
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To be sure, §303(e) calls for a continuing planning process
whereby States establish effluent limitations in accordance with,
inter alia, water quality standards. The State may include such
limitations in certifications under §401. But nothing else in §303
calls for effluent limitations. Water quality standards are to
include only water quality criteria and use designations (§303(c)(2))
or, if established under the prior law, water quality criteria and
plans of implementation (§10(c)).* Since §303 provides for the
establishment of effluent limitations only by States under sub-
section (e),** the Company's reading would leave the Administrator
powerless to apply water quality standards to any discharger. Only
the State could take such action, under §§303(e) and 401. I am sure
this is not the result Congress intended. As the Senate Report on
S.2770 states,
. . . the Administrator is under a
specific obligation to require that
level of effluent control which is
needed to implement existing water
quality standards without regard to
* The reference in §303(e)(3)(A) to "effluent limitations and schedules
of compliance ... at least as stringent as any requirements contained
in any applicable water quality standard" simply acknowledges that old
water quality standards carried forward under §303(a) in the 1972 amend-
ments were established under §10(c) of the prior Act, which required
water quality standards to include a "plan for the implementation and
enforcement of the water quality criteria . . . ." These so-called
"implementation plans" ordinarily included schedules of compliance, which
are by definition also "effluent limitations" under §502(11).
** The reference in §316(c) to "effluent limitations established under
section 303" is, of course, a reference to §303(e) limitations.
117
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the limits of practicability.
Senate Committee on Public Works,
A Legislative History of the Federal
Water Pollution Control Act Amend-
ments of 1972 (Leg. Hist.) at 1461.
(Emphasis supplied.)*
The Company stresses the use of the word "whenever" at the
beginning of §302 to suggest that §302 procedures are non-discretionary
and exclusive. But §302 only applies when BAT effluent limitations
are "required" by §301(b)(2) — that is, in Phase II, the 1977-1983
period — and when the application of such limitations would "interfere"
with attainment of the 1983 goal. Clearly, if the 1983 goal is to
be attained pursuant to other provisions of the statute, then appli-
cation of BAT cannot "interfere" with attainment of that goal. The
Company's theory would require the Administrator to engage in point-
less case-by-case cost-benefit balancing when, for example, limitations
to achieve the 1983 goal had been included in a certification under
§401 or in a State permit condition established pursuant to State
law preserved by §510. In both cases, the Administrator would be
clearly powerless to modify such requirements, whatever his view
of the balance of costs and benefits. He is similarly powerless to
rewrite §301(b)(1)(C).
I am riot persuaded that the limitation of §302 to a "specific
portion of the navigable waters" must be invested with the significance
* There is no conflict between this passage and that cited by the
Company, Leg. Hist, at 1464. That passage has no relevance here, since
it refers only to the role of water quality standards after 1977. More-
over, the latter passage's continuing validity is in doubt, because
the House action in inserting §303 continued the water quality standards
program which the Senate bill would have eliminated.
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the Company ascribes to it. The Company argues it is inconsistent to
provide for the attainment of the 1983 goal for only portions of a
stream under §302, if the same result could be achieved for the
entire stream under water quality standards. But this language has
no purpose other than to limit the scope of the hearing. Thus, the
Administrator may not hold a nationwide hearing under §302 for all
waters, but must limit the hearing to "a specific portion" of all
navigable waters. Of course, an entire stream could constitute such
a "specific portion". So viewed, the claimed distinction vanishes.
Water quality standards serve as a base level for water quality
under the 1972 Amendments when the technology-based effluent controls
required by sections 301, 304 and 306 are inadequate. See Montgomery
Environmental Coalition v. Fri, 366 F. Supp. 261, 265 (D.D.C. 1973).
Section 302, on the other hand, is intended solely for use in attaining
the 1983 goal of "fishable and swimmable" water, and protecting uses
such as public drinking water supplies, where an independent exami-
nation of uses for the stream, and accordingly the water quality
standards, did not reflect the 1983 goals. In such cases, Congress
correctly inferred that the greater costs of going beyond ŁAT, and
the dubious benefits of a simple upgrading of the entire stream's
use designation, required a broad consideration of costs and benefits
before the more stringent limitations required to attain such
higher uses could be applied. However, nothing in the Act or its
legislative history suggests that this limited, special-purpose
119
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balancing process was intended to be a means of undermining the
water quality standards program by injecting a requirement of
extensive cost-benefit balancing into the process of applying the
standards to dischargers. In short, I believe the view set forth
in the Kirk letter to be correct.
Finally, two general observations are in order. First, I note
that the State of North Carolina, which set the water quality
standard applicable here,* is a party to the adjudicatory hearing.
Should the State conclude that application of the standards to the
Company would be inappropriate, it may submit modified water
quality standards to EPA for approval.
Second, the meager record before me does not disclose the sub-
category within which the Company's facility falls. However, BAT
has been set for the Fruits and Vegetables Processing industry, as
for all industries, only after careful consideration of the costs
and their impact on the industry as a whole. In this industry,
the Agency found that many plants were already achieving zero dis-
charge or levels below BAT limits:
There is an additional fifty percent
of the fruit and vegetable industry
that is presently using land treat-
ment . Therefore many plants are
presently achieving an effluent
reduction greater than required by
the application of the best available
See 40 CFR §120.10 (1975).
120
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control technology economically
achievable and most have no dis-
charge of pollutants to navigable
waters. This technology is used
with and without holding ponds
in all regions of the country.
40 Fed. Reg. 49222, 49224, Oct. 21, 1975.
Thus, it may well be that the Company could attain the water quality
standards here at issue without closing its facility or incurring
inordinate costs. In any event, as I have previously stated, the
water quality standards must be applied by EPA without resort to a
cost-benefit analysis of the sort contemplated by §302.
Dated:
JAN 90 1Q7C
64 |a/D
Robert V. Zener
General Counsel
121
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|58S * UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
*" r- WASHINGTON, D.C. 20460
DEC 2 61974
THE ADMINISTRATOR
MEMORANDUM
TO: All Regional Administrators
FROM: Administrator
SUBJECT: Water Quality Standards and Section 302 of the Federal
Water Pollution Control Act
In the Water Quality Strategy Paper (at pp. 32 - 33), we took
the position that a permit based on water quality standards could
not require a discharger to go above "best available technology"
effluent limitations, unless the cost-benefit analysis required by
section 302 of the Act were completed.
The Office of General Counsel has recently re-examined this
question. It has concluded that the requirement of meeting water
quality standards exists independently of section 302, and that
accordingly effluent limitations designed to meet water quality
standards are not subject to the cost-benefit analysis of section
302. A letter from the Assistant Administrator for Enforcement
and General Counsel, setting forth this conclusion, is attached.
In light of the foregoing, I am withdrawing the statement on
this point made in the Water Quality Strategy
y#-
ellvE. Trc
tfU.
rain
122
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Mr. Edward Dunkelberger
Covlngtea and Burling
*»8 16th Street, U. W.
Washington, D. C. 20006
Dear Mr. Dunkelberger;
Thank, you for your careful cad thought-provoking letter of
June 7, 1974, concerning the applicability of section 302 of the
Federal Water Pollution Control Act to peroits tarn** now which
contain effluent llmltatlo&a required to eoaply with water quality
standards, «hara thoaa limitations ara wire stringent thaa those
required by the application of tha beat available technology
economically achievable. Although, aa will ba apparamt fro» tha
following, I aa tmabla to agraa with Many of yaor coocltuiiona,
1 appreciate the opportunity your lattar aaa givan to focua cm
tha problena iavolvad In cooatraing tala •action.
In ay view, it ia elaar that 'water quality related efflwant
limitatioaa under section 302 of the Act are aot the aaae aa lintlta-
tiona "ojeceasary to neat water quality ataadarda" uAdetr aectioaa
301(b)(l)(C) and 303. The two seta of re^vireaeata are eatabliafeed
and applied in quite different vaya, and are carefully diatiaguiahed in
the language of the Act itaalf. Thna, the hearing aad ceat-hanefit
balaacing reqoireaeata aaclieaUa to o«e eaaaat be read to aae>ly to
the other.
There are two baaie diatlactiane betwaea section 302 of the
Act, providing for 'water quality related effluent li»ltationa, ' and
geeclone 301(b)(l)(C) and 303 of the Act, providing for efflaeat
limitations to achieve, and •aiataia water e^tallty staadarda. The
first distinction la that the statute ret«iree each to be isplaaanted
in different tiate pkaaes following eBactam«t, and to be judged against
s different standard. The second ia that water quality ataadarda ara
intended to be established by the Ststes, while "water quality
related effluent limitations' under cection 302 are to be established
by the Administrator.
S. 2770, the original genate bill, Included provision* coaparabls
to the present »301(b)(l)(C) and 1302 of the Act. Thus, froat the
outset, these two parallel systca* were to be established under the
law. Section 303, added by the Boose ia B.I. 11S96, petoetuatad the
water quality standards program (tha Senate bill did not proviso far
post-enactment revision and approval of water quality staadartfe).
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Both bills however, contained a provision comparable to the present
§301(b), which requires the achievement, by the end of the first
phase of implementation of cleanup requirements (Phase I ends July 1,
1977 in the law as enacted), of effluent limitations requiring
application of "best practicable control technology currently
available" for industries, "secondary treatment" for municipalities,
and for all point sources,
. . . any more stringent limitation, including
those necessary to meet water quality standards,
treatment standards, or schedules of compliance,
established pursuant to any State law or regula-
tions (under authority preserved by section 510)
or any other Federal law or regulation, or required
to implement any applicable water quality standard
established pursuant to this Act.
FWPCA, §301(b)(l)(C)
There are no qualifiers in this requirement. Indeed, the Congress
could scarcely have made more plain its unequivocal command that
effluent limitations adequate to comply with water quality standards
be achieved by 1977.
Section 302, on the other hand, was intended to be implemented
in the second phase, which ends in 1983. Section 101(a)(2) provides
a national goal that,
wherever attainable, an interim goal of water quality
which provides for the protection and propagation of
fish, shellfish, and wildlife and provides for
recreation in and on the water be achieved by July 1,
1983 ....
The means of implementing this goal is section 302, which requires
the Administrator to establish "water quality related effluent
limitations" whenever, in his judgment, best available technology
would be inadequate to achieve a water quality level adequate to
"assure . . . the protection and propagation of a balanced population
of shellfish, fish and wildlife, and allow recreational activities
in and on the water."
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The level of water quality which oust be provided through
limitations under §302 was generally referred to in the debates
as the goal of "swimmable" water quality. I/ By contrast, §303
does not provide for any particular minimum water use. Under
8303, water quality standards are required only to be "such as
to protect the public health or welfare, enhance the quality
of water and serve the purposes of this Act."
This language was parroted verbatim from §10(c)(3) of the Act
as in effect prior to October 18, 1972, the date of enactment of
the FWPCA Amendments of 1972. Moreover, water quality standards
submitted under the initial round of revisions were to be "consistent
with the applicable requirements of this Act as in effect immediately
prior to [October 18, 1972]." Standards submitted in subsequent
rounds of revisions were to include "the designated uses of the
navigable waters involved and the water quality criteria for such
waters based upon such uses." Thus, Congress clearly intended to
carry forward into the new law the system of varying uses, some
not requiring the high water quality necessary for a "balanced"
aquatic population or body contact recreation. 2]
This approach has been followed by EPA in implementing the water
quality standards program. EPA's internal "Guidelines for Developing
or Revising Water Quality Standards", published in January, 1973, called
for the protection of waters for various uses, but not less than "for
recreational uses in and/or on the water and for the preservation and
propagation of desirable species of aquatic biota . . . ." Recreational
uses "on the water" require a less stringent water quality, and
constitute a lower use classification (secondary contact recreation),
than the national goal under S302 of "recreational activities in and
on the water" (primary contact recreation).
Even though the water quality standards program seeks to
attain these goals, Provision is made for careful case-by-case
evaluation of water bodies to determine if an exception should be
made. Exceptions are allowable in cases of "naturally occurring
poor quality, man-made pollution or... technological limitations
prohibiting improvement of water quality to the degree necessary."
I/ Congressional Research Service, Library of Congress, A Legislative
History of the Federal Water Pollution Control Act Amendments of 1972,
93d Cong., 1st Sess., at 1151 (1973). (Hereafter "Legislative History".)
2j Congress was clearly aware that many waters were classified for
lower uses than "recreation in and on the water." See,e.g., Hearings
on S.75 et al Before the Subcommittee on Air and Water Pollution of
the Senate Committee on Public Works, Part 3, 92d Cong., 1st Sess. at
1494-98 (1971).
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The provisions of §302, by contrast, seek to raise all waters
to "swimraable" water quality, regardless of the designated uses.
Clearly, this explains why Congress required a balancing of costs
and benefits and a hearing before water quality related effluent
limitations could be imposed. . Equally clearly, the absence of any
balancing requirement in connection with the application of water
quality standards under §301(b)(1)(C) reflects a legislative policy
that, where waters have been individually examined and designated
for particular uses, criteria adequate to those uses must be attain-
ed without further consideration of costs or benefits.
The Act was carefully drafted to ensure that implementation of
section 302 did not interfere with or weaken the water quality
standards program. Section 302(c) provides that the "establishment
of effluent limitations under this section shall not operate to
delay the application of any effluent limitation established under
section 301 of this Act". (Emphasis supplied.) Such limitations
include those required to meet water quality standards. _3/ The
independence of such limitations from §302 procedures, and the
requirement that they be applied irrespective of any proceedings
under §302, is thus assured.
The passage from the Senate report on S. 2770 which you set
forth in your letter simply refers to the fact that implementation
of the water quality standards program will surely yield data
which would be useful in establishing the more stringent limita-
tions called for under §302.4/
3/ In explaining this provision, the Senate Report states that
"Section 302 is intended to furnish a supplemental basis for
improving water quality, and not to be a cause for delay in
executing the requirements of Section 301, or for requiring any
less stringent effluent limitations". Legislative History at
1466 (emphasis supplied).
4/ One further example of Congressional awareness of this need
Ąor data is section 303(d)(1)(B), which requires States to
"identify those waters . . . for which controls on thermal dis-
charges under section 301 are not stringent enough to assure
protection and propagation of a balanced indigenous population
of shellfish, fish, and wildlife". Section 302 could provide
the means for establishing the required more stringent limitations.
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With respact to all water quality standard* presently in offset,
it 1* clear that any attempt to cosmroadLae, these standard*, whether
through a hearing under 1302 or otherwise, would ba unlawful, lister
quality atandarda have been eatabliahed in all the States. Kve*
though those standards ara submitted t« IFA for the Administrator'a
approval» and the Administrator haa certain powers te promulgate
ataadarda where tha Stataa fail to act (l303(b)), with fav exception*
tha ataadarda presently in affact ara estshHihert and enforceable
under Stata law.
Before th« Admlniatratar aay iaatso a diacharg* pecait, ha noat
obtain a cartification uadox aactioa 401 of tha Act froai tha Stata
in which tha diacharga originate*. Section 401(4) r«|air*a e«rtifica-
tion* to "aet forth any effluent limitation* and other liaitationa,
and toonitoring requireaanta nacaaaary to aaaare that any applioant for
a Federal license or permit will coolly with any applicable effluent
limitation* . . . under aaction 301 or 302 of thla Ant, . . . and with
any other appropriate requirement of Stata law. . . ." Thia clearly
requiree State water quality ataaderda to be enforced throagb certifica-
tion*, since linitationa naceaaary to covply with aueh atandard* are
both "llBitations . . . under aection 301" and "appropriate raojuirenantla]
of Stata law . ..." All auch requlrewonta aet forth in certificatiena
"becoew a condition on any Federal Uraaae or peradt anbject to the
proviaiona of" section 401.
Here again, the lav la quite explicit. Section 302 cannot be
read to require the Adniniatrator to ignore specific conditions in
a State certification in fawn: of his awn views ** to tha coats and
benefita.5/
VThia is not to aay that the State's certification constitutes
a final determination that a discharge will comply with tha Aet.
When the Administrator issues a permit under fAQ2(a), he has a
statutory responsibility to establish iodofondently auch additional
conditions as are necessary to comply with the Act, Including the
water quality atandarda requirements set forth in S301. 1402(8)(2).
Sae Calwt Cliff* Coordinating Committee v. ABC, 449 F.2d 1109
(D.C. Cir. 1971).
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The Act, in summary, sets forth in straightforward terms a
requirement that effluent limitations adequate to meet water quality
standards be achieved by 1977. There is no hint, either in the
statute or the legislative history, that this requirement "cuts off"
If treatment exceeding beat available technology would be required.
Section 302 was designed as a sword which the Administrator must
utilize to attain the national goal of "swlamable" water quality,
not as a shield by which dischargers may escape the clear requirements
of section 301.
Even If, as you suggest, the Administrator would be required to
utilize section 302 proceedings in advance of the statutory timetable,
there can be no doubt that this section was not intended to apply to
the States at any time, whether before or after 1977. Where Congress
Intended, under the FWPCA, to impose a duty upon a State, that duty
was specifically stated. Thus, section 316 authorizes modification
of thermal limitations where the discharger "can demonstrate to the
satisfaction of the Administrator (or, if appropriate* the State)"
that such limitations are move stringent than necessary.
The Senate version of section 302 did grant authority to the
States as well as to the Administrator. In S. 2770, section 302 was
Identical to the present law, except that it began, "Whenever, In the
judgment of a State or the Administrator . . . ." The only change
made In this section was the deletion of the words "a State or".
This change was explained by the conferees:
Section 302 of the conference substitute
is the same as section 302 of the Senate
bill with the exception that all author-
ity granted to a State in this section
has been eliminated.
Conference Report on
H.R. 11896, L.H. at 305.
Having no authority under 8302, the States can scarcely be said to
have any duties thereunder.
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A review of other provision* of the Act reply confirms this view.
The reading you suggest would require States to hold hearings to deter-
mine whether their own water quality standard* should b* compromised.
Yet section 510 unequivocally reserves to the States, "Except as
expressly provided in this Act,...the right... to adopt or enforce (A)
any standard or limitation respecting discharges of pollutants, or (B)
any requirement respecting control or abatement of pollution," except
that requirements less stringent than Federal requirements cannot be
enforced. Thus, in light of section 510, section 302 clearly cannot
be read ±xt such a way as to limit the power of the States to adopt
water quality standards and to enforce the* through permits.
Secticm 402(b) does nothing to alter this conclusion. States are
required, in order to receive authority to issue SPDES permits, to
riave authority to issue permits which "apply, aad insure compliance
with, any applicable requirements of sections 301, 302, 306, 307, and
403." This provision simply means that, where requirements under these
sections have been established by the Administrator, the State must
apply thaw in permits.
I uo not understand you to suggest that a State, in order to
apply the requirements of 1307, must publish a list of toxic pollutants,
publish proposed effluent standards, bold a hearing, and issue final
standards. It is equally far-fetched to suggest that a State must
carry out under its ova procedures the authority reserved exclusively
to the Administrator under f3Q2.6/
AS the. Agency stoves into the second phase of Implementing the
requirements of the FWPCA, and begins to write penaits applying
effluent limitations under i301(b)(2) of the Act, considerable
effort will have to be expended to ensure effective implementation
of section 302. Until that time, however, it is nty opinion that
that section grants no authority to, and imposes no duties upon,
either the Administrator or the States. Moreover, X see no alterna-
tive under the law to the conclusion that Congress required effluent
limitations necessary to meet water quality standards to be achieved
by 1977, aad did not authorise balancing of costs and benefits in
applying and enforcing such limitations.
v)grf truly yours,
Alan G. Kirk, II
Assistant Administrator for
Enforcement and General Counsel (EC-329)
F couraeTinr a~"5tate chooses to adopt under its own law procedures
alailar to those in 1302, its right to do so is guaranteed by 0510.
129
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
DECISION OF THE GENERAL COUNSEL ON MATTERS OF LAW
PURSUANT TO 40 C.F.R. SECTION 125.36(m)
NO. 38
In the Matter of National Pollution Discharge Elimination
System Permit for Evansville Materials, Inc., No. IN-0001091,
the Presiding Officer has certified three issues of law to the
General Counsel for decision pursuant to 40 C.F.R. 125.36(m).
The parties, having had the opportunity to provide written
briefs in support of their respective positions, present the
following issues:
ISSUE OF LAW NO. I
QUESTION PRESENTED
"Whether NPDES Permit No. IN-0001091 ('The Permit1) imposes
limitations on suspended solids and pH which are unlawful and
unreasonable in the absence of Federally-promulgated effluent
guidelines?"
CONCLUSION
No.
DISCUSSION
While it is not immediately apparent from the formulation
of the question presented, the argument advanced by the permittee
makes clear that what is being challenged is the authority of the
Agency to issue NPDES permits prior to the promulgation of
nationally applicable effluent regulations under sections 301
and 304 (b) of the Federal Water Pollution Control Act.
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There is no doubt that section 402(a)(1) of the Act confers
such authority. The question has been answered in a previous
Decision of the General Counsel, see Decision No. 1, Issue No. I,
*
(September 5, 1974). Permittee has advanced no reason upon which
to alter the conclusion reached there.
ISSUE OF LAW NO. II
QUESTION PRESENTED
"Whether the Pvegional Administrator has acted unreasonably
and arbitrarily in imposing limitations on suspended solids and
pH in the permit in the absence of the technology-based, industry-
wide effluent standards and limitations?"
CONCLUSION
No.
DISCUSSION
The question presented is substantially similar to Issue
No. I. The Regional Administrator did not act arbitrarily or
unreasonably in issuing the permit simply by virtue of the
fact that applicable "industry-wide effluent standards and
limitations" have not been promulgated, since section 402 (a) (1)
authorizes the issuance of permits in such circumstances.
ISSUE OF LAW NO III
QUESTION PRESENTED
"Whether the Regional Administrator has acted unreasonably,
arbitrarily and unlawfully in imposing limitations on suspended
solids and pH in the absence of full consideration of cost, site
location and land availability, uniqueness of the operation,
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biological harm, amount and size of the discharge relative to the
receiving waters, age of the equipment, the process employed, the
engineering aspects of the application of control techniques,
process changes, non-water quality environmental impact, including
energy considerations, the benefits of the effluent limitations
relative to the costs involved in application, and other relevant
factors?"
CONCLUSION
Prior to promulgation of industry-wide effluent regulations,
effluent limitations in an NPDES permit are based upon section
402(a) (1) of the Act, which authorizes the Administrator to
impose "such conditions as [he] determines are necessary to
carry out the provisions of this Act." For permits issued prior
to July 1, 1977, the relevant provisions of the Act include
section 301(b)(1)(A), which requires achievement of limitations
requiring the application of "best practicable control technology
currently available." In determining limitations for an individual
discharger which require this level of technology, in the absence
of industry-wide regulations defining it, the Regional Administrator
should consider those factors enumerated in section 304(b) (1).
The extent of that consideration will depend upon the amount of
information available to him. The adequacy of the Regional
Administrator's consideration of any particular factor is a
question upon which evidence may be presented, by the permittee
and the Regional Administrator, at an adjudicatory hearing. it is
132
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not a question which can be resolved by this office as a matter
of law in the absence of any record whatsoever. Finally, certain
of the factors listed in the "Question Presented" are, or may be,
inappropriate for consideration by the Regional Administrator in
this case.
DISCUSSION
Section 402(a)(1) gives a broad mandate to the Administrator
(which he has delegated to the Regional Administrator, and may
authorize the States to assume under section 402 (b)) to issue
permits which contain conditions necessary to carry out the
provisions of the Act prior to the taking of all implementing
actions under these sections - in this case, section 301(b).
In carrying out that authorization the Regional Administrators
perform a function analogous to, but distinct from, that of the
Administrator in issuing national regulations implementing the
statutory sections enumerated in section 402(a)(1).
There can be no question but that the factors listed in
section 304 (b) (1) are relevant to the imposition of effluent
limitations in individual NPDES permits, just as they are to
the establishment of industry-wide (or, typically, subcategory-
wide) regulations by the Administrator. But the degree of
consideration given to any such factor must depend, in the case
of issuance of individual permits, upon the amount of information
available to the Regional Administrator, including that made
available by the permit applicant. The Regional Administrator
may not disregard relevant information supplied to him by the
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applicant in formulating the terras of the particular permit,
anymore than the Administrator may disregard comparable evidence
in proposing regulations. But the scope of the Regional
Administrator's obligation is necessarily narrowed.
There is no basis for the contention that the Regional
Administrator must engage in an evaluation of the entire
industry, its economic posture, its energy consumption patterns,
etc., comparable to that which the Administrator undertakes in
nationally-applicable rulemaking for the industry. To the extent
that the applicant seeks to require the Regional Administrator to
consider any particular factor during permit issuance, he is
obligated to present evidence demonstrating the relevance of
that factor to the appropriate limits for his particular facility.
He may not adopt the expedient course of remaining silent and
then complaining of the inadequacy of the Regional Administrator's
consideration of such factors.
To the extent that the permittee is attempting to bring into
question the reasonableness of the precise limits on suspended
solids and pH contained in the permit, it is in the wrong
forum. As I have previously indicated, "the reasonableness of
the particular conditions established in the permits involved . .
is a factual matter which must be determined on the basis the
record of an adjudicatory hearing. .." Decision of the General
Counsel No. 21, Issue No. IV.
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Finally, it should be pointed out that certain of the factors
included in the question presented are inappropriate for consider-
ation by the Regional Administrator under any circumstances and
some appear to be inappropriate for consideration in this case.
The permittee contends that the Regional Administrator must
consider, inter alia, the "biological harm resulting from the
discharge." This is clearly incorrect. Section 304(b) does not
mention biological harm and the structure of the Act and its
legislative history indicate that the omission was intentional.
Water quality considerations may form the basis for more stringent
limitations than the required technology would achieve (Section
301 (b) (1) (C)) . But it may not reduce the requirement based on
that technology. As stated in the Senate Report, "the application
of Phase I technology to industrial point sources is based upon
the control technology for those sources. . . It is not based
upon ambient water quality considerations." A Legislative
History of the Federal Water Pollution Control Act Amendments
of 1972, at page 1416. See also Legis. Hist, at page 309 (Conference
Report), Legis. Hist, at page 788 (House Report).
Similarly, the "nature and size of the discharge relative
to the receiving waters" is relevant only if the limitations in
the permit are derived from State water quality standards and
thus imposed under section 301(b)(1)(C) as more stringent limits
than those based on the best practicable technology. Otherwise,
these issues are simply irrelevant.
135
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Finally, the "uniqueness OL the operation" would seem relevant
primarily to a request for a "variance" from otherwise applicable
industry-wide regulations, pursuant to the "variance clause"
contained in most such regulations. In the absence of regulations
from which to seek a variance on grounds of "uniqueness," this
factor would not appear to be independently relevant apart from
a determination of the effluent limits based on "best practicable
control technology currently available" for the facility in
question.
Date :
Robert V. Zener
General Counsel
JAN 29 1976
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
DECISION OF THE GENERAL COUNSEL ON MATTERS OF
LAW PURSUANT TO 40 C.F.R. §125.36(m)
No. 39
In the matter of National Pollutant Discharge Elimination
System Permit Nos. WV 0000400, WV 0000442, and WV 0001678, FMC
Corporation's Nitro Industrial Chemical Plant, South Charleston
Industrial Chemical Plant, and Nitro Fibers Plant, the Presiding
Officer has certified two legal issues to the General Counsel
for decision pursuant to 40 CFR §125.36(m) The parties, having
had the opportunity to provide written briefs in support of
their respective positions, present the following issues:
Issue _of_JLaw_No_.__!(_aj_
Question Presented
Was it proper for EPA Region III to add new conditions to the
permits subsequent to the 40 CFR §125.34 public hearing, issuance
of determinations by the Regional Administrator pursuant to
40 CFR §125.35(a), request for an adjudicatory hearing and the
granting of that request pursuant to 40 CFR §125.36(b) and (c),
and issuance of public notice of the adjudicatory hearing, but
prior to commencement of the adjudicatory hearing?
137
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Conclusion
Addition of the new permit conditions was proper. The
Presiding Officer has no authority to disallow inclusion
of the. permit conditions at issue but must insure that permittee
and all other interested persons possess notice and an opportunity
to be heard concerning the permit conditions.
Discussion
In Decision of the General Counsel 19, I concluded that, "the
Agency's regulations authorize the Regional Administrator to
amend permit conditions contained in a proposed permit at any
time provided that all persons are afforded an opportunity for
a hearing on the revised permit conditions." That Decision dealt
with a situation where a permit was modified after the public
hearing procedures of 40 CFR §125.34 but, unlike the case
here, prior to the Regional Administrator's determination
pursuant to 40 CFR §125.35(a). The question, then, is whether
issuance of the Regional Administrator's determination, as
well as granting of an adjudicatory hearing and issuance of
notice of the adjudicatory hearing, requires a finding that
the permit cannot now be changed by the Regional Administrator
during the ongoing proceedings but can only be changed by
initiating new proceedings.
Section 125.32(e)(8)(v), which was relied upon in Decision
19, provides, "The proposed permit may be amended by the Regional
Administrator prior to or after the adjudicatory hearing . . . ."
138
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FMC argues that the reference to "proposed permit" limits the
section to permits which have not yet been subject to the determina-
tions of the Regional Administrator purusant to §125.35(a).
But Sl25.32(e)(8)(v) states that it applies "prior to o_r_after
the adjudicatory hearing" and thus cannot be as restricted
in its application as FMC contends. Nor is its relevance
diminished by its presence in provisions defining the contents
of a public notice of an adjudicatory hearing, since it is
obvious that the statements required to be contained in the
public notice represent important elements concerning the
nature of the permit process and the rights and obligations
of prospective parties, parties, Presiding Officers, and Regional
Administrators. To repeat these elements elsewhere in the regulations
would be redundant.
FMC also argues that 40 CFR §125.36(b)(1) precludes a change
in a permit as late in the process as occurred here. That section
provides that any interested person may request an adjudicatory
hearing "to reconsider the determination with regard to a
permit and the conditions contained therein." According to FMC,
the adjudicatory hearing therefore must be confined to the permit
as of the Regional Administrator's determination. But section
125.36(b)(l) refers to both "the determination with respect to
a permit Łnd the conditions contained therein." (emphasis
added). The section thus confines the adjudicatory hearing
to the conditions contained in the permit (and the §125.35(a)
determination) but does not fix those conditions as of some point
in time. Particularly when read in conjunction with §125.32(e)(8)(v)
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this provision cannot be ascribed the limiting function FMC would
give it. Other provisions of Part 125 cited by FMC are similarly
unsupportive of permittee's position. Sections 125.36(b)(1),
125.36(b)(2)(vi) and 125.32(e)(8)(ii) quite simply do not apply
to EPA. Sections 125.36(b)(l) and (b)(2)(vi) apply to the person
requesting an adjudicatory hearing and 125 . 32(e) (8)(ii ) applies
to a person admitted as an additional party to an adjudicatory
proceeding. EPA obviously fits neither of these descriptions.
Moreover, the Agency's regulations authorize the introduction
subsequent to the issuance of the Regional Administrator's
determination and publication of notice of the adjudicatory hearing
of additional issues by intervening third parties. 40 CFR
§125.36(d)(1) and (2)._V These issues could themselves entail
the proposal of additional permit terms or conditions. In
addition, the Administrator has recently ruled that permittees
are entitled, in certain circumstances, to amend their requests
for adjudicatory hearings to raise additional issues, despite the
apparent bar to so doing posed by a literal reading of 40 CFR
§125.36(b)(2)(vi). See U.S.S. Agri-Chemicals, Crystal City,
NPDES Appeal No. 75-7, February 2, 1976. It would be an odd rule
indeed which authorized third parties and permittees to interject
VAlthough an additional party must normally request admission (and
set forth issues intended to be raised) within 30 days after
publication of public notice of the adjudicatory hearing, requests
for intervention may be made after this time has elapsed, and,
under certain circumstances, may be granted even after commencement
of the first prehearing conference. 40 CFR §125 . 36(d)(2) .
140
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new issues into permit proceedings but prohibited the Agency
(which, after all, has the responsibility for developing and
issuing permits which carry out the provisions of the FWPCA--
a statute designed to protect the public interest) from doing so.
The Administrator's Decision In Re U.S. Pipe and Foundry Co.,
October 10, 1975, ™ojd.if_ied, December 9, 1975, reveals concern
with the need for procedures which are as orderly, and expeditious,
as possible. This concern was fundamental to the decision
in U- §. Pipe that, "The standards and guidelines for the preparation
of NPDES permits must be fixed at some point in time so permit
terms can become final and pollution abatement can proceed.
I believe the proper point in time for fixing applicable NPDES
standards and guidelines is when the Regional Administrator
initially issues a final permit." The situation here, however,
is very different from that in U.S. Pipe. Addition of a new
permit condition late in the permit process can cause some
delay. But requiring the Regional Administrator to initiate
new proceedings on an issue which could be resolved in ongoing
proceedings could involve a false economy, and lead, in the
long run, to much greater delay. A flat rule that a new permit
condition cannot be added after any particular point in time
would therefore not promote the values the Administrator sought
to uphold in U^S^_Pj:pe_. Thus, the Agency's regulations do
not forbid addition of a permit condition under the circumstances
presented in this case and sound policy does not require such
a result.
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However, a basic concern which must be considered is fairness
and due process for permittee and all other interested persons.
In Decision of the General Counsel 19, I conditioned my finding
that proposed permit conditions may be amended at any time
with the proviso that "an opportunity for a hearing on the revised
permit condition" must be afforded. The same principal applies
here. However, as I stated in that Decision, a second public
hearing is not needed. The adjudicatory hearing can provide
all process that is due. What is required is notice to permittee
of the new permit conditions, sufficient time to prepare to
deal with the matter at the adjudicatory hearing, and opportunity
at the adjudicatory hearing to make arguments and present evidence
relevant to the new permit conditions. Similar notice must also
be provided all other interested persons. Therefore, while
the Presiding Officer may not exclude a new permit condition,
he may take whatever steps are necessary to insure that due
process is provided.
_I.gsue of Law^No . I ( b)
Quest ipn_Presented
"Whether the U.S. Environmental Protection Agency has the
authority under the Federal Water Pollution Control Act Amendments
of 1972, in the absence of promulgated guidelines pertaining to
the specific point source category in question, to impose
in an NPDES permit the requirements to conduct studies to determine
the type of technology necessary to reflect best available
technlology economically achievable (BATEA) for its facility?"
