17, 1980 61617 with applicable tariffs. Copies of...D.C. 20460, 202-472-5746. SUPPLEMENTARY INFORMATION: EPA is under a court order to promulgate regulations establishing ocean discharge

Federal Register / Vol. 45, No. 182 / Wednesday, September 17, 1980 / Rules and Regulations 61617

reveals a threat to the discipline, health,welfare, or morals of the Armed Forces.

Dated. September 11. 1980.M. S. Healy,OSD FederalRegister Lioison Officer,Washington Headquarters Services,Department of Defense.[FR Do. 80- Filed 9-18-f0 8AS am]

BILNG CODE 3810-70-M

ENVIRONMENTAL PROTECTION

AGENCY

40 CFR Part 117

[FRL 1606-8]

Water Programs; Determination ofReportable Quantities for HazardousSubstances

AGENCY: Environmental ProtectionAgency.ACTION: Notice of effective date.

SUMMARY: This notice establishes thedate on which the determination ofreportable quantity regulation, 40 CFRPart 117, will be applicable to commoncarriers. When published on August29,1980, 40 CFR Part 117 deferred itsapplicability to discharges of hazardoussubstances from common carriers.Beginning November 20, 1980, commoncarriers will berequired to reportdischarges of hazardous substances asprovided for under Subpart C of 40 CFRPart 117.EFFECTIVE DATE: November 20,1980.FOR FURTHER INFORMATION CONTACT:Joseph Krivak, Director, Criteria andStandards Division (WH-585}, Office ofWater Planning and Standards, 401 MStreet, S.W., Washington, D.C. 20460(202) 755-o10o.SUPPLEMENTARY INFORMATION: OnAugust 29, 1979, the EnvironmentalProtection Agency ("EPA") published aregulation in the Federal Register (44 FR50766) establishing a new Part 117 in theCode of Federal Regulations entitled"Determination of Reportable Quantitiesfor Hazardous Substances." Theregulation established reportablequantities for those substancesdesignated as hazardous in 40 CFR Part116, and provided that discharges ofsuch amounts be reported to the FederalGovernment (§ 117.21]. Discharges ofreportable quantities also give rise tocivil penalties (§ 117.22) and liability forclean-up costs [§ 117.23).

The regulation became effective on"September 28,1979, except fordischarges of hazardous substanceswhich have been offered to commoncarriers who are required to accept suchsubstances for shipment in compliance

with applicable tariffs. EPA recognizedthat under regulations and practicesthen in existence, not all hazardoussubstances would be identified as suchin upplicable shipping papers. Thus,common carriers may not have known iftheir cargoes contained hazardoussubstances, and would have had greatdifficulty in complying with therequirement to report discharges ofdesignated hazardous substances.

On May 22,1980, the Department ofTransportation ("DOT') promulgatedregulations (45 FR 34560) requiringidentification of hazardous substancesshipped in quantities greater than orequal to a reportable quantity, 49 CFRParts 171 and 172. Certain packagescontaining low concentrations ofhazardous substances were excludedfrom DOT's identification requirements.See § 171.18 and preamble discussion,45 FR 34568-70. DOT's regulationsbecome effective on November 20,1980.

Accordingly, appropriateidentification of shipments containinghazardous substances will soon be inplace and EPA's regulations will bemade applicable to all discharges.including those from common carrierson the same date (November 20,1980)on which DOT's regulations pertainingto hazardous substances becomeeffective. The discussion regardingpossible changes in existing tariffswhich appeared in the preamble toEPA's August 29,1979 regulations, (44FR 50775-76) is of course no longerapplicable.

It should be noted that both DOT'sregulations (49 CFR 117.17) and EPA'sregulations (40 CFR 117.21, referencing33 CFR 153.203) provide for immediatenotification to the Federal Governmentof discharges in reportable quantities.The toll-free notification number (800-424-8802) is identical under bothregulations. Notification made pursuantto DOT regualtions will be considerednotification pursuant to EPA regulations.

Dated: September 11, 1980.Douglas M. Costle,Administrator[FR Do. 0-288 Flid 9-16-0 8:43 au)BILUNG COoE 6560-01-

40 CFR Part 125

[FRL 1607-3]

Ocean Discharge Criteria

AGENCY: Environmental ProtectionAgency ("EPA").ACTION: Notice of availability of finalregulation.

SUMMARY. Copies of EPA's forthcomingocean discharge criteria implementingSection 403(c) of the Clean Water Actwill be available to the public onSeptember 30,1980ADDRESS: Copies of the regulation willbe available at EPA, Room 741. EastTower, 401 M SL. S.W., Washington.D.C. 20460.FOP. FURTHER INFORMATION CONTACr.Kenneth Farber, Office of WaterPlanning and Standards (WH-586), EPA.401 M St., S.W., Washington. D.C. 20460,202-472-5746.SUPPLEMENTARY INFORMATION: EPA isunder a court order to promulgateregulations establishing ocean dischargecriteria under Section 403(c) of the CleanWater Act, 33 U.S.C. § 1343(c). Theorder originally required EPA to deliverthe final regulation to the office of theFederal Register by July 30,1980.Recently, the court amended its order,so that EPA is now required to deliverthe regulation to the Federal Register bySeptember 30, 1980. The court has alsoordered the Agency, by that date, tomake a copy of the final regulationavailable to any interested person. Inaccordance with the court's order, this isto give notice that copies of the finalregulation will be available at EPA onSeptember 30,1980, after 3:00 pm, at theaddress and room noted above.

Dated. September 11, 1980Steven Schatzow,DeputyAssistantAdministratorfor WaterReSulations and Standards.tFRI Dc 60-29 82 Fd 9-15-6 t i1

81UjNO CODE 6660-01-M

40 CFR Part 423

[FRL 1606-3]

Steam Electric Power Generating PointSource Category; Amendment to BPTVariance Clause

AGENCY: Environmental ProtectionAgency.ACTION: Final rule.

SUMMARY. Because a recent Courtdecision may create confusion aboutEPA's position on an issue offundamental importance under theClean Water Act. EPA is amending aregulation to emphasize its position. Theregulation applies to the steam electricpower industry. The amendmentspecifies that a plant's impact onreceiving water quality is not relevant tothe issue of whether the plant mayreceive a "variance" from national "bestpracticable technology" limitations.EFFECTIVE DATE: October 31,1980.FOR FURTHER INFORMATION CONTACT:

Richard G. Stoll, Jr. (A-131), Assistant

HeinOnline -- 45 Fed. Reg. 61617 1980

61618 Federal Register / VoL 45, No. 182 /.Wednesday, September 17, 1980 / Rules and Regulations

General Counsel, EPA, 401 M Street,S.W., Washington, D.C. 20460. (202) 755-0960.SUPPLEMENTARY INFORMATION:

I. IntroductionA basic requirement of the Clean

Water Act I is that all industrial plantsmust at a minimum limit their pollutiondischarges to the Nation's waters to alevel representative of the "bestpracticable technology currentlyavailable" ("BPT") as defined by EPAfor that type of plant §§ 301(b)(1)(A),304[b)(1](B). EPA has issued regulationsspecifying BPT limits on a national basisfor numerous industrial categories andsubdategories.

Because of time and resourceconstraints, EPA generally bases itsnational BPT limits on data from plants.which EPA has judged to berepresentative in terms of the relevanttechnical, engineering, and costcharacteristics. Because EPA doesmnotbase its national limits on data fromevery plant in a category or-subcategory,EPA includes a "variance clause" ineach BPT regulation. This clauseprovides an opportunity for anindividual plant to show that it is"fundamehtally different" from theplants EPA examined in setting thenational limits. In such a case, a newBPT limit may be Set at such level as islegally appropriate for that plant

One important issue relating to theBPT variance clause is whether a plant'simpact on receiving water quality maybe a relevant factor. EPA has longmaintained that the Clean Water Actprecludes consideration of this factor.As discussed below, two court decisionshave affirmed EPA's position. A recentcourt decision, however ("ApplachianII"), expressed doubt as to whether EPAhas actually adopted the foregoingposition. The decision also indicateddisagreement with such a position insome respects.

