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Catalyst for Improving the Environment
Quick Reaction Report
Decision Needed on
Regulating the Cooling Lagoons
at the North Anna Power Station
Report No. 2007-P-00038
September 20, 2007

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Report Contributors:
Larry Dare
Christine Baughman
Michelle Brown
Abbreviations
Board
Virginia State Water Control Board
CFR
Code of Federal Regulations
EPA
U.S. Environmental Protection Agency
FOLA
Friends of Lake Anna
MOU
Memorandum of Understanding
NAPS
North Anna Power Station
OIG
Office of Inspector General
VDEQ
Virginia Department of Environmental Quality
WHTF
Waste Heat Treatment Facility
Cover picture: A satellite image of Lake Anna in Virginia, obtained through the Website
of MapQuest, Inc.

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s	U.S. Environmental Protection Agency	2007-P-00038
£ %M \ Office of Inspector General	September 20,2007
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%; At a Glance
Catalyst for Improving the Environment
Why We Did This Review
We conducted this review in
response to a complaint from
the Friends of Lake Anna
(FOLA), a citizens group,
alleging that the water
discharge permit for the North
Anna Power Station (NAPS)
inappropriately allows the
cooling lagoons to be
designated a waste heat
treatment facility exempt from
the Clean Water Act.
Background
NAPS is located on Lake
Anna, which has two parts:
a 9,600 acre reservoir that
provides water for the NAPS
to operate, and 3,400 acres of
lagoons to cool the water from
the NAPS condensers before
the water returns to the
reservoir. Both parts of Lake
Anna are used for recreation.
By August 2005, FOLA
identified concerns about the
high water temperatures in the
cooling lagoons.
For further information,
contact our Office of
Congressional and Public
Liaison at (202) 566-2391.
To view the full report,
click on the following link:
www.epa.qov/oiq/reports/2007/
20070920-2007-P-00038.pdf
Decision Needed on Regulating the Cooling
Lagoons at the North Anna Power Station
What We Found
NAPS has a water discharge permit allowing it to discharge water from the
cooling lagoons into the Lake Anna reservoir. Lake Anna is classified as Class III
waters. The Virginia water quality standards for Class III waters include, among
other factors, that the maximum temperature cannot exceed 32° Celsius, which is
about 90° Fahrenheit. The current (and all prior) water discharge permits, as well
as the draft permit being processed by the Virginia Department of Environmental
Quality, exempts the cooling lagoons from the water quality standards because
they are considered a waste treatment facility.
To protect those who use the cooling lagoons for recreational purposes, FOLA
believes a water temperature limit should be placed on the cooling lagoons. For a
variety of reasons, it believes the cooling lagoons are waters of the United States
that can be regulated under the Clean Water Act. If so, the new water discharge
permit can establish such limits.
Although the U.S. Environmental Protection Agency (EPA) authorized Virginia to
administer the water discharge permit program in 1975, it retained the authority to
review and, if needed, object to permits proposed by Virginia. The NAPS permit
is the type that must be reviewed by EPA Region 3. Based on its review of the
proposed permit, Region 3 officials may: not respond, object, or make comments
or recommendations.
In view of the concerns raised by FOLA that the cooling lagoons should be
designated waters of the United States, the permit review process by EPA is
critical.
What We Recommend
We recommend that the Region 3 Regional Administrator:
1.	Decide whether additional time should be requested for the Region's
review of the proposed permit for NAPS, in order to consider whether the
cooling lagoons should be classified as waters of the United States under
the Clean Water Act.
2.	Consider communicating to the public that this review was performed.

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4	I	WASHINGTON, D.C. 20460
PROl^
# 	 %	UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
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OFFICE OF
INSPECTOR GENERAL
September 20, 2007
MEMORANDUM
SUBJECT: Decision Needed on Regulating the Cooling Lagoons
at the North Anna Power Station
Report No. 2007-P-00038
FROM: Eileen McMahon
Assistant Inspector General for Congressional and Public Liaison
TO:	Donald S. Welsh, Regional Administrator
Region 3
This is our report on the subject review conducted by the Office of Inspector
General (OIG) of the U.S. Environmental Protection Agency (EPA). This report contains
findings that describe the problems the OIG has identified and corrective actions the OIG
recommends. This report represents the opinion of the OIG and does not necessarily represent
the final EPA position. Final determinations on matters in this report will be made by EPA
managers in accordance with established resolution procedures.
The estimated cost of this report - calculated by multiplying the project's staff days by the
applicable daily full cost billing rates in effect at the time - is $54,900
Action Required
In accordance with EPA Manual 2750, you are required to provide a written response to this
report within 90 calendar days. You should include a corrective actions plan for agreed upon
actions, including milestone dates. We have no objections to the further release of this report to
the public. This report will be available at http://www.epa.gov/oig.