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The permit conditions in issue are the following:
Permit WV 0000400^ŁFMCJNj.tro_ ln_du_str_ial_Chemic_al Plant)
The permittee shall conduct treatment and control studies,
the goals of which are to determine if it is technologically and
economically feasible (as provided in Section 301(b)(2)(A) of
the Federal Water Pollution Control Act Amendments of 1972)
to attain BATEA as currently estimated by EPA. These studies
should include detailed economic analyses of various alternatives.
The permittee shall submit proposals for such studies to EPA
by August 1, 1976. If the reasonableness of these studies
is mutually agreeable, these studies shall begin by October 1,
1976 and the results shall be submitted to EPA by October 1, 1978.
Current EPA estimates of BATEA for this facility are as
follows:
Outfall 001 Iks/day Average
BOD Phenols TSS Arsenic Nh -N
5 3
225 4 500 0.1 (maximum) 20
Permit WV 0000442 (FMC South Charleston industrial Chemical Plant
The permittee shall conduct treatment and control studies,
the goals of which are to determine if it is technologically
and economically feasible (as provided in section 301(b)(2)(A)
of the Federal Water Pollution Control Act Amendments of 1972)
to attain BATEA as currently estimated by EPA. These studies
should include economic analyses of various alternatives. The
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Nh -N
3
N/A
8
N/A
30
125
500
TKN
N/A
N/A
N/A
N/A
650
1000
Chlor
250
N/A
N/A
N/A
100
N/A
permittee shall submit proposals for such studies to EPA by August
1, 1976. If the reasonableness of these studies is mutually
agreeable, these studies shall be submitted to EPA by October
1, 1978.
Current EPA estimates of BATEA for this facility are as
follows:
Outfall Iks/day Average
BOD
5
019 N/A
022 N/A
023 150
024 N/A
027 N/A
029 N/A
Conclusion
The authority exists to require that such studies be
conducted.
Discussion
FMC argues that the FWPCA does not provide authority to
require the kinds of BATEA studies contained in the permits.
The contention is that sections 308 and 402 provide authority
only to require information directly relevant to the enforceable
effluent limitations contained in the permit, and that the FWPCA
does not allow EPA to require submission of data relevant
only to limitations to be contained in a future permit.
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Section 402 cross-references section 308 in a broad and
comprehensive fashion. Section 402(a)(l) provides that the
Administrator may issue a permit for the discharge of a pollutant
upon condition that the discharger complies with section 308.
And section 402(b)(2) requires a State permit issuing
authority, and, by virtue of section 402(a)(3) the Administrator,
to require "compliance with all applicable requirements of
section 308 or [t]o inspect, monitor, enter and require reports
to at least the same extent as required by section 308 . . . ."
Therefore, the authority under §402 to require submission
of information in a permit is obviously at least as broad
as the authority conferred by section 308. See General Counsel
Decision No. 21 at 14, General Counsel Decision No. 27 at
7-8, General Counsel Decision No. 32 at 7-8, General Counsel
Decision No. 35 at 3-4.
FMC's very narrow interpretation of Section 308 is at variance
with the plain language of that provision. The authority conferred
is limited only by the requirement that the information submitted
is "required to carry out the objective of [the] Act. . . ."V
and that the obligations placed upon the owner or operator be
reasonable.**/ General Counsel Decision No. 27 at 7. Information
_*_7'rThe objective of this Act is to restore and maintain the chemical,
physical, and biological intergrity of the Nation's waters."
Section 101(a).
j^*_/As I have said in other Decisions, the reasonableness of
monitoring and other section 308 requirements is a factual
issue. General Counsel Decision No. 21 at 15, General Counsel
Decision No. 32 at 8.
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which may be required includes "determining whether any person
is in violation of any ... effluent limitation. . . ." (§308(a)(2))
but also specifically, and additionally, includes "developing
or assisting in the development of any effluent limitation. ..."
(§308(a)(l)) and "carrying out sections 305, 311, 402, and
504. . . ." (§308(a)(4)). FMC's contention that information
can be required only when relevant to enforceable limitations
contained in a permit thus considers only §308(a)(2) and wholly
ignores §§308(a)(l) and 308(a)(4). It just cannot be seriously
contended that information directly relevant to establishment
of effluent limitations reflecting BATEA for the very permittee
from whom the information is obtained is not information
"required to carry out the objective of [the] Act. ..."
and that it is neither to be used for "developing or assisting
in the development of any effluent limitation. ..." nor relevant
to "carying out section ... 402. ..."
Not only are the contested permit provisions consistent
with the language of the FWPCA, they are also consistent with
its legislative history. FMC's arguments to the contrary again
ignore relevant language. The House Report notes "that the
Environmental Protection Agency has had difficulty in obtaining
reliable cost and waste loading information to set effluent limits
and to enforce effective pollution control." A Legislative
History of the Federal Water Pollution Control Act Amendments
of 1972 (hereafter Leg. Hist.) at 800 (emphasis added). The
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Senate Report similarly found that "A necessary adjunct to the
establishment of effective water pollution requirements and the
enforcement of such requirements is authority to require infor-
mation. . . ." Leg. Hist. 1480 (emphasis added). Thus, Congress
clearly anticipated that §308 authority would be used to develop
effluent limitations—precisely the function performed by the
permit requirements in issue. FMC's argument that the information
required by a permit condition must relate to effluent limitations
contained in the same permit thus has no support in the legis-
lative history. Even the language in the House Report that
"monitoring is basically for control of the discharge of pollutants
and not the gathering of data." Leg. Hist. 801, is not inconsis-
tent with the permit conditions at issue since these clearly
relate to "control of the discharge of pollutants."
FMC also argues that the only generation of information that
EPA may require under §308 must be "related to data obtained by
the monitoring of effluents", and that the "information" and
"reports" required can be little more than records of such
monitoring. This is an extraordinarily cramped reading of the
law. The provisions of §308 relating to maintaining records
and making reports would be rendered redundancies with the
monitoring requirements. And the fact that the Administrator is
empowered to require "such other information as he may reasonably
require. . . ." (§308(a)(A)(v)) is overlooked. Moreover, the
reference in §308(b) to "effluent data" would be unnecessary
since, under FMC's interpretation, this would be the only
sort of data supplied to EPA. Although the legislative history
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focuses on monitoring requirements, it is nowhere stated that no
other types of information can be required. In fact, the House
Report noted the lack of EPA access to cost data, as well as
waste loading information, as a reason for establishing §308.
See Leg. Hist, at 800. Cost data cannot be obtained by effluent
monitoring. Similarly, the Senate Report discusses the need
for information, data, and reports "as well as" monitoring
requirements. Leg. Hist. 1480. Thus, both Reports discuss
monitoring in an inclusive, not exclusive, way. I can therefore
find no basis whatever for FMC's argument that a permittee cannot
be required to obtain or generate data other than by monitoring
effluent.
FMC notes that EPA's NPDES regulations, 40 CFR Part 125, do
not explicitly provide for permit provisions of the nature
of those at issue here. But there is no inconsistency between
EPA's regulations and these permit conditions. Section 125.22(b)
provides that "Permits shall also include ... such other conditions
as the Regional Administrator considers necessary or appropriate
to carry out the provisions of the Act." And the types of
monitoring and reporting requirements set out in 40 CFR 125.27
are not exclusive. That section provides that "Any permit
shall be subject to such monitoring requirements as may be
reasonably required by the Regional Administrator. ..."
and then proceeds to list requirements which are clearly meant
to represent minimum obligations.
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Finally, two other points deserve mention. FMC argues
that the estimates of BATEA contained in the permits are
defective because "unsupported by any statement of technical
or economical basis." But such questions are irrelevant.
The BATEA limitations are estimates to be used as an aid in
the information gathering effort, they are not operative during
the life of the permit as enforceable limitations. Therefore,
the only issue is whether the BATEA study requirements are
"reasonable" and not whether a sufficient basis now exists
for setting BATEA limitations. The other point raised by FMC
has to do with whether EPA has somehow "delegated" to FMC the
obligation to establish BATEA. The information supplied by FMC
will be used for "developing or assisting in the development of ..
effluent limitation[s]. . . ." But, of course, EPA retains
ultimate responsibility for determining BATEA.
UiŁHe of Law No. II
Question Presented
Whether the U.S. Environmental Protection Agency
has the authority under the Federal Water
Pollution Control Act Amendments of 1972 to
include a condition in a NPDES permit which
allows results of sampling alleged to have
been conducted for research and diagnostic
purposes to be excluded from the calculations
of the results of all required effluent
monitoring performed by the permittee and
reported by the permittee on its monthly
discharge monitoring report forms; and
further, to include a condition which
permits such sampling results to be exempted
from civil and criminal liability when such
results exceed the effluent limitations set
forth in the permit?"
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Conclusion
EPA has the authority to include in the permits the per-
mit conditions at issue.
Discussion
The permit condition at issue is the following:
"The permittee may elect, however, to exclude
from the calculation and reporting required in the
Discharge Monitoring Report Form the results of
all such additional monitoring which is performed
solely for research and diagnostic purposes. If the
permittee makes this election, the permittee shall
report the results of this research and diagnostic
monitoring for information purposes only in an
attachment to each Discharge Monitoring Report
Form. Such results shall not be taken into account
in computing the daily maximum or daily average
effluent monitoring results on such discharge
Monitoring Report Form, nor shall they be taken
into account in applying the permit conditions
on 'Noncompliance Notification1 (Part II, A-2) .
All records and information resulting from such
research and diagnostic moni-toring shall be
recorded, identified, and retained as such by
the permittee in accordance with the permit
conditions on 'Recording of Results' (Part I,
C-5) and on 'Records Retention1 (Part I, C-7)
as if required by the permit. 'Additional
monitoring which is performed solely for
research and diagnostic purposes' shall
mean any monitoring by the permittee in addition
to that required by the permit and which is
conducted for the purposes of research on
the operation of permittee's facilities, or
of the diagnosis of any problems that may arise
in such operation."
This condition would supplement Part I, C-6 which provides:
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"If the permittee monitors any pollutant at
the location(s) designated herein more
frequently than required by this permit, using
approved analytical methods as specified above,
the results of such monitoring shall be included
in the calculation and reporting of the values
required in the Discharge Monitoring Report Form
[EPA No. 3320-1]. Such increased frequency shall
also be indicated."
Additionally, the permits would exclude such monitoring
from being the basis for civil or criminal penalties.
At the outset it should be made clear that the authority
of the Regional Administrator to require submission of the
monitoring data described in the permit conditions set out
above, and to take enforcement action based upon that in-
formation, is not in question. FMC, the proponent of the per-
mit conditions at issue, does not, and cannot, argue that the
conditions are required by law. The question is instead
whether the Regional Administrator has discretion to include
such conditions in a permit.
The Region argues that exemption of so-called research
and diagnostic monitoring data from the enforcement mechanisms
of the permit would violate the FWPCA. I cannot read the law
so rigidly. In issuing a permit the basic obligation of the
Regional Administrator is to insure that the permittee meets
"all applicable requirements under sections 301, 302, 306,
307, 308, and 403...or...such conditions as the Administrator
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determines are necessary to carry out the provisions of
this Act." §402(a)(l). The Regional Administrator
must also "prescribe conditions for such permits to
assure compliance with the requirements of [§402(a)(l)J
including conditions on data and information collection,
reporting, and such other requirements as he deems appro-
priate." §402(a)(2).
I believe that the Regional Administrator could
adopt the permit conditions proposed by FMC and not vio-
late his obligations under §402(a). The exemption of
data from the enforcement mechanisms of the permit is
not so broad or pervasive that the Regional Administrator
would be unable to rationally find that he would still
retain adequate ability to insure compliance with
the requirements of the permit by resort to civil
or even criminal sanctions. The Regional Admin-
istrator could also find that the permit conditions
at issue, by encouraging research on pollution control,
or otherwise, would operate to advance the purposes of
the FWPCA.
Therefore, while nothing compels the Regional Ad-
ministrator to include the permit conditions at issue
here, I can find nothing that would prevent him from doing
so.
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Robert V. Zener
General Counsel
Dated:
y;* 30
153
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
DECISION OF THE GENERAL COUNSEL ON MATTERS OF LAW
PURSUANT TO 40 C.F.R. Section 125.36(m)
No. 40
In the matter of National Pollutant Discharge Elimination
System Permits No. RI 0001147 and RI 0001457, Bristol County
Water Company, water treatment plants in Warren, Rhode Island
and Barrington, Rhode Island, the Presiding Officer has
certified seven legal issues to the General Counsel for decision
pursuant to 40 CFR §125.36(m). The parties,!./ having had the
opportunity to provide written briefs in support of their
respective positions, present the following issues.
Issue of Law Number I
Question Presented
"To what extent may or must EPA take into account the
economic situation of a discharger (BCWC) in determining the
effluent limitations and other requirements of the NPDES permits
to be issued to the discharger, given that applicable effluent
limitations guidelines under Sections 301 and 304 of the FWPCA,
33 U.S.C. 1311 and 1314, have not yet been proposed or published."
I/ In addition to Bristol County Water Company and U.S. EPA
~ Region I, briefs were submitted by Ecology Action of Rhode
Island and Laurel Park Improvement Association.
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Conclusion
Prior to the promulgation of regulations pursuant to
Sections 301 and 304 of the Act, the Administrator evaluates
the factors set forth in Section 304(b)(1)(B) in making a
determination of best practicable control technology currently
available for the individual point source. Such consideration
may include an evaluation of the "total cost of application
of technology in relation to the effluent reduction benefits
to be achieved from such application." The economic situation
of the discharger may be relevant in determining the total cost
of the application of various levels of technology and hence to
the appropriate effluent reduction levels required in a permit.
Discussion
As I have previously held, prior to the promulgation of
industry-wide effluent regulations, effluent limitations in an
NPDES permit are based upon Section 402(a)(1) of the Act, which
authorizes the Administrator to impose "such conditions as [he]
determines are necessary to carry out the provisions of this
Act." (See Decisions of the General Counsel, No. 1, Issue No. I
(September 5, 1974) and No. 38 (January 29, 1976). As stated
in Decision of the General Counsel No. 38, Issue of Law No.
Ill, "There can be no question but that the factors listed in
Section 304(b)(1) are relevant to the imposition of effluent
limitations in individual NPDES permits just as they are to the
establishment of industry-wide (or, typically, subcategory-wide)
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regulations by the Administrator. But the degree of consideration
given to any such factor must depend, ....upon the amount of
information available...including that made available by the permit
applicant." That Decision further provides that "to the extent
that the applicant U seeks to require the Regional Administrator
to consider any particular factor during permit issuance, he is
obligated to present evidence demonstrating the relevance of that
factor to the appropriate limits for this particular facility."
The Administrator typically considers the economic posture
of an industry in the promulgation of nationally-applicable
regulations under Sections 301 and 304 of the Act. The economic
posture of a permit applicant may become similarly relevant where
the Regional Administrator issues a permit pursuant to Section
402(a)(1) of the Act. The consideration of economic impact in an
individual case is comparable to the one made in nationally-
applicable rulemaking but is, of course, confined to the specific
permit applicant.
Section 304(b)(l)(B) provides that "Factors relating to the
assessment of best practicable control technology currently
available ...shall include consideration of the total cost of
application of technology in relation to the effluent reduction
benefits to be achieved from such application. . ."
27Or,for that matter, any party.
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The legislative history pertinent to this provision indicates,
albeit inferentially, that the economic posture of an individual
discharger may be relevant to this consideration in the context
of a permit written without assistance of national regulations.
The Conference Report on the bill which became the FWPCA
reveals Congress1 general expectation that case-by-case economic
inquiries were neither expected nor desired: "The conferees
intend that the Administrator or the State, as the case may be,
will make the determination of the economic impact of an effluent
limitation on the basis of classes and categories of point sources
as distinguished from a plant-by-plant determination." Legis.
Hist, at page 304.
Similarly, in explaining the conference agreement to the
Senate, Senator Muskie explained:
"The balancing test between total cost and
effluent reduction benefits is intended to limit
the application of technology only where the
additional degree of effluent reduction is
wholly out of proportion to the costs of
achieving such marginal level of reduction
for any class or category or sources. The
conferees agreed upon this limited cost-benefit
analysis in order to maintain uniformity within
a class and category of point sources subject
to effluent limitations, and to avoid imposing
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on the Administrator any obligation ... to
determine the economic impact of controls on
any individual plant in a single community."
Legis. Hist, at page 170.
The statements just quoted can best be understood as ex-
pressing the Congress' rejection of any obligation on the
Administrator to reconsider individual plant economics in
applying national regulations, once the economic posture
of the industry category had been taken into account in estab-
lishing the generic regulations. In those instances where
no national effluent regulations have been promulgated, this
legislative history similarly expresses Congress' preference
that, if available information allows consideration of efflu-
ent limitations which are reasonable in light of the overall
economic situation of an industry, such limitations should be
applied, notwithstanding the economic situation of any in-
dividual plant. Since Congress manifestly did not intend for
all considerations of cost to be ignored in pre-regulation
permits, the most reasonable construction of the Act is, as
we have previously held, that the relation of the total cost
of the technology to the effluent reduction benefits, along
with other factors in Section 304(b)(l), be taken into ac-
count when issuing permits under Section 402 (a) (1).
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That being the case, the question is what is meant by
"total cost." The Legislative History indicates that the
term "total cost of application of technology" was meant to
include "those internal, or plant costs sustained by the owner
or operator and those external costs such as potential unem-
ployment, dislocation and rural area economic development sus-
tained by the community, area, or region." Legis. Hist, at
page 231.
"Effluent reduction benefits" is, as the previously cited
explanation of Senator Muskie indicates, the quantitative
reduction in pollutants discharged effected by various levels
of technology. Accordingly, the Regional Administrator in a
case such as this must, if presented with evidence relevant to
the "internal" and "external" costs of effluent reduction, weigh
that evidence against the incremental effluent reduction achieved
by various levels of technology under consideration. The
resolution of that process is, of course, a matter within the
sound discretion of the Regional Administrator; it is not a
matter of law. I would observe, however, that just as the
Administrator, after considering these factors on a national
level, may properly issue regulations which will result in the
closure of marginal plants, (See American Iron and Steel
Institute v. Train, (CAS 1975, 8 ERC 1321)) so too may the Regional
Administrator legally issue a permit requiring the attainment
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of levels of effluent reduction which could result in the
operator of the plant electing to close down rather than
make the necessary investment in pollution control facili-
ties. Indeed, where evidence is available as to levels
of treatment reasonable for the industry as a whole, it
might well be arbitrary for the Regional Administrator,
in disregard of such evidence, to issue a permit re-
quiring some lesser degree of treatment on the basis of
an individual discharger's economic situation.
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Issues of Law II and Hi
Question Presented
II
"May EPA allow a discharger (BCWC) to operate discharging
facilities (the Nyatt Road and Child Street Stations) in a
"stand-by" mode without treating the discharge (filter backwash),
on the grounds that this represents "best practicable control
technology currently available" ("BPT") within the meaning of
Sections 301 and 304 of the FWPCA? For the purposes of this
and the following issues, "stand-by" means that the facilities
would be used only in "emergency" conditions (when the normal
supply of drinking water available to BCWC is not sufficient
to meet the demand)."
Question Presented
III
"Should the effluent limitations which represent BPT for
discharging facilities (the Nyatt Road and Child Street Stations)
which are in a "stand-by" mode be the same as they would be for
the same discharging facilities if they were operated continuously?"
Conclusion
Prior to the promulgation of effluent regulations pursuant
to Sections 301 and 304 of the Act which would be applicable to
any point source, the determination of the required level of
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technology which must be achieved is a factual matter to be
resolved in the permit issuance process and is not properly
referrable as an issue of law.
Of course, Section 301(b)(l)(C) requires that discharges
must comply with applicable state water quality standards.
Limitations based on these standards would apply were they to
be more stringent than effluent limitations derived from best
practicable technology. All discharges - whether continuous or
intermittent - must comply with applicable water quality standards.
Issue of Law Number IV
Question Presented
"May EPA allow a discharger (BCWC) to operate discharging
facilities (the Nyatt Road and Chi'ld Street Stations) continuously
without treatment of the discharge after July 1, 1977, either
because:
(1) The discharging facility will be put in a
"stand-by" mode at some date after July 1, 1977, or
(2) The discharger will install treatment facilities
at some date after July 1, 1977.
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Conclusion
By July 1, 1977, all dischargers of pollutants must achieve
effluent limitations requiring the application of best practicable
control technology currently available or any more stringent
limitations necessary to carry out the requirements of Section
301 (b) (1) (C). Continuation of the discharge of untreated
effluent cannot be sanctioned unless the Regional Administrator
were to conclude both that no treatment represented the best
practicable treatment currently available and that the discharge
would not violate water quality standards or other requirements
of Section 301(b)(1)(C). Whether or not these conclusions may
properly be reached in this case is a question of fact. The
fact that a discharger asserts that it intends to install
treatment facilities at some date after July 1, 1977, however,
is irrelevant to the issue of what constitutes best practicable
control technology currently available. And effluent levels
commensurate with best practicable control technology must be
achieved by July 1, 1977.
Discussion
All point sources other than publicly-owned treatment works
must achieve at least the level of pollution abatement specified
in Section 301(b)(1)(A) by July 1, 1977. See Decision of the
General Counsel No. 11 (May 1, 1975), Decision of the General
Counsel No. 26 (July 24, 1975); affirmed in the Decision of the
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Administrator in Bethlehem Steel, NPDES No. 75-9, (September 30,
1975). See also Virginia State Water Control Board v. Train,
U.S.D.C. E.D. Va. No. 74-0328-R, February 9, 1976.
These decisions make clear that the Agency does not have
discretion to extend the date for compliance on pragmatic or
prudential grounds. Similarly, a "committment" by a discharger to
install treatment after the statutory date is simply irrelevant
in face of its unambiguous obligation to install whatever treatment
methods are necessary to achieve the requisite effluent reduction
by the statutory date.
These principles, however, do not resolve entirely the
question of what effluent reduction level (and what corresponding
level of treatment) .is best practicable control technology
currently available or is required to meet State water quality
standards. The intervening public interest groups have advanced
persuasive arguments against the permittee's request to have
its continued discharge of untreated wastewater sanctioned. But
these arguments are properly to be made to the Regional Adminis-
trator. While the Region concedes that it seems unlikely that a
completely unrestricted discharge would represent BPT and
comply with water quality standards, it also correctly points
out that these are issues for the trier of fact.
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Issue of Law Number V
Question Presented
"May EPA require a discharger (BCWC), through an NPDES
permit, to remove deposits of sludge or silt in a navigable
water where the deposits are the result of discharges which
occurred prior to 1970? Prior to the issuance of the NPDES
permit? Subsequent to the issuance of the NPDES Permit?"
Conclusion
No.
Discussion
Unlike the situation addressed in Decision of the General
Counsel No. 28 (August 11, 1975), a condition requiring removal
of sludge deposits was not here required by the U.S. Army Corps
of Engineers pursuant to Section 402(b)(6) of the Act and 40 CFR
§125.22(b). Nor, so far as appears from the briefs, has the
State of Rhode Island imposed such a condition on the permit
through its certification rights pursuant to Section 401
of the Act. V
Accordingly, the source of the Agency's authority for imposing
a requirement for removal of sludge must be found, if at all, in
Section 402.
3/Hence, we need not resolve the question of whether such a
condition could be properly imposed by a State under Sec-
tion 401 (d) .
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Section 402(a)(1) authorizes the Agency to issue permits
upon condition that applicable requirements of other enumerated
sections are met, or, "prior to the taking of necessary implementing
actions" relating to such sections, upon "such conditions as the
Administrator determines are necessary to carry out the provisions
of this Act." Section 402(a)(2) requires EPA to impose conditions
in NPDES permits "to assure compliance with the requirements" of
paragraph (a)(1) - which includes Sections 301, 302, 306, 307,
308 and 403. See generally, Decision of the General Counsel
No. 19 (June 27, 1975) .
Section 402(a)(1) directs the Administrator to ensure that
the permitted "discharge" is in compliance with the enumerated
sections of the Act. The Administrator is not confined by this
language to imposing only conditions which address merely the
physical discharge. General Counsel's Decision No. 19, for
example, approved conditions on the qualifications of treatment
plant personnel which were found necessary to assure compliance
with sections 301 and 308 - both cited in section 402. That
Decision states the rule as follows:
"So long as there is a rational connection
between the condition and the assured attain-
ment of effluent limitations, there is statutory
authority to impose it."
However, this does not conclude this issue since a condition
requiring removal of pollutants attributable to the discharge
must be shown necessary to the assured compliance with one or
more of the sections listed in Section 402(a)(1). With the
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exception of section 308, the enumerated sections authorize or
require the Administrator to issue a variety of generally appli-
cable regulations or to take individual standard setting actions.
A common feature of these sections is their focus on the
regulation of discharges of pollutants through the imposition
of effluent limitations - defined in section 502(11) as "any
restriction established ... on quantities, rates and concen-
trations of chemical, physical, biological and other constituents
which are discharged." None of the sections contemplate remedial
measures such as the removal of in-place pollutants.
It is suggested that section 301(b)(l)(C) supports the
imposition of a requirement for removal of pollutants permitted
to be discharged.!/ The argument is that (a) section 301(b)(l)(C)
authorizes the imposition of "limitations" necessary to implement
applicable water quality standards; (b) Rhode Island's water
quality standards prohibit "sludge deposits," and hence (c) EPA
may require the removal of such deposits as a condition in NPDES
permits.
The argument founders on the fact that a requirement that
a discharger remove in-place pollutants cannot reasonably be
characterized as a "limitation," and it is limitations more
stringent than those required by section 301(b)(1)(A) and (B)
4/ It is conceded that a permit may not require the dredged
removal of pollutants discharged prior to issuance of the
permit.
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which section 301(b)(1)(C) requires to be achieved. The
limitations referred to in section 301(b)(l)(A) and (B) are
expressly denominated "effluent limitations" and it is clear
that section 301(b)(1)(C) refers as well to restrictions on
the amount or characteristics of effluents discharged.5/ Thus,
while the Administrator may regulate (or prohibit if necessary)
the discharge of pollutants to prevent the accumulation of
deposits which would cause a violation of water quality standards,
he may not, through the vehicle of an NPDES permit, impose
conditions requiring dredged removal of in-place pollutants.
Issue of Law Number VI
Question Presented
"Whether EPA may or must regulate, by an NPDES permit, the
flow of water over a dam, when the reservoir upstream of the
dam (the Kickemuit Reservoir) is navigable water within the
meaning of section 502(7) of the FWPCA, 33 U.S.C. 1362 (7),
and is owned by the owner of the dam (BCWC), and the water below
the dam (the salt water portion of the Krikemuit River) is also
navigable."
5_/ The authorization to contract for removal of in-place pollutants
contained in section 115 of the Act is further indication that
Congress did not intend to confer on the Administrator the
power to require such removal through NPDES permits.
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Conclusion
The question of whether or not EPA may or must regulate the
flow of water over a dam by an NPDES permit is not relevant to
this permit proceeding since BCWC does not appear to have applied
for a permit for a point source discharge associated with its dam
nor does the proposed permit include conditions or limitations
on the flow of water over the dam. For purposes of this
proceeding, therefore, the question is purely hypothetical and
is not properly certified.
Issue of Law Number VII
Question Presented
"Whether EPA may take into account the healthfulness or
safety of the product (drinking water) supplied by a discharger
(BCWC) in setting limitations in the discharger's NPDES permit."
Conclusion
As a general proposition, EPA may take into account the
effect a particular effluent limitation may have on the health-
fulness or safety of the product supplied by a discharger. The
fact that the permittee in this instance supplies drinking water
to the public, however, does not form an independent basis upon
which EPA may fashion more stringent effluent limitations upon
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its discharge than would otherwise be justified by sections 301(b)
(1) (A) and (b) (1) (C).
Discussion
The Region asserts that section 402 does not authorize EPA
to use NPDES permits as a "mechanism for quality control of the
product" produced by a discharging facility. The proposition
is correct, though its converse is not; i.e. , EPA may properly
take into account a claim by a discharger that the methods required
to meet a particular proposed effluent limitation wi11 endanger
the healthfulness or safety of the product manufactured.
Here the "product" is drinking water supplied to residents
of Rhode Island municipalities and the discharge sought to be
permitted is filter backwash which is apparently discharged
upstream of the intake to the water supply plant.
This fact does not alter EPA's statutory powers; under
section 402 the Agency is required to establish limits on any
discharge consistent with state water quality standards. Hence,
if Rhode Island has classified the receiving water affected by
the outfall in question here for "drinking water supply" and
established associated ambient criteria levels/ the discharge
would have to conform to those levels. (Section 301(b)(1)(C)).
Similarly, section 302 authorizes more stringent effluent
limitations to be established if application of limitations
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pursuant to section 301(b)(2): "Would interfere with the attainment
or maintenance of that water quality in a specific portion of the
navigable waters which shall assure protection of public water
supplies. ."
The fact that a downstream use of water is as drinking
water supply does not in itself warrant imposition of conditions
in NPDES permits not otherwise justified by the Act. The
passage of the Safe Drinking Water Act, 42 U.S.C. Section 300(f)
et seq., does not alter this condition.
Robert V. Zerfet fT
General Counsel
Date:
2 7976
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DECISION OF THE GENERAL COUNSEL ON MATTERS OF
LAW PURSUANT TO 40 CFR §125.36(m)
NO. 41
In the matter of the National Pollutant Discharge Elimination
System Permit for Brunswick Steam Electric Plant, Permit
No. NC0007064, Southport, North Carolina, the presiding officer has
certified four issues of law to the General Counsel for decision
pursuant to 40 CFR 125.36(m). The parties, having had the
opportunity to provide written briefs in support of their respective
positions, present the following issues:
ISSUE OF LAW NO. 1
QUESTION PRESENTED
Timing of Imposition - July, 1981, Guideline Date - Can "best
technology available" requirements be imposed under §316 (b), and thus
under §301, prior to the July 1, 1981, date specified in 40 CFR
§423.13(m) for compliance with §301 thermal effluent limitations?
DECISION
Insofar as §316 (b) addresses a different environmental problem in
a different manner than the §301 thermal effluent limitations, §316(b)
determinations are independent of determinations under the thermal
effluent limitations. Furthermore, the July 1, 1981, date in
40 CFR §423.13 was set on the basis of the overall ability of the
172
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Steam Electric industry to construct the best available technology —
closed cycle cooling systems. Since §316(b) does not establish a
uniform "best technology available", it would be inappropriate to establish
a uniform date under §316(b).
Insofar as neither §316(b) nor the regulations thereunder specify
a time limitation for the application of best technology available, the
ultimate compliance date under §316(b) is governed only by §301(b)(2)(A)
which requires compliance not later than July 1, 1983. Therefore,
best technology available under §316(b) may be imposed in NPDES permits,
on a case by case basis, prior to July 1, 1981, so long as the
prescribed technology is, in fact, available by the compliance date.
DISCUSSION
Carolina Power and Light Company's (CP&L) argument that best
technology available under §316(b)i' cannot be imposed until July 1,
1981, (the date for compliance with thermal effluent limitations)
rests on a misapprehension of the relationship between §316(b) and
thermal effluent limitations under §§301 and 306. CP&L's argument
assumes that §316(b) determinations and thermal effluent limitation
I/
Section 316(b) states:
Any standard established pursuant to section 301 or
section 306 of this Act and applicable to a point source
shall require that the location, design, construction,
and capacity of cooling water intake structures reflect
the best technology available for minimizing adverse
environmental impact.
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decisions under §§301 and 306 are interdependent and that §316(b)
requirements "ride on the coattails of §301 effluent limitations."
(CP&L's Brief on Issues of Law Referred to the Office of General
Counsel, at 13). Given this assumption, CP&L asserts that §316(b)
determinations are bound by the July 1, 1981, statutory date of
compliance with the thermal effluent limitations contained in
the Steam Electric Power Generating Point Source Category regulations
prescribing "best available technology". (40 CFR Part 423; 39 F.R.
36186, October 8, 1974).
CP&L's underlying assumption that §316 (b) determinations are
dependent upon thermal effluent standards is misconceived. First,
§316(b) does not establish effluent limitations for discharges of heat.
Rather, it addresses a distinct environmental problem — the withdrawal
of massive volumes of water and the aquatic organisms therein through
cooling water intake structures. Second, the regulations under
21
§316(b),— unlike the thermal effluent regulations, do not establish a
single industry-wide "best available technology" standard. That is,
the Steam Electric regulations require that all plants within specified
categories in the industry must attain prescribed thermal effluent
limitations by July 1, 1981. Conversely, the §316 (b) regulations do
not prescribe a single technology or technologies which all sources
in the country must apply.— The preamble to §316(b) regulations
I/
40 CFR 401.14, 402.10, 402.11, 41 F.R. 17389-90, April 26, 1976.
I/
41 F.R. 17388.
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states that "the Agency believes that the appropriate technology is
best determined after a careful evaluation of the specific aspects at
each site." Third, unlike the thermal effluent regulations, the
§316(b) regulations do not establish a date for compliance with "best
technology available." Thus, §316(b) determinations are bound only by
§301(b)(2)(A) which requires that effluent limitations shall require
compliance with best available technology economically achievable
not later than July 1, 1983. As CP&L concedes, EPA has authority to
advance the statutory deadline in NPDES permits where regulations do not
otherwise establish a compliance date.—'
Under §316(b) the best technology available must, of course, be
available. In other words, a compliance schedule under the §316(b)
regulations must take into consideration the time necessary to implement
the appropriate technology at a given intake structure. —'
In some cases, the implementation of such technology may require only
modest alterations in design, for example, which could easily be completed
well in advance of 1981. There is no need to delay the attainment of
A/
Decision of the General Counsel No. 11, at 3; Decision of
the General Counsel No. 23, at 9.
5/
The capacity of a cooling water intake could be restricted under
316(b) so as to necessitate the construction of a closed cycle
cooling system. If so, a compliance schedule for such a
restriction should be co-ordinated with any independent require-
ment for the installation of a closed-cycle cooling system under
the Steam Electric guidelines.