II. Background to "Appalachian Nl'Decision

On October 8,1974, EPA publishednational BPT limits and a varianceclause for the steam electric powerindustry. 40 CFR Part 423, 39 FR 3686 etseq. The variance clause. did not specifywhether economic factors could beconsidered. On August 12 and 20,1974,however, EPA had ruled they could not39 FR 28926 and 30073. On July 16, 1976,the U.S. Court of Appeals for the Fourth.Circuit rejected the steam electricvariance clause because EPA excluded

Pub. L 92-500 (1972) as amended by Pub. L 95-217 (1977).

economic factors.Appalachian PowerCo.-v. Train, 545 F.2d 1351, 1358-60("Appalachian L'3

On September 29,1978, EPA amendedthe steam electric variance clause tocomply with the Appalachian I decision.43 FR 44846-48. The amended clause,however, did not explicitly address thereceiving water quality issue discussedabove. Essentially the same group ofpower companies which sued inAppalachian I sued again in the FourthCircuit. This time, they argued thatEPA's variance clause was defectivebecause it failed to account forvariations in receiving water quality.EPA's attorneys responded in their briefthat receiving water quality cannotlegally be considerd as a relevant factor.

In its opinion of April 28,1980, theCourt refused the power companies'reqhest to vacate the variance clause.Appalachian Power Co., et al. v. EPA,620 F.2d 1040 ("Appalachian H'3. A copyis reprinted below as Exhibit A. TheCourt based its decision on theassumption that EPA would allowconsideration of water quality, anddismissed statements to the contrary inEPA's brief as the "mere assertion of anattorney." The Court indicated its beliefthat the Clean Water Act required EPAto allow consideration of water quality.

Because the Court refused to ascribeEPA's attorneys' argument to EPA, itsrejection of that argument may beregarded as undefinitive, or dicta, inlawyers' parlance. Nevertheless, EPApetitioned the Court for a rehearingbecause of the potential for confusion. Acopy is reprinted below as Exhibit B.EPA pointed out that EPA has indeedadopted the position stated in its brief,and that this position had been upheldin another Fourth Circuit decision(Consolidation Coal Co. v. Costle, 604F.2d 239,244-245 (1979)) and by anotherCourt of Appeals (Weyerhaeuser Co. v.Costle, 590 F.2d 1011, 1041-1044 (D.C.Cir. 1978)). On May 27,1980, the Courtdenied EPA's petition for rehearing. Acopy of the denial is reprinted below asExhibit C.II. Need for Amendment to Power PlantVariance Clause

The Appalachian I Court premised itsopinion on the assumption that EPA'sbrief did not represent EPA's position.EPA has, however, formally adoptedand consistently adhered to the positionin its brief. I accordingly believe it isnecessary to amend the clause toresolve any possible ambiguities

* regarding EPA's intent. The amendmentshould provide an opportunity for adefinitive judicial resolution of thisissue.

IV. Explanation of EPA's PositionOn June 7,1979, EPA published a BPT

variance clause for all industries otherthan power plants.2 40 CFR 125.30-32,44FR 32950-1. 3 This clause provides that"the impact of a discharge on localreceiving water quality" may not be aground on which to grant a variance. 40CFR 125.31(3)(4). As explained in thepreamble to this regulation:[Slpecific receiving water quality is not arelevant factor in the fundamentally differentfactors variance contextL To allow relaxtlonfrom technology-based limits because ofcase-by-case variations in receiving waterquality would be grossly violative of the Actand contrary to its fundamental principles.44 FR 32893-4.

I have already thoroughly explainedthe basis for thii position. In BeLouisiana-Pacific Corp, 10 ERC 1841(1977).4A cop, of this decision isattached as Exhibit D. As my decisionshows, Congress concluded in 1972 thatearlier water pollution legislation hadbeen ineffective because of thecomplexities of relating water qualityeffects to discharge levels. Congressaccordingly made a basic policyjudgment in the 1972 statute: dischargerswere to meet technology-based controlrequirements at a minimum and andvariations in receiving water qualitywere not to be relevant in setting theserequirements.

My decision shows that Congressrecognized that its basic policyjudgment might in some cases requirecontrols where no direct, site-specificwater quality benefit could be shown.Congress deliberately chose thisapproach, however, as preferable to onein which control efforts could be boggeddown interminably by highly technicalscientific and legal disputes. Moreover,by requireing each plant-regardless ofits location-to reduce its discharges inthis fashion, Congress assured general

2EPA has placed the BPr variance clause forpower plants on a different "track" than the iPTvariance clause for all other industries because EPAdisagrees with the Appalachian I ruling to theextent it requires consideration of § 301(c) factors(including affordability) In the EPT variancecontext. EPA recently secured a writ of certiorarifor Supreme Court review of this Issue. EPA V.National Crushed Stone Association, ot al.. No. 79-770.

3EPA published minor technical amendment tothis clause at 45 FR 33512, May 19. 1900.

4The Appalachian l Court expressed agreementwith the result in Louisiana-Pacilic In which Idenied variances for two pulp mills. The Court

'interpreted my position to be that a variance cannotbe granted where water quality Is the onlyfundamental difference. My position Is muchbroader water quality is not a relevant factor to beconsidered, whether alone or with other factors.Moreover. I see no point in considering a factor If Itcould not, when all other factors are equal, tip thescale.


Federal-Register / Vol. 45, No. 182 / Wednepday, September 17, 1980 / Rules and Regulations 6-1619

improvement in the quality of thenation's waters.

In the 1977 Amendments to the CleanWater Act, Congress changed thisapproach in some respect for certaintypes of dischargers, for certain types oflimitations, and for certain types ofpollutants.5 Significantly, Congressmade no such change with respect toBPT limitations for industrialdischargers such as power plants. Infact, as the Fourth Circuit noted inConsolidated Coal (604 F.2d at 245) andas the D.C. Circuit noted inWeyerhaeuser (590 F.2d at 1043),Congress refused to amend the Act inthis regard despite pleas from industrialinterests to do so. As Senator Muskiestated in explaining the newamendments:

Although numerous changes have been madeto sections 301 and 304, effluent limitationsand guidelines developed pursuant to thesesections remain technology-based standards.Except to the extent expressly provided inthe statute, such limitations cannot be variedor modified due to the nature or quality ofreceiving waters.

Cong. Rec. daily edition, S. 19646,December 15,1977, emphasis added.

V. Conclusion

Congress chose in 1972, andreaffirmed in 1977, a policy under whichreceiving water quality impact isirrelevant in determining BPT for anyindustrial plant. Because theAppalachian H Opinion was premisedon the assumption that this was notEPA's official position, I feel it isincumbent upon me to amend the powerplant variance clause to make theposition totally clear. Because theamendment imposes no new duties orobligations and reflects EPA's long-standing position, I find for good causethat it would be unnecessary to proposethis amendment for public comment.

Consistent with 40 CFR 100.01 (45 FR26048, April 17,1980) this amendmentshall be considered issued'for purposesof judicial review at 1:00 p.m. eastern

5 Section 301(g) now authorizes relaxations front"BAT" (1984-1987) limitations on water qualitygrounds for industrial dischargers for npn-toxic,non-conventional pollutants. Section 301(h) nowauthorizes relaxation from "secondary treatment"limitations on water quality grounds for municipal("POTW') discharges into marine waters.

time on October 1,1980, and effective onOctober 31,1980.(Secs. 301, 304, and 501. Clean Water Act, 33U.S.C. 1311,1314. and 1361)

Dated. September 10, 1980.Douglas K. Costle,Administrator.