If you or your staff have any questions, please contact Paul McKechnie at 617-918-1471 or
mckechnie.paul@epa.gov, or Larry Dare at 202-566-2138 or dare.larry@epa.gov.

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Purpose
In November 2006, the U.S. Environmental Protection Agency (EPA) Office of Inspector
General (OIG) Hotline received a complaint from the Friends of Lake Anna (FOLA). FOLA is a
citizens group created to protect Lake Anna and its surrounding landscape. Based on their
complaint, we performed work to determine whether EPA Region 3 provided oversight of the
Virginia Department of Environmental Quality's (VDEQ's) actions affecting environmental
factors at Lake Anna. Our primary objective was to answer the following question:
How should EPA respond to allegations that the water discharge permit for the
North Anna Power Station inappropriately allows the cooling lagoons to be
designated a waste heat treatment facility and, therefore, exempt from the Clean
Water Act?
The North Anna Power Station (NAPS) is a nuclear power generating facility located next to
Lake Anna, near Mineral, Virginia. VDEQ staff are reissuing the water discharge permit for
NAPS. According to FOLA, the permit, as drafted, does not properly address the cooling
lagoons associated with the NAPS: the NAPS cooling lagoons should be treated as waters of the
United States, in accordance with the Clean Water Act.
Background
Lake Anna is used for both recreational purposes and to provide water for the nuclear reactors at
the NAPS. Formed from impounding the North Anna River, there are two parts to Lake Anna: a
9,600 acre reservoir and 3,400 acres of cooling lagoons. These cooling lagoons are also referred
to as the waste heat treatment facility (WHTF), the "warm side," and the "private side" of Lake
Anna. Three dikes separate the reservoir and cooling lagoons. Water needed by NAPS is
withdrawn from the reservoir, passed through the condensers at the power station, released into
the cooling lagoons to dissipate the heat, and ultimately discharged back into the reservoir.
Reservoir water flows back into the North Anna River. At least 10 streams flow into the cooling
lagoons.
On a summer weekend, approximately 8,000 people may be using the cooling lagoons for
recreational purposes. Those with property on the cooling lagoons may go boating on them.
However, boats cannot pass between the reservoir and cooling lagoons of Lake Anna. Although
boat ramps are available so members of the public can launch boats into the reservoir, there are
no public ramps into the cooling lagoons. No boats are allowed in the discharge canal carrying
the water from the NAPS to the cooling lagoons. Several areas are available to allow the public
to fish and swim in the cooling lagoons.
By August 2005, FOLA had identified concerns about the high water temperature in the NAPS
cooling lagoons. Appendix A shows how high the water temperatures become during the
summer months. For purposes of the NAPS water discharge permit, the lagoons are classified as
a waste heat treatment facility under Virginia law. Accordingly, current permit temperature
limits do not apply to the cooling lagoons. FOLA disagrees with this position. Regardless of
when Virginia officials initially approved the original permit for the NAPS, FOLA asserts the
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legal requirements are now different. The organization contends that the Clean Water Act
applies to the cooling lagoons and requires that they be treated as waters of the United States.
The Clean Water Act provides for EPA oversight of actions by States authorized to implement
the water discharge permit program. In 1975, EPA authorized the State Water Control Board to
administer the permit program in Virginia. The EPA Administrator has the authority to review
water discharge permits issued by an authorized State under Section 402 of the Clean Water Act.
A permit may not be issued if the Administrator objects to it. According to a 1984 EPA
delegation of authority, the Regional Administrator fulfills this responsibility by objecting to any
permit proposed by a State that is outside the guidelines and requirements of the Clean Water
Act. The Region 3 Regional Administrator re-delegated this authority to the Director, Water
Protection Division. Throughout this report, statutory or regulatory references to the EPA
Administrator should be deemed to refer to the Regional Administrator or his delegate.
Scope and Methodology
We began our review in May 2007. We interviewed staff from EPA Region 3, the EPA Office
of Water, VDEQ Northern Virginia Regional Office, VDEQ Division of Environmental
Enhancement, and the U.S. Army Corps of Engineers. We reviewed various documents
provided by these organizations, obtained from their Websites or from various other Websites,
such as the Nuclear Regulatory Commission. We also reviewed documents provided by FOLA.
We obtained information from EPA's data systems on similar water discharge permits, and on
enforcement actions related to the existing permit for NAPS. Finally, we visited Lake Anna and
toured a portion of the NAPS cooling lagoons.