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§316(b)'s mandate until that date by mechanistic reference to unrelated
sections of the law. In other cases, best technology available under
§316(b) may entail substantial changes in cooling water intake structures
and associated cooling system alterations. It may not be feasible to
make these changes by 1981 in certain instances. Thus, the benefits
of a flexible case-by-case §316(b) implementation schedule cut both
ways.
ISSUE OF LAW NO. II
QUESTION PRESENTED
Type of Control Technology - Can Cooling Towers Be Required -
Does §316(b) of FWPCA allow imposition of closed-cycle cooling require-
ments since such requirements relate not to the location, design,
construction and capacity of the cooling water intake structures
themselves, but rather to the type of cooling system and its thermal
discharge technology?
DECISION
Section 316(b) authorizes the reduction of the volume (capacity)
of cooling water withdrawn through a cooling water intake structure if
such a reduction reflects the best technology available for minimizing
adverse environmental impact. Such a reduction of allowable capacity
may necessitate the use of a closed cycle or recirculating cooling system.
Section 316(b) does not, however, allow for the imposition of
closed cycle cooling systems per se.
176
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DISCUSSION
Section 316(b) provides that "the location, design, construction,
and capacity of cooling water intake structures reflect the best technology
available for minimizing adverse environmental impact." The major adverse
environmental impacts of cooling water intake structures are those affecting
aquatic organisms living in the volumes of water withdrawn through
the intake structure.— Generally, the organisms are damaged either
through direct contact with the intake structure (impingement) or
through "inner plant" effects which occur when the organisms are swept
through the intake structure and into the plant itself (entrainment).
One means of minimizing entrainment damage in particular is to restrict
the capacity of the intake structures and thus the volume of water
withdrawn through the intake system. In this manner, the overall
exposure of aquatic organisms to entrainment effects may be reduced.—
CP&L, however, asserts that the term "capacity" refers only to the
velocity of water withdrawn through an intake structure. To the contrary,
it seems clear to me that the term "capacity" in §316(b) means the volume
of water withdrawn through a cooling water intake structure. This
i/
In the Steam Electric industry, the volumes of water drawn
through plants utilizing "once through" cooling systems are
generally very large. Senate Comm. on Pub. Works. A
Legislative History of the Water Pollution Control Act
Amendments of 1972, 93d Cong., 1st Session., at 196-197
(1973). (Hereinafter cited as Leg. Hist.).
2J
41 F.R. 17388, April 26, 1976.
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conclusion is supported by the commonly understood meaning of the term
"capacity" — the definition of the term in the regulations under §316(b)—/
and the legislative history of the Federal Water Pollution Control Act
Amendments of 1972.
In the course of debating the conference report of the Act on
October 4, 1972, the Senate was well aware of the dangers posed to
aquatic life by the withdrawal of large volumes of water through
cooling water intake structures.—' In response to concerns voiced
by Senator Buckley that the Act would prevent the effective regulation
The Random House Dictionary of the English Language defines
capacity (definition 2) as "cubic contents; volume; that
which can be contained." (Unabridged 1970).
I/
40 CFR. 402.11(c), 41 F.R. 17390, April 26, 1976.
IP./
During debate, Senator Buckley cited - with approval - two
newspaper articles which reported a decision of the Atomic
Energy Commission (AEC) to require Consolidated Edison
Company to install a closed cycle cooling system at its
nuclear power plants at Indian Point on the Hudson River.
The articles pointed out that plants withdrew massive amounts
of water from the River and, as a result, also withdrew
thousands of aquatic organisms each minute. In order to
minimize this adverse environmental impact, the articles noted
that the AEC had ordered Consolidated Edison Company to stop
removing such large volumes of water from the River and to
install cooling towers in order to do so. Leg. Hist.,
supra n 6., at 196-197.
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of this problem, Senator Muskie, the Chairman of the Senate Conference
Committee, stated that EPA had authority under the Act to regulate the
withdrawal of cooling water so as to minimize adverse environmental
aspects.—
In this context, it is clear that Congress sought to give EPA
authority to regulate the volume of water withdrawn through cooling
water intake structures, and that Congress was concerned that EPA should
do so where necessary to protect aquatic communities. In short, the
term "capacity" must be interpreted to mean the "volume of flow" through
a cooling water intake structure so as to be consistent with the
dictionary definition of the term, the regulations under §316(b),
and the intent of Congress.
Thus, it does not make sense to define the term "capacity" in
terms of the physical size of the inlet opening of the intake structure
as urged by CP&L. First, as noted by CP&L, the size of the inlet
determines only the velocity of the water withdrawn, not the volume.
Although velocity (and volume) is an important factor in the impingement
of larger fish, velocity is not important with respect to the entrainment
of smaller organisms. Rather, the volume withdrawn is the principal
determinant of entrainment damage which is the major adverse environ-
mental effect associated with most cooling intake structures. (41 F.R.
13788, April 26, 1976).
Id. at 197-198.
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Second, the Random House Dictionary of the English Language
(Unabridged, 1970 Edition) defines "capacity" as "cubic contents;
volume; that which can be contained." CP&L's definition of
"capacity," then, would prevent EPA from solving a problem which
Congress clearly wanted EPA to solve, and it also is contrary to the
established definition of the term "capacity."
CP&L also argues that closed cycle cooling technology may only be
imposed on the basis of thermal discharge effluent limitations. The
definition of cooling water intake structures in the regulations under
§316(b) does not encompass cooling systems. ' Inasmuch as the scope
of §316(b) only extends to the location, design, construction and
capacity of intake structures, a closed cycle cooling system per
se cannot be imposed under §316(b).
However, CP&L also implies that closed cycle cooling may not be
imposed even indirectly under §316(b). That is, CP&L seems to argue
that the capacity of a cooling water intake structure may not be
restricted under §316 (b) so as to necessitate a closed cycle cooling
system. Such an interpretation of §316 (b) is clearly contrary to the
Congressional intent underlying §316 (b), see discussion supra, and
would upset the overall framework of §316.
As discussed in terms of Issue I, §316(b) and thermal effluent
limitation standards require independent determinations. Section 316(b)
12/
40 CFR 402.11(a), 41 F.R. 13789-17390, April 26, 1976.
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is concerned with the adverse environmental impact of the withdrawal
of cooling water rather than the discharge of heated water. The §316(b)
standard is whether the cooling water intake structure reflects the
best technology available for minimizing adverse environmental impact
rather than whether the discharge exceeds a thermal limitation or
whether the discharge interferes with the propagation of a balanced
indigenous population of shellfish, fish, and wildlife.if/
In sum, although §316(b) does not authorize the Agency to impose
a specific closed cycle cooling technology, it does authorize the
restriction of the capacity of an intake structure. Such a restriction
may necessitate a closed cycle cooling system. This result is not
Ł
inconsistent with Agency restrictions on the volume of pollutant discharge
under §§301 and 306. That is, while the Agency cannot specify abatement
technologies to be employed under those sections, the use of a particular
treatment system may be a predictable consequence of the limitation
imposed on the discharge of specific pollutants.
13/
Thus, the one-standard approach to §316 urged by Carolina Power
and Light was clearly rejected by Congress. In fact, the original
House version of §316 more or less combined §316(a) and §316(b)
considerations in one standard, but this approach was abandoned
in the final conference version of the Act. If Congress had
intended to limit §316(b) determinations to the confines of existing
thermal discharge technologies, it could have enacted the House
version of §316 or otherwise linked a determination under
§316(a) to a determination under §316(b).
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ISSUE OF LAW NO. Ill
QUESTION PRESENTED
Can an NPDES Permit Require Cooling Towers As Such - May the NPDES
permit specify use of a particular control technology—in this case
closed-cycle cooling towers—or must cooling water intake structure
requirements be limited to meeting an established level of environmental
performance which is directly related to the degree of significant
adverse environmental impact found to be caused by the existing intake
structure?
DECISION
An NPDES Permit may specify restrictions on the location, design,
construction, and capacity of a cooling water intake structure. A
permit may not, as the Region contends, specify a particular closed
cycle cooling system technology. On the other hand, a permit need
not, as CP&L urges, contain a "performance standard" expressed in
terms of the amount of environmental harm to be avoided by compliance
with §316(b). Rather, restrictions under §316(b) need only reflect
the best technology available for minimizing adverse environmental
impact.
DISCUSSION
Section 316(b) requires that the "location, design, construction
and capacity of cooling water intake structure reflect the best technology
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available for minimizing adverse environmental impact." Cooling
towers or other closed cycle cooling systems are not cooling water
intake structures. It is clear that there is no independent basis under
§316(b) to require a cooling tower in a permit. However, under
§316(b) a permit may restrict the volume of flow or capacity of an
intake structure. If the capacity of an intake structure is so
restricted, the adverse environmental impact of the intake structure
will have been minimized to a given level regardless of whether the
company installs a cooling tower. That is, the limitation on intake
volume—not the cooling towers—protects the endangered aquatic
organisms. Cooling towers are an issue only to the extent that
a point source may have to install a closed cycle cooling system in
order to maintain existing operations if the permit restricts the
volume of previously "once-through" cooling water.
Finally, the statute does not require that these cooling water intake
structure regulations be expressed in terms of a level of performance
which specifies the degree of adverse environmental impact, attributable
to the intake structure, which is tolerable.- Nor is it clear how
compliance with a standard so expressed could effectively be monitored
and enforced. The structures must reflect the best technology available
14/
for minimizing (i.e. "reducing to the smallest possible amount or degree") —'
adverse environmental impact—significant or otherwise. All environmental
harm should be avoided, but the continued operation of a facility will,
14/
Random House Dictionary of the English Language,
(Unabridged 1970).
183
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in most cases, prevent this result. Under §316(b), EPA is confined to
the establishment of technical parameters governing the optimal location,
design, construction and capacity of intake structures.
In other words, the goal of best technology available under §316(b)
is to minimize all adverse environmental impacts—not to reduce the
impact to a pre-determined level. CP&L's argument to the contrary
obscures the critical fact that §316 (b) does not establish
effluent limitations. Rather, §316(b) conditions effluent limitations
established pursuant to §§301 and 306. As such, CP&L's citations to
the definition of effluent limitations are misleading. While it is
true that an effluent limitation regulates the performance which must
be achieved and not the technology (CP&L Brief, at 27), §316(b)
specifically regulates enumerated aspects of cooling water intake
structures rather than the makeup of the intake water.
Accordingly, whereas an NPDES permit may not specify closed cycle
cooling systems as best technology available under §316(b), a permit
may specify a particular location, design, construction technique,
or capacity for a cooling water intake structure as best technology
available.
ISSUE OF LAW NO. IV
QUESTION PRESENTED
Is a permittee estopped from contesting the cooling tower require-
ments of an NPDES permit when said permittee agreed to install such
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devices by stipulation in settlement of a case before the NRC involving
the same facility where the EPA was not a formal party to such pro-
ceedings?
DECISION
The permittee is not estopped from contesting the NPDES permit
proceeding at issue as the merits of the Stipulation between NRC and
the permittee were not actually adjudicated.
DISCUSSION
Collateral estoppel and res judicata apply only to administrative
actions which are actually adjudicated.— Insofar as the Stipulation
between NRC and CP&L was not a result of an adjudication of the
merits of the issue but rather represented a pre-adjudicatory settle-
ment, it is not appropriate to apply the principles of collateral
estoppel or res judicata against CP&L in this proceeding.—'
15/
Davis, Administrative Law Treatise, §18.03, at 558;
§18.08, at 597 (1958).
See, Decision of the General Counsel No. 33, at 4.
It should be noted that the Stipulation provided that
Nothing in this Stipulation shall affect
any authority of the Environmental Protection
Agency .
185
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The spectacle of a major power company renouncing the environmental
responsibilities embodied in its voluntary agreement with NRG to
construct a cooling tower at its Brunswick plant is an unpleasant
one. Nevertheless, since an essential prerequisite to the application
of res judicata and collateral estoppel is not here present, I do
not believe the company should be totally precluded from presenting
its case to EPA. See Grose v. Cohen, 406 F 2d 823, 824-5 (C.A. 4 1969),
G. William Frick
General Counsel
Dated:
186
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
DECISION OF THE GENERAL COUNSEL ON MATTERS OF LAW
PURSUANT TO 40 C.F.R. Section 125.36(m)
No. 42
In the matter of National Pollutant Discharge Elimination
System permit for Northern Indiana Public Service Company,
Bailly Generating Station (IN-0000132), the Presiding Officer
has certified two issues of law to the General Counsel for
decision pursuant to 40 C.F.R. §125.36(m). The parties, having
had the opportunity to provide written briefs in support of
their respective positions, present the following issues:
ISSUE OF LAW NO. I
Question Presented
Both the permit applicant in this proceeding and the
Porter County Chapter of Isaac Walton League of America, Inc.,
have stated the question as follows: "Whether the Permittee
should be required to comply with the requirements of Public
Law 89-298, Title III—Rivers and Harbors, Section 301,
Navigation, paragraph captioned Burns Waterway Harbor, Indiana?"!/
T/EPA Region V has restated the issue in its brief to read:
"Does Section 301 of the Rivers and Harbors Act, P.L. 89-
298 have any applicability in setting effluent limitations
for a NPDES permit?"
187
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Conclusion
No.
Discussion
Public Law 89-298 was enacted on October 27, 1965 as an
omnibus public works measure authorizing "the construction,
repair and preservation of certain public works on rivers and
harbors for navigation, flood control, and for other purposes."
Title III of this law applies to Burns Waterway Harbor (one of
several projects authorized by the law) and reads, in pertinent
part, as follows:
"TITLE III RIVERS AND HARBORS
"Sec. 301. The following works of improvement of
rivers and harbors and other waterways for navigation,
flood control, and other purposes are hereby adopted
and authorized to be prosecuted under the direction
of the Secretary of the Army and supervision of the
Chief of Engineers, in accordance with the plans and
subject to the conditions recommended by the Chief
of Engineers in the respective reports hereinafter
designated. . . .
NAVIGATION
"Burns Waterway Harbor, Indiana: House Document
numbered 160, Eighty-eighth Congress, at an estimated
cost of $25,000,000. The Secretary of the Army may
reimburse the State of Indiana for the expenditure
of funds used to construct such portions of the
project as approved by the Chief of Engineers and
constructed under the supervision of the Chief of
Engineers. Unless construction of the project is
initiated within three years from the date of enact-
ment of this Act, the authority to reimburse the
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State of Indiana contained in this paragraph shall
expire. The State of Indiana shall furnish assurance
satisfactory to the Secretary of the Army that water
and air pollution sources will be controlled to the
maximum extent feasible in order to minimize any
adverse effects on public recreational areas in the
general vicinity of the Harbor. No appropriation
is authorized to be made for the construction of this
project until the Indiana Dunes National Lakeshore
has been voted upon by both Houses of Congress during
the same Congress."
Public Law 89-298 establishes three preconditions to the
expenditure of federal funds to reimburse the State of Indiana.
There is no claim that the first of these conditions was not
met - i.e., that construction be commenced within three years
of enactment. And it is apparent that the third condition -
relating to the Indiana Dunes National Lakeshore - has been
accomplished, Congress having enacted Public Law 89-761 (16 U.S.C.
§§ 460u through 4600-9) authorizing the Indiana Dunes National
Lakeshore.
The Isaac Walton League contends that the second precondition,
that the State of Indiana furnish assurance to the Secretary of
the Army that air and water pollution would be controlled to the
maximum extent feasible, imposes obligations upon the permit
applicant as well.
I do not agree.
The three preconditions described above were to be met
by the State of Indiana and the Congress of the United States.
The condition in question requires "assurance" be furnished by
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the State of Indiana "satisfactory to the Secretary of the Army."
Congress clearly left the determination of the scope of such
assurance to the discretion of the Secretary of the Army. It
appears that such assurance has been received; in any event the
appropriation has been made and the harbor built.
The purposes of Public Law 89-298, insofar as it relates
to the Burns Waterway Harbor, have been fully accomplished by
the reimbursement of the State of Indiana with federal funds
for construction of the harbor. The Act on its face does not
impose any obligations on parties other than those named in it.
In the absence of compelling legislative history to the contrary,
I conclude that Public Law 89-298 has no applicability in
establishing effluent limitations for the NPDES permit at issue.
ISSUE OF LAW NO. II
Question Presented
"Is the compliance schedule Part I.C.I.a (Page 9) a
condition of the permit which is required by law, specifically
Section 301(b)(l)(C) of the Federal Water Pollution Control
Act (FWPCA) Amendments of 1972, to insure the attainment of
State water quality standards by July 1, 1977?"
Conclusion
The record before me does not contain sufficient facts to
determine whether, under the Administrator's Decision in U.S.
Pipe & Foundry Company, the water quality standards at issue in
190
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this case are of the type which must be met by July 1, 1977, or
whether they need only be implemented by that date. Moreover,
as discussed below, the Administrator is presently reconsidering
the correctness of his decision in the U.S. Pipe case.
Discussion
Section 301(b)(1)(C) of the Federal Water Pollution Control
Act Amendments of 1972 (FWPCA) requires that:
"There shall be achieved. . . not later than
July 1, 1977, any more stringent limitation
including those necessary to meet water quality
standards, treatment standards, or schedules of
compliance, established pursuant to any State
law or regulations (under authority preserved
by Section 510) or other Federal law or regulation,
or required to implement any applicable water
quality standard established pursuant to this
Act."
The NPDES permit issued to Northern Indiana Public Service
Company for its Bailly Generating Station requires compliance
with thermal water quality standards by July 1, 1977. The
company objects to this compliance date, relying on the
Administrator's decision in the matter of U.S. Pipe and Foundry
Company, October 10, 1975. The Region, on the other hand, argues
that the Administrator's decision in that case is not controlling
because "consistency from case to case is not necessarily required
in administrative proceedings."
191
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Without attempting to resolve the issue of the degree to
which the Agency must adhere to positions taken in prior cases,
it is clear that in this case at least the U.S. Pipe decision
is relevant, and governing. The decision constitutes a fiormal
interpretation of the FWPCA by the Administrator of the Agency.
As such, it is to be followed until reversed by the Administrator
or by a court of competent jurisdiction.
In u's« Pip6/ the Administrator concluded that the distinction
between the words "meet" and "implement" in Section 301(b)(l)(C)
was significant. Giving effect to the distinction, the
Administrator held that water quality standards established
under section 303 of the Act must be "'implemented' (i.e. put
into effect) by July 1, 1977, but such standards need not
necessarily be 'met' by such date."
While not expressed in the U.S. Pipe decision, the corollary
of the above principle is that effluent limitations necessary to
meet water quality standards established pursuant to "any State
law or regulations (under authority preserved by section 510)
or any other Federal law or regulation" (Section 301(b)(1)(C)
must be achieved by July 1, 1977. Therefore, it is necessary
to determine whether the thermal water quality standards upon
which the compliance schedule in this case is based were
established pursuant to section 303 of the FWPCA, as opposed to
having been established pursuant to State or other Federal law.
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If so, the rule of U.S. Pipe would authorize the Regional
Administrator to consider whether it is "appropriate" under
the facts of this case to require that the water quality
standards be implemented rather than actually met by July 1,
1977. If not, the Regional Administrator has no such authority.
The State of Alabama has challenged the Administrator's
decision in U.S. Pipe in the U.S. Court of Appeals for the Fifth
Circuit (Alabama ex rel Baxley v. EPA, No. 75-4435).
The Agency's Assistant Administrator for Enforcement and
its General Counsel have both petitioned the Administrator, on
May 14, 1976, to reconsider his decision in U.S. Pipe insofar
as it holds that some water quality standards need not be met
by July 1, 1977. The reasons for the action of the General
Counsel in joining that petition are set forth in a "Memorandum
of Law in Support of Petition for Reconsideration" filed with
the Administrator. A copy of that memorandum is attached.
The Administrator granted the Petition on May 18, 1976.
Accordingly, while the rule expressed in U.S. Pipe is
still binding on the Agency, prudence would suggest deferring
the decision in this case pending the Administrator's decision
on reconsideration.
G. William Frick
General Counsel
Dated: June / , 1976
193
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
DECISION OF THE GENERAL COUNSEL ON MATTERS OF
LAW PURSUANT TO 40 C.F.R. §125.36(m)
No. 43
In the matter of National Pollutant Discharge Elimination
System Permit No. TX 0005380, Friendswood Development Company,
the Presiding Officer has certified nine legal issues to the
to the General Counsel for decision pursuant to 40 CFR §125.36(m)
The parties, having had the opportunity to provide written
*/
briefs in support of their respective positions, present the
following issues:
Issue^of Law No v 1
Does the EPA have the statutory authority to provide in
an NPDES permit that industrial users of Friendswood ' s waste-
water treatment plant are jointly and severally responsible
with Friendswood for compliance with the provisions of the
NPDES permit issued for the treatment plant?
Conclusion
Yes.
a d d I t i o n to the briefs filed by Friendswood Development Co.
and EPA Region VI, briefs were also submitted on behalf of
the industrial users of Friendswood ' s treatment plant (Armak
Company, Big Three Industries, Inc., Celanese Chemical Co.,
Dart Industries, Inc., Dixie Chemical Co., The Goodyear
Tire and Rubber Co., Hercules, Inc^.T ICI United States Inc.,
The Lubrizol Corp., Oxirane Chemical Co^r Petrolite Corp.
and Velsicol Chemical Co.).
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Discussion
Friendswood Development Company (Friendswood) is the developer
of an industrial park in Harris County, Texas. It owns and
operates a waste treatment plant which accepts wastewater from
a number of industrial facilities in the park (these will be
referred to as Friendswood's customers). The permit issued by
Region VI provides that the industrial users of the Friendswood
treatment plant are parties to the permit and are jointly and
severally responsible with Friendswood "for the compliance of
such contributing facilities' individual or joint waste stream
contribution with this permit." The basic issue Friendswood
and its customers pose is this: what is the legal status un-
der the Federal Water Pollution Control Act (FWPCA) of industrial
users of privately-owned treatment works?
Section 301(a) of the FWPCA provides: "Except as in
compliance with this section and sections 302, 306, 307, 318,
402, and 404 of this Act, the discharge of any pollutant by
any person shall be unlawful." As defined in section 502(12),
"'discharge of a pollutant1 and the term 'discharge of pollutants'
each means ... any addition of any pollutant to navigable waters
from any point source, . . . ." "Point source", as defined in
section 502(14), "means any discernible, confined and discrete
conveyance, including but not limited to any pipe, ditch, channel,
tunnel, conduit, well, discrete fissue, container, rolling stock,
concentrated animal feeding operation, or vessel or other floating
craft, from which pollutants are or may be discharged."
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A "point source" which "discharges pollutants" must obtain a §402
permit and comply with effluent limitations and other requirements
pursuant to, uvtej: aj._ia, sections 301(5) (1) (A) ( i) , 301(b) (1) (B) ,
301(b)(1)(C), 301(b)(2)(A)(i), 301(b)(2)(B), 306, 307(a) and
402.
Friendswood and its customers argue that the customers are not
"point sources" which "discharge pollutants" and are thus not
subject to §301(a) and related provisions of the FWPCA. In their
view coverage by these sections of the Act is limited to persons
who are directly and immediately responsible for the release
of pollutants into navigable waters. Since Friendswood, rather
than its customers, is the person who adds pollutants to the
water, it (and its customers) contend that it is exclusively
responsible for compliance with §301(a), that its customers
are entirely outside the purview of this and related sections of
the FWPCA, and that the customers therefore cannot be made parties
to a permit or jointly and severally liable for compliance.
Section 301(a) provides that the basic triggering mechanism
for its prohibition and for the application of related provisions
of the FWPCA is the release of pollutants from some form of
conveyance or container into navigable waters. But once this mech-
anism is activated the scope of regulatory activity extends up the
pipe and includes the treatment plant and the industrial source
of the pollutants. Thus, it has been found in prior Decisions
of the General Counsel that EPA is empowered to impose controls
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on facilities which apply other than at the end of the pipe, so
long as there is a "rational connection" between the control imposed
and the attainment of applicable effluent limitations. In General
Counsel Decision 19 it was held that it is within EPA's authority
to require the full time attendance of a qualified treatment plant
operator. The permittee had argued that so long as a facility
is complying with effluent limitations in its permit EPA has
no legitimate interest in the qualifications of permittee's employees,
But it was noted that §402(a) authorizes imposition of permit
conditions which assure compliance with the effluent limitations
in the permit, and concluded that requiring a qualified operator
was consonant with that provision of the FWPCA. Similarly, in
General Counsel Decision 27, Issue VIII, it was noted that:
The prohibition of §301 of the Act against the
"discharge of any pollutant by any person"
except in compliance with the Act's regu-
latory provisions clearly applies only to
the addition of pollutants to waters of the
United States from point sources. See
§§502(12), 502(14). Thus, the NPDES permit
system extends only to those wastes which are
discharged in that manner. This does not,
however, resolve the question of how and where
controls may be applied to regulate such
d ischarges.
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It was therefore found proper to apply discharge limitations
and monitoring requirements internally to process discharges,
rather than externally to outfalls "if such discharges would
ultimately be discharged into waters of the United States and
if such limitations are necessary to carry out the principle
regulatory provisions of the Act." See_aJLjS2 General Counsel
Decision No. 33 .
In this proceeding the only new element is the fact that the
industrial source of the pollutants which ultimately are discharged
into navigable waters does not own the treatment plant and outfall
through which the pollutants reach the waters of the United States.
Friendswood's customers argue that they are in a position analogous
to that of industrial contributors to publicly owned treatment
works. Analysis of the FWPCA and its legislative history makes
it clear that contributors to public owned works are not subject
to §301(a) and related provisions and need no §402 discharge
permit. Instead, these sources are subject to pretreatment
requirements pursuant to sections 301(b)(1)(A)(ii), 301(b)(2)(A)(ii),
307(b) and 307(c) and to certain provisions of §402(b). The
Senate Bill had defined the term "discharge" in a manner similar
to the present language of §502(12) but had also included "any
addition of any pollution to publicly owned treatment works
. . . by any industrial user. ..." The Senate bill had also
provided specifically in §402 that permits were to be required
for users of publicly owned treatment works. See A Legislative
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History of the Pollution Control Act Amendments of 1972 (Committee
print) (hereafter Leg. Hist.) at 1699, 1687. The House bill
contained neither of these provisions and both were dropped
in conference. The Conference Report states simply that "Under the
conference substitute individual industrial users of municipal
waste treatment plants will not be required to obtain a permit
under section 402." Leg. Hist. 313. Senator Muskie's explanation
for the change, much relied upon by Friendswood and its customers,
can best be analyzed when considered in its entirety. As explained
by Senator Muskier
The term "discharge" is a word of art
in the legislation. It refers to the
actual discharge from a point source
into the navigable waters, territorial
seas or the oceans. It does not refer
to the contribution of waste by a
point source to a treatment facility.
The Senate provision differed from
the House amendment by including in
the defintion of "discharge" not only
direct and indirect discharges into
the navigable waters, but also dis-
charges into municipal waste treatment
plants.
The Conferees discussed at some length
whether or not such contribution from
discharges by point sources should be
subject to section 306 or should be
required to obtain a permit under
section 402 as required by the Senate
bill. The Conferees agreed that no specific
permit would be required for any
industrial users subject to sections
204, 307, or 308 contributing to a
municipal waste treatment plant, but that
the permit for the municipal waste treatment
plant would set forth the requirements
imposed on the industrial user.
The elements of the requirements on the
municipal plant are set forth in
section 402.
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Leg. Hist. 178. Emphasis is placed by Friendswood and its
customers on the statement that "It [discharge] does not
refer to the contribution of waste by a point source to a treat-
ment facility." They argue that since Friendswood's customers
contribute waste to a treatment facility that they are encompassed
within the exclusion referred to. The plausibility of this
argument fades, however, in the light of the fact that when
viewed in context the term "treatment facility" was meant to
refer only to publicly owned (or "municipal") treatment works.
Every other reference to treatment plants in the statement is
to "municipal" plants. Moreover, emphasis is placed in the statement
on the fact that contributors to such plants are subject to
control under sections 204, 307, 308 and certain provisions
of §402. Since sections 204 and 307 apply only to users of publicly
owned works, these references can not apply to users of privately
owned treatment works. Of particular importance is the last sentence
of the first paragraph of the statement. There Senator Muskie
states that "The Senate provision differed from the House amendment
by including in the definition of "discharge" not only direct
and indirect discharges into the navigable waters, but also discharges
into municipal waste treatment plants." (emphasis added). This
makes clear that §301(a) and related provisions were meant to
apply comprehensively and that only users of municipal treatment
works were meant to be excluded from control as "dischargers".
Senator Muskie specifically states that indirect as well as
direct discharges into navigable waters were meant to be covered
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by the term "discharge". Thus, the argument that only the
person who directly adds pollutants to navigable waters is
subject to §§301(a) and 402 runs contrary to congressional
intent. It was exclusively users of publicly owned treatment
plants who were excluded from the definition of discharge
by the conference committee. Other "indirect" dischargers
(such as users of privately owned treatment works) remained
subject to §301(a) and related provisions.
Friendswood and its customers contend not only that Congress
meant to exclude users of privately owned treatment works
from coverage by sections 301(a), 402, et ^al^, but also that
Congress failed to include them in the alternate control scheme
provided for users of publicly owned works. But it makes little
sense to believe that the same Congress which, in the case
of contributors to publicly owned treatment works, so carefully
provided pretreatment and other controls in return for exemption
from the §301(a) regulatory scheme, should have meant to exempt
users of privately owned works from any coverage under the
FWPCA whatsoever. Although Friendswood and its customers
point out that there is concern in the case of industrial
users of publicly owned treatment works for protecting the
large public investment in such works, this is an entirely
unsatisfactory explanation for the problem with their interpre-
tation of the Act. In the first place, a treatment works need
not be federally funded to be publicly owned. More important,
protection of the public fisc is provided by section 204.
Sections 307(b) and (c), on the other hand, are concerned
with protection of the environment. It is hard to understand
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how the purpose of these latter provisions, particularly in
terms of prevention of the "pass through" of pollutants to
navigable waters, can be considered irrelevant to users of
privately owned treatment works. The inescapable explanation
for the fact that §§307(b) and (c) do not apply to users of
privately owned works must be that §§301(a), 402 and related
provision do apply, and provide the necessary authority to
EPA to protect the Nation's waters.
Friendswood and its customers also argue that if the customers
can be held responsible for the discharge of pollutants generated
in their facilties then, to use their example, a farmer who
sells chickens to a poultry processor would be liable for pollutants
which could be traced back to his chickens. The answer to this
contention is simply that the chickens, when delivered, are not
pollutants. It is the processor who generates pollutants and
causes them to be released into navigable waters. Clearly, it
is a fair and reasonable rule, wholly consistent with congressional
intent, that he who generates pollutants be held responsible
for the pollution. Friendswood's customers create pollutants—they
should therefore be directly responsible for their proper
disposition.
In fact, a more difficult definitional problem would be
created by the interpretation of the FWPCA urged by Friendswood
and its customers. Their narrow view of the scope of §301(a)
focuses solely on the point at which pollutants are released
into the water. Logically, therefore, an industrial facility
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could insulate itself from coverage under the FWPCA by
simply selling (or giving) its outfall pipe to someone else.
Recognizing the mischief such situations could cause, Friendswood
and its customers emphasize that "The industrial users in the
instant case are not indirectly discharging their wastes through
mere conduits, but instead have contracted to have their wastes
accepted by Fiendswood, whose facility has been specifically
designed for their treatment." Brief of Armak Company e_t al. at
11. But the definitional provisions of the FWPCA, cited by
Friendswood and its customers, of the terms "point source" and
"discharge of pollutants" make no mention of treatment. More
important, whether the pollutants are treated by an adequately
designed treatment plant is a factual matter which may be relevant
to how the industrial contributors are regulated, but is not
appropriate as a standard to determine whether EPA has authority
to regulate them.
The argument that Congress intended to encourage joint
treatment of wastes and that this is not consistent with
finding users of privately owned treatment plants subject
to §301(a) and related provisions, is not persuasive. Whatever
Congress' motives with regard to private joint treatment of
wastes, encouragement of joint treatment"appropriately flows
from economies of scale and similar advantages. I do not
believe that it was intended that joint treatment be fostered
at the expense of protection of the Nation's waters.
It cannot be doubted that inability to hold industrial
users of privately owned treatment works directly responsible for
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the pollutants they cause to be released to the environment
would pose a major obstacle to fulfillment of the vital goals
of the FWPCA. Friendswood and its customers argue that adequate
protection of the navigable waters of the United States is
afforded by the indirect means by which such persons can be
controlled. Through its uncontested authority to require
Friendswood to obtain and comply with a §402 permit EPA is said
to be able to influence its customers' behavior. And, if
Friendswood cannot provide adequate treatment, EPA could force
these persons to discharge directly and come within the Agency's
immediate authority by shutting Friendswood down. But these arguments
do not explain why Congress found insufficient such indirect
control of users of publicly owned treatment works. Section 307(b),
307(c) and portions of 402(b) were obviously designed to deal with
a problem that otherwise would go unremedied. There is no reason
to think that indirect control of users of privately owned
works would be any more satisfactory. Senator Muskie noted that
enforceability was one of "three essential elements" of the
new law (Leg. Hist. 162), and the Senate Public Works Committee
emphasized that "if the timetables established throughout the
Act are to met, the threat of sanction must be real, and enforce-
ment provisions must be sw'ift and direct." Leg. Hist. 1483.
Unless Friendswood1s customers are themselves subject to §301(a)
and related provisions of the FWPCA enforceability as against
them would be speculative, and certainly neither swift nor
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direct. In the event compliance requirements placed on Friendswood
were not met, its customers would be immune from enforce-
ment action under §309 so long as they utilized the Friendswood
system. Closing Friendswood and forcing its customers to apply
for permits would be a long, cumbersome and difficult process.
The only certain outcome would be degradation of the Nation's
waters.
Friendswood and its customers argue that industrial users
of privately owned treatment works are exempt from §301(a) and
all related provisions of the FWPCA even though no specific expression
of this exclusion can be found in the Act or its legislative history.
In fact, as explained above, the most relevant portion of
that legislative history indicates that users of such works
are not exempt from §301(a) and related provisions. Thus, a
major gap in the otherwise comprehensive coverage of the FWPCA
is urged without any clear-cut support in the law or its legisla-
tive background. Acceptance of such a position would fly in
the face of the repeated teachings of the Supreme Court that
laws designed to protect the Nation's waters must be read
"charitably" and not given "a narrow cramped reading."