§§ 423.12,423.22,423.32, and 423A2[Amended]

40 CFR Part 423 is amended by addingthe following sentence to the end of§ § 423.12(a), 423.22(a), 423.32(a), and423.42 (introductory paragraph):

*** In no event may a discharger'simpact on receiving water quality beconsidered as a factor under thisparagraph.

Exhibit A-U.S. Court of Appeals for theFourth Circuit

[Nos. 74-2096,74-2188.74-219, 74-223 ,74-2263, 74-2264, 74-225, 74-22 8,74-2209, 74-2270. 74-2286, 74-2298. 74-2312, 74-2313. 74-2315, 74-2339, 74-2340, 74-2341, 74-2343, 74-2365. 74-2368,74-2390,75-1014.75-1020,75-1021. 7&-1022, 75-1047, 75-1074, 75-1078,75-1091, 75-1094,75-1095,75-119, 75-1199,75-1200.75-1201.75-1202.75-1203.75-1223.75-1255,75-1345,75-1348,75-1347,78-1701,78-1878,78-1902]

Appalachian Power Co., Baltimore Gasand Electric Co., Carolina Power & LightCo., Duke Power Co., MonongahelaPower Co., Ohio Power Co., PotomacEdison Co., Potomac Electric Power Co.,South Carolina Electric & Gas Co.,Virginia Electric and Power Co., WestPenn Power Co. (Petitioners) v. RussellE. Train, as Administrator,Environmental Protection Agency(Respondent) Alabama Power Co., Et Al,Jersey Central Power & Light Co.,Metropolitan Edison Co. andPennsylvania Electric Co. (Intervenors).On Petitions for Review of Actions ofthe Administrator of the EnvironmentalProtection Agency*Argued. April 4.1979.Decided, April 28, 1900.

Before Breitenstein,* Senior CircuitJudge, Widener and Phillips, Circuit

'Judges

"The following Petitions for Review. all namingTrain as Respondent. were consolidated-

74-2188-National Rural Electric CooperativeAssociation

74-2198--Georgia Power Company

74-2238-Tampa Electric Company74-22W-Indiana & Michigan Electric Company74-2254-Indana-Kentucky Electric Corporation74-226-illnots Power Company74-228-Pacific Gas and Electric Company74-2289--San Diego Gas & Electric Company74-2270-Southem California Edison Company, a

California Corporation74-2235--Mississippi Power Company74-2296--Arkansas Power & Light Company and

Arkansa -Missouri Power Company74-231-Cul Power Company74-2313-Alabama Power Company74-231--Boston Edison Company. Holyoke

Water Power Company. Nontaup ElectricCompany. New England Power Company. PublicService Company of New Hampahire. WesternMassachusetts Electric Company

74-2330-Consolidated Edison Company of NewYork. Inc.

74-240--Pennsylvania Power & Light Company74-2341-Philadelphia Electric Company74-2343-Flocida Power & Light CLmpany74-2366-Dalryland Power Cooperative74-2388-Commonwealth Edison Company74-2305-MIsissippi Power & Light Company,

Louisiana Power & Light Company. and NewOrleans Public Service. Inc.

75-1014--Western Farmers Electric Cooperative,a corporation

75.-1020--Alsbama Electric Cooperative. Inc.7S-10c1-Buckeye Power. Inc.. Indiana and

Michigan Power Company. Kentucky PowerCompany. Ohio Electric Company. Ohio PowerCompany. Ohio Valley Electric Corporation

75-1022-Brazos Electric Power Cooperative. Inc.75-1047--Connecticut Light & Power Company,

The Hartford Electric Light Company. WesternMassachusetts Electric Company. Long IslandLightip Company. New York State Electric& GasCorporation (Intervenors)

75-1074--Com Belt Power Cooperative75-1078-Texas Utilities Generating Company,

Dallas Power & Light Company. Texas ElectricService Company. Texas Power & Light Company

75-1091-Public Service Electric & Gas Company75-1094-Unlon Electric Company75-10G6--Central Iowa Power Cooperative75-1198-South Texas Electric Cooperative Inc.75-1199--Central Power & Light Company and

West Texas Utilities Company75-1200-State of Texas75-1201-Houston Lighting & Power Company75-1202--Tennessee Valley Authority75-1203-Brazeo River Authority75-1223-Cincinnati Gas & Electric Company.

Cleveland Electric Illuminating Company. •Columbus & Southern Ohio Electric Company,Dayton Power & Light Company. Ohio EdisonCompany. Toledo Edison Company

75-1256-Union Electric Company, a MissouriCorporation

75-134-Platte River Power Authority75-1346--City of Lamar. a municipal corporation

of the State of Colorado, and The Lm UtilitiesBoard

75-1347-Tri-State Generation and TransmissionAssociation. Inc.

78-1701-Appalachian Power Company, et aL78-1878--Naturl Resources Defense Council.

I=c78-190-Natural Resources Defense Council.

Inc... Honorable lean S. Breltenstein. United States

Circuit Judge for the Tenth Circuit. sitting bydesignation.


61620 Federal Register I Vol. 45, No. 182 / Wednesday, September 17, 1980 / Rules and Regulations

George C. Freeman, Jr. (Turner T. Smith. Jr.,William A. Anderson, H, E. Gabriel Smith,Hunton& Williams on brief) for PetitionersAppalachian Power Company, et al; JamesTaylor Banks (Stephen H. Schroeder, Ronald1. Wilson on brief) for Petitioner NRDC;Richard G. Stqll, Deputy Associate GeneralCounsel, EPA (Joan Z. Bernstein, GeneralCounsel, James A. Rogers, Associate GeneralCounsel, EPA, James W. Moorman, AssistantAttorney General, Land and NaturalResources Division, Bradford F. Whitman,Assistant Chief, Pollution Conlrol Section,Barry J. Trilling, Department of.Justice onbrief) for Respondents

WIDENER, Circuit Judge:

These actions arise because of EPAamending its regulations to comply withour mandate in Appalachian Power Co.v, Train, 545 F2d 1351 (1976). InAppalachian Power, approximatelyseventy power companies sought reviewof the Environmental Protection.Agency's (EPA) regulations proinulgatedunder authority of the Federal WaterPollution Control Act (Act).' The powercompanies now challenge EPA'samendments to parts of 40 CFR Part423 2 on grounds that they do not fullycomply with Appalachian Power. Part423 sets out the best practicabletechnology (BPT) limitation standardsfor the steam electric power industry..National Resources Defense Council(NRDC), through its petitions, also seeksa review of certain EPA BPT regulations,not on the ground that AppalachianPower has not beencomplied with buton the ground that § 301(1), 33 USC§ 1311(1), a 1977 amendment to the Act,prohibits EPA from modifying any of§ 301, 33 USC § 1311, including BPTlimitations, for toxic pollutants. It alsochallenges the EPA varianceamendments on the ground that they didcomply with Appalachian Power sc faras the factors in § 301(c) are referred toin the amended regulations.

In 1972, Congress passed the FederalWater Pollution Control Act (Act) withan ultimate goal of no pollutant .,discharges into our nation's waters.Toward that ultimate goal, Congress -established increasingly stringentstandards of pollution control. Phase-I ofthe Act sets best practicable technology(BPT] limitations to go'into effect in ' '1977.3 In 1983, best available technology(BAT) limitation standards are to go intoeffect. 4 Several parts of the Act wereamended in 1977 but the basic goals andstrategies of the Act remain intact. EPAis given broad power under the Act so

'33 USC § 1251 et seq.2 Specifically amended were 40 CFR 423.12(a),

423.22(a), 423.32(a) and 423.42.2 § 301(b)ll}[A). 33 USC § 1311(bJ(1IA).4 § 3tf(b)(2)(A). 33 USC § 1311(b(21(A).

that it may insure that the phases ofimprovement can be achieved. In orderto carry out its obligation, EPApromulgated regulations setting singlenumber effluent limitations for variousindustries in order to commence theachievement'of the goal of the statute.InduPont, we held that EPA had theauthority to promulgate such effluentlimitations which are to be consideredpresumptively applicable. E. L duPontde Nemours & Co. v. Train, 541F2d 1018,1028 (4th Cir. 1976), aff'don this point430 U.S. 112 (1977). Through theregulations applicable unless rebutted,EPA hopes to achieve nationaluniformity as the goal of no discharge ofpollutants is soughL Id at 1028.