We performed this review in accordance with generally accepted government auditing standards,
issued by the Comptroller General of the United States, except that we limited our review of
management controls and compliance to those directly relating to the issues identified in the
complaint. Because computer-processed data were not significant to our findings, we did not
determine if the data obtained were valid and reliable.
Lagoons Are Exempt from Water Quality Standards
The Clean Water Act applies to navigable waters. The law defines navigable waters as waters of
the United States. Federal regulations at Title 40 Code of Federal Regulations (CFR) 122.2
implementing the water discharge permit program define waters of the United States to include,
in part, "(c) All other waters such as intrastate lakes, rivers, streams (including intermittent
streams) .. .(1) Which are or could be used by interstate or foreign travelers for recreational or
other purposes... " This definition also states "Waste treatment systems, including treatment
ponds or lagoons designed to meet the requirements of C[lean] W[ater] A[ct] ... are not waters
of the United States."
Virginia has classified Lake Anna as Class III waters and Lake Anna is also classified as waters
of the United States. The water quality requirements for Class III waters include, among other
things, that the maximum temperature cannot exceed 32° C (about 90° Fahrenheit). If the
cooling lagoons were considered waters of the United States under the Clean Water Act, the
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water temperature could not exceed 32° C without a variance. However, under the Virginia
program, the cooling lagoons have been determined a waste treatment facility, so they are not
subject to these water quality standards.
Virginia regulations provide an exclusion for waste treatment systems. Virginia has consistently
applied the waste treatment system exclusion to the cooling lagoons at NAPS. In June 1968,
before NAPS was built, the Virginia State Water Control Board (Board) considered potential
thermal pollution to be the primary water quality issue resulting from the NAPS discharge.
Treatment facilities proposed to prevent the thermal pollution of the North Anna River included
constructing dikes to create three interconnected, heat dissipating impoundments totaling 3,500
acres. The Board's staff considered the proposed cooling system to be soundly based and
conservative. The resulting permit was issued in accordance with a 1950 Virginia law. It
allowed treated industrial waste from the proposed NAPS to be discharged into the North Anna
River.
Region 3 Must Review the Proposed Permit
Federal regulations require Region 3 to review the permit for NAPS. Title 40 CFR 123.24(d)
provides that the Regional Administrator cannot waive the right to review certain permits
prepared by an authorized State. Types of facilities that the Region must review are (1) those
with discharges of uncontaminated cooling water that exceed 500 million gallons per day, (2) a
major discharger, or (3) within any of 21 industrial categories listed in appendix A to Title 40
CFR Part 122. NAPS meets all of these requirements: it discharges more than 500 million
gallons of cooling water a day, it is a major discharger, and it falls in the category of a steam
electric power generating point source.
The 1975 memorandum of understanding1 (MOU) between Region 3 and Virginia's Board
contains this review requirement. This MOU was executed as part of EPA's 1975 authorization
of Virginia's permit program. It provides that the Regional Administrator may comment on or
object to a proposed permit if significant adverse comments were submitted about the draft
permit during the public comment period. Such comments were submitted. The MOU also
requires the Regional Administrator to submit any objection within 14 days after receiving the
proposed permit. On September 7, 2007, a VDEQ official sent Region 3 the package on the
proposed NAPS permit. Under the MOU, the Regional Administrator may take one of three
actions regarding the proposed permit: not respond, object, or make comments or
recommendations.
Not respond. The MOU provides that if the Regional Administrator does not provide any
objections or significant comments on the proposed permit, after 14 days the staff (i.e., VDEQ)
may submit its recommendations to the Board for action. In this case, unless the Board changes
it, the permit proposed by VDEQ will be issued. Thus, if the Regional Administrator decides the
status quo is appropriate, he may take no action. Once the permit is issued, any appeal would be
governed by Virginia procedures.
1 Titled Memorandum of Understanding Regarding Permit and Enforcement Programs Between State Water
Control Board and the Regional Administrator, Region 3, Environmental Protection Agency.
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Object. According to the Clean Water Act, section 402(a)(5), the Administrator may object to a
permit proposed by an authorized State. In 1984, the Administrator delegated this authority to
the Regional Administrators. Regulations at Title 40 CFR 123.44 identify the grounds on which
the Regional Administrator may object. One basis for objecting is if the State Director
misinterprets the Clean Water Act or any guidelines or regulations under that law, or misapplies
them to the facts. Region 3 officials stated that they have discretion in reviewing water
discharge permits and any decisions vetoing permits.