United States v. RepubJJLc_S teel_CoŁŁor_a_^ion, 362 U.S. 482, 491
(1960), United States v. §;UmdjaŁd_OLl_Co^ 384 U.S. 224,230
(1966) , United States v. Pennsylvania Industrial Chemical Corp.,
411 U.S. 655, 669-70 (1973). This teaching has also been
followed by federal courts interpreting the FWPCA. See United
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v. MhlMSLOlL-Cp-L , 504 F.2d 1317, 1329 (6th Cir. 1974),
United States v. Holland, 373 F. Supp. 665 (M.D. Fla. 1974),
United States v. Phelps Dodge Corp., 391 F. Supp. 1181 (D.Ariz. 1975). V
From all of the foregoing I conclude that Fr iendswood ' s
customers, as users of a privately owned treatment works, are
subject to sections 301(a) and related provisions of the FWPCA
and therefore are required to obtain a §402 permit.
A further question concerns whether it is appropriate to
issue a single permit for a privately owned treatment works
and its customers and to provide therein that the customers are
parties to the permit and are jointly and severally responsible
with the privately owned works for compliance. It certainly
appears sensible to issue a joint permit under circumstances
such as those present here, since the users of the Friendswood
facility, and Friendswood itself, are so intertwined with
^/Friendswood and its customers cite two decision by the U.S. District
Court, Southern District of Texas, in which reference was made
to the principle that federal jurisdictional statutes should
be strictly construed. Uni t ed Stat es v. GAjTjCorjD^, 389 F. Supp.
1379, 1387 (S.D. Tex. 1975), United States' v. Armco_Stee 1 _CoŁp. ,
333 F. Supp. 1073, 1079 (S.D. Tex. 1971). But the related notion
that penal statutes should be strictly construed was rejected
by the Supreme Court in relation to water pollution control
legislation. Sjee United States v. Standard Oj.l_Co., s_upra at
230-37 (dissenting ojpTnion) . Moreover , "the tFiTogy of land-
mark Supreme Court cases cited above revolutionized the law of
environmental protection and expanded federal jurisdiction
under the Refuse Act. Similarly, the Ashland Oil, Holland,
and PhelPs ^Dodge cases all had the effect of authorizing expansive
federal jurTsdiction.
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one another. But the argument is made that imposition of joint
and several liability for violation of the permit is improper.
Region VI points out that the permit provides that joint
and several responsibility attaches only "for the compliance
of such contributing facilities' individual or joint waste
stream contribution with this permit." Thus a particular
customer's responsibility attaches only where noncompliance
is at least in part attributable to the waste stream from
that customer. I can find no legal impediment to such a
provision,V either in the FWPCAj^/ or in implementing regulations,
I therefore find it within the power of the Agency to make
a user of a privately owned treatment works a party to a joint
permit and subject to joint and several liability for non-
compliance with the terms of the permit attributable in whole
or in part to the user's waste stream.
Other arguments put forward by Friendswood and its customers
concerning the issue referred go to factual matters beyond the
scope of 40 CFR §125.36{m).
^/Friendswood and its customers cite no authority for their
argument other than United States v. Whi title, 287 F.2d 638
(4th Cir. 1961), a case which, contrary to their assertion,
states no general legal proposition, but is limited instead
to the statute therein construed.
^/Nothing in the FWPCA forbids imposition of joint and several
responsibility. In some circumstances, in fact, joint and several
responsibility for violations of the Act is specifically
contemplated. See §309(e).
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In conclusion, I find that users of privately owned
treatment works are subject to §§301(a), 402 and related
provisions of the FWPCA, that they must obtain §402 permits,
that such permits may be issued jointed to the privately-
owned treatment works and its users, and that they may provide
for joint and several responsibility to be imposed on users
for noncompliance to the extent attributable to the waste
stream from such users.
Issue j)f Law No. 2
Does the EPA have statutory authority to use an NPDES
permit issued to Friendswood to impose on either Friendswood
or the industrial users of Friendswood1s plant pretreatment
requirements and conditions concerning the wastewater streams
transmitted by the industrial users to the Friendswood plant?
Conclusion
EPA may impose pretreatment requirements and conditions
covering the wastewater streams transmitted by industrial users
to the Friendswood treatment plant so long as the requirements
and conditions are rationally related to assured compliance
with effluent limitations which apply to pollutants which are
ultimately discharged to navigable waters.
Discussion
Section 402(a)(l) of the Act authorizes the Agency to
issue permits upon condition that applicable requirements of
other enumerated sections are met. Section 402(a)(2) sets forth
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the conditions which are to be included in NPDES permits.
It requires that EPA impose conditions "to assure compliance
with the requirements" of paragraph (a)(l) which includes
the requirements of sections 301, 302, and 307 of the Act.
40 CFR §125.22(b) provides that permits are to include "such
special conditions as are necessary to insure compliance with
applicable effluent limitations."
I found in my discussion of issue of law No. 1 that industrial
users of privately owned treatment works are subject to the
permit requirements of §402 and that such users may be made
parties to a joint permit together with the privately owned
works. It follows that permit conditions and requirements
contained in such a permit may therefore apply directly
to the industrial users, as well as to the treatment works.
The question then becomes the permissible scope of such permit
conditions. In General Counsel Decision 19 it was stated that
so long as "there is a rational connection between the condition
and the assured attainment of ... effluent limitations"
statutory authority exists to impose the requirement. See
al^so General Counsel Decision 27, Issue of Law No. VIII;
General Counsel Decision 33. The same principle applies
here. So long as the permit conditions are rationally related
to attainment of effluent limitations applicable to the pollutants
ultimately discharged to navigable waters they are permissible.
Such conditions could include pretreatment and other requirements
applied to individual industrial users' waste streams.
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Issue of Law No. 3
If the answer to Issue No. 2 is affirmative, are the terms
and conditions of paragraphs B. 1, B. 2, and C. 1 of Part III
of the permit too vague and indefinite to be enforceable?
Conclusion
Neither the FWPCA nor EPA regulations implementing its
provisions forbid permit conditions of the nature of those in
question. To the extent that a constitutional issue has been
raised it is outside the scope of referrals of issues of
law.
Discussion
The permit in question contains numerical effluent limita-
tions and a series of narrative requirements and prohibitions.
The latter conditions are challenged as excessively vague
and indefinite. Friendswood and its customers argue that the
FWPCA authorizes imposition in §402 permits only of specific
numerical effluent limitations. It is indisputable that the
FWPCA contemplates inclusion of specific effluent limitations
in §402 permits. But there is also no question that non-
numerical, narrative requirements may be included in permits,
so long as relevant to attainment of the effluent limitations
also contained therein. See e.g. , General Counsel Decisions
19, 33. Nothing in the regulations implementing the FWPCA is to
the contrary. While 40 CFR §125.24 provides for inclusion
in permits of quantitative effluent limitations, 40 CFR §125.22
provides that "Permits shall also include such special conditions
as are necessary to assure compliance with applicable effluent
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limitations or other water quality requirements including
schedules of compliance, treatment standards, and such other
conditions as the Regional Administrator considers necessary
or appropriate to carry out the provisions of the Act."
Other questions raised are basically constitutional questions.
As such they are not appropriately resolved in this forum. jSee,
e.g., General Counsel Decisions 5, 21.
Is sue of Law_ No.4
Does the EPA have statutory authority to subject Friendswood
to double liability for one discharge as in Part III C.I of the
permit?
Conclusion
A permit may appropriately contain conditions designed to
assure compliance with the effluent limitations also contained
therein despite the possiblity that more than one permit provision
may be violated in the course of a single discharge of pollutants.
Discussion
Section 402 of the FWPCA and EPA regulations promulgated
thereunder contemplate inclusion in §402 permits of effluent
limitations and of conditions designed to assure compliance
with such limitations.V Compare §402(a)(l) with §402(a)(2).
See also 40 CFR §§125.22, 125.24. The permit in issue appears
to contain both types of conditions. Friendswood and its customers
;*7See~GeneFaI Counsel Decisions 19, 27, and 33, and the discussions
of Issues of Law 1 and 2, above.
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argue that violation of one can overlap with violation of another—
leading to possible double liability for one action. But such
overlap is inherent in the nature of the two types of permit
conditions and thus was contemplated by Congress. Nothing in
the FWPCA or its legislative history indicates a contrary intent.*/
Such permit conditions serve different functions and are therefore
not mere attempts to multiply the possible penalties that could
be imposed. The possiblity of overlapping penalties, therefore,
does not invalidate the permit condition in issue.
Other arguments made concerning this issue repeat contentions
already disposed of in this Decision,^/ or are factual questions
not appropriately resolved here.
Issue of Law No. 5
Does EPA have the statutory authority to use an NPDES
permit issued to Friendswood to impose on either Friendswood
or the industrial users of Friendswood's plant affluent monitoring
requirements on wastewater streams transmitted by industrial
users to the Friendswood's plant.
V^Frlendswood and its customers cite United States v. Petrex
Chemical Industries, Inc., 393 F. Supp. 735 (N.D. Ohio, 1975) for
the proposition that a permittee can be can be held liable
for no more than one violation of the FWPCA per day. The decision
cited is not well reasoned and, in any event, concerned an
enforcement action under the FWPCA and did not involve review
of the validity of a permit.
_*jVFriendswood and its customers make the assertion that a publicly
owned treatment works cannot be held liable for accepting wastes
introduced by a user in violation of the user's pretreatment
standards. I see no basis for such an assertion. While a violation
by a user of a publicly owned treatment works of its pretreatment
standards could cause violation by the treatment works of
the effluent limitations or other conditions in its permit,
there is nothing in the FWPCA or EPA regulations which would
thereby excuse the permit violations.
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Conclusion
EPA may include in the permit monitoring requirements
applicable to Friendswood, its industrial users, or both, in
accordance with sections 308 and 402(a) of the FWPCA, and these
requirements may be required to be performed at points other than
that of ultimate discharge.
Discuss ion
Pursuant to §§308 and 402(a) of the FWPCA, EPA possesses broad
authority to require submissions of information. The only
limitations on this authority are that the information is
"required to carry out the objective of [the] Act. ..." and
that the requirement is "reasonable." See General Counsel
Decisions 27, 39. See a1so General Counsel Decisions 21, 32,
and 35. I have already found that the industrial users of a privately
owned treatment works are subject to §§301(a), 402 and related
provisions of the FWPCA. Since "the authority under §402 to
to require submission of information is obviously at least as
broad as the authority conferred by section 308" (General Counsel
Decision 39, Issue of Law No. I(b)), it follows that such persons
are fully subject to the information submission requirements of
§§308 and 402(a).*/ Thus, users of privately owned treatment
works, as well as the works itself, may be required by EPA
to make data and information submissions which are reasonable
in scope and pertinent to, j.nte_r_ ill3.' "developing or assisting
in the development of any effluent limitation . . . determining
*l3ectlon~308 is in fact, applicable even to users of publicly
owned treatment works, despite their exemption from §§301(a)
and 402. See Leg. Hist. 313 (Conf. Rept.).
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whether any person is in violation ... or ... carrying out
sections 305, 311, 402 and 504. . . ." §308(a).V
There can be no question but that monitoring may be required
to be done at a point other than that of ultimate discharge.
In General Counsel Decision 27, Issue of Law No. VIII, it
was found that effluent limitations and monitoring requirements
may be applied to internal process discharges. Similarly,
so long as relevant to insuring compliance with the effluent
limitations in the permit, or for any other reason consonant
with §§308 and 402, Friendswood and its customers may be required
to monitor the individual or joint waste streams of the users
"upstream" of the Friendswood treatment plant.
VEven If I had not found Friendswood's customers directly subject
to §§308 and 402(a) of the FWPCA, I would still find authority
in EPA to require submission by Friendswood of any relevant
information reasonably obtainable, including data concerning
its customers. Both the House and Senate Reports noted the vital
importance of authority to require information for setting and
enforcing water pollution control requirements. See Leg. Hist.
at 800-801, 1480-1481. It would therefore be reasonable to
require Friendswood to submit data concerning its customers
as a condition to obtaining a permit. A customer unwilling to
supply such data to Friendswood would have the alternative
available to him of pulling out of the works and discharging
directly. Just as Friendswood and its customers point to
EPA's indirect control over Friendswood's customers even if only
Friendswood were subject to the FWPCA, so EPA would have indirect
authority to require information concerning the customers even
if only Friendswood were subject to §§308 and 402(a).
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IssueL_QŁ_Law_NoJLj6.
Does EPA have the statutory authority to require Friendswood
or the industrial users of the Friendswood plant to provide
consumption rates for each raw material and production rates
for each product and all intermediates from each industrial
user.
Conclusion
Yes.
Discussion
The legal authority of EPA to require information from
industrial users of privately owned treatment works is discussed
above in Issue of Law No. 5. The reasonableness of any particular
data submission requirement and its relevance to attainment of
effluent limitations or other appropriate purposes are factual
matters.
Issue of Law No. 7
Does the EPA have jurisdiction under PL 92-500 to regulate .
state permitted injection wells owned and operated by and located
on the premises of industrial users of the Friendwood plant
in an NPDES permit issued to Priendswood and is that jurisdiction,
if any, altered by the passage of the Safe Drinking Water Act?
Conclusion
The Environmental Protection Agency has authority to control
well injection through conditions in NPDES permits issued for
215
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discharges into navigable waters, and may apply this authority
to industrial users of the Friendswood treatment plant.
Discussion
*J
In General Counsel Decisions 6, 8 and 18 it was found
that EPA has authority to regulate well injections in connection
with permits for discharges into navigable waters. Since it has
been found that Friendswood ' s customers are properly parties to
a §402 permit Decisions 6, 8 and 18 are applicable and decisive.
All questions raised by Friendswood and its customers were,
with one exception, discussed in these prior Decisions, and I
see no reason to alter the conclusions reached. The one matter
not specifically discussed previously concerns the effect of
passage of the Safe Drinking Water Act. Friendwood and its
customers argue that authority to control well injections
now flows solely from that Act and that whatever authority EPA
possessed under the FWPCA was superceded. Since nothing in the
Safe Drinking Water Act supports their contention they rely on
the legislative history and certain general legal principles.
But the legislative history, far from supporting their views,
strongly refutes their contention. House Report 93-1185,
93d Cong., 2d Sess. (1974) states, in connection with an
explanation of the need for the legislation, that:
6 relied upon a December 13, 1973 Opinion of the Acting
Deputy General Counsel (No. 590).
216
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Finally, it appears that the Federal Water
Pollution Control Act may not authorize any
regulation of deep well injection of wastes
t in conjunction with
__
a disc h a r g e into n a v ig able waters. _ See U .S .
E . P. A. Opinion of the Acting Deputy General
Counsel 1590, December 13, 1973. For these
reasons and for the reasons which follow, the
Committee has determined that broadened and
strengthened legislation to assure safe dr ink ing
water is necessary.
H.R. Kept. No. 93-1185 at 4 (emphasis added). Thus, Congress
intended to broaden EPA's authority over well injection to
include situations not covered by the FWPCA, it did not intend
to diminish or replace that pre-existing authority. This conclusion
is strengthened by examination of the following statement
at page 30 of the House Report:
In adopting this approach, the Committee was
intent on allowing the Environmental Protection
Agency sufficient leeway to adopt a program
which would be administratively compatible with,
and nonduplicative of, the permit provisions
of the Federal Water Pollution Control Act.
Again, it is clear that Congress meant to supplement EPA's
authority under the FWPCA, not supercede it. Therefore,
I find nothing in the Safe Drinking Water Act which requires
modification of General Counsel Decisions 6, 8 and 18.
I ssue o 1^ Law No .^8
Part II A. 6 of the permit requires that "solids, sludges,
filter backwash, or other pollutants removed in the course of
treatment or controls or wastewater" be disposed of in a manner
"such as to prevent any pollutant from such materials entering
217
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navigable waters". Does this language mean that the per-
mittee could be charged with liability under the permit for
acts or omissions of independent contractors or others who
receive such wastes?
Conclusion
In the form referred to me the question of whether a
permittee could be held liable for acts or omissions of in-
dependent contractors or others who handle sludges and other
pollutants removed during waste treatment is excessively
hypothetical and not properly certified. The possibility
that such liability will in fact be imposed upon Friendswood
or its customers is wholly speculative. Moreover, as posed,
the question requires me to construe the terms of the per-
mit rather than decide an issue of law. Interpretation of
the language of a permit under such circumstances is beyond
the scope of referrals of issues of law.
Issue g f Law No.9
Are the NPDES permit time limits extended to allow the
completion of the adjudicatory hearing processes?
Cone1us ion
If the expiration date in a permit is contested its
effectiveness is stayed pending conclusion of the adjudica-
tory hearing process.
Discussion
The permit in question contains an expiration date of
March 31, 1976. Friendswood and its customers argue that since
218
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the expiration date is a contested issue that pursuant to
40 CFR §125.35(d)(2) the permit cannot expire during the ad-
judicatory hearing process. In addition, they argue that
upon conclusion of the adjudicatory hearing process the ex-
piration date of the permit must be extended to add an amount
of time to the duration of the permit equivalent to the
length of the stay.V
Section 125.35(d)(2) provides that, "If a request for an
adjudicatory hearing is granted . . . the effect of the con-
tested provision(s) of the proposed permit . . . shall be
stayed . . . pending final agency action pursuant to §125.36
of this subpart." The expiration date of a permit is ob-
viously one of its provisions and thus clearly is subject
to this section of the regulations. I therefore agree with
Friendswood and its customers that if the expiration date of
their permit has been properly contested its effectiveness
is stayed and the permit cannot expire during the pendency
of the adjudicatory hearing process. But 40 CFR §125.35(d)(2)
does not require any change in the expiration date. It only
stays the effectiveness of a permit provision, it does not
provide for modification of such a provision. If Friendswood
and its customers deem an extended expiration date appropriate
*_/ The determTKations of the Regional Administrator pursuant
to 40 CFR §125.35(a) were issued on October 28, 1974, and in-
cluded a permit expiration date of December 31, 1975. This date
was later extended to March 31, 1976. Referral of issues of law
pursuant to 40 CFR §125.36(m) occurred on February 19, 1976 and
briefing was completed on May 10, 1976.
219
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they may seek such a change in the permit during the adjudica-
tory hearing proceedings. The merits of such a question are
not before me. For the purposes of this referral it is
sufficient to conclude only that nothing in the FWPCA or EPA
regulations requires such an extension.
Although Friendswood and its customers cite the Admin-
istrator's Decisions in the Consolidated Offshore Cases and
the Shell Offshore Case (Appeals Nos. 75-1 and 75-2, Septem-
ber 25, 1975) nothing in those Decisions refers to the ex-
piration date of any permit. They refer instead to compliance
schedules, a different matter entirely.jV Moreover, the
Decisions do not state any legal principles as such concerning
the schedules of compliance but instead made essentially
factual determinations. Friendswood's and its customers'
contention that considerations of equity compel automatic
extensions of expiration dates is similarly unpersuasive.
The fact that a permit may expire upon completion of the
adjudicatory hearing may be bothersome and awkward, but I
cannot find it illegal. Permittees will not be required to
meet any contested permit condition prior to an opportunity
to be heard concerning that condition. Instead they only
V' It is argued'that extension of the expiration date in a permit
is a more important matter than extension of compliance schedules
because without extension of the expiration date "the whole
adjudicatory hearing procedure could become moot." Brief of Armak
et Łl_._ at 55. It seems to me that since a compliance schedule
Ts an affirmative and possibly very burdensome requirement while
expiration of a permit only means that a new permit must be applied
for, that permittees have their priorities quite possibly reversed.
220
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may have to apply for a new permit. Not only are all of
their legal rights preserved, but it is highly likely that
all issues resolved in the adjudicatory hearing will be
relevant to any new permit that may be needed and thus
the proceeding will not have been superfluous.
Dated: Ut^v^ / ' '
-------
UNITED STATES ENVIRONMENTAL PPOTECTION AGENCY
WASHINGTON, D.C. 20460
DECISION OF THE GENERAL COUNSEL ON MATTER OF
LAW PURSUANT TO 40 CFR §125.35(m)
NO. 44
In the matter of NPDES permit for Texaco, Inc., Lock-
port Plant (Permit No. IL 0002305), a legal issue has been
referred to the General Counsel for decision pursuant to
40 CFR §125.36(m). The parties, having had the opportunity
to provide written briefs in support of their respective posi-
tions, present the following issue:
QUESTION PRESENTED
"Can the U.S. Environmental Protection Aaency, pursuant
to Sections 401 or 301(b)(l)(C) of the Federal Water Pollu-
tion Control Act Amendments of 1972, or otherwise, incor-
porate in an NPDES permit issued by it, State effluent limita-
tions, subject, by State statute, to a discretionary enforce-
ment standard, and, thereby, make them Federal limitations
subject to a nondiscretionary Federal enforcement standard?"
222
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ANSWER
Yes. This result is not changed by the fact that
there may be significant differences between Federal and
State schemes for the enforcement of established require-
ments .
DISCUSSION
In this referral, Texaco, Inc. (Texaco) challenges the
authority of the Regional Administrator, Region V (the
Region) to impose in an NPDES permit effluent limitations
based upon Part IV, Ch. 3 of the Rules and Regulations
promulgated by the Illinois Pollution Control Board (the
Board). Part IV "prescribes the maximum concentrations of
various contaminants that may be discharged" into Illinois
waters. This regulation is based upon §13(a)(2) of the
Illinois Environmental Protection Act (IEPA), which auth-
orizes the Board to prescribe
Effluent standards soecifvinq the
maximum amounts or concentrations,
and the physical, chemical, ther-
mal, biological and radioactive
nature of contaminants that may be
discharged into the waters of the
State ....
Variances from such limitations (or any requirements
under the IEPA) may be granted by the Board under §§35 and
223
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36, IEPA, upon a showing that compliance "would impose an
arbitrary or unreasonable hardship." Variances are limited
to one year, except that they may extend to five years in
cases where the variance is granted in connection with per-
mit issuance. §36(b), IEPA.
Enforcement is not, as the question referred assumes,
entirely discretionary. The Board must issue notice and
schedule a hearing when its "investigation discloses that a
a violation may exist." §31(a), IEPA. At that hearing, how-
ever, the Board has the burden of showing that a violation
exists. §31(c), IEPA. In making any orders pursuant to
the hearing, moreover, the Board must take into account:
(1) the character and degree of
injury to, or interference with
the protection of the health,
general welfare and physical pro-
perty of the people;
(2) the social and economic value
of the pollution source;
(3) the suitability or unsuitability
of the "pollution source to the area
in which it is located, including
the question of priority of location
in the area involved; and
(4) the technical practicability and
economic reasonableness of reducing or
eliminating the emissions, discharges
or deposits resulting from such pol-
lution source. IEPA, §33(c)l/
I/ Eve"n~in cases of clear violations of Board regulations, the
Board must adduce and consider evidence on each of these factors,
CPC International v. Pollution Control Bd., 32 111. App. 3d 747,
336 N.E.' 2d 601 (1975); Metropol itan Sanitary District v. Pollu-
tion Control Bd., 338 N.E. 2d 392 (Sup.~Ct. 111. 1975).
224
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Finally, in enforcement proceedings, the alleged violator
may "show that compliance with the Board's regulations
would impose an arbitrary or unreasonable hardship."
§31(c), IEPA. See Chicago Magnesium Casting Co. v.
Ł2iiHll2!l_Ł2n.tI2i_lli' 22 I1:L* AlDD- 3d 489' 317 N-E-
2d 689 (1974) .
With this statutory scheme in mind, the question re-
ferred appears somewhat recondite. The question assumes
State enforcement to be discretionary, which it evidently
y
is not. However, an important issue does emerge from
the parties' briefs. To avoid confusion, a somewhat more
complete explanation of the law is required than would
be necessary merely to answer the referred question.
The referred question itself is simply answered. The
existence of enforcement discretion does not somehow render
nugatory an otherwise effective provision of law. To so
argue is to contend that, because the government has pro-
secutor ial discretion, an unprosecuted bank robber has not
violated the law.
2/ There are, however, significant differences between the
state enforcement scheme and that contemplated by the FWPCA.
By and large, issues as to the "reasonableness" of particular
requirement are to be resolved prior to federal enforcement
of NPDES permits and indeed, issues which may be litigated at
an earlier stage are excluded as defenses in enforcement actions
under Section 309. See Section 509(b)(l).
225
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A second, equally significant, issue relates to whether
EPA is obligated to review limitations appearing in State cert-
ifications, or, in the absence of such a certification, whether
EPA must evaluate State limitations in the context of rele-
vant State law before including them in NPDES permits.
If an identifable requirement of State law exists, and
limitations based upon such requirements are incorporated
into a State certification under §401 of the FWPCA, such
limitations must become conditions on the NPDES permit.
FWPCA, §401(d). Beyond determining that a certification
meets the requirements of 40 C.F.R. §123.2(a) and (as re-
quired by §401(d) of the FWPCA) sets forth the "appropriate
requirement of State law" upon which it is based, EPA is with-
out authority to review the substance of a facially valid
State certification.
Where EPA issues the permit in the absence of a certifi-
cation, however, it does not have a State determination of
what are the "requirements" of State law. Instead, under
§301(b)(1)(C), it must apply "any more stringent limitation
. . . established pursuant to any State law or regula-
tions . . .."
226
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Texaco cites statutory, regulatory, and judicial
authority which tends to show that the State law, al-
though authorizing the Board to establish regulations,
requires the Board to surmount a number of further ob-
stacles before the regulations may actually be enforced
against any person. Thus, argues Texaco, the Illinois
effluent limits are "fundamentally different" from
their counterparts under Federal law, and the State
limits may not be applied in NPDES permits.
To be sure, the enforcement scheme under State law,
as noted previously, differs from the Federal scheme in
that some administrative review of the standards takes
place at the enforcement stage. But this does not mean
that the State effluent limitations in question may not
be included in NPDES permits. As was stated in Opinion of
the General Counsel No. 13, May 19, 1975 at 4:
In applying water quality stan-
dards in the absence of a State
certification, the Administrator
is entitled to presume the va-
lidity of State established
227
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regulations and to assume that
such regulations have the sub-
stantive content that appears
from the plain language of
the provisions.
The availability of a State variance procedure re-
inforces, rather than alters, this conclusion. For if
the applicant sought review of the State requirement,
it could have obtained it by seeking a variance. Its
failure to do so leaves the State requirement in effect,
and it must be given effect under §301(b) (1)(C).
Every State requirement that has not been appealed
to the State's highest court may be subject to further
State review. If EPA could not incorporate in an NPDES
permit any requirement for whicn review remains avail-
able, the Agency would be incapable, for example, of
applying most State water quality standards in permits.
Yet §301(b)(1)(C) clearly requires State standards to
be applied in federally issued NPDES permits. C.f. EPA
v• State Water Resources Control Board, U.S.
, Mo. 74-1435, slip op. at 18-20 (June 7, 1976).
EPA is thus required to incorporate in permits limits
based on State law. However, the Agency is neither author-
ized nor required to assume the mantle of a State judge
228
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or administrative agency- An effluent limitation or
other requirement under State law must therefore be
applied to a permit applicant, regardless of differ-
ences between FWPCA enforcement and that under State
law, and regardless of unutilized State procedures for
variances, waivers, and exemptions.
•
.--V ( L : C
67 ~wTTITam~FFTck
Dated:
J';.•:;? 2 1976
229
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Washington, D. C. 20460
DECISION OF THE GENERAL COUNSEL ON MATTERS OF
LAW PURSUANT TO 40 CFR §125.36(m)
No.
In the matter of National Pollutant Discharge Elimination System
Permit for Collier Carbon and Chemical Corporation, Kenai, Alaska
(AK-000050-7), the Presiding Officer has certified one issue of law to
the General Counsel for decision pursuant to 40 CFR §125.36(m),
The parties, having had the opportunity to provide written briefs in
support of their respective positions, present the following issue:
ISSUE OF LAW NO. I
Question Presented
Where it is impossible, despite the exercise of all reasonable
diligence, for a Permittee to complete construction and installation of
treatment facilities necessary to achieve effluent limitations representing
BPT by July 1, 1977, but where the Permittee can achieve such limitations
no later than November 1, 1977, may a Regional Administrator extend a
compliance schedule beyond July 1, 1977, which schedule would require
achievement of BPT effluent limitations by November 1, 1977?
230
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Conclusion
No. Section 301(b)(l)(A) of the Federal Water Pollution Control Act,
as amended (the "Act"), requires that schedules of compliance contained
in NPDES permits terminate by July 1, 1977, when best practicable control
technology currently available must be operational and effluent reductions
based thereon must be achieved. The Administrator has no discretion to
issue an NPDES permit which extends the date for achievement of final
effluent limitations beyond July 1, 1977.
Discussion
The applicant concedes that "the Agency seems to have determined
that the Act requires every point source in the nation (other than
publicly owned treatment facilities) to install and make operative
pollution abatement equipment representative of BPT no later than
July 1, 1977." See, Decision of the General Counsel No. 26. Nevertheless,
it urges that §301 (b) of the Act is subject to a more flexible alternative
interpretation which should be adopted in view of asserted constitutional
infirmities and policy considerations associated with its "impossibility of
compliance." JL/ Section 301(b) dictates that "effluent limitations" be
achieved by July 1, 1977. Since the definition of "effluent limitations"
I/ The issue, as certified, seems to assume that compliance by
July 1, 1977 is impossible despite the exercise of all reasonable
diligence. The difficulty or impossibility of compliance with BPT
by a date which is still over a year away is a factual matter and,
indeed, one which would not appear capable of resolution at the
present time. For purposes of this opinion, I assume that the
Regional Administrator could find, on the facts of this case, that
compliance is impossible.
231
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contained in §502 of the Act includes "schedules of compliance", applicant
contends that §301(b) requires only that by July 1, 1977, point sources
be following an enforceable compliance schedule leading to the installation
of equipment representative of best practicable control technology currently
available. I cannot accept this contention.
I have examined the appropriate legislative history as well as prior
adminstrative and judicial decisions on point, 2] and reaffirm that all
point sources must achieve effluent reductions representing the use of BPT
by July 1, 1977. The Administrator has no discretion to extend this
deadline in an NPDES Permit.
The language of §301 is mandatory, not discretionary. It imposes
a uniform deadline for all industrial dischargers of pollutants in the
United States. The legislative history of the Act is replete with
statements which make it abundantly clear that no deviations or extensions
beyond July 1, 1977, are permited. 3J
2j See, Decision of the General Counsel No. 26, affirmed in Decision
of the Administrator, September 30, 1975, in the Matter of NPDES
Permits for Bethlehem Steel (PA0011177); State Water Control
Board v. Train, 8 ERG 1609 (E.D. Va., 1976).
_3_/ For remarks in addition to those discussed infra, see e.g.,
Leg. Hist, at 524, 725, 787-88, 1259 and 1278.
232
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In the Senate consideration of the Report of the Conference Committee,
Senator Muskie, principal author of the bill, explained the significance
of the July 1, 1977 date:
This does not mean that the Administrator
cannot require compliance by an earlier date; it
means that these limitations must be achieved no
later than July 1, 1977, that they must be uniform
and that they will be final upon the issuance of the
permit under Section 402 of the bill. A Legislative
History of the Water Pollution Control Act Amendments
of 1972. at 162. (hereinafter referred to as Leg. Hist.)
[emphasis added].
The Legislative History associated with H.R.11896, the House version
of the bill that eventually became the Act, is similarly instructive.
Administration officials urged the adoption of a provision allowing for
extension of the compliance deadline:
Some provision should be made, however, for an
extension of the 1976 [now 1977] deadline for
facilities where it cannot be achieved despite
good faith efforts ... we suggest an extension
of no more than 2 years for such cases . . .
Leg. Hist. at 1115.
Section 301(b)(3) of the bill that passed the House contained such an
extension provision:
The Administrator may extend for any point source
the dates prescribed in subparagraphs (A) and (B)
or paragraph (1) of this subsection. No extension
of extensions of such date shall exceed a total of
two years from the date prescribed in such sub-
paragraph. Public hearings must be held by the
Administrator in connection with any such extension
prior to granting such extension. No extension
should be granted unless the Administrator determines
that it is not possible either physically or legally
to complete the necessary construction within the
statutory time limit . . . Leg. Hist, at 965.
The bill that emerged from the Conference Committee, which was
233
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enacted into law as the FWPCA, contained no provision for extension of
the deadline due to any cause. Thus, at one time, Congress considered
writing the Act in a manner which would support the flexibility urged
by the applicant. Yet, Congress specifically refused to do so. To
infer that "Congress intended a result that it expressly declined to
enact" would be violative of fundamental cannons of statutory
construction. Gulf Oil Corp., v. Copp Paving Company, 419 U. S. 186
(1974).
The definition of "effluent limitation" in §502 of the Act does not
alter this conclusion. Proper legislative interpretation requires that
the words of a statute be considered in context. It is clear that what
§301(b) requires to be achieved by July 1, 1977, is final effluent
limitations representing the use of Best Practical Control Technology
Currently Available; not merely a compliance schedule leading thereto. The
Report of the Senate Committee on Public Works reinforces this conclusion:
By January 1, 1976 [now July 1, 1977] all point
sources of pollution, expect publicly owned
treatment works, must have in use the best
practicable treatment technology . . . Leg. Hist.
at 1459-60. 4/ [emphasis added].
The terms "effluent limitations" and "schedules of compliance" are
not used synonymously, and are often set forth separately in a single
section of the Act. The context within which these terms are used
4/ Applicant concedes in its brief that, in addition, "the
Conference Report does refer to the 'use' of BPT technology
by the deadline date established in §301(b) ..."
234
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indicates that "effluent limitations" includes "schedules of compliance"
for some, but not all, purposes. The legislative history of §502
supports this conclusion and demonstrates that the definition of "effluent
limitations" was not meant to have the far reaching consequences urged by
Applicant:
A definition of effluent limitations has been
included so that control requirements are not
met by narrative statements of obligation,
but rather are specific requirements of
specificity as to the quantities, rates, and
concentration of physical, chemical, biological
and other constituents discharged from point
sources. It is also made clear that the term
effluent limitation includes schedules and
time tables of compliance.
The Committee has added a definition of schedules
and time-tables of compliance so that it is clear
that enforcement of effluent limitations is not
withheld until the final date required for achieve-
ment. Leg. Hist, at 1495.