Appalachian Power involved a reviewof many of EPA's regulationspromulgated to aid in the applicationand enforcement'of the Act. Only ourholding dealing with BPT varianceregulations is pertinent to our decisionhere. Among other provisions underattack in Appalachian Power was EPA'svariance clause providing that avariance from the 1977 standards set outin the regulations would be grantedwhen "the factors relating to equipmentor facilities involved, the processapplied, or other such factors related tosuch discharger are fundamentallydifferent from those factors consideredin establishing the guidelines'" 5 Costswere excluded from consideration byEPA's interpretation of its ownregulation. We struck down the clausebecause EPA's refusal to consider costsresulted in too restrictive a view of theminimum content of the variance. Underthe 1983 standards set out in the Act, forexample, costs were to be a relevant'factor. Following our decision in duPont,we reasoned that the Act contemplatedprogressively more stringent standardsas the country moved closer to the goalof elimination of pollutant discharge.Therefore, .the 1977 standards were notintended to be any less flexible than the1983 standards. As a result, weremanded the regulation to EPA for theagency to come forward with ameaningful variance clause taking intoconsideration at least the statutoryfactors set out in § § 301(c), 33 USC§ 1311(c); 304(b)(1)(B), 33 USC§ 1314(b)(1)(B); and 306(b)(1)(B), 33 USC§ 1316 (b) (1) (B). 6 Appalachian Power at1359-60. Z ,

After the Supreme Court's decision inE. I. duPont de Nemours &' Co. v. Train,

5 §423.12(a) interpreted at 39 FR 28926-2 (Aug. 2.1974). 230c73 (Aug. 13,1974).

6§ 301(c), 33 USC § 1311(c). provides: The

Administrator may modify the requirements ofsubsection (b)[2]A) of this section with respect to

430 U.S. 112 (1977), we modified ourdecision in Appalachian Power toexclude the requirement of a variancefor new sources, but declined to modifythe opinion further.7 In March 1978, EPAproposed its amendment to the BPTvariance provision. 43 FR 8812-13 (1978).After a comment period, this rule wasmade final on September 22,1978. EPAamended 40 CFR 423.12(a), 423.22(a),423.32(a) and 423.42 by adding thefollowing paragraph:

In accordance with the decision inAppalachian Power, 545 F2d 1351,1358-60(4th Cir. 1976), EPA's legal interpretationappearing at 30 FR 30073 (1974) shall notapply to this paragraph. The phrase "othersuch factors" appearing above may Includusignificant cost differentials and the factorslisted in section 301(c) of the Act.

43 FR 43025 (Sept. 22, 1978] corrected at43 FR 44848 (Sept. 29, 1978).

any point source for which a permit application Isfied after July 1, 1977. upon a showing by the owneror operator of such point source satisfactory to theAdministrator that such modified requirements (1)will represent the maximum use of technologywithin the economic capability of the owner oroperator, and () will result in reasonable furtherprogress toward the elimination of the discharge ofpollutants.

§ 304(b)(1]1)]. 33 USC § 1314(b)(1)(13), providesthat such regulation shall: [SIpecify factors to betaken into account in determining the controlmeasures and practices to be applicable to pointsources (other than publicly owned treatmentworks) within such categories or classes. Factorsrelating to the assessment of best practicablecontrol technology currently available to complywith subsection (b)(1) of section 1311 of this titleshall include consideration of the total cost ofapplication of technology in relation to the effluentreduction benefits to be achieved from suchapplication, and shall also take into account the agoof equipment and facilities involved, the processemployed, the engineering aspects of the applicationof various types of control techniques, processchanges, non-water quality environmental impact(including energy requirements), and such otherfactors as the Administrator deems appropriate,

§ 306(b](1J(1). 33 USc § 1316{b)(l(]I), provides:As soon as practicable. but In no case more thanone year. after a category of sources Is Included In alist under subparagraph (A) of this paragraph, theAdministrator shall propose and publish regulationsestablishing Federal standards of performance fornew sources within such category. TheAdministrator shall afford interested persons anopportunity for written comment on such proposedregulations. After considering such comments, h0shall promulgate, within one hundred and twentydays after publication of such proposed regulations,such standards with such adjustments as he deemsappropriate. The Administrator shall, front time totime. as technology and alternatives change, revisesuch standards following the procedure required bythis subsection for promulgation of such standards,Standards of performance. or xevlslons thereof,shall become effective upon promulgation. Inestablishing or revising Federal standards ofperformance for new sources under this section, theAdministrator shall take into consideration the costof achieving such effluent reduction, and any non-water quality environmental impact and energyrequirements.I 'No. 74-2096 Order of September 20, 1977.



In October 1978, EPA published anotice rescinding its no-costinterpretation of 1974.43 FR 50042. InOctober 1978, the utilities filed thisaction.8

The utilities challenge the EPAamendment to the BPT varianceprovisions, contending that the mandateof Appalachian Power has not been metby the addition of "significant costdifferentials and the factors listed insection 301(c) of the Act." Specifically,the utilities argue that AppalachianPower requires EPA to consider304(b)(1)(B) factors including "total cost

S.. in relation to effluent reductionbenefit."

The utilities concede that the additionof "significant cost differentials and thefactors listed in section 301(c) of theAct" to the existing variance provisionson its face could fulfill the Appalachianmandate. They argue, however, thatEPA has made it clear that effluentreduction benefits are not a relevantfactor under the regulation. The utilitiesurge that EPA's interpretation of effluentreduction benefit is much too narrow inthat it considers only costs in relation tothe degree of effluent reduction with noconsideration of receiving water quality.Such an interpretation, they urge, isimpermissible in light of Appalachian.

No variance has been applied forhere. Therefore, the utilities' onlyauthority offered to show EPA'sapplication of its newly amendedregulations is the February 6,1979recommendation of the AssistantAdministrator for Water Enforcement ofthe EPA tentatively turning downCincinnati Gas and Electric Company'sapplication for a variance for its W. C.Beckjord Station, as well as the case ofIn jre Louisiana-Pacific Corp., 10 ERC1841 (1977). That document; the utilitiescontend, shows EPA's rejection of waterquality as a factor in consideringeffluent reduction benefits pursuant toAppalachian. There, Cincinnati Gas'application for a variance from phlimitations was turned down because nofundamental difference was found tojustify a less stringent standard. Incommenting on receiving water quality,the Office of Enforcement of the EPAincluded in its recommendation to theAdministrator the following:The Administrator has determined In thematters of Louisiana Pacific CorporationNPDES No. CA0005894 and Crown SimpsonPup Company NPDES No. CA0005882 10 ERC1841 (September 16,1977) ("Louisiana

$NRDC had filed its original petition onSeptember 28,1978, in the D.C. Circuit. The utilitiesand NRDC then filed petitions for review in thiscourt. Upon motion, the D.C. Circuit transferredNRDC's first petition to this court. NRDC v. EPA.No. 78-1929 (D.C. Cir. Dec. 21.1978].

Pacific") that EPA is not authorized to grant aFDF variance providing relief fromtechnology-based limitations guidelines duetp the characteristics of the receiving water.The type of receiving water or the fact thatthe receiving water quality will not beharmed by the discharge or measurablyimproved by installing control equipment arenot legally fundamental differences.Recommendation on Variance RulingFDF 78-01 at pp. 7-8.