If Region 3 were to determine that the cooling lagoons should be regulated as waters of the
United States, it may object to the proposed permit. Under the MOU, the Regional
Administrator must inform Virginia officials of a possible objection within 14 days of receiving
the proposed permit. Once notified, regulations at Title 40 CFR 123.44 provide that the
Regional Administrator must send the State written details on the objection within 90 days of
receiving the proposed permit. The Regional Administrator's objection should be resolved
before VDEQ staff present the proposed permit to the Board for issuance. If the objection
cannot be resolved, the Regional Administrator may need to issue the permit. In that case,
Region 3 would administer the permit instead of VDEQ. Region 3 has indicated that this is not
the preferred outcome with an authorized State. Region 3 officials indicated they would not
object to this permit unless EPA's Office of General Counsel and Office of Water agreed that an
objection was appropriate.
Make comments or recommendations. Without objecting to the proposed permit, Region 3
officials can provide comments or recommendations to the Board or VDEQ. In this case, the
comments or recommendations might address the jurisdiction issue (as discussed previously) or
issues about better protecting the recreational use of the cooling lagoons.
Region 3 officials could use the comment option to suggest additional steps for protecting people
and the environment. For example, Region 3 officials might suggest that VDEQ work with the
permit holder to voluntarily reduce water temperatures. Region 3 could suggest that the permit
holder expand annual studies performed to verify that the temperature of the discharge is not
causing any impairment to a healthy and diverse fish population in the lake or river. The studies
might be expanded to include more sampling locations in the cooling lagoons, and a greater
variety of aquatic life. For example, other aquatic species could be sampled in addition to fish.
Recommendations
We recommend that the Region 3 Regional Administrator:
1.	Decide whether additional time should be requested for the Region's review of the
proposed permit for NAPS, in order to consider whether the cooling lagoons should be
classified as waters of the United States under the Clean Water Act.
2.	Consider communicating to the public that this review was performed.
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Status of Recommendations and
Potential Monetary Benefits
RECOMMENDATIONS
POTENTIAL MONETARY
BENEFITS (In $000s)
Rec.
No.
Page
No.
Subject
Status1
Action Official
Planned
Completion
Date
Claimed
Amount
Agreed To
Amount
Decide whether additional time should be
requested for the Region's review of the proposed
permit for NAPS, in order to consider whether the
cooling lagoons should be classified as waters of
the United States under the Clean Water Act.
Consider communicating to the public that this
review was performed.
Region 3
Regional Administrator
Region 3
Regional Administrator
1 0 = recommendation is open with agreed-to corrective actions pending;
C = recommendation is closed with all agreed-to actions completed;
U = recommendation is undecided with resolution efforts in progress
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Appendix A
Water Temperatures in the Discharge Canal and Lagoons
Regularly Exceed 32° C during the Summer
Highest Hourly Temperature (in Celsius)
Month
Discharge Canal
WHTF Site 1
WHTF Site 2
June 1994
36.3
34.5
33.5
July 1994
37.4
35.8
34.4
August 1994
36.0
34.3
32.7
June 1997
*
34.1
32.2
July 1997
37.9
36.2
34.8
August 1997
37.7
35.6
33.6
September 1997
36.2
34.6
32.3
June 2000
37.4
36.6
32.3
July 2000
38.9
37.0
37.3
August 2000
37.3
35.0
33.8
June 2001
37.3
36.1
34.2
July 2001
37.3
35.0
33.1
August 2001
37.3
35.9
34.3
June 2002
37.4
36.1
34.4
July 2002
39.1
36.8
35.4
August 2002
39.5
37.3
35.3
July 2003
38.1
35.5
33.5
August 2003
38.5
36.4
34.7
September 2003
37.3
35.0
33.0
June 2004
35.7
33.8
32.4
July 2004
37.8
35.7
34.0
August 2004
37.6
35.6
33.7
September 2004
36.5
34.4
32.8
June 2005
36.7
34.7
33.1
July 2005
39.6
37.8
35.9
August 2005
39.8
37.6
35.6
September 2005
37.3
34.9
33.3
June 2006
36.3
34.3
32.7
July 2006
39.3
37.0
35.9
August 2006
40.5
38.0
36.7
* = Missing data
Source: Attachment 11 to the Fact Sheet for draft permit VA0052451, obtained via
http://www.deq.virginia.gov/vpdes/northanna/VA0052451 .Attachment 11.2007.pdf
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Appendix B
Distribution
Office of the Administrator
Assistant Administrator for Water
Regional Administrator, Region 3
Audit Followup Coordinator, Region 3
Director, Water Protection Division, Region 3
Regional Counsel, Region 3
Director, Office of Public Affairs, Region 3
General Counsel
Agency Followup Official (the CFO)
Agency Followup Coordinator
Associate Administrator for Congressional and Intergovernmental Relations
Associate Administrator for Public Affairs
Director, Office of Regional Operations
Acting Inspector General
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