That schedules of compliance in NPDES Permits must terminate by July 1,
1977, at which time BPT technology must be installed, is shown by the
remarks of Representative Jones in the House consideration of the Report
of the Conference Committee:
It is the intention of the managers that the
July 1, 1977, requirements be met by phased
compliance, and that all point sources will
be in full compliance no later than July 1,
1977 . . . Leg. Hist, at 231.
Thus, whether one considers the wording of the Act and its
legislative history, or the objectives of the Act when
considered in its entirety, there can be no other conclusion but that
the Administrator has no authority to issue an NPDES Permit extending
235
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compliance with effluent reductions based on the use of best practicable
control technology currently available to a date beyond July 1, 1977.
While I am not persuaded that this interpretation of the Act creates
any constitutional infirmities, questions of constitutional law are beyond
the scope of the legal referral process established by 40 CFR §125.36(m).
See, e.g., Decisions of the General Counsel No. 5, Issue II, No. 18,
Issue II.
The foregoing discussion addresses the limits on the Administrator's
power to issue NPDES permits which contain compliance schedules that
extend the date for attainment of BPT beyond July 1, 1977. It is not
intended to address the scope of the Administrator's discretion to enforce
violations of NPDES permits. While there is, as yet, little judicial
authority on point, that which does exist confirms the Agency's broad
latitude in exercising its enforcement discretion. See, e.g., Sierra
Club v. Train. N. D. Ala., Civ. No. 75-P-0316W, decided September 19, 1975,
not yet reported, appeal pending. In this regard, I would observe that the
Assistant Administrator for Enforcement has recently issued a directive to the
Agency's Regional Enforcement Division Directors which sets out the Agency's
policy with respect to situations where, as here, NPDES permits have not
yet been finally issued and where, as is claimed to be the case here, the
applicant will be unable to attain the requiste effluent limitations by
July 1, 1977 despite good faith efforts to do so. A copy of that
memorandum is attached.
Dated:
June 23 f 1976
* /
(
/
/
-
G. William Frick
General Counsel
236
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« UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20460
June 3, 1976
OFFICE OF ENFORCEMENT
TO: Regional Administrators
Regional Enforcement Directors
NPDES State Directors
SUBJECT: Enforcement Actions Where an Industrial Discharger
Fails to Meet the July 1, 1977, Statutory Deadline
for Achieving Best Practicable Control Technology
or Other Applicable Effluent Limitations
Industrial dischargers, i.e. all dischargers except municipal
dischargers, are required to achieve "best practicable control technology
currently available" ("BPT") by the July 1, 1977, deadline set forth in
section 301(b) (1)(A) of the Federal Water Pollution Control Act,.as
amended in 1972 (FWPCA).* The July 1, 1977, date is of fundamental
importance to the integrity of the FWPCA and to the National Pollutant
Discharge Elimination System (NPDES) permit program. Fortunately, the
great majority of industrial dischargers have finalized permits and are
on engineering and construction schedules which will lead to attainment
of BPT on or before July 1, 1977. However, it has now become apparent
that there are some industrial dischargers which will not achieve BPT by
that date.
Where an industrial discharger will not achieve BPT by the July 1,
1977 date, the Regions are directed to take firm and prompt enforcement
actions. Appropriate penalties and other applicable sanctions should be
sought. Vigorous enforcement of the July 1, 1977, date is vital to
preserve the integrity of the program, to make all dischargers aware
that future deadlines will also be strictly enforced and to provide
equitable treatment to the vast majority of dischargers who have moved
quickly and cooperatively to install necessary control technology to
meet the statutory deadline. A failure to enforce vigorously this
deadline would present undue and unfair advantages to those
* It should be noted that industrial dischargers are also required
to meet water quality standard limitations by July 1, 1977.
Section 301 (b) (1) (C). For the sake of simplicity reference
is made through this memorandum to achievement of BPT by
July 1, 1977, but this reference should be understood to
include meeting water quality standard limitations by that
date.
237
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recalcitrant dischargers who have delayed without good cause the installation
of required equipment and would allow them to profit through postponement
of capital and operating costs. Accordingly, for these and a number of
other reasons, I cannot overemphasize the importance of firm enforcement
of the July 1, 1977, date for compliance with the final effluent limitations
reflecting BPT.
In following this firm enforcement of the July 1, 1977, deadline,
we must not lose our sense of fairness nor be so procrustean in our
approach as to impact harshly and unfairly on an industrial discharger
which will not achieve BPT by July 1, 1977, because it has no effective
permit, either because EPA has not yet issued the permit or because
compliance schedule or final effluent provisions of the permit are
stayed by the pendency of an adjudicatory hearing. It would be unfair
to penalize such a discharger for delay that could be attributed to EPA
or an NPDES State or to utilization of appeal procedures made available
by EPA or an NPDES State. Moreover, an enforcement action against most
such dischargers would probably not decrease the time required to achieve
BPT and in many cases might substantially increase the time required to
achieve BPT through protracted litigation.
It is apparent that some dischargers which do not have effective
permits at the present time and which do not presently have BPT cannot
be expected to accept permits requiring achievement of BPT by July 1,
1977, if it would be physically impossible to achieve BPT by that date
and would be subject to liability for a permit violation for such failure.
Most permittees would contest the schedules in the permits through
adjudicatory hearings and judicial appeals, thus deferring the date for
achievement of BPT for substantial periods of time. These dischargers
must be dealt with in the manner best calculated to achieve BPT at the
earliest possible date and to impose appropriate penalties on those
dischargers whose failure to achieve BPT in a timely manner is attributable
in whole or in part to the lack of best efforts by the dischargers. It
is imperative to get these dischargers on compliance schedules to achieve
BPT at the earliest reasonable date after July 1, 1977.
While a possible approach might"be to issue permits to such dischargers
with compliance schedules extending beyond July 1, 1977, that course of
action is foreclosed by decisions of the Administrator and Federal
Courts interpreting section 301 of the Act. In his decision in the
matter of NPDES Permit for the Bethlehem, Pennsylvania Plant, Bethlehem
Steel Corporation (Docket No. PA-AH-0058, September 30, 1975), the
Administrator determined that he did not have the authority to issue a
permit to a non-municipal discharger extending the 1977 statutory date for
achievement of 1977 statutory requirements for its facility even if
he made a finding that the facility could not achieve BPT within the
statutory period. The rationale of the recent decision by the U.S. District
238
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Court for the Eastern District of Virginia in State Water Control Board
v. Train (8 ERG 1609) supports the Administrator's decision. Since a
permit cannot be issued which does not require by its terms compliance
by July 1, 1977, with BPT effluent limitations, the permit alone cannot
solve this situation.
In particular cases it may be appropriate to establish a compliance
schedule for a discharger that does not have a finally effective permit
and cannot achieve BPT by July 1, 1977, by the issuance of an administrative
order, the commencement of a civil action, or the issuance of a permit
requiring achievement of BPT by July 1, 1977. In the latter instance
the discharger would be expected to appeal the schedule to the appropriate
Court of Appeals, usually on a stipulated set of facts and on narrowly
focused issues. These methods should be utilized against such dischargers,
however, only after prior coordination with the Director, Enforcement
Division, Office of Water Enforcement.
A discharger which has proceeded in good faith but which does not
have a finally effective permit and which cannot achieve BPT by July 1-,
1977, should be dealt with by: 1) issuing a permit requiring the achieve-
ment of BPT by July 1, 1977; and 2) simultaneously issuing an Enforcement
Compliance Schedule Letter ("ECSL") establishing a compliance schedule
to achieve BPT in the shortest reasonable period of time after July 1,
1977, and stating the permit issuing authority's intention to refrain
from enforcing the July 1, 1977, requirement for achieving BPT as long
as the discharger complies with the terms of the ECSL and all terms of
the permit other than that requiring the achievement of BPT by July 1,
1977. An ECSL may not be issued unless the discharger has submitted:
1) documented evidence that, despite all reasonable good faith efforts,
it cannot achieve BPT by July 1, 1977; and 2) a critical path or other
construction management analysis of the shortest reasonable schedule by
which it can achieve BPT.. If the Regional Enforcement Division Director
or the NPDES State Director concurs with the submission, he should
prepare an ECSL to the discharger establishing the shortest realistic
schedule by which the discharger can achieve BPT. The ECSL is discussed
in detail in an accompanying memorandum entitled "Procedures for Issuance
of Enforcement Compliance Schedule Letters."
An ECSL shall be issued only for reasons beyond the control of the
discharger: 1) where NPDES permits have not been issued in a timely
manner; 2) delays have occurred in the resolution .of adjudicatory
hearings; or 3) section 316 (a) determinations have resulted in delay.
Of course, where the discharger's projected failure to achieve BPT is
239
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occasioned in whole or in part by its own lack of good faith, this method
should not be employed: the discharger should be dealt with by traditional
enforcement mechanisms.
In the case of an ECSL issued by an NPDES State, it should be noted
that the ECSL would not be binding on EPA. For this reason most permittees
will wish to have EPA as a joint signator on the State-issued ECSL or to
have EPA issue a separate ECSL. Regional Offices and NPDES States
should establish mutually satisfactory procedures to accomplish this end
where the Regional Enforcement Division Director concurs in the determinations
made by the NPDES State Director.
As required by the FWPCA and the NPDES regulations, the public
must be given notice and opportunity for a hearing on all permits.
Permits issued in the context of this memorandum are not exceptions
to that rule. Additionally however, public notices and, where
appropriate, fact sheets issued for these permi-ts should include
notice of the ECSL and its contents. .Copies of these notices and
fact sheets should 'be transmitted to the Director, Permits Division,
Office of Enforcement.
The issuance of ECSL's must be carefully applied to afford relief
only to those dischargers that despite all reasonable good faith efforts
do not presently have finally effective permits and cannot achieve BPT
by July 1, 1977. This mechanism should not be used to give relief
to dischargers which are violating compliance schedules in finally
effective permits or to weaken or undermine the integrity of the
July 1, 1977, date which is of fundamental importance to the structure
of the FWPCA and its goal of improving our Nation's water quality.
Stanley WV Legro //
Assistant Administrator
for Enforcement
240
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D. C. 20460
DECISION OF THE GENERAL COUNSEL ON MATTERS
OF LAW PURSUANT TO 40 C.F.R. S125.35(m)
NO. 46
In the matter of National Pollutant Discharge Elimination
System permit for Public Service Company of New Hampshire,
Seabrook Station, Units 1 and 2, NH0020338 ("PSC"), the Pre-
siding Officer has certified an issue of law to the General
Counsel for decision pursuant to 40 C.F.R. §125.36(m). The
parties, having had the opportunity to provide briefs in sun-
port of their respective positions, present the followina issue:
ISSUE OF LAW
Question Presented
._ 1-27
"Under the facts set forth in the attached stipulation,
is the subject facility a "new source1 within the meaninq of
section 306 of P.L. 92-500?"
I/ DonaTd~B7~Ros~s7 a~paFty~~to~the NPDES proceeding has not siqned
the stipulation. Counsel for Mr. Ross informed counsel for Public
Service Company that if Mr. Ross failed to brief, he should be
treated as having waived his right to participate in this asoect
of the proceeding. No brief has been received from Mr. Ross but
Mr. Ross' rights granted under the NPDES regulations shall not be
deemed waived. As a party, Mr. Ross, may petition for review of the
initial decision to the Administrator and he may participate in the
development of the facts at any hearing held pursuant to 40 C.F.R.
Part 125. Further, since Mr. Ross has not signed the stipulation,
this legal opinion is binding upon the Regional Administrator only
to the extent that his findings of fact coincide with the stipulated
facts.
2/ A copy of this stipulation is attached. Because of their lenoth,
however, the exhibits to that Stipulation are not reproduced.
241
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Conclusion
On the basis of the facts presented, Seabrook Station is
not a new source within the meaning of section 306 of the
Federal Water Pollution Control Act, as amended (the "Act").
pisjgussign
The term "new source" is defined in section 306(a)(2) of
the Act as:
. . . any source, the construction of
which is commenced after the publica-
tion of proposed regulations pre-
scribing a standard of performance un-
der this section which will be applic-
able to such source, if such final
standard is thereafter promulgated in
accordance with this section.
"Construction" is defined in section 306(a)(5) of the Act
as:
. . . any placement, assembly, or
installation of facilities or
equipment (including contractual
obligations to purchase such facili-
ties or equipment) at the premises
where such equipment will be used,
including preparation work at such
premises.
And "source" is defined in section 306(a)(3) as:
. . . any building, structure, facil-
ity, or installation from which there
is or may be the discharge of pollu-
tants.
On March 4, 1974 (39 Fed. Reg. 8294), EPA published proposed
standards of performance under the authority of section 306 which
are applicable to the Seabrook Station. Such standards were there-
242
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after promulgated on October 8, 1974 (40 C.F.R. Part 423).
Thus, the question presented is whether construction of Sea-
brook Station had commenced, within the meaning of section
306, on or before March 4, 1974.
I
The definition of "construction" includes "any place-
ment, assembly, or installation of facilities or equipment
... at the premises where such equipment will be used . . .
PSC argues that the installation of a meteorological tower
at the Seabrook Station site, prior to March 4, 1974, falls
within the ambit of this portion of the statutory definition.
The stipulation reveals that the tower was installed at
the cost of $22,483. Presumably its function is to acauire
information about weather conditions prevailing at the site
in order to prepare environmental reports and complete
necessary license applications. I do not believe that a
meteorological tower constitutes "facilities" or "eauioment"
as those terms are used in section 306. In my view, the in-
tended reference is to items which form a permanent part of
the source itself and which are used in its operation rather
than to unrelated or preliminary items. Certainly, the re-
ference to installation at the site "where such equipment
will be used" supports this reading as, indeed, does the in-
clusion of the word "facility" in the definition of the term
243
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"source" in section 306(a)(3). Accordingly, the existence
of the meteorological tower in advance of March 4, 1974 does
not prevent the Seabrook Station from beina classified as a
y
new source.
II
A second category of activitv that may constitute "con-
struction" is "preparation work at such premises" — i.e.,
the premises where the equipment and facilities will be used.
PSC points to various environmental, geological, hvdro-
graphic, etc. studies and surveys which it had conducted, at
a cost of several million dollars, in connection with the
Seabrook Station. This, however, mistakes feasibility and
design studies for site preparation. In my opinion, the use
of the term preparation worj? at the PŁ.ero_L§es denotes physical
preparation of the site for construction — for example,
clearing of the land or excavation. It does not include
mere preliminary investigations, particularly where, as here,
_3/ While not controlling, the proposed regulations governina
the application of the National Environmental Policy Act to new
sources also support this reading of the statute. Appendix A
to those regulations, entitled Guidance on Determinina A New
Source provides "Facilities and equipment shall include onlv
the major items listed below . . .
(a) structures; or
(b) structural materials; or
(c) machinery; or
(d) process equipment; or
(e) construction equipment."
(40 Federja^L ResisteŁ 47715, 47720, October 9, 1975.)
244
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it appears that much of those investigations were directed
toward establishing the feasibility of the project and were
not conducted at the plant site. To accept PSC's argument
to the contrary would mean that virtually any observations
of and reports on aspects of a potential site would con-
stitute "construction" -- a result quite at odds with the
I/
language of the section and its apparent purpose.
Ill
The third and final type of activity that is relevant
to the determination of whether or not a facilitv is a new
Ł/ Any distinctTon~be:tween "existing" and "new" plants as of
a given date is, necessarily, arbitrary to some extent. As
both the Region and the permittee point out, the process of
development of a new industrial facility proceeds along a
spectrum from conception to operation and there is, for most
purposes, no need to categorize the facility as having started
construction as of a particular day. However, the Act admits
of but two categories of sources and requires that the classif-
ication be made as of a specific date. The legislative historv
does indicate a Congressional recognition of the greater flexi-
bility in accomodating to stringent pollution control reauire-
ments possessed by plants which are not yet operational, as
compared to those in existence for which compliance would en-
tail retrofitting. For example, Report of the House Committee
on Public Works observed that the provisions of section 306
afforded "recognition of the significantly lower expense of
attaining a given level of effluent control in a new facility
as compared to the future cost of retrofitting a facility to
meet stringent water pollution control measures." Leg_. Hist.
at 797. See also the remarks of Senator Muskie durinq debate
on the bill which emerged from conference. kect' ^Vst • at 172.
On the other hand, the distinction was drawn by Conaress in
terms of construction, not design or other preliminary non-
physical and non-site-specific preparatory activities. The in-
clusion of the design and environmental studies carried out here
as within the meaning of "construction" would push the exception
from new source standards well past the point at which substan-
tial, indeed nearly total, flexibility in meeting those stan-
dards remains.
245
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source is "contractual obligations to purchase" facilities
and equipment of the sort previously described.
The Stipulation reveals that PSC had entered into sev-
eral contracts prior to March 4, 1974. The cruestion is
whether these contracts constitute contractual obligations
of the type required by section 306. Each will be analyzed
in turn.
(1) Nuclear Steam Supply^Contract
According to the Stipulation, PSC had entered into a
contract with Westinghouse Electric Corporation on January
23, 1973, effective "as of" June 7, 1972. The contract,
according to the Stipulation, "provides for the purchase by
PSC of two nuclear steam supply systems at a total price in
excess of $65 million . . . [A]s of March 1, 1974 PSC had
paid approximately $754,000 for 'Costs of Design, Engineering
and Licensing1, which was the amount then due under the NSSS
contract. PSC could have terminated the NSSS contract on or
about March 4, 1974 without additional liability."
There is no question that the steam supply system con-
stitutes "facilities or equipment" within the meanina of sec-
tion 306(a)(5) since that system is an item basic and neces-
sary to the operation of the generating facility. There is,
however, much dispute between the Region and PSC as to whether
the contract represented, as of March 4, 1974, a "contractual
246
-------
obligation" to purchase these items of equipment. According
to the Region, the NSSS contract was structured by the par-
ties, in recognition of the dependence of the project on
approval by various governmental regulatory aqencies, so
that it could be terminated with little or no liability by
the Company prior to the time those regulatory decisions were
expected to be made. Thus, the Region points out, as of
March 4, 1974, PSC had paid $754,000 under the contract all
of which was for design and engineering services rather than
for actual fabrication of the steam supply systems them-
selves. At that point, PSC could have terminated the con-
stract without any additional obligation to r>ay. Hence,
argues the Region, no contractual obligation to purchase
equipment had arisen on or before March 4, 1974.
PSC disputes the Region's analysis. It argues that, the
terms "contractual obligation" and "contract" should be viewed
as synonymous or, if a distinction is to be drawn, that the
former term is broader and more encompassing than the latter.
And it points out that termination would entail a loss to
PSC — namely its investment of $754,000 already expended.
As to the former proposition, the Region's position is
more persuasive and more in accord with what appears to be
Congress" intent. It is not necessary to enter upon an extend-
ed analysis of the complex field of contract law in order to
247
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conclude that Congress1 concern was with the reality of the
financial and physical process by which industrial sources
are developed and not with the labels applied to the arranqe-
ments to develop those facilities. By includina the paren-
thetical phrase "(including contractual obligations to pur-
chase such facilities and equipment)" Congress established
the point at which a facility was to be considered an ex-
isting source a step earlier in the developmental process
than any physical activity on site — requisites of the other
two elements of the statutory test. Presumably, its purpose
in so doing was to recognize that substantial financial com-
mitments can be incurred (and flexibility thereby diminished)
through contractual obligations to purchase specially de-
signed equipment and facilities as well as by their actual
assembly or installation on site. However, Congress pre-
sumably did not intend that any document denominated a "con-
tract" satisfy this test regardless of whether its actual
terms imposed any obligations on the owner of the source.
Thus PSC's contention that the Agency should look no further
than to discover if a document entitled "contract" exists
would permit widespread evasion of the new source standards
through the simple expedient of arranging for what are in ef-
fect "options" to purchase, revocable at little or no cost, not
248
-------
constraining the flexibility of the owner and amountinq, in
effect, to cheap insurance against the application of section
306 and the potential application of the National Environ-
mental Policy Act.
As to the second proposition, Congress expressly did
not intend that any contractual obligation associated with
a facility qualifies it as an existing source. It is only
obligations to purchase facilities and equipment which so
qualify; obligations undertaken for design or engineering
work are not sufficient. And again, I believe the position
of the Region is more reasonable — i.e., that it may analyze
the terms of the contract to determine whether, as of the
critical date, an obligation existed under it t:o purchase
such facilities. Hence, the "loss" of $754,000 alluded to
by PSC is irrelevant to the narrow Question of whether the
project was an existing or new source at the pertinent date,
since it represents payment for personal services, not pro-
gress payments for the purchase of facilities or equipment.
However, I need not resolve these issues in order to
conclude that the NSSS contract is not one which satisfies the
statutory criteria. The Act requires the existence of e con-
tractual obligation to purchase "such facilities or equip-
ment" — namely the facilities or equipment to be installed
249
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"at the premises" where such equipment will be used. Here,
from the face of the contract, it is apparent that the ele-
ment of geographic specificity is lacking. The "Preamble"
to the NSSS contract provides, in part:
The Nuclear Steam Supply Systems fur-
nished by Westinghouse Electric Corp-
oration will be incorporated by the
Public Service Company of New Hampshire
and its assignees in nuclear genera-
ting units proposed to be constructed
at its installation site located at
Seabrgoke, Ro~cking'ham County, Tn the
State of New Hampshire or at LTtchfTeld,
HTllsbgrough County, in the State of
New HampshTFe. (Emphasis added.) ~
In light of this express negation, in the contract, of a
committment to the Seabrook site, it is impossible to say that
the NSSS contract constitutes a contractual obligation to pur-
chase equipment or facilities which are to be installed at the
premises of the source now claimed to be an existing source on
the basis of the contract.
(2) Fuel Contract
The stipulated facts reveal that, also in January 1973, PSC
and Westinghouse entered into a contract for the fabrication of
nuclear fuel for the Seabrook Station. The total price of the
fuel ordered was in excess of $25 million. However, as of
March 4, 1974, no payments were due under the Fuel Contract and
it could have been terminated without liability.
250
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The Region contends the Fuel Contract is not relevant
to the question of whether or not the Seabrook Station is
a new source for two reasons: First, it contends that the
contract is not one for "facilities or equipment" within the
meaning of those terms in section 306. Second, the Region
urges that PSC had no obligation under this contract as of
March 4, 1974 since it could have terminated the contract
without liability. PSC disputes the latter proposition but
does not offer any argument in opposition to the first. I
believe PSC's reticence reflects the strength of the Region's
position. The question of what sort of items constitute
facilities and equipment for purposes of section 306 has
been considered above in connection with PSC's reliance on
the actual installation of a meteorological tower. The inter-
pretation outlined there, that "facilities and eouipment" re-
fers to items "which form a permanent part of the source it-
self and which are used in its operation," applies here as
well. Fuel is used in the operation of the facility but, un-
like those items normally considered to be "eauipment", it
is consumed in the process. Moreover, fuel is normallv a
fungible commodity, the acquisition of which does not reduce
5/
the flexibility in construction of a facility. The Region
5/ There may~be a~specTs~o7~nuclear fuel which render it unique
in this regard and distinguish it from barrels of oil or tanks
of natural gas. Nothing appears in the stipulated facts, how-
ever, which supports this and PSC does not argue the point.
251
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has not cited any authority in support of its contention that
fuel does not constitute equipment, other than the guidelines
which appear as an appendix to the proposed regulations apply-
ing NEPA to new sources, 40 Łed. Reg. 47715. These are in-
structive but, as indicated above, not determinative since
they have not been finally promulgated. PSC offers no argu-
ment on the point whatsoever. In the absence of assistance
from the parties, I have consulted the Uniform Commercial Code
for guidance as to the commonly accepted commercial classifi-
cation of fuel. The UCC supports the conclusion that fuel
is not normally considered as equipment. Section 9-109 dis-
tinguishes between "eauioment" and "inventory", including with-
in the latter "raw materials ... or materials used or con-
sumed in a business" section 9-109(4). The commentary to this
section cites, as an example of materials used or consumed in a
business, and thus inventory, "fuel to be used in operations."
Section 9-109(4) provides explicitly that "inventory of a
person is not to be classified as his eguipment."
In light of this, and in the absence of any countervailing
evidence in the legislative history, I conclude that the con-
tract for nuclear fuel does not constitute a contract for facil-
ities or equipment within the meaning of section 306.
252
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On October 19, 1973, PSC entered into a contract with
United Engineers and Contractors ("UE&C") to provide en-
gineering, design, and construction management services for
the Seabrook Station. UE&C's services were to include the
preparation of plans and specifications for eauipment and
construction work, the recommendation of materials, assis-
tance in the preparation of bid solicitations and the let-
ting of purchase orders. Exhibit 4 to the stipulation in-
dicates that PSC had paid UE&C $6,628,550 as of February 28,
1974 under this contract and that this sum "Includes costs,
expenses and fee for the architect engineer who is responible
for the engineering and design of the nroject. These costs
include the work done by United Engineers and Contractors
and (sic) support of our licensing applications."
The Region rejects this contract on the grounds that it
is not a contract for the purchase of facilities and eauio-
ment. PSC does not dispute the accuracy this characteriza-
tion and does not specifically address the problem which this
would seem to present to its reliance on the E/C Contract.
Instead, its argument on this point is a broad one — "The
scope of the application of section 306 . . . arques independ-
ently for a definition of "new sources' which excludes projects
253
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which at the time of publication of applicable effluent stan-
dards, are already in the planning and development process
and which fall without the literal definition of the 'new
sources' in sections 306(a)(2) and (3)" (PSC Brief, pp. 29-
30) .
The difficulty with this argument is that it, concededly,
necessitates ignoring the language of the Act. Congress
could have provided that once any design and planning efforts
were underway a contemplated facility would be exempt from
new source standards. It did not do so, however. Instead,
section 306 sets out three independent criteria by which
existing sources may be distinguished from new sources. Ap-
plication of these criteria may produce anomolous results
in individual cases. Application of these criteria may not
accord with various groups' notions of sound social policy.
But it is to the statute that we must look and when the
statute speaks as clearly as it does here, it is the statute
which must govern. The E/C contract is one for professional
services; it is not a contract to purchase eouipment and
facilities. Therefore, its existence before March 4, 1974
does not render Seabrook Station an existing source.
(4) Purchase Orders
The stipulation indicates that UE&C's responsibility under
the E/C contract included the preparation of specifications and
254
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equipment procurement documents, the receipt and evaluation
of bids from suppliers, pre-award meetinqs with successful
bidders at which final details and terms are discussed, the
oral award of the order and the subsequent documentation of
the order in a written and signed purchase order. "A total
of 267 such specifications are projected for the UE&C scope
of work, of which 48 had been completed prior to March 1,
1974. Of these 48, 6 had advanced through the biddina pro-
cess to the point of verbal (sic) orders prior to March 1,
1974." These six orders were for the purchase of "equipment
or facilities" within the meaning of section 306 and in the
aggregate, totaled over $18 million. Only one, however, had
been reduced to writing signed by both the supplier and by
PSC (or its agent UE&C) prior to March 4, 1974.
The Region rejects these purchase orders on two grounds.
It contends that the five purchase orders which had not been
accepted in writing by the supplier prior to March 4, 1974,
are not "contractual obligations" of PSC since they would
have been unenforceable as against PSC under the Statute of
Frauds. PSC objects vehemently to the "formalistic niceties"
upon which the Region's analysis rests, apparently contending
that the suppliers' reliance on the oral offers would render
them enforceable. Neither party cites any authority from
New Hampshire pertinent to that State's Statute of Frauds or
255
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estoppel by reliance or any other state law relevant to the
enforceability of these oral orders. On such a record, I
am not disposed to speculate as to whether the orders would
be enforceable in New Hampshire State Courts. Nor is it
necessary to do so, since all parties concede that one order
was reduced to writing on March 1, 1974. The order in
question relates to the purchase of "Feedwater Heaters."
The total contract price of this eauipment is $3,750,000.
According to the stipulation, it could have been cancelled
by PSC on or about March 4, 1974 upon pavment of a cancela-
6/
tion charge of 13.8% of the total price, or about $517,000.
The Region contends that this purchase order, thouoh
concededly a contractual obligation to purchase eauipment
antedating March 4, 1974 should not suffice because the
cancellation charge of $517,000 is not "substantial" in com-
parison to the total cost of the Seabrook Station, estimated
at approximately $1,545,000,000.
At the outset, it is clear that the Act itself does not
expressly provide for a consideration of the substantiality
or significance of the contractual obligations, nor of either
of the other two criteria by which determinations as to a
facility's status as a new source are to be made. Indeed,
67 The Region's reference to $417,000 appears to be a typographical
error .
256
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the statutory language is to the contrary. Section 306(a)
(5) defines "construction" as "any_ placement, assembly, or
installation of facilities or equipment (including contrac-
tual obi igations to^purchase such facilities or equipment)
at the premises where such equipment will be used, includ-
ing preparation work at such premises" (emphasis added).
The Region does not argue to the contrary but contends
that a requirement of substantiality or significance should
be inferred. According to the Region, the intent of the
Act's definition of construction is to identify that point
on "the spectrum from the gestation of the original idea to
the completion of the project" at which the owner has lost
sufficient flexibility that it would be in some sense un-
reasonable to require the alteration of the project to meet
new source performance standards. The Region observes, cor-
rectly, that some contracts for facilities and equipment do
not materially reduce this flexibility. Second, the Region
points out that the opposite rule would encourage evasion of
the "application and intent of 306" by resort to small but
qualifying contracts which entail very little expense and
which do not limit flexibility in a meaningful way.
The Region's position has obvious force as a matter of
policy. And there may indeed be instances in which, despite
the Act's reference to "any_" contractual obligations, reliance
257
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on an isolated contract, not part of a continuous course of
conduct leading toward the development of a facility, and
small in absolute terms, would be unavailing.
This is, however, not the case at hand. From the
stipulated facts it is apparent that PSC has been engaged
in a continuous course of development of the Seabrook Sta-
tion for several years. The initial site studies began as
early as 1969. In 1972 PSC filed a petition, according to
its brief, to the New Hampshire Public Utilities Commission
for a Certificate of Site and Facility, though the contents
and purport of the Petition are not further disclosed. In
March 1973, PSC filed an application with the then Atomic
Energy Commission for construction permits for Seabrook
Station. The application, including an,eiqht volume Prelim-
inary Safety Analysis Report, a three volume Environmental
Report and an eight volume Reference Safety Analysis Report
was accepted for docketing by A.E.G. in July 1973. The
Nuclear Steam Supply Contract and the Fuel Contract, as well
as the E/C engineering services contract, while not them-
selves satisfying the test of section 306, are indicia of
a sustained and serious intent to proceed with the Seabrook
project which substantially antedated the publication of the
EPA new source performance standards. So too is the Letter
258
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of Intent concerning the construction of two "Turbine gener-
ators and four half-size Reactor Feedpump Turbines" issued
to General Electric Company in March 1973, discussed briefly
below. In short, there is ample evidence that PSC had, prior
to the execution of the feedwater heater purchase order on
March 1, 1974, contemplated the construction of a nuclear
electric generating facility at Seabrook and there is no
evidence whatsoever that the execution of that order was in
any sense a device to evade the yet to be issued new source
performance standards.
Finally, even accepting the Region's position as to the
proper measurement of the magnitude of the contractual obliga-
!/
tion under the purchase order, that amount is significant
in absolute terms, amounting, as it does to over one half a
million dollars.
It may be that, despite the apparent conqruity between
the cancellation charge and PSC's ultimate contractual li-
ability for the completed and delivered feedwater heaters,
this sum ($517,000) represents only an option price, that is,
a price paid to secure PSC's "place in line," for the fabrica-
tion of this equipment. It will be open to the Region or other
parties, at the adjudicatory hearing, to attempt to show this
77 The Region contends that -the proper measure is the cancella-
tion charge ($517,000) rather than the total contract price
($3,750,000) .
259
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fact, in which case a contrary conclusion as to the order's
significance as to the new source determination would be
appropriate. But if, as it appears to be the case from the
stipulated facts, the cancellation charge represents pro-
portionate compensation to the supplier for its efforts in
preparing to fabricate, or fabricating, the described
equipment then the purchase order is a contractual obliga-
tion to purchase facilities or equipment executed before
March 4, 1974, and hence renders the Seabrook Station an
existing source for purposes of section 306.
(5) Letter of Intent re Turbine Generators
According to the stipulation, PSC forwarded a Letter of
Intent to the General Electric Company relating to the pur-
chase of two turbine Generators and four half-size reactor
Feedpump Turbines in March 1973. The letter expressly re-
ferred to development of a "formal contract" and provided
that "no work will be done and no liability to the General
Electric Company will be incurred . . . prior to Public Ser-
vice Company's formal release for Engineering and Manufacture",
after which date cancellation charges would not exceed $25,000
per month through December 1974. The letter was acknowledged
by General Electric in May 1973. The release for enqineering
8/
for Unit #1 was given by PSC on May 25, 1973; as of March 4,
87 The stipulation indicates that Seabrook Station is to con-
sist of two electric generating units, each with a generatinq
capacity of 1150 megawatts.
260
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1974 cancellation charges would have amounted to approxi-
mately $250,000. The release for engineering for Unit #2
was given in February 1974; as of March 4, 1974 cancella-
tion charges would have amounted to approximately $125,000.
The "formal contract" referred to above and contemplated by
the Letter of Intent was not executed until June 1975.
While the Region expresses some doubt as to whether
the above-related events would give rise to contractual obli-
gations, it ultimately concedes in its brief (p. 7) that a con-
tract did exist prior to March 4, 1974 and that the relevant con-
tractual obligation would be the cancellation charge of
$275,000.
That being the case, the analysis set forth above with
respect to the Purchase Order for the Feedwater Heaters is
equally applicable here. That is to say, so ]ona as it is
not shown that the cancellation charge was no more than al-
ternate nomenclature for an option to purchase (i.e., that
it did not represent an effort to compensate the General
Electric Company for its expenditures in engineerinq and the
"benefit of its bargain" up to the- point of cancellation) then
this contract too Qualifies as a contractual obligation to
purchase equipment or facilities upon which the Seabrook Sta-
tion may be found to be an existing source.
_
G. William Frick
General Counsel
Dated:
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Washington, D. C.