We think the utilities' reliance on therecommendation in the Cincinnati Gasand Electric variance recommendationis misplaced. First and principally, theAdministrator has not yet taken anyaction with respect to the variance. Thatbeing so, we do not believe that, evenassuming the utilities' construction ofthe recormiendation to be correct, therecommendation of the Office ofEnforcement to the Administrator islegally binding on the Agency. While itmay have considerable significance,legal as well as practical, to the partiesinvolved, it is little if anything more thanan in-house memorandum from asubordinate in the Agencyrecommending to the Administrator theaction he should take in passing on therequested variance. Second, thelanguage we have above quoted, whichis that upon which the utilities rely, wedo not believe, read in context, can betaken to say that the Administrator inno instance will consider the quality ofthe receiving water as a part of theevidence in a case requesting avariance. Read literally, the languagesimply means that the quality ofreceiving water of itself is not afundamental difference upon which avariance can be granted. This is entirelyconsistent with that part of our ruling inAppalachian Power in which we deniedthe claim of Consolidated Edison that itought to be allowed to discharge intoNew York harbor not subject to effluentlimitations because the harbor wasalready so dirty the addition of itseffluent would make no difference. Froman examination of the papers on hand inthe Cincinnati Gas and ElectricCompany variance No. FDF 78-01, webelieve, however, that the variance wasnot sought solely or even principallybecause of the water quality of the OhioRiver into which the effluent flowed.Rather, it was based principally uponcost differentials and a claim that theaddition of sulphuric acid to its settlingponds to reduce their alkalinity woulddo more harm to the receiving waterthan the effluent in question in that case.

Much the same remarks apply toEPA's decision in In re Louisiana-Pacific Corp., 10 ERC 1841 (1977). In thatcase the claim of the industry was that adischarge of its effluent into the ocean

would do no harm apparently becausethe ocean waters were so vast. TheAdministrator denied that variance,again entirely consistent with ouropinion in Appalachian Power,concluding that be could provide no ' ...relief from technology-based effluentlimitations guidelines due solely to thecharacteristics of particular receivingwaters...." He stated that he could notpermit exemption where the type ofreceiving water is the fundamentaldifference between the seekers of thevariance and other pulp and paper mills.In his opinion, the Administrator timeand again made it plain that the onlything he acted upon was a request for avariance based solely on water quality.At no place in that decision did theAdministrator indicate that he did orwould hold that the quality of thereceiving waters was irrelevant in allinstances in variance proceedings. It istrue EPA does take that position in itsbrief in this court: "Receiving waterquality simply cannot legally beconsidered a relevant factor inevaluating a variance request" Brief atp. 13. But as the mere recommendationof a subordinate does not bind theAgency,'neither does the mereassertion of an attorney in a brief exceptfor the purposes of that case. Much aswe disagree with the statement, therehas been no application of it in the casebefore us, and no binding statement hasbeen made to that effect by theAdministrator. We will have to await aproper case to see if the Administratorin actual practice, or in theadministration of the statute, takes thesame extreme position his attorneys doin the brief in this case. No such extremeposition can be read into the Louisiana-

'The Deputy Assistant Administrator for WaterEnforcement, who made the recommendation inChxnati CoGs andElectdc Co. acts only as theprincipal adviser to the Administrator of EPA onmatters of enforcement. 40 CFR § 1.31. Thu., hisdecision Is not binding on the Administrator. In likevein, we held that a decision of the ProviderReimbursement Review Board. and in-house board.does not bind the Secretary of HEW. who canmodify or reverse that decision on his own motion.Fairfax Hoepital Ass n 1= v. Califano. 585 F2d O(4th Cir. 1978). See also. e.g. Universal CameraCorp. v. NLR8, 340 U.S. 474 (1961) (NLRB rejectedexaminer's findings; En Vironmental Defense Fund,Ih. v. FPA. 480 F2d 1247 (D.C. Cir. 1973)(Administrator decided contrary to the conclusionof the Hearing Examiner regarding the banning ofDDIT Adolph Coots Co. v.FT 497 F2d 1178 (lothCir. 1974) (FrC overruled Admnilstrative LawJudge's finding that Coors had not violated 15 ofthe Federal Trade Commission Act]:. Petersa Y.Codne,. 301 F~d 208 (2d Cir. 1966). (AppealsCouncil can rule contra to decision of the HearingExaminer]: Alcoa Steamship Co. v.FederalMaritime Commission, 321 Fzd 758 (D.C. Cr. i963)(Maritime Commission rejected recommendation ofexaminer and approved pooling agreement];Bratwell Motor Fre t Lies v. USA, 275 F.Sepp. 98[W.D. Texas 1907). alld 389 U.S. 569 (196) (ICCrejected recommendation of its examiner).


61622 Federal Register / VoL 45, No. 182 / Wednesday,.September 17, 1980 / Rules and Regulations

Pacific or Cincinnati Gas variance,cases.

Because we believe the amendment ofthe variance provision will admitconsideration of all of the factorsrequired in oar opinion, and there hasbeen no concrete application denying avariance request which is under review,we decline to set aside EPA's amendedregulations as a non-compliance withour mandate. 10

EPA and NRDC also ask us toreconsider our holding in AppalachianPower to the effect that § 301(c) factorsare applicable in consideration ofvariances from BPT limitations. Id at1359-60. This issue was dealt with againby this court in National Crushed StoneAssoc. Inc. v: EPA, 601 F2d Ill (4th Cir.1979), and in Consolidation Coal Co. v.Costle, 604 F2d 239 (4th Cir. 1979), cert.granted 48 LW. 3513 (1980). In thosecases the industries successfully soughtapplication of Appalachian Power's BPTvariance holding outside the steamelectric industry to which EPA haslimited our holding inAppalachian. Wedeclined to change our AppalachianPower variance holding in those cases,and we decline to do so here.

We should note at this point that EPAcontinues to argue from extremepositions which we do not believe arejustified by the statute, and even are notjustified by the actions of theAdministrator as distinguished from thelanguage in his brief. EPA's principalargument in this case is shown by anexample it gives that a discharger of acopper compound might be granted avariance if it were on a clean river butnot if it were on a dirty river. Theexample misses the point. If thedischarger were economically unable tocorrect its condition of violation andifits efforts resulted in reasonable furtherprogress toward meeting the standard,then there is no reason to necedsarilyexclude the issuance of a variance. Butif the c6ntinued discharge, during tietime it took the industry to comply,might kill all aquatic life in the river, itmight easily be said that the progresswas not reasonable, while, if thedischarge did little or no actual harmduring this period, it might just as easily,be said that reasonable progress wasbeing made. To determine whether ornot progress is reasonable, we repeat, itmay be appropriate to consider waterquality as a factor, that is to say as anitem of evidence. Its sought-for arbitrary

"The utilities-also rely upon EPA's commentspublished with its amendment of the varianceprovisions in 40 CFR Part 423. 43 FR 40324 (Sept. 2?.1978). typographically corrected at 43 FR 44847(Sept. 29.1978). The comments no more than reflectthe ruling in Louisiana-Pncifi c supra, and are notcontrary to our mandate in Appalachian Power.

exclusion by EPA is simply too rigid aconstruction of the statute, and we donot believe it is justified. To holdotherwise ultimately can only result inregulation for regulation's sake, at whichpoint, of course, a serious question ofconstitutional limitations would arise.We believe this useful statute deservesbetter treatment

NRDC's petitions request us to holdthat variances from BPT limitationscannot be granted to a discharger oftoxic pollutants because of a 1977amendment to the Act, which states:The Administrator mky not modify anyrequirement of this section as it applies toany specific pollutant which is on the toxicpollutant list under section 307(a)(1) [33,U.S.C. § 1317(a)(1]

§ 301(1] of the Act, 33 U.S.C. 1311(1).It is the contention of NRDC that the

amendments to the various regulationsshould have as required content aprohibition against issuing a variancefrom BPT limitations on account of toxicpollutants.

"33 U.S.C. § 1317(a)(1) (§ 307(a)(1) ofthe Act] requires the Administrator topublish a list of toxic pollutants. Upondesignation of a pollutant as toxic,§ 307(a)(2) [33 U.S.C. § 1317(a)(2)] goesinto effect, requiring the EPA to set BATstandards for those pollutants.

As now interpreted by EPA, thevariance clause applies to all pollutantsfor which BPT limitations are set byregulations. The BPT limitations for thesteam electric industry includgpollutants which are on the toxicpollutant list in 40 CFR Part 129. Asnoted, because of § 301(1), NRDCcontends that EPA in a repromulgationof its variance regulations must in termsexclude toxics from their coverage. EPAand the utilities contend that § 301(1)was not intended to-apply to BPT, butonly to the specific sections of § 301which allow an operator to be relievedof an effluent limitation. They also arguethat a BPT variance is not a truevariance so as to bring § 301(1] intoeffect BPT variances, the argumentgoes, do not excuse anyone frommeeting BPT limitation standards.Instead. they enable EPA to determinean individual BPT limitation for anindustry procuring a variance. As aresult, an operator granted a variance isstill in compliance with its BPTlimitation standard. Its standard is justdifferent from others.