DECISION OF THE GENERAL COUNSEL ON MATTERS OF
LAW PURSUANT TO 40 CFR §125.36 (m)
No.47
In the matter of National Pollutant Discharge Elimination System
Permit No. NH0100188 for New London, New Hampshire, two issues of law
have been certified to the General Counsel for decision pursuant to
40 CFR §125.36 (m). The parties, having had the opportunity to provide
written briefs in support of their respective positions, present the
following issues:
ISSUE OF LAW NO. I
Question Presented
May EPA issue an NPDES permit to a New Hampshire municipality with
an existing inadequate wastewater treatment facility, which permit does
not, by the imposed abatement implementation schedule, require the
construction and operation, by July 1, 1977, of a treatment facility
adequate to provide secondary treatment and to achieve any more
stringent limitation necessary to meet applicable New Hampshire water
quality standards?
262
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Conclusion
No, unless the permitted facility's application for construction
grant funds under Title II of the FWCA. was approved prior to June 30,
1974 in which case secondary treatment is to be achieved upon completion
of construction, which must occur within four years of approval; i.e.,
no later than June 30, 1978.
Discussion
The permit in question is for a municipally owned sewage treatment
works. It contains numerical effluent limitations on Biochemical Oxygen
Demand and Total Suspended Solids, expressed in terms of percentage
removal, which are to be met until June 1, 1977, at which point the
permit expires. These limitations are less stringent than those
required by the Agency's regulations defining secondary treatment.
(See 40 CFR Part 133). The permit also contains an "implementation
schedule" which requires commencement of construction of a new or
enlarged treatment plant by June 1, 1976 and attainment of an unspecified
"operational level" by December 31, 1977 - i.e., six months after the
statutory date for attainment of secondary treatment set forth in
Section 301(b)(1)(B) and seven months after the expiration of the permit.
The Region asserts that the sewage treatment facility to be constructed
will be "adequate to provide secondary treatment and to meet applicable
downstream water quality standards." This assertion is not contested by
the requestor, the Town of Sutton, New Hampshire.
The requestor objects to the permit on two grounds: first, that it
does not affirmatively require the attainment of effluent limitations
263
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consistent with secondary treatment by July 1, 1977; and second, that it
affirmatively establishes a later date for compliance.
The question has been answered in two previous Decisions of the
General Counsel. See Decision of the General Counsel No. 26 (July 24, 1975),
affirmed in Decision of the Administrator, September 30, 1975, in the Matter
of NPDES Permits for Bethlehem Steel; Decision of the General Counsel No. 45,
(June 23, 1976). In view of those Decisions, the matter does not require
extended discussion here. The only distinction between the factual situation
at issue in those Decisions and that in the case at hand is that the former
Decisions concerned industrial facilities subject to Section 301 (b)(1) (A)
whereas in this case the permittee is a publicly owned treatment works
subject to Section 301(b)(1)(B). I/
I/ A possible second distinction is the fact that the permit in this
case expires on June 1, 1977, one month in advance of the statutory
date. The Region does not argue that this early expiration date
alleviates the problems with the deferred operational date. The Town
of Sutton dismisses the June 1 expiration date as "an indefensible
sham and a fraud."
Section 402(a)(1) authorizes the Administrator to issue permits for
discharges "upon condition that such discharge will meet . . . all
applicable requirements under Section 301 . . .". Section 402 (a)(2)
directs that the Administrator shall prescribe conditions for such
permits to assure compliance with the sections enumerated in Section
402 (a) (lT7
In my view, the combined effect of those sections is to impose on the
Administrator an obligation to issue permits which do assure that the
substantive and time-related requirements of the Act are complied
with. This is not to say that permits which expire before a statutory
deadline are necessarily objectionable. There may be many instances
in which short-term permits (which contain an implementation schedule
that does not require full compliance with ultimately applicable
standards be achieved during the term of the permit) may be appropriate.
But here, the permit was issued on January 26, 1975 and extends until
June 1, 1977 only one month before effluent limitations consistent with
secondary treatment would be required by the Act. And it also contains,
in its implementation schedule, evidence that this effluent level
will not be achieved until December 31, 1977. In this case, it is
apparent that the permit does not contain conditions necessary to
assure compliance with Section 301.
264
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The distinction is potentially significant. Section 301(b) contains
one exception to the otherwise identical July 1, 1977 compliance date
applicable to both industrial dischargers and publicly owned treatment
works. Section 301(b)(1)(B) provides, in effect, that publicly owned
treatment works approved pursuant to Section 203 of the FWPCA prior to
June 30, 1974 must attain secondary treatment upon completion of
« construction. The section contains the further proviso that construction
must be completed within four years of approval. The combined effect of
these provisions is to afford treatment works whose applications for federal
construction grant assistance are approved after June 30, 1973 and before
June 30, 1974 and whose construction schedules require a full four years
to complete, an additional period of time (but in no case more than one
year - i.e., to June 30, 1978 in the most extreme case) in which to
attain secondary treatment.
The briefs of the parties do not address the question of whether
the permittee's facility would be eligible for some or all of this
additional time. Whether it is or not is a factual question which may
be determined at an adjudicatory hearing. Assuming that the permittee
does not come within the class of facilities approved pursuant to
Section 203 prior to June 1974, however, then the permit is deficient
for the reasons advanced by the Town of Sutton. 2/
2_/ The permit at issue does not require attainment of the baseline,
technological standard of secondary treatment by July 1, 1977.
It would seem, a_ fortiori, that it also would not require
attainment of more stringent limitations, if any, derived from
water quality standards or other sources of authority enumerated
(Footnote continued)
265
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ISSUE OF LAW NO. II
Question Presented
May EPA issue an NPDES permit to a municipality with an existing
inadequate wastewater treatment facility, which permit contains an
implementation schedule based in part on the administrative time
necessary for preparing and processing applications for state and
federal construction grants?
(Footnote continued)
2/ in Section 301(b)(1)(C).
I am aware that the New Hampshire Supreme Court recently held
that the State of New Hampshire Water Supply Commission acted
properly in certifying, pursuant to Section 401 of the Act,
to the issuance of this permit despite the fact that, as a
result of the permitted discharge, the receiving waters would
not meet the quality prescribed by State Water Quality Standards
until December 31, 1977. See Town of Sutton v. Water Supply
Commission, A 2d , 8 ERC 2085, March 5, 1976.
There is no need to consider here the precise question before
the New Hampshire Supreme Court. It is clear that the permit
does not ensure attainment of secondary treatment by July 1, 1977,
as required by Section 301(b)(1)(B) of the Act. This question
was not before the State Court and is a matter involving solely
the interpretation of federal law and regulations issued thereunder
by this Agency.
With respect to the New Hampshire Supreme Court's interpretation of
Section 301 (b) (1) (C), I would observe that the Administrator has
recently issued a modification to his earlier Decision in U. S. Pipe
and Foundry Company. While that Decision construes a different
portion of Section 301 (b) (1)(C) than that at issue in Town of Sutton
v. Water Supply Commission, it may be relevant to the Region's action
in reissuing the permit in a manner consistent with this opinion.
Accordingly, I am attaching a copy of the Administrator's Decision
as Appendix B.
266
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Conclusion
Yes, provided that the implementation schedule does not extend
beyond the date by which the facility is required to achieve secondary
treatment pursuant to Section 301(b)(1)(B).
Discussion
The Region explains the December 31, 1977 date by which the
"attainment of operational level" (presumably equivalent to that required
to meet secondary treatment and water quality standards) is required as
follows:
"Those dates were selected by our Municipal
Permits Section, taking into account the time
required for processing, approving, and funding
New London's applications for federal and state
construction grant monies. The decision to
consider the grant process in selecting the
Permit's compliance dates was made in recogni-
tion of the reality that New London cannot, and
would not, construct the required sewage treatment
plant absent these grants, and that a Permit setting
out compliance dates selected without regard to the
grant process would not be realistic."
The Town of Sutton concedes that federal funding for municipal
treatment works is a part of the overall Act. But it objects to the
Region's extending the compliance date in the permit predicated on delays
attendant to processing the permittee's application for a construction
grant. It contends that "Nothing in the Act . . . suggests that the
obligation of municipalities to comply with the law is conditional on
the federal government paying the bill." (Br. p 7).
The precise question was decided in State Water Control Board v.
Train, F. Supp. , 8 EEC 1609 (E. D. Va. 1976). In that case,
the State of Virginia contended that the obligation of a publicly owned
267
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treatment works to comply with secondary treatment by July 1, 19.77 is
conditioned upon its receipt of federal funding. It sought a declaration
that such a facility is not required to comply with otherwise applicable
effluent limitations until (a) it had received such funding and
(b) a reasonable time thereafter had elapsed in which to complete
construction.
The District Court rejected the State's argument, holding that the
Act did not afford the Administrator discretion to issue permits under
Section 402 extending the date for compliance with the requirements of
Section 301 beyond July 1, 1977.
As the District Court observed, Administration officials testified
in support of a provision authorizing administrative extensions of the
deadlines in Section 301(b). Specifically, Mr. Ruckelshaus, then
Administrator of EPA, was convinced that:
A two year extension from the 1976 [now 1977]
deadline will be necessary for some industrial
sources. Similarly, we are of the view that
all municipal sources in existence in 1976
[now 1977] cannot achieve secondary treatment;
that secondary treatment requirements should
only apply to projects for which federal grants
are provided. (Leg. Hist, at 1197)
The bill reported to the House contained a more general extension
provision supported by the Administration. It did not include, however,
the specific provision linking the obligation to comply with the statutory
deadlines with federal grant assistance urged by Mr. Ruckelshaus. And
the bill which emerged from Conference, and became the FWPCA, contained
no such provision whatsoever.
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The State Water Control Board has appealed the ruling of the District
Court. The position taken by the Agency in the U. S. Court of Appeals for
the Fourth Circuit is that the District Court was correct in holding that
the Administrator may not issue NPDES permits which extend the date for
attainment of secondary treatment because of inadequacies or delays in the
provision of federal grant support. Accordingly, I conclude that the
permit in question is not in accord with the Act.
As I cautioned in a similar context in Decision of the General Counsel
No. 45, the foregoing discussion concerns the limits on the Administrator's
power to issue NPDES permits which contain compliance schedules beyond
July 1, 1977. The Administrator's discretion in enforcing violations of
NPDES permits is a separate matter, governed by other principles. In
this regard, I would observe that the Assistant Administrator for Enforcement
has recently issued a directive to the Agency's Regional Enforcement Division
Directors which sets out the Agency's policy with respect to situations
where, as here, NPDES permits have not yet been finally issued and where,
as is asserted to be the case here, a publicly owned treatment works will
be unable to attain the requiste effluent limitations by July 1, 1977,
despite good faith efforts to do so because of delays attendant on the
provision of federal construction grant funds. A copy of that memorandum
is attached.
Dated:
2° , 1976
G. William Frick
General Counsel
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I UNITED STATES ENVIRONMENTAL PROTECTION AGFNCY
''vi?
>t0 WASHINGTON. D.C. 204GO
June 3, 1976
OFFICE Of ITNFOKCKMLNT
TO: Regional Administrators
Regional Enforcement Directors
NPDES State Directors
SUBJECT: Enforcement Actions Against a Municipal D5scharger that'Fails
to Meet the July 1, 1977, Statutory Deadline for Achieving
Secondary Treatment Where the Municipal Discharger is Currently
Funded for a Step 1, 2 and/or 3 Construction Grant Directed
Toward Achieving Secondary Treatment or Occupies a Position
on a Priority List Such that it Can Reasonably Be Expected
to Be. so Funded Prior to July 1, 1977
Municipal dischargers are required to achieve secondary treatment*
by the July 1, 1977, deadline set forth in section 301(b)(1)(B) of the
Federal Water Pollution Control Act, as amended in 1972 (FWPCA). The
July 1, 1977, date is of fundamental importance to the integrity of tlv;
FWPCA and to the National Pollutant Discharge Klimiration System (HPDES)
permit program. Fortunately, many of the subject municipal dischargers
have finalised permits and are on engineering and construction schedule"'
which will lead to attainment of secondary treatment on or before; July 1,
1977. However, it has now become apparent that; a significant number of
these municipal dischargers will not achieve secondary treatment by
that date.
Where a municipal discharger 1) will not achieve secondary treatment
by the July 1, 1977, date; and 2) is funded for a Step 1, 2 mid/or 3
construction grant directed tov/ard achievement of secondary treatment
or occupies a position on a priority list such that it can be expected
to bu so funded by July 1, 1977, by funds authorized in section 207
of the FWPCA; and 3) is not proceeding ?s expeditiously as practicable
toward the achievement of secrjnclary treatment consistent with the
construction grant process: the Regions are directed to take firm and
proii'pt enforcement actions. Appropriate penalties and other applicable
sanctions should be sought. Vigorous cnforccrriont of the July 1, 1977,
date is vital to preserve the integrity of the program, to make all
* It should be noted that municipal dischargers arc also required to
achieve wat^r quality standard limitations by July 1, 1977. Section
301 (b) (1) (C) of the Act. In addition, municipal facilities that have
been approved under section 203 of the Act prior to J\mo> 30, 1974, may
be accorded up to June 30, 1978, to achieve secondary treatment
limitations. For the sake of simplicity reference is made throughout
thin memorandum to achievement of secondary treatment limitations by
July 1, 3977, but this reference should be understood to include
meeting water quality standard limitations by that date and, if
appropriate, achieving secondary treatment limtiations by June 30,' 1978.
270
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dischargers avare that future deadlines wil] also bo strictly enforced
and to provide equitable treatment to the vast majority of municipal and
industrial dischargers who have moved quickly and cooperatively to
install necessary control technology to meet the statutory deadline. A
failure to enforce vigorously this deadline would present undue and
unfair advantages to those recalcitrant dischargers who have delayed
without good cause the installation of required equipment and would
allow them to profit through postponement of capital and operating
costs. Accordingly, for the^e and a number of other rcason.s, I cannot
overemphasize the importance of firm enforcement of the July 1, 1977,
date for compliance with the final effluent limitations.
In following this firm enforcement of the July 1, 1977, deadline,
we must not lose our sense of fairness nor be so procrustean in our
approach as to impact harshly and unfairly on a municipal discharger
that will not achieve secondary treatment by July 1, 1977, not so much
because it has not made all reasonable good faith efforts to do so, but
more from processes within the control of EPA or an NPDES State. These
situations are:
1. Where a discharger lias no effective permit, either
because EPA or an NPDF.S State has not yet issued the"
permit or the final effluent limitations or compliance
schedule are stayed by the pendency of an adjudicatory
hearing; and
2. Where a discharger's progress is delayed by the protracted
nature of the construction gr?nt process. This situation
would occur, of course, only when the discharger:
a. has proceeded toward achievement of secondary
treatment limitations in good faith as expeditiously
as practicable consistent with the construction grant
process; and
b. is currently funded for a Step 1, 2, and/or 3
construction grant directed toward achieving secondary
treatment .limitations or occupying a position on a
priority list such that it reasonably can be expected
to be so funded prior to July 1, 1977, from funds
authorized in section 207 of the FV/PCA.'
It would be unfair to penalize such a discharger for delay that could be
attributed to EPA or an NPDES State or to utilization of appeal procedures
made available by EPA or an NPDES State. Moreover, an enforcement
271
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action against most such dischargers would probably not decrease the
time required to achieve secondary treatment and in many cases might
substantially increase the time required to achieve secondary treatment
through protracted litigation.
It is apparent that some dischargers which do not have effective
permits at the present time and do not presently have secondary treat-
ment cannot be expected to achieve secondary treatment by July 1, 1977.
These dischargers must bo dealt with in the manner best calculated to
achieve secondary treatment at the earliest possible date and to impose
appropriate penalties on those dischargers whose failure to achieve
secondary treatment in a timely manner is attributable in whole or in
part to the lack of bont efforts by the dischargers. Few, if any, of
these 'dischargers could be expedtcd to accept permits requiring achieve-
ment of secondary treatment by July 1, 1977 if it would be physically
impossible to achieve secondary treatment by that date and would be
subject to liability for a permit violation for such failure. I'lost
permittees would contest the schedules in the permits through adjudicatory
hearings and judicial appeals, thus deferring the date for achievement
of secondary treatment for substantial periods of time. It is impera-
tive to get: thane dischargers on compliance schedules to achieve
secondary treatment at the earliest reasonable date after July 1, 1977.
While a possible approach might be to issue permits to such dischargers
with compliance scliedul.es extending beyond July 1, 1977, that course of
action is foreclosed by decisions of the Administrator and Federal
Courts interpreting section 301 of the Act. On February 9, 1976, the
U.S. District Court for the Eastern District of Virginia in the case of
State* Water Control Board v. Train (8 ERG Ib09) issued an opinion that
interpreted section 301 of the FWPCA. That opinion held that
a permit cannot be issued which- does not require by its terms compliance
by July 1, 1977, with secondary treatment effluent limitations.
Accordingly, the permit alone cannot solve this situation.
In particular cases it may be appropriate to establish a compliance
schedule for a discharger that does not have a finally effective permit
and cannot achieve secondary treatment by July 1, 1977, by the issuance
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of an administrative order, the commencement of a civil del.ion, or the
issuance of a permit requiring achievement of secondary treatment by
July 2, 1977. In the latter instance the discharger would be expected
to appeal the schedule to the appropriate Court of Appeals, usually on a
stipulated set of" facts and on narrowly focused issues. These methods
should be utilised against such dischargers, however, only after prior
coordination with the Director, Enforcement Division, Office of Water
Enforcement.
Cases where a discharger (a) does not have a finally effective
permit (or has a permit expir.ing prior to July 1, 1977, which must be
reissued) and cannot achieve secondary treatment by July 1, 1977, find is
currently funded for a Step 1, 2 and/or 3 construction grant directed
toward achieving secondary treatment or -(b) occupies a position on a
priority list such that it can reasonably be expected to be so
funded prior to July 1, 19/7, from funds authorized in section 207 of the
rwPCA,' should be dealt with by: • 1) issuing a permit requiring the
achievement of secondary tr.eat.ment by Ju.ly 1, .1977; and 2) simuJ tunconsJ y
issuing an F,n roreement Compliance Schedule Letter ("KCSL") establishing
a compliance schedule to achieve secondary treatment in the shortest
reasonable period of time after July 1, 1977, and slating the permit
issuing authority's intention to refrain from enforcing the July 1,
19-77, 2 equirem< ait for achieving secondary treatment as long as the
discharger complies \'it.h the term::, of the ECSL and all terms of the
permit other than that requiring achievement of secondary treatment by
July 1, 1977. An ECSL may not be issued unless the discharger lias submitted:
1) documented evidence thai., despite, all reasonable good faith efforts,
it cannot arid eve secondary treatment by July 1, 1977; and 2) a critical
path or other coastructjon management analysis of the shortest reasonable
schedule by which it can achieve secondary \ >catmint. If the Regional
Enforcement Division Director or the NPDES State UJ rector concurs with
the submission, he should piepare an ECSL to the di 5,charger establishing
the shortest realistic schedule by which the discharger can achieve
secondary treatment. The. ECSI, is discussed in detail in an accompanying
mc.morandum enl.ii.led "Procedures for Issuance of Enforcement Compliance
Schedule Letters." Of course, where the dischargers's projected failure
to achieve secondary treatment is occasioned in whole or in part by its
own lack of good faith, this method should not be employed: the discharger
should be dealt with by traditional enforcement mechanisms.
In the case of an ECSL issued by an NPDES State, it should be rioted
that the ECSL would not be. binding on EPA. For this reason most permittees
will wish to have EPA as a joint signator on the State-issued ECSL or to
have- EPA issue a separate ECSL. Regional Offices and NPDKS States
should establish mutually satisfactory procedures to accomplish this end
where the Regional Enforcement Division Director concurs in the determination;:
made by the NPDES State Director.
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As required by the FWPCA and the NPDES regulations, t)ie public
must be qivcn notice and opportunity for a hearing on all permits.
Permits; issued in the context of this memorandum arc not exceptions
to that rule, /vdditionally, however, public notices and, where
appropriate, fact sheets issued for these permits should include '
notice of the ECSL and its contents. Copies of these notices. and
fact sheets should be transmitted to the Director, Permits Division,
Office of Water Enforcement.
The issuance of LCSI/s must be carefully applied to afford relief
only to those municipal dischargers that despite all reasonable good
faith efforts do not presently have finally effective permits (or have
permits expiring prior to July 1, 1977, .which must be reissued), cannot
achieve secondary . treatment by July 1, .1977, and that are currently
funded lor a Step 1, 2 and/or 3 construction grant directed toward
achieving secondary treatment or occupies a position on a priority list
such that it reasonably can be expected to be so funded prior to July 1,
3977, from funds authorized in section 207 of the FV.TCA. This mechanism
should not be used to qive relief to dischargers which arc violating
comp]Jance schedules in finally effective permits or which are 'not
funded or likely to be funded with construction grants prior to July 1,
1977, from current appropriations, or to ^weaken or undormine the integrity
of the July 1, J977, date which is of fundamental importance to the
structure of the FWPCA an*1 its goal of improving your Nation's water
quality.
Stanley W. Leqro
Assistant Administrator
for Enforcement
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BEFORE THE ADMINISTRATOR
U.S. ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C.
IN THE MATTER OF: )
)
National Pollutant Discharge ) NPDES Appeal No. 75-4
Elimination System )
) (NPDES Docket No. AHAL 002)
Permit For: )
)
U.S. Pipe and Foundry Company )
North Birmingham Complex )
NPDES No. AL 0003247 )
Permittee. )
SECOND MODIFICATION TO
DECISION OF THE ADMINISTRATOR
I am today modifying my Decision of October 10, 1975 (as modified
on December 9, 1975) in the above-captioned matter in order to correct
an erroneous legal interpretation. This correction will require a
modification to certain terms of the above-captioned permit, as explained
below.
Background
My October 10 Decision upheld on appeal the Initial Decision of the
EPA Regional Administrator, Region IV, which affirmed the terms of the
above-captioned permit (the "Permit") issued under Section 402 of the
Federal Water Pollution Control Act, P.L. 92-500 (the "Act"). One part
of my Decision specifically upheld terms of the Permit which deferred
achievement of certain water quality-based effluent limitations until
July 1, 1979.
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On May 14, 1976, EPA's General Counsel and EPA's Assistant Admini-
strator for Enforcement filed a joint "Petition for Reconsideration of
Administrator's Decision" in this matter. They asked that I reconsider
that portion of my October 10 Decision which upheld the 1979 achievement
date for water quality-based limitations.
In an Order dated May 18, 1976, my Deputy announced that I would
reconsider the issue and invited all parties to submit briefs. Permitee
U.S. Pipe and Foundry Company filed pleadings opposing the Petition.
The Alabama Conservancy filed pleadings (on behalf of itself and numerous
other parties) supporting the Petition. EPA's Region IV filed a pleading
supporting the Petition. The General Counsel and the Assistant Admini-
strator for Enforcement filed a Response to Permittee's pleadings.
Region IV supported this Response. I have considered all of these
pleadings in reaching my decision today.
Disposition of Petition
The statutory provision at issue here is Section 301(b)(l)(C) of
the Act, which provides in pertinent part:
[Tjnere shall be achieved ... (C) not later than July 1, 1977, any
more stringent limitation, including those necessary to meet water
quality standards ... established pursuant to any State law or
regulations ... or any other Federal law or regulation, or required
to implement any applicable water quality standard established
pursuant to this Act. (Emphasis added.)
I have underscored above the key words and phrases bearing on the issue
before me.
In my October 10 Decision, I indicated my agreement (at pp. 11-13)
with the analysis in the Initial Decision which drew a sharp and
276
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significant distinction between the words "meet" and "implement" as
quoted above. The reasoning of the Initial Decision was that water
quality standards adopted prior to the 1972 Act amendments had to be
completely met by July 1977 while water quality standards established
pursuant to Section 303 of the 1972 Act amendments, because of the
verb "implement," need only be subject to requirements by July 1977
which would "lead to the meeting of the standards." Since certain
Alabama water quality standards were established under the 1972 Act
amendments, the Initial Decision reasoned, the Permit limitations pro-
viding for achievement of such standards in 1979 were acceptable.
Neither the Initial Decision nor my October 10 Decision cited any
legislative history, case law, or other authority for the "meet-implement"
distinction. The Initial Decision reasoned at page 32: "Obviously
Congress must have intended in the use of these two different words to
require different actions." My Decision outlined briefly some different
"commonly understood" connotations to the two words.
Upon review of all of the pleadings now before me, I am convinced
that my prior reliance on whatever difference in connotation there may
be between "meet" and "implement" was misplaced. Upon consideration of
the clear and convincing legislative history and upon further reflection
on the statutory language itself, I must conclude that Section 301(b)(l)(C)
demands that water quality standards, including those established pur-
suant to Section 303 of the 1972 Act amendments, be fully achieved not
later than July 1, 1977.
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Turning first to the statutory language itself, it appears that my
prior focus on the distinction between "meet" and "implement" caused me
to overlook the primary verb of the statutory sentence in question:
"achieved." Section 301(b)(l)(C) clearly states that effluent limita-
tions, whether necessary to "meet" or "implement" water quality standards,
"shall be achieved not later than July 1, 1977." Thus, considering the
sentence in its entirety, whatever fine distinction might exist between
"meet" and "implement" loses its importance..
Moreover, the legislative history greatly fortifies my reconsidered
statutory construction. The statutory language in question, including
the "meet-implement" juxtaposition, appeared first in the House bill,
H.R. 11896. The Committee Report accompanying H.R. 11896 makes explicit
that both basic variations of water quality standards addressed in the
Initial Decision (those established prior to the 1972 amendments and
those established under Section 303 of the 1972 amendments) are to be
met by July 1977:
Subsection (b)(l)(C) of section 301 requires that any more
stringent limitation than that established under section 301(b)(l)(A)
and (B), including any necessary to meet water quality standards,
treatment standards, or schedules of compliance established pur-
suant to any other State or Federal law or regulation or any required
to implement any applicable water quality standards established
pursuant to section 303 of this Act shall be met by January_J7~1976.
The Committee intends that the water quality standards established
pursuant to subsection (c) of section 10 of the existing Federal
Water Pollution Control Act be complied with prior to January 1,
1976, in accordance with the implementation plans that are parts of
such standards, or any revision of these standards made pursuant to
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section 303 of this Act, and that there be appropriate phased
compliance with revised or new standards adopted pursuant to
section 303(c) of this Act, not_ l_ate_r_than January ]_,_ 1_9_7_6.*
H.R. Rep. No. 92-911, 92d Cong. 2d Sess. (1972), as reprinted in
A Legislative History of the Water PollutionControl Act Amend-
ments of 1972. Library of Congress, Serial No. 93-1 (197Ty7af p.
788 (emphasis" added) .**
In light of the foregoing, my October 10 Decision must be modified.
Specifically, the section construing Section 301(b)(l)(C) of the Act at
pp. 11-13 shall, to the extent inconsistent with today's Decision, be
considered superseded by today's Decision. Conclusions 5 and 6 on page
14 of the October 10 Decision are hereby revoked and the following Con-
clusion 5 should be substituted for them:
"5. The requirements of Section 301(b)(l)(C) are not. fully
satisfied by the subject permit, in that it contains effluent
limitations which defer achievement of water quality standards
beyond the statutory deadline of July 1, 1977. The initial
decision erred in ruling that water quality standards established
pursuant to Section 303 of the Act are not required by Section
301(b)(l)(C) to be met or fully complied with by July 1, 1977."
The Order on page 14 of my October 10 Decision is also revoked to
the extent it is inconsistent with the Order which follows. Moreover,
any statements in my December 10 modification which are inconsistent
with today's Decision (i.e., bottom of p. 3, top of p. 4) shall be
considered superseded.
* The compliance date was changed to July 1, 1977 by the conference
committee.
** Equally persuasive legislative history may be found at pp. 246 and
777 of the same volume.
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ORDER
This matter is hereby remanded to the EPA Regional Administrator,
Region IV, with instructions to modify, as expeditiously as practicable,
the Permit to specify a final achievement date of July 1, 1977 in any
case where the Permit now specifies a later final achievement date for
effluent limitations based upon any water quality standards.
Dated:
J(tN
4 T976
280
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Certificate of Service
I hereby certify that copies of the foregoing Decision and Order
were mailed this date to all parties who were served with copies of the
Petition for Reconsideration referenced on page 2, to EPA's General
Counsel, and to EPA's Assistant Administrator for Enforcement.
JUS 2 4 1975 Richard G. Stoll, Jr.
Acting Judicial Officer
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C.
DECISION OF THE GENERAL COUNSEL ON MATTERS
OF LAW PURSUANT TO 40 CFR §125.36(m)
No. 48
In the matter of National Pollutant Discharge Elimination
System Permit No. VA0025402 for Richmond, Virginia, three issues
of law have been certified to the General Counsel for decision
pursuant to 40 CFR §125.36(m). The parties, having had the
opportunity to provide written briefs in support of their
respective positions, present the following issues:
ISSUE OF LAW NO. I(a)
Question Presented
"For the purposes of §301(b) of the Act, are combined
sewer systems included within the phrase 'publicly owned
treatment works' or within the phrase 'point source1?"
Conclusion
Discharges from combined sewer systems are discharges
from point sources as that term is defined in the Act. Whether
or not a combined sewer system constitutes a publicly owned
treatment works for purposes of Titles III and IV of the Act
depends upon whether it stores, treats, recycles or reclaims
municipal sewage as opposed to merely discharging untreated
sewage during periods of excess rainfall.
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DISCUSSION
Overflow outfalls from combined sewer systems I/ constitute
"point sources" within the meaning of Section 502(14) of the
FWPCA since they are "confined discrete conveyances." Indeed
several of the specific items included within this broader
definition - particularly "pipe", "ditch", "channel", "tunnel"
and "conduit" seem particularly apt descriptions of sewage
outfalls. Since combined sewers convey at least "sewage" and
most likely "industrial" and "municipal waste" which are
pollutants as defined by Section 502(6), I conclude that combined
sewer overflow outfalls constitute "point sources."
Whether such overflow outfalls constitute "publicly owned
treatment works" is a more difficult question. The Act itself
does not define "treatment works" for purposes of Titles III
and IV. The definition of "treatment works" in Section 212 is
expressly limited to Title II and the purposes of that defini-
tional section are quite different from those of the regulatory
portions of the Act. Both "construction" and "treatment works"
are defined broadly in order to confer wide authority on EPA
to finance the development of a variety of classical and
experimental waste treatment systems. Both definitions are,
I/ Although the parties do not define the term, I understand
that combined sewer systems are those in which storm water
drains are connected to the basic sanitary/industrial
sewer system.
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therefore, broader than would be appropriate for other portions
of the Act. In short, I do not construe the Act itself as
defining combined sewer overflows as "publicly owned treatment
works."
EPA must, of course, obey its own regulations as well as
the statute. Section 125.1(hh) of the Agency's NPDES regulations
(40 CFR Part 125) defines "treatment works" as "any facility,
method or system for the storage, treatment, recycling or
reclamation of municipal sewage or industrial wastes of a
liquid nature, including waste in combined storm water and
sanitary sewer systems." Section 125.11(c) of those regulations
requires that "publicly owned treatment works must achieve
secondary treatment by July 1, 1977 or in accordance with the
period specified in Section 301(b)(1)(B) of the Act."
I do not believe that the definition of "treatment works"
in 40 CFR 125.1(hh) was intended to extend to combined sewer
overflows whose essential purpose is not to provide "storage,
treatment, recycling or reclamation" of sewage but simply to
discharge it when treatment plant capacities are exceeded. The
concluding clause in the definition serves merely to make clear
that those facilities which do store, treat, recycle or reclaim
sewage constitute "treatment works" for purposes of the NPDES
284
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regulations even if the only type of waste which they process is
that from combined storm water and sanitary sewer systems. 2/
Accordingly, so long as combined storm water/sanitary
sewer overflows are designed simply to discharge essentially
untreated sewage (rather than to provide storage, treatment,
recycling or reclamation) they do not constitute "treatment
works" for purposes of the Section 402 permit program. They
remain, however, "point sources" subject to the provisions of
that program.
ISSUE OF LAW NO. I(b)
Question Presented
"If so, must the permit include a schedule of compliance,
as that term is defined in the Act, and as required by 40 CFR
§125.23 for the combined sewer systems?"
Conclusion
Yes, if one would be required by 40 CFR 125.23.
Discussion
The Agency's NPDES regulations prescribe the circumstances
in which schedules of compliance are required to be included in
NPDES permits. The regulations make no distinction among classes
of permits. The necessity for schedules of compliance for permits
governing discharges from combined sewer system outfalls may be
determined by reference to 40 CFR 125.23.
2_/ Thus pollutants contained in combined sewer systems which
~ are delivered to the municipality's central treatment
plant and subsequently discharged, are discharges from
"publicly owned treatment works." See, however, 40 CFR
133.103(a).
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ISSUE OF LAW NO. I(c)
Question Presented
"If so, must the term of the permit extend to the deadline
for compliance established in that schedule?"
Conclusion
No.
Discussion
In effect, the question asks whether a permit may contain
compliance schedule milestones which extend beyond the expi-
ration date of the permit. There is no express statutory
prohibition of such a provision, but its utility would seem
dubious since the underlying permit will have expired before
the permittee could be shown to be out of compliance with the
extended compliance schedule requirements.
In the context in which the question is posed, however,
it is clear that the concern is less with the fact that elements
of the implementation schedule extend beyond the term of the
permit than with the fact that the permit expires on June 30,
1977 (one day before the statutory date for attainment of
effluent limitations consistent with "secondary treatment" and
"best practicable treatment currently available") and the
extended compliance dates in the permit give evidence that
the permit contemplates a delayed attainment of those
statutorily described levels of treatment.
286
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As has been held in Decision of the General Counsel No.
47, (June 30, 1976) the Administrator has no authority to
issue NPDES permits which extend the date of achievement of
final effluent limitations beyond July 1, 1977 or the date
prescribed in Section 301(b)(1)(B). The Agency's regulations
require a similar conclusion. See 40 CFR 125.11(c). As
explained in Decision of the General Counsel No. 47, the
device of coupling an extended compliance schedule with a
permit which expires shortly before the statutory deadline
(in this case only one day before) is unavailing since such
permits do not assure compliance with Section 301, as required
by Section 402 (a) (1) and (2). 3/
ISSUE OF LAW NO. II
Question Presented
"Does EPA have the authority to commit itself in advance
as to what will be a sufficient reason for changing or amending
an NPDES Permit at some future date? (In particular, Special
Conditions - (b) 'state and/or federal delays in reviews
'approvals')."