It is apparent that if either argumentjust above stated is correct that EPA isnot required to exclude toxic pollutants'from BPT variances. We think that§ 301(1) does not apply to BP'Tvariances.

Toxic pollutants prior to the 1977amendments were not treateddifferently from other pollutants in thatBAT technology was not necessarilyapplied, and dischargers dischargingtoxic pollutants were neverthelessincluded in those required to complywith BPT effluent limitations. While the1977 amendments have required BATlimitations for discharges of toxicsubstances, they do not indicate that

.they are to operate retroactively so as topossibly retract any variance previouslyissued to an industry which justhappened to be discharging toxicsubstances, or to obliterate the knownpractice of EPA in not excluding toxicsubstances from those pollutants forwhich a variance might be grantedunder BPT effluent limitations. Neitherdoes the legislative history justify such aconstruction. See 3 U.S. CodeCongressional and AdministrativeNews, 1977, p. 4326 et seq. Theinterpretation of the statute by EPA isentitled in some deference. E. L duPontde Nemours v. Train, 430 U.S. 112,135 n.25 (1977]. It is also true that retroactiveapplication of a statute is not favored.Union Pacific RR Co. v. LaramieStockyards Co., 231 U.S. 190,199 (193].In our case, § 301(1) speaks topreventing the modification of anyrequirement of § 301 as it applies to anyspecific pollutant on the toxic pollutantlist. On its face, it might thus be said toapply to such parts of the statute as§ 301(c) which speaks of modifyingrequirements for BAT limitations.Indeed, in § 301(g), 33 U.S.C. § 1311(g),also a part of the 1977 amendments, it isprovided that the Administrator, withthe concurrence of the State, shallmodify BAT requirements withexceptions including toxic pollutants.While this may well be an indication ofCongressional intent that the statuteshould be read as EPA reads it, that§ 301(1) applies only to those sections of§ 301 which in terms permitmodification, in all events the best thatcan be said for § 301(1) is that it is notclear. That being true, we give weight tothe, construction the administeringagency has placed upon the statute, and,when we consider that retroactivity isnot favored, we are of opinion that§ 301(1) does not apply so as to requirethe exclusion of toxic substances fromBPT variance provisions.

Our ruling.today is limited to theholding that BPT variance regulationsneed not exempt toxic pollutants. We donot consider whether or not, or how,EPA will construe § 301(c) with relationto § 301(1). That question is not beforeus and its consideration would bepremature.



Accordingly, being of opinion thatEPA's amendments to 40 CFR 423.12(a),423.22(a), 423.32(a), and 423.42 aresufficient to permit a compliance by theagency with our opinion and mandate,the petition of the industry to requirefurther consideration of this matter byEPA is denied. (This petition was filedin case No. 74-2096.) The petition of theindustry dealing with the same subjectin case No. 78-1701 is likewise deniedfor the same reasons.

The petitions of NRDC are also deniedfor the reasons stated in this opinion.(These petitions were filed in cases Nos.78-1878 and 78-1902.)Exhibit B-U.S. Court of Appeals for theFourth Circuit

[No. 74-2096 et al.]

Appalachian Power Co., et al.,Petitioners, V. Russell E. Train, asAdnnistrator Environmental ProtectionAgency, Respondent

Petition for Rehearing

Pursuant to Rule 40, FRAP, respondenthereby petitions the Court for arehearing, and suggests that rehearingen band would be appropriate to resolvethe conflicts outlined below.

Introductory Statement

On April 28, 1980, a panel of thisCourt issued judgment and opinion inthe above-captioned case whichdeclined to invalidate the repromulgatedEnvironmental Protection Agencyregulations establishing a varianceclause for the steam-electric industry.This Court deferred consideration ofcertain of petitioners' claims on groundsof prematurity. In our judgment,however, the opinion expressesconclusions that are in square conflictwith another decision of this Courtwhich is not addressed in the opinion.Moreover, the opinion conflicts with adecision from another circuit andignores a statement of the Administratorset forth in EPA's recent NPDESregulations.

Specifically, it is counsel's judgmentthat:

(1) To the extent the court's decisionis based upon its assumption that theAdministrator of EPA has not adoptedthe position, urged by EPA in its brief,that water quality could not beconsidered as a factor in a BPT variancerequest, the assumption was renderederroneous by the promulgation, afterargument, and before decision of EPA'srevised NPDES permit regulations, at 44FR 32893 (une 7, 1979);

(2) This Court's conclusion (expressedon pages 17 and 18 of the slip opinion)that water quality is a factor to be

considered in determining whether ornot a variance may be granted from therequirements of best practicable controltechnology (BPT) is in direct conflictwith this circuit's holding inConsolidation Coal Co. v. Castle, 604F.2d 239 at 244-245 (1979); and

(3) The above mentioned conclusionconflicts with the holding ofWeyerhaeuser Co., et al. v. Castle, 590F.2d 1011, at 1041-1044 (D.C. Cir. 1978).Discussion

In dismissing the petition filed by theutility petitioners, the Court's decisionwas premised upon the followingassumption: the Administrator of EPAhas not clearly adopted the position thatwater quality could not be considered asa factor when considering"fundamentally different factors"variances. That assumption was in anyevent nullified prior to the Court'sdecision by a specific statement of theAdministrator. Moreover, while theCourt dismissed the industry's petition,it articulated the law in a way thatcontradicts the earlier opinion ofanother panel of this circuit inConsolidation Coal Co. v. Castle, 604F.2d 239 (4th Cir. 1979), and which isalso in conflict with Weyerhaeuser Co.v. Castle, 590 F.2d 1011 (D.C. Cir. 1978).Neither of these other cases is discussedin the opinion in relation to the waterquality issue.

The Court declined to vacate EPA'svariance clause because the panelassumed that the Administrator had notexpressed agreement with the positiontaken in EPA's Brief. (Slip op. at 14-15.)However, on June 7, 1979, theAdministrator stated at 44 FR 32893,(emphasis added):

EPA has been prompted by othercomments to add a new provision ... whichmakes clear that specific receiving waterquality is not a relevant factor in thefundamentally different factors variancecontext. To allow relaxation from technology-based limits because of case.by-casevariations in receiving water quality wouldbe grossly violative of the Act and contraryto its fundamental principles.

Although the Administrator madethese remarks in promulgating avariance clause for industries other thanthe steam electric industry, the legal andpolicy reasons for this determination areidentical to those relating to the steamelectric-industry, as set forth by EPA inpapers filed with the Court in this case.'

1This statement on the newly.promulgatedregulations was made after argument and before theCourt's decision. EPA did not file a supplementalmemorandum bringing It to the Court's attention atthe time it was Issued simply because thegovernment had no idea that the Court wouldconclude that the agency's representations made to

Since, at least as of June 7,1979, theAdministrator's position has beenprecisely what the Court had assumedthat it was not, the Court's refusal torule on the merits was grounded on aierroneous premise.

While declining to rule on the meritsof the water quality issue, the Court didexpress its view of the law. The Courtquoted and expressed strongdisagreement with the followingstatement in EPA's Brief: "Receivingwater quality simply cannot legally beconsidered a relevant factor inevaluating a variance request." Slip. op.at 14. The Court concluded (Slip op. at18, Court's emphasis):lit may be appropriate to consider waterquality as efactor that is to say as an item ofevidence. Its sought-for arbitrary exclusionby EPA Is simply too rigid a construction ofthe statute, and we do not believe it isJustified.