Conclusion
Yes. Section 402(b)(l)(C) provides that a permit may
be "terminated or modified for cause including, but not limited
to" three reasons which are also set forth in 40 CFR §125.22(d)(2).
The regulations provide that any such modification, suspension,
3/This does not mean, however, that a permit, regardless of when
it expires, may not contain requirements designed to result in
progress towards more stringent levels of control beyond those
set forth in the existing permit for achievement by July 1, 1977.
See Issue of Law Ho. Ill, infra. Thus, a permit may impose con-
ditions pertinent to achievement of certain discharge levels even
though such -levels may not be legally imposed until a subsequent
permit.
287
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or revocation can be effected following notice and opportunity
for a public hearing. No modification, however, may extend the
ultimate compliance date contained in the permit beyond the
relevant date established by §301(b), as discussed in Issue
Kc) .
Discussion
The statute and implementing regulations authorize EPA
to modify permits for cause. So far as appears, there is
nothing in the statute which precludes EPA from including
in a permit, at the time of its issuance, specific contengencies
which it believes constitute "cause" and upon which it would
entertain requests for modification of the permit. The pro-
priety of the modification provision itself may be tested at
the point of initial issuance, by appeal to the Administrator
and to the appropriate Court of Appeals. And, of course,
any subsequent modification would be subject to the prescribed
procedures for notice and hearing at which point the actual
occurrence of the contingency could be investigated.
For reasons already explained at some length above and in
recent prior Decisions, such a modification may not extend the
implementation schedule of the permit past statutorily prescribed
deadlines. But so long as the permit provision does not
expressly contemplate such an extension, there is nothing in
the Act to preclude its inclusion in the permit.
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"State and/or federal delays in reviews/approvals" would
appear to be the sort of predictable events "over which the
permittee has little or no control" which the NPDES regulations
indicate are valid grounds for modification of compliance
schedules. See 40 CFR 125.23(d). Whether or not the pro-
vision in the permit at hand is reasonable and within the
scope of Section 125.23(d) is a factual question for the
Regional Administrator's determination.
ISSUE OF LAW No. Ill
Question Presented
"Does the Act require that any NPDES permit be written so
as not to preclude compliance with the 1983 requirements of the
Act and consideration of alternatives that are consistent with
the 1983 and 1985 goals of the Act?"
Conclusion
The Act requires that the initial round of permits not
contain provisions which preclude the permittee's compliance
with the 1983 requirements of the Act. It contains no such
requirement with respect to the "1983 and 1985 goals of the
Act," since these goals, contained in Section 101 of the Act,
are not directly enforceable regulatory requirements, in
contrast to the 1983 requirements set forth in Section 301(b).
Discussion
The initial permits issued under Section 402 should be
viewed as the first stage towards implementation of the July 1,
1983 requirements of Section 301(b). I have already held that
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initial-round permits which extend past July 1, 1977 may contain
provisions and conditions designed to effectuate the second-
stage substantive requirements of the Act. See, Decision of
the General Counsel No. 2 (December 30, 1974) and Decision of
the General Counsel No. 33 (October 21, 1975).
It would also seem clear that initial permits may not
contain provisions which preclude attainment of these second-
stage requirements. However, in order to object to a permit on
this ground, it would lie with the objector to demonstrate with
some precision what will be required of the permittee by 1983
and to show that the initial permit in fact will preclude
attainment of those requirements. There is no comparable
obligation on EPA to issue permits now which can be shown to
be consistent with the 1983 and 1985 goals set forth in Section
101(a) to the extent that these goals are not also embodied in
applicable regulations issued under one or more of the
regulatory provisions of the Act.
G. William Frick
General Counsel
Dated: u-vU- o f 1975
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D. C. 20460
DECISION OF THE GENERAL COUNSEL ON MATTERS OF
LAW PURSUANT TO 40 C.F.R. §125.36(m)
No. 49
In the matter of National Pollutant Discharge Elimina-
tion System Permits No. MA0101192, MA0101541 and MA0101532
for the City of Boston and the Metropolitan District Com-
mission, three issues of law have been certified to the
General Counsel for decision pursuant to 40 C.F.R. §125.36(m).
The parties, having had the opportunity to provide written
briefs in support of their respective positions, present
the following issues:
ISSUE OF LAW NO. I
Question Presented
"Does the Regional Administrator have authority to
issue NPDES permits which do not require effluent limita-
tions based on secondary treatment for publically (sic) owned
treatment works to be installed by July 1, 1977?"
Conclusion
No, unless the permitted facility's application for con-
struction grant funds under Title II of the FWPCA was approved
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prior to June 30, 1974, in which case secondary treatment
is to be achieved upon completion of construction, which
must occur within four years of approval, i.e., no later
than June 30, 1978.
Discussion
See the discussion of this issue in Decision of the
General Counsel, No. 47 (June 30, 1976) and 48 (June 30,1976).
ISSUE OF LAW NO. II
Question Presented
"Does the Regional Administrator have the authority to
issue permits which do not require effluent limitations based
on best practicable control technology or secondary treat-
ment for storm water runoff to be installed by July 1, 1977?"
Conclusion
No. Permits issued covering discharges from separate
storm sewers must contain effluent limitations consistent
with best practicable control technology currently available
which must be achieved by July 1, 1977. What limitations
constitute best practicable control technology for individual
separate storm sewers, however, is a matter within the dis-
cretion of the Regional Administrator.
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Discussion
The permits in question each apply to several discharge
points including not only those from the principal sewage
treatment plant but also numerous discharges individually
identified and characterized as "storm drain overflows" and
"combined sewer overflows". With few exceptions those dis-
charges which are most likely to proceed from separate storm
sewer outfalls— are not subject to any effluent limitations.
I/ It is not entirely clear which of the numerous discharges
covered by these three permits constitute discharges from
separate storm sewers as opposed to discharges which are over-
flows from combined storm and sanitary sewer systems. Permit
No. MA0101192 lists 125 separate outfalls, 51 of which are
identified as "storm drains". For 50 of these the composition
of the discharge is described as "stormwater with possible
sanitary connections." In one case, it is described as "un-
treated wastewater."
Permit No. MA0101541 covers five outfalls, three of which
are continuous discharges from the main treatment plant and
one of which is identified as a "sludge outfall." The fifth
is described as "emergency relief."
Permit No. MA0101532 covers 23 outfalls, two of which are
the main plant outfalls, three are described as "plant relief"
discharges and the balance simply as "overflows."
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Requestor, the Commonwealth of Massachusetts, contends
that the storm sewer outfalls at issue are point sources
which may discharge only as authorized by an NPDES permit
2 /
issued under Section 402 of the FWPCA.—' Hence, it argues,
these permits must contain effluent limitations consistent
with best practicable control technology currently available,
as required by Section 301(b)(1)(A).-/
I agree. However, it should be added that effluent
limitations contained in permits for individual storm sewer
2/ The permits in question were issued prior to the Agency's
promulgation of amendments to 40 C.F.R. Part 125 setting out
a revised definition of "separate storm sewers" and estab-
lishing a general permit program applicable to discharges
from such systems. 40 Fed. Reg. 11303-07 (March 18, 1976).
Under the rule established by the Administrator's decision
in U.S. Pipe & Foundry Company, (October 10, 1975) these sub-
sequently promulgated regulations would not govern analyses
of the propriety of the Regional Administrator's initial issu-
ance of the permits. Even under the revised NPDES regulations,
the discharges in question would continue to be classified as
"point sources" and those regulations contemplate issuance
of individual NPDES permits for certain storm sewers (see 40
Fed. Reg 11307; 40 C.F.R. 125.52(a)(4)).
3_/ Although the question as referred mentions both "secondary
treatment" and "best practicable control technology currently
available" as potentially applicable statutory standards, the
Commonwealth's brief concedes, correctly, that storm sewer
overflows are subject solely to the latter standard and that
no nationally applicable regulations have been promulgated
defining that standard for separate storm sewers.
294
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outfalls (or, as here, aggregations of such outfalls) are
to be determined on a case-by-case basis by the respective
Regional Administrators, there being no nationally applicable
4/
regulations defining "BPT" for storm sewer discharges.—7
In many cases, these limitations may be no more than a re-
striction on increases above levels or volumes of pollu-
tants presently discharged. In other cases, the most signif-
icant permit terms may not be the effluent limitations, but,
as appears to be the case for at least one of the permits
at issue here, conditions precluding any new hookups into
storm sewers and a plan for the separation of existing sani-
tary/storm water sewers. In other cases, because of the
corrective steps which may be taken pursuant to the permit,
effluent limitations may reflect actual reductions in the
pollutant load discharged through storm sewer outfalls. In
any case, however, while permits for storm sewer system out-
falls must contain effluent limitations reflecting best
practicable control technology to be achieved by July 1,
1977, the determination of the actual limits commensurate
with that level of technology is a matter for the Regional
Administrator.
4_/ No such regulations have been proposed and, for the reasons
set forth in the preamble to the amendment of the NPDES regu-
lations pertaining to storm sewers (40 Fed. Reg. 11303-06),
none are likely to be proposed in the immediate future.
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ISSUE OF LAW NO. Ill
Question Presented
"Does the Regional Administrator have authority to issue
permits which do not require effluent limitations based on
best practicable control technology or secondary treatment
for combined sewer and bypasses to be installed by July 1,
1977?"
Conclusion
No.
Discussion
The Commonwealth of Massachusetts contends that dis-
charges from overflow outfalls associated with the permittees'
combined sewer system should be required to receive "secondary
treatment."-/
However, as has been held in Decision of the General
Counsel No. 48 (June 30, 1976), overflows from combined sewer
systems are, for the most part, not comprehended within the
definition of "publicly owned treatment works" for purposes
of Titles III and IV of the FWPCA.
5/ Specifically, the Commonwealth recommends that the permit
be modified to provide that all sanitary discharges be "sent
to the treatment plant" (where, presumably they would receive
secondary treatment; but see 40 C.F.R. 133.103 (a)) and that
storm sewer discharges receive best practicable treatment cur-
rently available.
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That being the case, the discharges from combined sewer
overflows involved in the three permits at issue here would
be required to meet effluent limitations consistent with
"best practicable control technology currently available"
(Section 301(b)(1)(A)) rather than secondary treatment as
required by Section 301(b) (1) (B).
Since no nationally applicable effluent regulations
prescribing "BPT" for combined sewer system overflows have
been promulgated (or are likely to be promulgated in the
immediate future), the determination of BPT for the individual
overflows is a matter within the discretion of the Regional
Administrator, pursuant to Section 402 (a) (1) of the FWPCA.
Here, it is apparent from a review of the permits that,
for the most part, they do not contain effluent limitations
applicable to the discharges from the combined storm water/
sanitary system outfalls. They are defective in their failure
to do so. However, as I emphasized in my discussion under
Issue No. II, above, the effluent limitations commensurate
with "BPT" for combined sewer overflows may be largely pre-
dicated on maintaining the status quo and the most pertinent
provisions in the permit may well be those, such as the con-
ditions contained in certain of the permits at issue here,
which require operational procedures designed to minimize
297
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the volume of water (and hence pollutants) which are dis-
charged through overflows during wet weather.
In summary, the permits in question are deficient in
that (1) they do not require that secondary treatment be
achieved by discharges from the main treatment plant by
July 1, 1977 or whatever later date may be authorized by
Section 301(b)(1)(B) and (2) they do not impose effluent
limitations consistent with the Regional Administrator's
determination of best practicable control technology cur-
rently available on discharges from (a) storm sewer systems
outfalls and (b) overflow outfalls from combined sewer
systems.
G. William Frick
General Counsel
Dated:
50 JUN 197.6
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D. C. 20460
DECISION OF THE GENERAL COUNSEL ON MATTERS OF
LAW PURSUANT TO 40 C.F.R. §125.36(m)
No. 50
In the matter of the National Pollutant Discharge
Elimination System permit for Ore-Ida Foods, Inc., Doc-
ket No. X-WP-75-5, the presiding officer has certified four
issues of law to the General Counsel for decision pur-
suant to 40 C.F.R. 125.36(m). The parties, having had
the opportunity to provide written briefs in support of
their respective positions, present the following issues:
ISSUE OF LAW NO. 1
Question Presented
Is the data on the amount of raw material (potatoes)
processed per day at Ore-Idaho Food, Inc. (Ore-Ida),
Burley Facility confidential information under the pro-
visions of Section 308 of the Federal Water Pollution
Control Act Amendments of 1972?
Answer
This issue incorporates issues No. 1 and No. 2 as
referred, which are substantivelv identical. The produc-
tion data (potatoes processed per day) can not be con-
sidered confidential information if disclosure of such
information would be necessary for a member of the public
299
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to determine whether the permittee is in compliance with its
permit, or to determine what would have constituted compliance
with the permit.
Discussion
Section 308(a) mandates that:
(a) Whenever required to carry out
the objective of this Act, includ-
ing but not limited to (1) develop-
ing or assisting in the development
of any effluent limitation, or
other limitation, prohibition, or
effluent standard, pretreatment
standard, or standard of perform-
ance under this Act; (2) determining
whether any person is in violation
of any such effluent limitation,
or other limitation, prohibition
or effluent standard, pretreatment
standard, or standard .of performance;
(3) any requirement established un-
der this section; or (4) carrying out
sections 305, 311, 402, and 504 of
this Act -- (A) the Administrator shall
require the owner or operator of any
point source to ... make such re-
ports . . . as he may reasonably reauire.
No exception from this requirement is provided. Thus, the re-
porting facility must submit any reauired information whether
or not that information contains trade secrets.
Section 308(b) further provides that any records, reports,
or information gathered under the section
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shall be made available to the
public, except that upon a show-
ing satisfactory to the Admin-
istrator by any person that the
records, reports, or informa-
tion, or particular part thereof
(other than effluent data) . . .
if made public would divulge
methods or processes entitled
to protection as trade secrets ....
§308(b)(2) .
Although production data may not quality as a "method or pro-
cess" in many instances, production data, given the broad in-
terpretation courts have assigned to the term "trade secrets,"
may be so related to a method or process as to Qualify for con-
fidential treatment. Under §308(b)(2), Ore-Ida has the burden
of showing that the production data would divulge "methods or
processes entitled to protection as a trade secret." If Ore-
Ida can make such a showing, then the information would be
entitled to confidential treatment under §308(b)(2).
There are, however, circumstances under which such con-
fidential information may be disclosed. If the information
constitutes "effluent data" it must be released irrespective
of its status as a trade secret. In determining what might
constitute effluent data an examination of the legislative his-
tory of §308 and its counterpart in the Clean Air Act is help-
ful. Section 308 of the FWPCA, according to the Senate Report,
"establishes authority .ideivtj.cial to the authority for such pur-
poses contained in the Clean Air Act Amendments of 1970 [42
301
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U.S.C. §1857c-9(c) (Supp. 1976)1." Senate Committee on
Public Works, A Legislative History of the Water Pollution
Control Act Amendments of 1972, No. 93-1, Vol. 2 at 1480
(1973) (emphasis added). In describing the purpose of the
Clean Air Act counterpart of §308(b), the Senate Public Works
Committee stated that the provision was, jinter aljica,
designed to acquire and make
available to the public in-
formation regarding compliance
with the applicable emissTon
standards. S. Rept. No. 91-
1196, 91st Conq. 2nd Sess. 19
(1970) (emphasis added).
The Committee also indicated that, despite the fact that in-
formation might otherwise constitute a trade secret, "the
public right to know what is being emitted overrides the pro-
prietary character of the information." I^d. Therefore, it
would appear consistent with the purpose of §308(b) to inter-
pret the term "effluent data" to include production data when
that data is necessary for the public to determine whether
the permittee is in compliance with its permit. Where permit
limitations vary with production levels, the production data
would have to be disclosed, in order that the public may know
what would constitute compliance.
Information accorded confidential treatment mav also be
released in the Administrator's discretion "when relevant in
any proceeding under this Act." Section 308(b)(2). Pequlations
302
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were proposed on May 20, 1975 (40 Fed. Peg. 21987), setting
forth procedures for the implementation of this provision.
These regulations are expected to be promulgated shortly in
final form. Until promulgation, the proposed regulations
will serve to indicate EPA's policy on such disclosure, should
a request for release of Ore-Ida's data, not otherwise re-
quired to be released, be received.
ISSUE OF LAW NO. 2
Quest ion Presented
Can Ore-Ida Foods, Inc. be subjected to civil or crim-
inal prosecution (not including oil soills) based whollv or
in part upon information reported to the Environmental Pro-
tection Agency in compliance with the condition in permit
No. ID-000061-2 which requires prompt notification of the by-
passing of waste treatment facilities?
Constitutional questions are not appropriately answered
in decisions rendered under 40 C.F.P. §125.36(m). Moreover,
this question is a hypothetical one, which would arise onlv
in the event EPA brought an enforcement action against the per-
mittee based upon data submitted by the permittee.
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Discussion
Although Ore-Ida did not submit a brief, this issue can
have no other purpose than to raise a constitutional auestion
concerning self-incr imination through permit monitoring data.
It has been the consistent position of the General Counsel
that constitutional or hypothetical questions will not be an-
swered in these decisions. See, e^g^, Decision of the General
Counsel No. 21, June 27, 1975; Decision of the General Counsel
No. 29, September 4, 1975.
Question Pr esent e d
Assuming that Ore-Ida Foods, Inc. is ready and willincr
to accept the NPDES permit as issued for only that period of
time from December 31, 1974, (the issuance date) to June 30,
1977, can the company be forced to accept a permit for a
full five-year period?
Answer
The duration of an NPDES permit is consigned to the dis-
cretion of the Regional Administrator or, where a State pro-
gram is approved, of the State.
Discuss ion
The company is not forced to accept any permit. However,
without a permit the discharge of any pollutant is unlawful,
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§301(a), and subject to the appropriate civil and criminal
penalties. See Environmental Protection Agency v. California
State Water Resources Control Board, U.S. , No. 74-
1435, decided June 7, 1976, Slip. op. p. 5. Beyond refusinq
a permit the company may only attempt to apprise the permit
issuing authority of special factors which it believes should
be considered. The duration of a permit, provided its term
does not exceed five years (§§402(a)(3) , 402(b)(1)(B) , FWPCA),
is a matter left to the discretion of the Administrator or
the State. The only limit to the discretion as to time dura-
tion within the statutory five year maximum is found in 40
C.F.R. §125.25, which provides that permits may be issued
for periods of less than five years in "appropriate cases,"
and requires Regional Administrators when issuina Federal NPDES
permits to give "great weight to the advice of State or inter-
state water pollution control officials on the appropriate
duration for particular permits."
G. William Frick
General Counsel
Dated: 1JUL1976
305
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
DECISION OF THE GENERAL COUNSEL ON MATTERS OF LAW PURSUANT TO
40 C.F.R. Section 125.36(m)
No. 51
In the matter of National Pollutant Discharge Elimination System,
Permit Number FL0032522, for Beker Phosphate Corporation, Manatee County,
Florida, the Presiding Officer has certified six issues of law to the
General Counsel for decision pursuant to 40 C.F.R. §125.36(m). The
parties, having had an opportunity to provide written briefs in support
of their respective positions, present the following issues:
ISSUE OF LAW NO. I
QUESTION PRESENTED
"Prior to the publication of an applicable
proposed regulation prescribing new source
performance standards under Section 306 of
the FWPCA, is an NPDES applicant entitled
to have its permit processed, irrespective
of the anticipated date of discharge, without
a determination of whether it is a new or
existing source?"
ISSUE OF LAW NO. II
Question Presented
"If so, is the Agency foreclosed from further
considering the new/existing source issue in
any further proceedings on this permit?"
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ISSUE OF LAW NO. Ill
Question Presented
"If not, can EPA make a new/existing source
determination prior to publication of an
applicable proposed new source performance
standard?"
ISSUE OF LAW NO. IV
Question Presented
"Based upon the above facts, if the answer to
Question No. 1 is no in the adjudicatory hearing
on said permit, what point in time is to be
utilized by the Agency in determinating whether
such source is new or existing: (a) the date
of the legal determination, (b) the date the
regulations were proposed, (c) the date of
issuance of the permit, or (d) some other date?"
ISSUE OF LAW NO. V
Question Presented
"Based on the above facts, was the Agency under
any time constraint to publish proposed new
source standards of performance for the phosphate
mining category in order to subject that category
to NEPA in the NPDES process?
If so, did the Agency comply with this time
constraint?
If no, what is the effect of such failure upon
the NPDES process, e.g. should an EIS be
required despite the failure?"
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Conclusions
All NPDES permit applicants are entitled to have those applications
processed in a timely fashion, but there is no specific time constraint
on the issuance of permits. Particularly when the applicant will not
commence discharging for a substantial period of time following the
date of application, the Regional Administration may reasonably first
process other applications for imminent or existing discharges. The
scope of any inquiry into the character of the discharge and the type
of source, either new or existing, depends on the facts of each
individual application. Any determination by the Regional Administrator
on the "new/existing source issue" can be considered at an adjudicatory
hearing. However, since a source cannot be new if its construction
begins before new source performance standards are proposed, there
can be no "new/existing" determination before such standards are proposed.
The Agency was under a time constraint to publish proposed new
source performance standards for the mineral mining category and it did
comply with the constraint. If the constraint was not met an EIS would
still not be required.
Discussion
Section 402(a)(1) of the FWPCA provides in part that the Administrator:
may, after opportunity for public hearing, issue a
permit for the discharge of any pollutant, or
combination of pollutants, notwithstanding section
301(a), upon condition that such discharge will
meet either all applicable requirements under
sections 301, 302, 306, 307, 308, and 403 of
this Act, or prior to the taking of necessary
implementing actions relating to all such requirements,
such conditions as the Administrator determines are
necessary to carry out the provisions of this Act.
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This section gives the Administrator significant discretion as to how
he issues NPDES permits.
Beker Phosphate (Beker) filed its permit application on May 16,
1975. Interim final effluent regulations for existing sources and
proposed standards of performance for new sources were not published
until June 10, 1976 (41 FR 23552). Thus, at the time of the application
the Regional Administrator was faced with issuing a permit based on
"such conditions" as he determined were "necessary to carry out the
provisions of the Act." Section 402 and 40 C.F.R. §125.11.
However, since Beker was applying for a permit for a proposed
discharge, the initial question was when would the facility's discharge
become active. In an effort to determine if Beker was making a good
faith application for a proposed discharge, the Regional Administrator
undertook a review to determine if Beker was a new source under §306(a)(2)
of the FWPCA. As a guide for this review he utilized the Agency's
proposed regulations for preparation of environment impact statements on
new source NPDES permits (40 FR 47713, October 9, 1975). The outcome of
the review was that Beker's facility was found to be an existing source.
The use of these regulations was not a fruitful way to determine
the character of the discharge, because the Regional Administrator could
not have determined that Beker was a new source, since a new source as
defined in §306(a)(2) of the Act:
means any source, the construction of which is
commenced after the publication of proposed
regulations prescribing a standard of
performance under this section which will be
applicable to such source, if such standard
is thereafter promulgated in accordance with
this section.
309
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Therefore, in the absence of proposed standards of performance
applicable to Beker or any other prospective point source the only
concern of the Regional Administrator should be when to begin processing
the permit application in light of the particular region's permit
workload. For previous discussions of this issue, see Decision of the
General Counsel, No. 4 (April 4. 1975), Decision of Administrator in
St. Regis Paper Company (NPDES Appeal No. 75-5, December 5, 1975).
The issue of whether a source is new or existing can be challenged
at an adjudicatory hearing. The purpose of an adjudicatory hearing is to
review the determinations of the Regional Administrator with respect to
a particular permit. Any proper party can seek to review the Regional
Administrator's decision that Beker's facility is an existing source.
Furthermore, since proposed standards or performance applicable to Beker
have how been published it is possible that if construction can be found
to have started after June 10, 1976, then Beker would be a new source.
This finding would subject them to a NEPA review as required by
§511(c)(l) of the Act.
Section 306(b)(l)(B) of the Act requires the Administrator to
propose regulations establishing standards of performance for categories
of new sources included in a list published pursuant to §306(b)(1)(A).
This list is subject to revision from time to time and shall at a
minimum include those sources listed in §306(b)(1)(A). As soon as
practicable, but in no case more than one year after the inclusion of
sources in such list, the Administrator is required to propose and
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publish on January 16, 1973 (38 FR 1624). On October 16, 1975 (40 FR 48668)
the Administrator amended the original list by adding mineral mining to the
list of categories.
In accordance with the one year requirement the Administrator
published proposed standards of performance for new sources in the
subcategory applicable to Beker on June 10, 1976 (41 FR 23552). The
Agnecy, however, was not under any time constraint to add mineral mining
to the §306(b)(1)(A) list. For those categories not named in the
§306(b)(1)(A) list, EPA is not required to propose and publish standards
until the Administrator amends the list. See NRDC v. Train, 510 F.2d
692, 705-06 (D.C. Cir. 1975).
The issue of what effect a failure to meet the §306(b)(1)(B) time
constraints has, was previously decided in Decision of the General Counsel
No. 4 (April 4, 1975). Based on the holding there, that when standards
of performance have not been proposed a point source cannot be a new
source, it is also true that the EIS requirement for NPDES permits for
new sources cannot be imposed.
ISSUE OF LAW NO. VI
Question Presented
"Should the burden of proof be allocated per
40 C.F.R. §125 to a requestor where the relevant
facts are within the control of an adverse party
to the NPDES proceeding and the regulations do
not provide for discovery?"
311
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Conclusion
Yes. This issue was previously addressed in Decisions of the General
Counsel. No. 5 (April 4, 1975) and No. 23 (July 3, 1975).
Dated:
General Counsel
312
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Washington, D. C. 20^60
DECISION OF THE GENERAL COUNSEL ON MATTERS OF LAW
PURSUANT TO 40 C.F.R. SECTION 125-36(m)
No. 52
In the matter of National Effluent Discharge Elimination System
permit for Gainesvi1le-Alachua County Regional Electric Water and
Sewer Utilities Board, Deerhaven Unit No. 2 (Permit No. FL0023990)
Gainesville, Florida, the Regional Administrator has certified one
issue of law to the General Counsel for decision pursuant to
kQ C.F.R. Section 125.36(m). The parties, having had the
opportunity to provide written briefs in support of their
respective positions, present the following issue:
ISSUE OF LAW NO. I
Question Presented
Did a quasi-contractual obligation, allegedly incurred by the
City of Gainesville through acceptance of bids for a turbine
generator component, constitute the commencement of "construction"
of the City's Deerhaven Unit No. 2, within the meaning of
section 306(a)(2)7
313
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Conclusion
The City of Gainesville did not incur a "contractual
obligation to purchase facilities or equipment" within the meaning
of section 306(a)(5) in accepting bids for the turbine generator
component, because the obligation incurred, if any, was not "to
purchase facilities or equipment" but to compensate the low bidder
for the costs of bid preparation and evaluation. Consequently,
the City's alleged obligation would not constitute commencement
of "construction" before the issuance of proposed regulations
under section 306(a)(2).
Discuss ion
A "new source" is defined in section 306(a)(2) of the Act
as:
. . v any source, the construction of
which is commenced after the publication
of proposed regulations prescribing a
standard of performance under this
section which will be applicable to such
source, if such standard is thereafter
promulgated in accordance with this
section.
"Construction" is defined in section 306(a)(5) as:
. . . any placement, assembly, or
installation of facilities or equipment
(including contractual obligations to
purchase such facilities or equipment)
at the premises where such equipment will
be used, including preparation of work at
such premises.
Gainesville disputes the applicability of new source standards to
its planned steam electric power plant (Deerhaven Unit No. 2). In
October 1973, the Gainesvi1le-Alachua County Regional Electric, Water and
314
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Sewer Utilities Board (Gainesville Utilities) hired an engineering
firm to develop plans and specifications for Deerhaven Unit No. 2
which was to be built next to an existing generating station
(Deerhaven Unit No. 1). The firm was authorized to call for bids.
On February 11, 197^, the firm received bids from Westinghouse
Electric Corporation and from General Electric Company for a turbine
generator and other equipment necessary for the facility.
Clarifications of the bids were sent to the engineering firm by
General Electric on February 19, February 25, and March 1, and by
Westinghouse on February 25. Westinghouse, the low bidder, proposed
to start shipment of equipment in June 1976, and to complete shipments
in the second quarter of 1977- On March 7, '97^, the engineering
firm formally recommended to the General Manager of Public Utilities
that the contract be awarded to Westinghouse. On March 20, 197^, the
General Manager requested approval of the low bidder from the
Regional Utilities Board. The contract award was made on March 20,
and the contract was signed on June 19, 197^-
New source standards applicable to Deerhaven Unit No. 2 were
proposed on March k, 197^ and promulgated on October 9, 1975. An
initial determination that Deerhaven Unit No. 2 was a "new source",
not under construction when the proposed regulations were issued,
was affirmed by the Regional Administrator upon reconsideration,
and Gainesville now questions the legal basis of the decision.
Gainesville agrees with the Region that no contract existed
between Gainesville Utilities and Westinghouse on the date that the
315
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regulations were proposed. Gainesville contends, however, that
"quasi-contractual obligations" were incurred before March 4,
that these obligations constituted "contractual obligations" within
the meaning of section 306(a)(5), and that Deerhaven Unit No. 2 is
consequently not a new source as defined by section 306(a)(2).
Specifically, Gainesville contends that under state law the
City would have been liable to the low bidder for damages on a
theory of quasi-contract, if both of the bids submitted had been
rejected. Gainesville claims that Westinghouse was informed before
March k, 197^ that it was the low bidder and that approval of its
bid would be recommended. The argument thus appears to be based on
a reliance theory. Gainesville summarizes its position as
fo11ows:
. . . [Wjhile the lower bidder could not
in all probability have forced the City
into a contract with him, it is possible
for him to have been in a position to
have potentially recovered some damages
in the nature of quasi-contract.
Preparation of the bid and the bid
evaluation involved expenditures of quite
literally thousands of dollars by both
bidders on the nearly ten million dollar
single piece of machinery. [Brief at 10]
The validity of the interpretation of state contracts law
which is advanced is not within the scope of this opinion. However,
even assuming for the moment that Florida contracts law would have
imposed liability for damages, that liability would not involve
an obligation "to purchase facilities or equipment" under the Act.
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At most, the City would have been liable for the costs of bid
preparation and evaluation. Gainesville does not argue
that a court would have required the City to purchase equipment
on March k, 197**, and there is no indication that manufacture of
equipment had begun on that date.
The Opinion of the General Counsel No. k6 is relevant to
issue of whether the obligations allegedly incurred by Gainesville
Utilities were for the purchase of facilities or equipment. That
Opinion indicated that a contractual obligation for design and
engineering services would not fall within section 306(a)(5). It
also indicated that a contractual obligation to purchase a fungible
commodity such as fuel would not fall within that section. Similarly,
one may conclude that an obligation to pay for the costs of bid
preparation and evaluation is not within the terms of section
306(a)(5). The assessment and planning that goes into the
submission and clarification of bids is preliminary work which
does not involve the actual manufacture and installation of
"facilities or equipment." I conclude that the alleged obligations
do not constitute "construction" within the meaning of section
306(a)(5), and that the existence of an obligation involving the
costs of bid preparation and evaluation would not prevent the
designation of Deerhaven Unit No. 2 as a new source.
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Gainesville raises additional issues in its brief, some of
them for the first time. Specifically, Gainesville contends that
the completion of certain site clearing and excavation work, the
installation of an oil tank on the premises, and the purchase of
aluminum bus bar prior to March k, 1974 constitute the commencement
of "construction" within the meaning of section 306(a)(5).
Evaluation of these contentions is outside the scope of the issue
referred by the Regional Administrator to the General Counsel for
decision. Consequently, those issues will not now be addressed.
\
Date:
G. Wi 1 1 iam Frick
General Counsel
318
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
DECISION OF THE GENERAL COUNSEL ON MATTERS OF
LAW PURSUANT TO 40 C.F.R. §125.36(m) No. 53
In the matter of National Discharge Elimination System permit for the
City of Phoenix, Arizona, Docket No. 141-32 (W), the Presiding Officer has
certified an issue of law to the General Counsel for decision pursuant
to 40 C.F.R. §125.36(m). The parties, having had the opportunity to
provide written briefs in support of their respective positions, I/
present the following issue:
ISSUE OF LAW
Question Presented
Based on the facts specified in the attached stipulation, does the
Salt River at and downstream from the sewage treatment plants of the City
of Phoenix constitute "navigable waters" as the term is defined in Section
(7) of the Federal Water Pollution Control Act [33 U.S.C. Section 1362(7)]?
Conclusion
The Salt River at and downstream from the sewage treatment plants
of the City of Phoenix falls within the definition of "navigable waters"
in section 502(7) of the Federal Water Pollution Control Act Amendments
of 1972 (the Act).
VIn addition to the briefs filed by the City of Phoenix, the Arizona
Department of Health Services and EPA Region IX, a joint amicus curiae
brief was filed by the Salt River Agricultural Improvement and Power
District and the Salt River Valley Water Users' Association.
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Discussion
Although the Agency's position on the applicability of the
term "navigable waters" has been discussed in several prior Decisions
of the General Counsel, it is appropriate to reiterate that position
in this particular permit proceeding. See Decisions of the General
Counsel No. 7 (April 8, 1975), No. 21 (June 27, 1975) and No. 30
(September 18, 1975).
The term "navigable waters" is defined in section 502 (7) of
the Act as "waters of the United States, including the territorial
seas." In a February 6, 1973, memorandum to all EPA Regional
Counsel, the Assistant Administrator for Enforcement and General
Counsel stated:
We have investigated the origin and history of the term
"navigable waters of the United States," in order to
determine the significance of the deletion of the word
"navigable." That phrase, as it was construed in early
Supreme Court decisions, depended upon the application
of two tests. First, the waters in question were
required to be navigable in fact, which meant that they
must be capable of being used by vessels in carrying
goods in commerce. Second, the phrase "of the United
States" meant that the waters had to be capable of
being used in interstate commerce. Accordingly, the
deletion of the word "navigable" eliminates the require-
ment of navigability. The only remaining requirement,
then, is that pollution of waters covered by the bill
must be capable of affecting interstate commerce. 2/
27This memorandum is reported in two places. VI Environmental Law
Reporter 46318 and EPA, A Collection of Legal Opinions, Vol. I at
295 (1975).