This conclusion is contrary to thedecision of another panel of this circuitin Consolidation Cool Co. v. Castle, 604F.2d 239 (1979). There, this Courtexpressed strong agreement withprecisely the same EPA position. TheCourt framed the issue as follows (604F.2d at 244. emphasis added):The precise issue, therefore, is whether thefactors peculiar to a source of pollution mustinclude comparison of the expectedimprovements in the receiving water with thecost of achieving them.

The Court in Consolidation Coal citedwith approval another decision 2because it had "affirmed theAdministrator's refusal to considerreceiving water quality in settinglimitations." Id., emphasis added. TheCourt stated (604 F.2d at 245, emphasisadded:

Any possible doubt about congressionalintent to preclude consideration of receivingwater quality in industrial variance rulingswas put to rest in 1977 [in the 1977 CleanWater Act Amendments].

We therefore conclude that the varianceregulations as interpreted by theAdminrstrator properly excludeconsideration of the quality of the receivingwater.

There is no way to reconcile theConsolidation Coal decision with that inthe instant case. In the one case theCourt has stated that receiving waterquality may not be considered inassessing variance requests, and in theother it has said that the agency must

the Court would be considered not to constituteagency policy. At the very least, the June 7.1979.Federal Register statement Is a "change in the lawwhich occurred after the case was submitted..."

2 WeyerhaeuserCo. v. Codtle. 500 F.d 1011 (D.C.Cir. 1978].


61624 Federal Register / Vol. 45, No. 182 / Wednesday, September.17, 1980 / Rules and Regulations

consider it.3 As a result, any action bythe agency in this regard will bevulnerable to charges that it violates oneor the other of the circuit's opinions.

The Court's opinion also conflictswith, and clearly overlooks, -

Weyerhaeuser Co. v. Costle, 590 F.2d1011 at 1036 (D.C. Cir. 1978). TheWeyerhaeuser court rejected complaintsabout EPA's"refusal to considerreceiving water qualty" in he BPTvariance clause for the pulp and paperindustry, 590 F.2d at 1036,1041-1044.The D.C. Circuit's decision, to the sameeffect'as Consolidation Coal, concludedthat water quality is not relevant to BPT.The Court stated in pertinent part (590F.2d at 1042-44, emphasis added]:

Congress made the deliberate decision to ruleout arguments based on receiving watercapacity.

Moreover, by eliminating the issue of thecapacity of particular bodies of receivingwater, Congress made nationwide uniformityin effluent regulation possible.

In only one limited instance, thermalpollution.4is receiving water to be'considered in relaxing standards. *Otherwise, receiving water quality was to beconsidered only in setting "more stringent"standards than effluent limitations otherwisewould prescribe.

[We affirm the Agency's refutsal to considerwater quality in setting its hmitations.

Both of thesa cases are relevant to theissue before the Court inAppalachianPower, and this Court's failure todiscuss them clearly constitutes "amaterial * * * law overlooked in thedecision." The Consolidation Coalholding is clearly in conflict with thiscase, and hence raises "an apparentconflict of another decision of the Courtwhich is not addressed in the opinion."

Since EPA's regulatory policy plainlydisregards water quality as a factor invariance decisions, the Court should,have adjudicated the issue on its merits,and thus rehearing is required.Moreover, since there is a direct conflictbetween the law as expressed by thispanel on the merits, and the Court's'holding in Consolidation Coal, rehearingen banc appears to be appropriate.

'The panel in the instant case failed to note theezdstence of contrary opinion in Consolfdation CoalThe Court's sole reference to that case (Slip Opinionat 17) is in the context of a different issue that isnow before the Supreme Court.

IThe Court's reference to thermal pollutionrelates to Section 316 of the Act. 33 U.S.C. 1326.

Rdspectfully submitted,Sanford Sagalkin.ActingAssistantAttorney General.Barry JTrilling,Attorney, Department oflustice.

Dated- May 12,1980.By-

Donald W. Stever, Jr..'Ctdef, Pollution Control Section, DepartmentofJustice, Washington, D.C. 20530, (202)633-5290. "

Of CounselJames A. Rogers,Richard G. Stall. Jr.,(A-131) En vironmental Protection Agency,Washington, D.C. 20460 (202) 755-0760.

Exhibit C-U.S. Court of Appeals for theFourth Circuit[Nos, 74-2096. et all

Appalachian Power Co., et al,Petitioners v. Russell E. Train, asAdministrator, Environmental ProtectionAgency, Respondent Alabama Power-Company, et al, Intervenors

No judge entitled so to do hasrequested a poll of the court on thepetition for rehearing en banc.

It is accordingly adjudged and orderedthat rehea'ing en banc shall be, and thesame hereby is, denied.

The panel has considered the petitionfor rehearing and is of opinion it iswithout merit.

It is accordingly adjudged and orderedthat the petition for rehearing shall be,and the same hereby is, denied.

With the concurrences of judge'Breitenstein and Judge P hilips.Exhibit D-Environmental ProtectionAgency

In the Matters ofLouisiana-PacificCorp., NPDES No. CA0005894 andCrown Simpson Pulp Co., NPDES No.CA0005882.

Decision of the Administrator

I have been asked to consider thegranting of variances from effluentlimitations guidelines for two pulp,paper, and paperboard mills located onthe Pacific Coast of California. Therequests for variances are denied,

L Procedural Background

On March 29, 1977, Mr. Bill B. Dendy,Executive Officer of the State WaterResources Control Board for the State ofCalifornia, submitted extensivematerials concerning the actions takenbefore the California Regional WaterQuality Control Board, North CoastRegion, and before the State Boarditself, with respect to these two mills. Alist of the enclosures to that March 29

letter appears in the margin. t Mr. Dandynoted in his March 29 letter that the"state board finds that a variance is

,warranted for the two dischargers...on the grounds that the environmentalbenefits (if any) to be derived from theapplication of the treatment required tomeet the guideline limitations for DODand pH would be far outweighed by thenonwater quality environmental costsincluding use of energy." Mr. Dandywent on to say that he believes "thatvariance based on these grounds is inaccordance with the precedentsestablished in the decisions of severalU.S. Court of Appeals, particularly theFourth Circuit's decision of the case ofAppalachian Power v. Train [545 F. 2d1351 (1976]]."

On May 26, 1977, Mr. G. WilliamFrick, EPA General Counsel, issued aRecommended Decision of theAdministrator which recommendeddenial the variance requests of the twocompanies. 42 FR 28167-72 (June 2,1977]. The preamble to therecommended decision advised thatwritten comments on the decision couldbe submitted and that all suchcomments received by July 5, 1977,would be considered prior to issuance ofa final decision of the Administrator.Comments were timely filed by CrownSimpson Pulp Company and Louisiana-Pacific Corporation (joint submission),the law firm of Hunton & Williams (onbehalf of the Utilities Water Act Groupand other petitioners in AppalachianPower Co. v. Train), Southern CaliforniaEdison Company, East Bay MunicipalUtility District and the National WildlifeFederation.

In reviewing the submissions by theState of California and the extensive

'A. State Board Order No. WQ 77-0 (withexhibits thereto]: B. Transcript of hearing before theState Board December 22,1976; C. Transcript ofhearing before the Regional Board, July 2,197N, D,Transcript of hearing before the Regional Board,August 26.1976; 1. "Written Comments on TentatlvoOrders" presented to the Regional Board July 21,1976; F. "Request for Variance in EPA Limltatlinson the Basis of Fundamentally Different Factors"dated Jne 21.1976; G. Written Statement of Dr.,Herman R. Amberg before the California RegionalWater Quality Control Board, North Coast Region,July 19,1976; H. "Written Comments on TentativqWastes Discharge Orders" dated December 1970- 1,Interoffice Memorandum from John R. Hannum t;D.C. Joseph and Gary Grimm dated December 13,1976; J. "Non-water Quality Environmental Impacts"calculation by Dr. Amberg: presented at State BoardHearing December 22.1976: K. Letter fronl Dr. C.Edward Taylor to Mr. W. Don Maughan datedJanuary 13,1977. The two companies havecommented that this list does not include certaindocuments which were before the State during Itsproceedings. However, they do not argue that thodocuments are vital to this decision nor have theytaken the opportunity afforded by the notice andcomment procedure to make any such materialsavailable to me. Under the circumstances, rind giventhe purely legal nature of my decision, I see no needto amplify the iecord.



materials, including legal briefs,submitted by the Louisiana-PacificCorporation and the Crown SimpsonPulp Company to the State as well asthe comments on the recommendeddecision, I have assumed for the purposeof the opinion as factually accurate thestatements by the State and the industryas to the essential nature of operationsat these facilities, the water qualityeffects of the discharges, the energyimpacts, the cost of application of thetechnology which would be required tomeet EPA's national limitations, andother major relevant facts. TheEnvironmental Protection Agency hasconducted no independent review of thefacts following the submission of therequests for variances. In other words,the-record of the State Board hearing assubmitted by Mr. Dendy with theaddition of the Development Documentfor the effluent limitations guidelinesapplicable to these mills, constitutes therecord which I have reviewed. While theDevelopment Document was notformally forwarded to me as part of therecord, I note that it is referred torepeatedly in the various materialswhich are part of the record, includingthe opinion and order of the State Board,and it is therefore properly before me.