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The Conference Report on the Act indicates that the new definition of
"navigable waters" is to "be given the broadest possible constitutional
interpretation unencumbered by agency determinations which have been made
or may be made for administrative purposes." 3/
A number of recent court decisions indicate that the traditional
concepts and tests of navigability have been abandoned as the controlling
factors in determining whether a body of water constitutes "waters of the
United States" and that Congress intended the Act to apply to all waters
to which its power extends under the ccmnerce clause of the Constitution.
See U.S. v. Ashland Oil and Transportation Co., 504 F. 2d 1317 (6th Cir.
1974); P.F.Z. Properties, Inc. v. Train, 393 F. Supp. 1370 (D.D.C. 1975);
NRDC v. Callaway, 392 F. Supp. 685 (D.D.C. 1975); U.S. v. Phelps Dodge Corp.,
391 F. Supp. 1181 (D. Ariz. 1975); U.S. v. Holland, 373 F. Supp. 665 (M.D.
Fla. 1974); Leslie Salt v. Froehlke, 403 F. Supp. 1292 (N.D. Cal. 1974).
The Agency has promulgated regulations, 40 C.F.R. §125.l(p),
implementing this broad interpretation of the statutory definition of
"navigable waters." 4/ The regulation reads:
(p) The term "navigable waters" includes:
(1) All navigable waters of the United States;
(2) Tributaries of navigable waters of the
United States;
(3) Interstate waters;
(4) Intrastate lakes, rivers, and streams
which are utilized by interstate travelers
for recreational or other purposes;
3/ "A Legislative History of the Water Pollution Control Act Amendments
of 1972," Serial No. 93-1, Senate Conmittee on Public Vforks, 327 (1973).
(Hereinafter "Legislative History.")
4_/ The Agency has also promulgated regulations defining "navigable waters"
pursuant to section 404 of the Act. See 40 C.F.R. Part 230 (40 F.R. 41293,
September 5, 1975).
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(5) Intrastate lakes, rivers, and streams frcm which
fish or shellfish are taken and sold in interstate
commerce; and
(6) Intrastate lakes, rivers, and streams which are
utilized for industrial purposes by industries
in interstate cottnerce.
As it was stated in Decision of the General Counsel, No. 30,
supra this definition is "inclusive rather than exclusive. Accordingly,
there may be 'waters of the United States' which are not specifically
included within its scope."
On December 5, 1973, the Acting Deputy General Counsel stated
in a memorandum to one of EPA's Regional Offices: 5/
a stream which flows intermittently is navigable
waters unless the stream is normally dry, has only
a short-term runoff which does not reach a navigable
water or cross a State line, and there is not use
of the stream by interstate travelers or for other
interstate commercial purposes.
That memorandum also addressed itself to a hypothetical fact
situation not unlike the one at issue here. The facts therein
describe a dry wash which occassionally contains seasonal runoff and
rainfall, and more importantly the year round effluent from a point
source discharge. Also the water never reaches a free flowing stream
because it is completely impounded for agricultural purposes. As
was stated in that December memorandum:
It is difficult to conceive that this stream would
constitute navigable waters under ordinary circumstances,
unless such a great distance intervened between the dis-
charge and the impoundment as to allow for interstate
recreational or industrial use. However, your memorandum
indicates that "it is hard to visualize any discharge
57This December 5, 1973 memorandum to the Director, Enforcement
Division, Region VIII appears as an appendix to this Decision.
322
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that would not reach waters of the United States at least
once every couple of years given the occasional cloud burst-
flash flood syndrome that creates these washes." The fact
that a discharge of pollutants occurs only once every year,
or even less frequently, does not alter its character as
a discharge. Thus, in the situation you describe, the
occasional discharge would nevertheless be a discharge into
navigable waters.
Although all of the relevant facts in the stipulation cannot be
summarized here, I will briefly describe the situation:
The Salt River after rising in the mountains of northern and eastern
Arizona, joins the Gila River about fifteen miles southwest of Phoenix.
Virtually the entire flow of the Salt River is diverted about twenty-
five miles upstream of Phoenix at Granite Reef Dam for irrigation and
municipal use. It is distributed to the area by a series of canals.
Except for occasional releases from Granite Reef Dam during flood
conditions, the flow in the Salt River below the Dam is due to rainfall
and small feeder streams until the City of Phoenix is reached. Such
releases have reached the Gila River eight times, for a total of 313 days,
from 1941 to 1975. Some of the waste water created by use of the diverted
water is collected and treated at two sewage treatment plants in the City
of Phoenix and the effluent is transmitted to the Salt River bed. All of
the approximately 100 million gallons per day of this effluent flows con-
tinuously in the Salt River bed for about 6.5 miles, until it is diverted
for agricultural uses by the Buckeye Irrigation Company.
Based on the facts set forth in the stipulation it would appear that the
Salt River falls within the statutory definition of "navigable waters."
The reasons for this finding are as follows:
1. While the facts indicate that the Salt River may not be navigable
in fact for commercial purposes, the stipulation does indicate that water
323
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uses in the Salt River below the sewage effluent outfalls provide
an "excellent fowl habitat, hunting, fishing and hiking area."
It also states that there may be body contact recreation in the
Salt and Gila Rivers during periods of flow. Also, interstate travelers
use and visit recreation facilities along the Gila River below its
confluence with the Salt River. These facts meet the 40 C.F.R. §125.l(p)(4)
criteria for a determination of coverage by the Act.
2. The stipulation indicates that non-edible crops such as
alfalfa and cotton are produced on approximately 24,000 acres of land
partially irrigated by water taken from the Salt River. Since
much of these crops are snipped in interstate commerce, 40 C.F.R.
§125.1(p)(6) is applicable.
3. The stipulation stated that on eight occasions, for 313
days from 1941 to 1975, releases from the Granite Reef Dam reached the
Gila River. Although the stipulation does not particularly address the
navigability of the Gila River, the facts indicate that it occasionally
flows into the Colorado River, which is certainly a navigable water of the
United States. Since this fact establishes the Gila River as at least a
tributary of a navigable water, any flow from the Salt River into the
Gila is into navigable waters of the United States, albeit an infrequent
happening. The Arizona Department of Health Services makes a very
persuasive statement in its brief on page 7. "If the Act were ineffective
to control discharges into the Salt River, then the tributary could indeed
'be used as open sewers as far as federal regulation was concerned. The
navigable part of the river could become a mere conduit for upstream waste.'
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U.S. Ashland Oil and Transportation Co., 504 F.2d 1317, 1326 (6th Cir., 1974)."
The issue of the Salt River's navigability under the traditional tests
also merits some disscussion. That the two tests of navigable in fact and
use in interstate comierce are met can be seen upon examination of the toro
leading Supreme Court cases and their progeny.
In Economy Light & Power Co. v. U.S., 256 U.S. 113,' (1921) the Supreme
Court held that a river, which had been daimved since 1835 and had not been
used for conmerce for approximately a century, was navigable with the
meaning of the Rivers and Harbors Act. The Court in applying the test
of navigability to the river in its natural state said:
Navigability in the sense of the law, is not
destroyed because the watercourse is interrupted
by occasional natural obstructions or portages;
nor need the navigation be open at all seasons
of the year, or at all stages of the water.
... [A] river having actual navigable capacity
in its natural state, and capable of carrying
commerce among the states, is within the power
of Congress to preserve for purposes of future
transportation, even though it be incapable of
such use according to present methods, either
by reason of changed conditions or because of
artificial obstructions. 256 U.S. at 122, 123.
In U.S. v. Appalachian Electric Power Co., 311 U.S. 377 (1940), the
Court expanded the traditional test of navigability to include suitability
for use in the future by reasonable improvements. The Court said: "when
once found to be navigable, a waterway remains so." The Court explained
this by saying: "In determining the navigable character of [a river]
325
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it is proper to consider the feasibility of interstate use after reasonable
improvements which might be made. ... Nor is it necessary that the improvements
should be actually completed or even authorized." 311 U.S. at 408-409.
Under the combined tests coming from Economy Light and Appalachian
Electric it has been stated that a river is navigable waters:
...if (1) it presently is being used or is suitable for
use, or (2) it has been used or was suitable for use in
the pasty or (3) it could be made suitable for use
in the future by reasonable improvements. Rochester Gas
and Electrical Corp. v. F.P.C., 344 F. 2d 594, 596
(2nd Cir.),(emphasis in original) cert, denied, 382
U.S. 832 (1965) 6/
The stipulation reveals that prior to any diversion of the waters of
the Salt River, while its flow was intermittent, a ferry was established
from Phoenix to Tempe that carried travelers, goods and cattle in
interstate commerce, during flood conditions. At present Federal and
State Highways cross the Salt River on bridges. Thus the fact that
the Salt River has been dammed and diverted has no effect on its
navigable character under Economy Light and the cases that followed.
6/A similar rule was stated in P.F.Z. Properties v. Train, supra
at 1380. Accord, Sierra Club, et. al. v. Leslie Salt Company, et. al.,
412 F. Supp. 1096 (N.D. Cal. 1976).
326
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At any time the Granite Reef Dam could be utilized to increase the
flow in the Salt River bed if necessary. 7/
In light of these cases as well as the legislative abandonment of
the requirement of actual navigability, which has in turn been followed
in the recent court decisions under the Act and the Agency's own
implementing regulations and memoranda, it is clear that the portion
of the Salt River in question is "navigable waters" within the
statutory definition. 8/
Dated: r^rn j ; 1975
General Counsel
2/See Economy Light Co. v. U.S., supra, at 118.
8_/ While this decision must rest on its own facts, one court has held
that a normally dry arroyo can be "navigable waters." In U.S. v. Phelps
Dodge Corp., supra at 1187 the decision reads:
Thus a legal definition of "navigable waters"
or "waters of the United States" within the
scope of the Act includes any waterway within
the United States also including normally dry
arroyos through which water may flow, where
such water will ultimately end up in public
waters such as a river or stream, lake,
reservoir, bay, gulf, sea or ocean either
within or adjacent to the United States.
The reliance in the brief of the City of Phoenix on the fact that the
Phelps Dodge case was dismissed at trial because the arroyo was found
not to be "waters of the United States" is misplaced, because the basis
for the Court's finding was that the waters in question were Mexican
waters and not "of the United States" within the control of the Act.
327
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UN1TED STATES ENVIRONMENTAL PROTECTION AGENCY,
' WASHINGTON, D.C. 20460
DEC 5 197?
iVCRCcVENT AND GENERAL COUNSEL
MEMORANDUM
TO : Irwin L. Dickstein
Director, Enforcement Division
Region VIII
FROM : Acting Deputy General Counsel
SUBJECT * : Intermittent or dry streams as navigable waters
This is in response-to your memorandum of November 14, in
which you pose a series of hypothetical situations, and inquire
whether the described waters are "navigable waters" within the •
meaning of §502(7) of the. Federal Water Pollution Control Act,
as amended. In addition, you set forth a specific factual
situation which you have encountered, and inquire whether the
waters in question are "navigable waters."
Before addressing the hypothetical cases and the factual
situation, it would be appropriate to outline the applicable
principles:
1. Navigable waters in general include the six categories
of waters listed in the memorandum dated February 6, 1972-,
from the Assistant Administrator for' Enforcement and General
Counsel to all Regional Counsel.
2. However, water contained entirely on the property of one
person is not navigable water. There is no basis for
assertion of Federal jurisdiction over such waters.
3. Navigable waters must be waters. Thus, a discharge
into a dry creek bed does not constitute a discharge into
navigable waters, unless it flows into waters listed in (1)
above.
328
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4. As indicated in my memorandum of September 28, 1973
(attached), a stream which flows intermittently is navigable
waters "unless the stream is normally dry, has only a short-
term runoff which does not reach a navigable water or cross
a State line, and there is no use of the stream by interstate
travelers or for other interstate commercial purposes."
Based on these principles, some of the specific fact situations
which you outlined can be evaluated.
1. The dry wash flows seasonally during three months in the
spring;
2. The dry wash flows only intermittently after a heavy rain
or during snow melt conditions;
3. The dry wash flows over half the year for a short distance
but dissipates before reaching a freely flowing water course;
4. The dry wash occasionally contains runoff as in 1 or 2
above, but flows the entire year with the effluent from a
point source discharge.
In these cases, if the stream disappears before reaching other
waters or crossing a State line, and if there is no use' of the stream
by interstate travelers or for interstate commercial purposes, it
would not be navigable waters. If any of these conditions is met,
however, the stream is navigable waters.
5. The situation described in (4) above, but the water never
reaches a free flowing stream because it is completely impounded
for agricultural purposes.
It is difficult to conceive that this stream would constitute
navigable waters under ordinary circuinstaaces, unless such a great
distance intervened .between the discharge 'and the impoundment as to
allow for interstate recreational or industrial use. However, ycur
memorandum indicates that "it is hard to visualize any discharge
that would not reach waters of the United States at least once every
couple of years given the occasional cloud burst-flash flood syndrome
that creates these dry washes." The fact that a discharge of
pollutants occurs only once every year, or even less frequently,
does not alter its character as a discharge. Thus, in the situation
you describe, the occasional discharge would nevertheless be a discharge
into navigable waters.
Robert V. Z
cc: All Regional Counsel
Albert Printz
AGDW:AWEckert:cam:12-3-73
-------
2 8 J.77-J
OGC-W #355
MEMORANDUM
To: David Morell
OAWP Municipal Permits Coordinator
Froa: Acting Deputy General Counsel
Subject: Intermittent Streams
Wo have your memorandum of August 27, 1973, together with
Bob Sansora's.March 20, 1973 memorandum and Walt Gilbert's draft
memorandum, concerning issuance of permits and establishment of
water quality standards for intermittent streams.
Thofe arc two questions involved: 1) for what intermittent
streams must NFDES discharge permits be issued; and 2) for :what •
intermittent streams roust water quality standards be established?.
1. Under the FWTCA, permits must be ivnued (with exceptions
uot pertinent hero) for dischnrp.ea into "navigable waters."
Mr. Queries' raeciorandura of February 6, 1973 (copy attached) inter-
prets the phrase "navigable waters" as* used in the FWPCA, listing
the following sis categories of voters as being included:
(1) All navigable waters of the United Stores;
(2) Tributaries of navigable waters of the united States;
(3) Interstate waters,
(4) Ititrastatts lakes, riv--.ro, and stroair.3 which ire
utilized bv interstate travelers for recreational
or other purposes;
(5) Intrantaf.e lakes, rivers, and streams from which
fish or shellfish are taken and sold in ;'.uterstata
e; and
(6) Ir.trantate lakes, rivers, and strearas which ara
utilized for Industrial purposes by industries in
interstate commerce.
330
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Where a stream has substantial flow during some seasons of
the year, *t would fall under category (1) in Mr, Queries'
memorandum. Where there is only short-term runoff in a normally
dry stream bed, category (i) would not apply, but categories (2)
or (3) would apply if the runoff reaches a navigable water or
crosses a State line. Categories (4) and (5) are self-explanatory.
Category (6) would not normally apply to i municipal permit.
In short, NPDES permits should be required for all municipal
discharges into intoraittent streams unleaa the utreara is normally
dry, has only short-term runoff vhich does not reach a navigable
vatcr or cross a State line, and there is no use of the atreaa
by interstate travelers or for other' interstate commercial purpot>e:i.
2. Generally, water quality standards should be established
for all vaters for which NTDES permits are required. Howevar,
where the stream would not support aquatic life even absent
any pernitted discharge, re do not interpret the F^PCA to require
establishment of water quality standards.
3. V.'e agree with the assertion in Tlr. Ransom's March 20
memorandum that the nhort discharge channelT of treatment plants
containing only effluent arc ;iot subject to establishment of vator
quality standards.
x~> A , f\ /O\
n/J> / Uv'V
|U^ v* A
Robert V, Zener
Enclosure
cc: John TJictt
All Ke^ionnl Ccvusel
Dave llowday, Region IX
AGDW:RVZener:lh 9-27-73 to 511 WGIM x50753
331
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UNITED STATES
ENVIRONMENTAL PROTECTION AGENCY
REGION IX
IN THE MATTER .OF NATIONAL POLLUTANT ) Docket No. 141.32(W)
DISCHARGE ELIMINATION SYSTEM PERMITS)
FOR CITY OF PHOENIX (PERMITS NUMBER ) STIPULATION OF FACTS
AZ0020559 AND AZQ020524 )
COME NOW the parties hereto, by and through their
respective counsel, and do hereby stipulate to the facts set
forth in the attached Stipulation, which attachment is, by
this reference, incorporated herein as though fully set forth.
It is further, agreed by and between the respective parties
that the matter may be submitted to the Office of General
Counsel for the Environmental Protection Agency for determination
of the issues of laws raised by the attached Stipulation as
formulated by the Administrative Law Judge.
RESPECTFULLY SUBMITTED this 10th day of September,
1976.
CITY OF PHOENIX
, / C
__//.
By:
Alan
Assistant City Attorney
BRUCE E. BABBITT
Attorney General
U
By:'
HarIan C. Agnex? .
Assistant Attorney General
#&-^
t~r —
Matthew Walker
Senior Attorney, Enforcement Division
332
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STIPULATION OF FACTS
Phoenix, Arizona, is a large metropolitan city with
a present population of approximately 671,000 people covering
an area of approximately 273 square miles. The City's water
and sewerage service area is geographically larger, containing
approximately 232,000 water connections. The City is located
on a large plain bisected and drained by the Salt River in a
generally southwest direction. The region receives approxi-
mately seven inches of rainfall annually.
The City collects sewage from municipal and industrial
users and after treatment releases the effluent into the bed
of the Salt River at its 23rd Avenue Sewage Treatment Plant.
and at its 91st Avenue Sewage Treatment Plant. Effluent which
is released from the subject treatment facilities originates
partly from water diverted at Granite Reef Dam and partly deep
wells.
The Salt River rises in the mountains of northern
and eastern Arizona and joins the Gila River about fifteen
miles southwest of central Phoenix. At its junction with the
Gila, it drains approximately 12,700 square miles. Its
principal tributary is the Verde River that joins the Salt
above Phoenix and drains approximately 6,000 square miles, or
about half the total area of the Salt River Basin.
333
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Prior to any diversion of the waters of the Salt
River, its flow was intermittent and during flood -conditions
a ferry was established from Phoenix to Tempe to carry
travellers between the two cities and it existed until the
river was bridged. Some of those travellers were on inter-
state journeys. Besides people, goods and cattle being shipped
in interstate commerce travelled on the ferry. At the present
time most Federal and state highways cross the Salt River on
bridges.
Virtually the entire flow of the Salt and Verde
Rivers is diverted for irrigation and municipal use at Granite
Reef Dam, approximately three and three-quarter miles below the
confluence of the Salt and Verde, or about twenty-five miles
upstream from Phoenix.
Except during times of flooding, the flow in the
Salt River below Granite Reef Dam is due to rainfall and small
feeder streams until the City of Phoenix is reached. Occa-
sional releases are made from Granite Reef Dam during intense
storm conditions, and the water so released generally evaporates
or percolates within a short distance. Such releases have
reached the Gila River from Granite Reef Dam eight times, for
a total of 313 days, from 1941 to 1975. Water has flowed in
the Salt River belox^ Granite Reef Dam and above Phoenix 3.7
percent of the time since completion of the first of the Salt
334
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River Project reservoirs in 1911, and 1.4 percent of the time
since 1941. Since 1941 such flows have reached the Colorado
River once.
Prior to the construction of the Salt River Project
Reclamation Facilities, the Gila and its branches were the
principle streams of southern Arizona. This river released
an immense volume of water in the wet season, but in the dry
season sunk and flowed under the surface for miles on each
side.
The water diverted at Granite Reef Dam is used for
municipal, domestic, industrial, commercial and agricultural
purposes by various private users and municipalities. After
use the waste water is collected by sewers and treated at the
subject sewage treatment plants, the 23rd Avenue Plant exclusively
processing "City of Phoenix" waste water and the 91st Avenue
Plant processing waste water from all of its joint owners
[i.e., the cities and towns of Glendale, Scottsdale, Youngtown,
Mesa, Tempe and Phoenix (Phoenix being the managing agent)].
The delivery to the Buckeye Irrigation Company of
some of the subject effluent is pursuant to contract rights
and is effected on the 91st Avenue Plant site; from the plant
site, Buckeye Irrigation Company (B.I.C.) transmits the
effluent in the bed of the dry Salt River. The remaining,
335
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Of Che total water used by Arlington, about 7-1/2 to 10 percent
is transmitted, by pipe, behind and across Gillespie Dam for
entry into the headgate of the Enterprise Canal.
The canal water is supplemented by four deep wells
and the water thus provided is used and reused through the use
of a sump and two sump pumps which serve to recirculate the
wastewater back into the Enterprise Canal and, therefore, no
water from the Enterprise Ranch ever gets beyond the Enterprise
Canal nor is it released into the Gila River as wastewater.
Below the B.I.C. diversion, the Gila flows in
response to rainfall and flow from tributary washes. There
are localized areas of standing water consisting of irrigation
tailwater and rainfall pooling in the Gila River above Painted
Rock Reservoir that contain water throughout the year. Painted
Rock Reservoir is a flood control reservoir operated by the
Corps of Engineers about 70 miles below the B.I.C. diversion.
Below Painted Rock Reservoir the stream flow is intermittent
and the result of rain, occasional releases from Painted Rock
Reservoir and irrigation return flow. When there is signi-
ficant flow in the Gila River, it releases into the Colorado
River, a navigable water of the United States, above Yuma,
Arizona, which then flows into Mexico and the sea.
Water uses in the area of the Salt River and the
Gila River below the wastewater treatment plant releases
provide an excellent water fowl habitat, hunting, fishing, and
336
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hiking area. During periods of flow there may be body contact
recreation in the Salt and Gila Rivers. The Bureau of Land
Management of the U.S. Department of Interior and the Arizona
Game and Fish Department cooperatively manage a Resource
Conservation Area along the Gila River from about its confluence
with the Salt River for nearly 100 miles to the town of Date
Palm. Visitors and users of the recreation facilities come
from (and return to) all parts of the United States.
337
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Washington, D. C. 20460
DECISION OF THE GENERAL COUNSEL ON MATTERS OF LAW
PURSUANT TO 40 C.F.R. SECTION 125.36(m)
No.
In the matter of National Pollutant Discharge Elimination
System Permit for Armco Steel Corporation, TX0008524, the Presiding
Officer has certified three issues of law to the Office of General
Counsel for decision pursuant to 40 C.F.R. Section 125.36(m). The
parties, having had an opportunity to provide written briefs in
support of their respective positions, present the following
issues:
ISSUE OF LAW NO. I
Question Presented
"Does the EPA have the statutory authority to include discharge
limitations in NPDES permits for effluent characteristics that it has
chosen not to include in its promulgated effluent limitations guide-
lines and standards for the affected industrial subcategories?"
Conclusion
Substances or effluent characteristics which are not governed
by promulgated effluent limitations guidelines may be regulated on
338
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a case-by-case basis by the permit-issuing authority. Any
restrictions which are necessary to carry out the provisions of the
Act may be established. The Administrator has not indicated that the
effluent limitations guidelines applicable in the present case were
intended to be an exhaustive list of the substances or effluent
characteristics subject to restriction. Consequently, limitations
on other pollutants or effluent characteristics which are not
within the terms of the regulations may be established by the permit
issuing authority.
Discussion
Armco Steel Corporation does not dispute the basic principle
that discharges not yet regulated by effluent limitations guidelines
may be limited in permits pursuant to Section 402(a) of the FWPCA.
(See, e.g., Decision of the General Counsel No. 1). Rather, Armco
argues that in the case of the final effluent limitations guidelines
promulgated for existing sources in the iron and steel manufacturing
category (40 C.F.R. Part 420 (1975); 41 Fed. Reg. 12990 et seq.
(March 29, 1976)), the omission of limitations on discharges of
ammonia, cyanide, and phenol in the subcategories applicable to its
plants manifests an affirmative agency decision to permit such
discharges without limitation. Armco notes that ammonia, cyanide,
and phenol are explicitly regulated in most of the other subcategories
within the iron and steel manufacturing point source category, and
bases its argument on this difference between subcategories.
339
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The only issue for decision is thus whether or not the
Administrator has fixed the permissible levels of discharge of
ammonia, cyanide and phenol in the applicable subcategories at an
unlimited amount, or whether the Administrator has, by omitting those
substances from the effluent limitations guidelines, merely chosen
to allow restriction of those pollutants on a case-by-case basis in
permits rather than by national regulation.
A regulation for a particular pollutant establishing "unlimited
discharge" as the level of effluent reduction attainable through
application of BPCTCA would have to meet the same statutory require-
ments as an effluent limitations guideline which sets a specific
numerical ceiling on discharges. Section 301(b) of the Act
provides:
In order to carry out the objectives of
this Act there shall be achieved —
(1)(A) not later than July 1, 1977,
effluent limitations for point sources,
other than publicly owned treatment works,
(i) which shall require the application
of the best practicable control technology
currently available as defined by the
Administrator pursuant to section 304 (b)
of this Act. . . .
Section 304(b)(l)(A) states that such regulations shall:
identify, in terms of amounts of constitu-
ents and chemical, physical, and
biological characteristics of pollutants,
the degree of effluent reduction attainable
through the application of the best
practicable control technology currently
available . ...
Thus, the Administrator is required by the terms of the Act to set
forth in detail the levels of discharge attainable under BPCTCA
and the reasoning upon which the conclusion is reached, taking into
340
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account all factors enumerated in section 304(b)(1)(B). An
"unlimited discharge" regulation which establishes as an industry-wide
rule that no effluent reduction of a particular pollutant is attainable
under BPCTCA is subject to these statutory requirements, and must be
set forth just as explicitly as an effluent limitations guideline
which establishes a numerically-defined ceiling on the level of
discharge.
Consequently, the lack of regulations applicable to the
particular pollutants in question does not have the significance that
Armco suggests. The omission of national standards affecting ammonia,
cyanide, and phenol in certain subcategories does not mean that there
is no need to regulate those substances. Rather, the omission
suggests that a nationally uniform standard was deemed either
unnecessary or inappropriate at the present time, and that discharges
should therefore continue to be regulated on a case-by-case basis.
Even if "regulation by implication" were allowed by the terms
of the Act, however, the language of the regulations applicable in
the present case indicates that the meaning urged by Armco was not
intended. The relevant language in the effluent limitations guide-
lines provides:
The following limitations establish
the quantity or quality of pollutants
or pollutant properties, controlled
by this section, which may be
discharged by a point source subject
to the provisions of this subpart
after application of the best practi-
cable control technology currently
available: . . . [emphasis added].
341
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40 C.F.R. §420.32 (1975). The obvious interpretation of this
language is that all pollutants which are controlled by the section
are specifically listed, and that other pollutants are outside the
scope of the regulation, rather than implicitly regulated.
In light of the statutory and regulatory language, I conclude
that the omission of phenol, cyanide and ammonia from the applicable
subcategories is not equivalent to the promulgation of an "unlimited
discharge" effluent limitations guideline. Consequently, discharges
of those substances may be limited on a case-by-case basis in
permits.
The Region's brief raises a secondary question regarding the
appropriate limitations to be incorporated in the permit. The Region
in the present case argues that ammonia, cyanide and phenol are
"toxics" within the meaning of section 307(a), which provides for
the designation of toxic substances and the promulgation of effluent
standards for such substances. Accordingly, the Region takes the
position that it may impose restrictions on individual "toxic"
pollutants using the stringent criteria set forth in section 307.
I agree that prior to the promulgation of standards under section 307,
permits may contain conditions consistent with the need to protect
the environment from toxic pollutants. Decisions of the General
Counsel No. 2, 33. However, the permit-issuing authority may only
rely upon the regulatory provisions of section 307(a) for substances
already designated as "toxic" by the Administrator under section
307(a)(1). The judicial comment relied upon by the Region
342
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(United States v. Armco Steel, 3 E.R.C. 1263, 1264, modifying 333 F.
Supp. 1073 (S.D. Tex. 1971)) that ammonia, cyanide, and phenol are
"toxic" substances does not obviate the need for an administrative
designation in order to trigger the operation of section 307(a)(2).
While cyanide is on the toxic substances list, ammonia and phenol are
not. Thus, the permit-issuing authority may rely on section 307(a)
only with respect to cyanide restrictions. V
This conclusion does not mean, however, that a permit writer is
entirely precluded from considering the harmful characteristics of a
pollutant which has not been designated as a toxic substance under
section 307(a). As discussed above, the permit-issuing authority
is directed by section 402(a) to impose such conditions as are
"necessary to carry out the provisions of this Act." In setting
technology-based limits under section 301 in the absence of national
standards, a permit writer is authorized to take into account a wide
variety of factors in accordance with the provisions of section 304(b).
Furthermore, as evidenced by the existence of section 307(a), it would
be otherwise consistent with the purposes of the Act to impose more strin-
gent limitations pursuant to section 301 on a pollutant which has toxic
properties than on other pollutants. Thus, toxicity is one factor
which a permit writer may take into account in establishing permit limita-
tions on a pollutant pursuant to sections 301(b) and 304(b). Whether the
*/ If the permit-issuing authority does rely on section 307(a)
in this case, it must take into account the relevant factors
and requirements set forth in section 307(a).
343
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application of BPCTCA in the present case would result in discharges
of "no detectable amounts" of the substances in question as urged by
the Region is a determination which must be made at the adjudicatory
hearing.
ISSUE OF LAW NO. II
Question Presented
"If a consent decree was entered prior to the enactment of
the Federal Water Pollution Control Act Amendments of 1972 and the
decree did not provide for incorporating its provisions into a
permit, does the EPA have the statutory authority to incorporate
into an NPDES permit, provisions from the consent decree which are
more stringent than the promulgated effluent limitations guidelines
and standards for the affected industrial subcategories and not
required by state certification or to implement water quality
standards?"
Conclusion
The briefs of the parties do not provide an adequate basis for
analyzing this issue. The Presiding Officer may recertify the
question for decision if additional briefs are submitted.
Discussion
The parties have not provided an adequate basis for deciding
whether the limitations in question are properly included in the
permit. Further information would be needed regarding the factual
background of the case, including the exact language of the permit
provisions in question and the particular consent decree provisions
which are relied upon. In addition, issues such as the scope and
force of the consent decree in the context of the Refuse Act and the
FWPCA, the legal basis for relying upon the consent decree in permit
344
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issuance, the availability of pertinent case law, possible
alternative grounds for the limitations in question, and the
relevance and implications of prior Decisions of the General
Counsel regarding the effect of consent decrees would need to be
explored in depth.
ISSUE OF LAW NO. Ill
Question Presented
"Does the Regional Administrator have the statutory authority
to include discharge limitations and monitoring requirements
for stormwater runoff in existing NPDES permits prior to the
promulgation of effluent limitations guidelines and standards
for stormwater runoff from the affected point source category
and in view of the EPA's tentative decision to defer proposing
miscellaneous runoff controls for the affected point source
category until such time as the BATEA and NSPS limits will
apply?"
Conclusion
In the absence of promulgated effluent limitations guidelines,
the permit-issuing authority may set such conditions on stormwater
runoff on a case-by-case basis. Under the provisions of the Act
345
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itself, however, the permit-issuing authority should take into
account those factors set forth in the Act, including considerations of
the type which led to the decision not to impose national effluent
limitations guidelines at the present time, which are relevant to the
individual case.
Discussion
Under 40 C.F.R. §420.222, "[no] limitations are established
for BPCTCA" for discharges from coal, limestone, and ore storage
piles. This statement in the regulations explicitly indicates
that a decision has been made not to formulate an industry-wide
standard for a particular type of discharge. The effect of such a
decision is governed by my discussion of Issue of Law No. I above.
Since industry-wide regulation of the discharge from the point
sources in question was not found to be appropriate, the
permit-issuing authority retains the power to implement the
provisions of the Act on a case-by-case basis.
The preamble which was published when the effluent limitations
guidelines applicable to "miscellaneous runoffs" were proposed
indicates that certain cost considerations were important factors
in the decision not to impose industry-wide limitations for BPCTCA.
Because of the high capital investment
that may be required by these proposed regula-
tions for the operating functions under this
segment, these regulations propose no limita-
tions for the BPCTCA level for this subcategory.
Thus all capital investment and operating costs
for miscellaneous runoff control for this sub-
part can be deferred until such time as the
BATEA and NSPS limits will apply.
346
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40 Fed. Reg. 36708, 36719 (Aug. 21, 1975). Armco insists that
this statement of reasons for not imposing national limitations
must be interpreted as restricting the power of the permit-issuing
authority to act on an ad hoc basis, and as preventing the
imposition of any restrictions with respect to the discharges in
question.
Armco misconstrues the impact of the agency's decision not to
regulate a discharge on a nationwide basis. The statement in the
regulations that "no limitations are established ..." clearly
reflects a decision to formulate no national limitations; however,
an intent to additionally preclude imposition of limitations on an
ad hoc basis in permits is not implied. V
Compare the language used in 40 C.F.R. §420.222 to that
typically used in pretreatment regulations to establish
a "no limitation" standard. See, e.g., 40 C.F.R.
§423.16:
. . .[F]or the following pollutants or pollutant
parameters . . . the following pretreatment
standards are established:
Pollutant or pollutant Pretreatment
parameter: standard
Heat No limitation.
Free available chlorine ... No limitation.
Total residual chlorine ... No limitation.
Such language if used in regulations under §§301, 304 and
306 would preclude the establishment of permit limitations
on the enumerated pollutants or pollutant parameters.
347
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The quoted language in the preamble must be read as an
explanation of the regulations. Thus, the preamble should be read
as setting forth the reasons for not establishing a national
standard, but it cannot be interpreted to restrict the permit-issuing
authority's power to set permit limitations in a particular case
based upon consideration of any statutory factors which are deemed
relevant. Thus, the permit-issuing authority should take into account
any relevant considerations, including factors of the type discussed by
the Administrator in the preamble; however, based on available
evidence, the permit-issuing authority may find that cost
considerations which led to the decision not to impose national
limitations do not affect the establishment of limitations for the
particular discharger in question. The appropriateness of the
limitations which were established in the present case is a matter
which must be resolved in the adjudicatory hearing.
Z 2 1976
G. William Frick
General Counsel
348
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