As I discuss in more detail below, theissues which are to be resolved in thesevariance requests are solely legal, anddo not require an independent analysisor weighing of facts. This is not to say,however, that in other variance requestsit would not be appropriate to conductfactual reviews. 2

The Crown Simpson Pulp Companyand the Louisiana-Pacific Corporationeach operate bleached kraft pulp millson the Samoa Penninsula, on the westside of Humboldt Bay, near Eureka,California. Louisiana-Pacific alsooperates a plywood mill at this location.Each mill produces about 600 air drytons per day of bleached kraft pulp; theLouisiana-Pacific saw mill also producesabout 500,000 board feet per day oflumber. Each mill principally discharges

2 Crown Simpson and Louisiana-Pacific complainof the lack of an opportunity for a hearing beforeme, arguing that such a hearing is required by law.But the companies were given extensive opportunityfor hearings by the State and an opportunity tocomment upon the General Counsel's recommendeddecision. I have not augmented the record compiledby the State nor have I independently evaluated thefactual conclusions reached below. A hearing.particularly of the nature apparently envisioned bythe two companies in which they would "respond to[my] questions concerning the voluminous record inthe ... proceedings before the State.. ." would bea useless exercise. I have carefully considered thearguments made by the companies concerning thelegal issues involved in this proceeding. I amconvinced that the procedures I have used havebeen fair and entirely adequate and that all process"due" has been provided.

through separate ocean outfalls about2500 feet from shore and at a depth ofapproximately 30 to 40 feet. The outfallsare about one mile apart, and each has adiffuser at the end.

On December 4,1974, the RegionalBoard of the California Water ResourcesControl Board adopted waste dischargerequirements for these dischargers; atthat time national effluent limitationsguidelines for these sources were notavailable. EPA Region IX objected to theRegional Board orders on the groundsthat the Regional Board failed toimplement the provisions of Sections 301and 304 of the Federal Water PollutionControl Act by not imposing effluentlimitations in those orders which wouldrequire achievement of best practicablecontrol technology currently availableby July 1,1977. The State Boardreviewed the regional orders, and, aftera hearing on March 7,1975, remandedthe orders to the Regional Board withdirections that effluent limitations basedon best practicable control technology,or "BPT", be included. These BPTlimitations were to be based onpromulgated national regulations ifavailable, otherwise the Regional Boardwas directed to establish the numbersbased on its best judgment as to whatconstituted BPT.

On February 19,1976, EPApromulgated interim final effluentlimitations guidelines for the bleachedkraft sector of the pulp, paper andpaperboard point source category. 40CFR Part 430 Subparts F-I. EPA issuedfinal amendments to these regulationson January 6,1977. The validity of thenational regulations is not at issue inthis variance proceeding. Each nationallimitation contains a variance clause '

=The regulations are being challenged inWyerhaeuser Company, et a/. v. Train. No. 75-1874.et al. before the United States Court of Appeals forthe District of Columbia Circuit. See footnote s.infra.

'For example. 1 430.72 reads in part an follows: Inestablishing the limitations set forth in this section.EPA took into account all information it was able tocollect, develop and solicit with respect to factors(such as age and size of plant. raw materials.manufacturing processes. products produced.treatment technology available. energyrequirements and costs) which can affect theindustry subcategoritzalon and effluent levelsestablished. It is, however, possible that data whichwould affect these limitations have not beenavailable and, as a result, these limitations shouldbe adjusted for certain plants in this industry. Anindividual discharger or other interested personmay submit evidence to the Regional Administratorfor to the State. if the State has the authority toissue NPDES permits) that factors relating to theequipment or facilities involved. the processapplied. or other such factors related to suchdischarger are fundamentally different from thefactors considered in the establishment of theguidelines. On the basis of such evidence or otheravailable information, the Regional Administrator(or the State) will make a written finding that such

which in essence provides that adischarger may submit evidence thatfactors such as the age or size of plants,raw materials, manufacturing processes,treatment technology available, energyrequirements or other such factors, arefundamentally different from the factorsconsidered during the establishment ofthe national effluent limitationsguidelines.$

In accordance with the instructionsfrom the State Board, the RegionalBoard conducted hearings with respectto these two mills, on June 24, July 29,and August 25,1976. The dischargerestrictions for Crown Simpson andLouisiana-Pacific established by theRegional Board did not follow the EPAnational effluent limitations guidelines.On September 3,1976, EPA Region IXissued a letter of objection to theRegional Board orders, noting that theRegional Board had in effect grantedvariances from the national limitationswithout submitting the matter to theAdministrator of EPA for approval. Thisaction by EPA prompted the two mills toseek review in the United States Courtof Appeals for the Ninth Circuit (Nos.76-3161 and 76--3287. Those actionshave been stayed pending decision onthis matter.

On October 21,1976, the State WaterResources Control Board adoptedresolution 76-108 to review the action ofthe Regional Board with respect to thesetwo mills. On December 22,1976, theState Board held a hearing, and onMarch 17,1977, the Board issued itsopinion.

The Board ordered that the RegionalBoard Orders No. 76-133 and 76-134 beset aside and replaced by the permitsestablished by the State Board. Itgranted the requested variances fromthe effluent limitations guidelines forBOD and pH, subject to approval by theEPA Administrator, and ordered theExecutive Officer of the State Board toforward to EPA all necessaryinformation, data and documents for aprompt decision on this matter.

factors are or are not fundamentally different forthat facility compared to thoe specified in theDevelopment Document. If such factors are found toexist, the Regional Administrator or the State shallestablish for the discharger effluent limitations inthe NPDES permit either more or less stringent thanthe limitations established herein, to the extentdictated by such fundamentally different factors.Such limitations must be approved by theAdministrator of the Environmental ProtectionAstcy. The Administrator may approve ordisapprove such limitations, specify otherlimitations or initiate proceedings to revise theseregulations.

* Crown Simpeon and Louisiana-Pacific note intheir comments that should I deny their variancerequests they may seek judicial review of mydecision and raise the question of whether thevariance provision Is valid.


61626 Federal Register /,Vol. 45, No. 182 / Wednesday, September 17, 1980 / Rules "and Regulations

Alternative effluent limitations for BODand pH, to apply in the event the , •variances were approved or denied bythe Administrator, were established in

'the permits. The dischargers also weregranted an extension of time until July 1,1983, to meet the effluent qualityrequirements for chromium contained inthe California Ocean Plan. 6 :

The differences between the permitconditions based on the nationaleffluent limitations guidelines, on theone hand, and those which will resultfrom the granting of the variances fromthose guidelines, on the other hand, aresubstantial. In NPDES Permit No.CA0005882 the limitation onBOD5(daily maximum) is 18,450 pounds, andthe limit on total solids is 36,480 pounds.The pH must be maintained within therange of 5.0- 9.0. According to the termsof the permit, "Upon approval by theAdministrator of EPA of the finding of'fundamental difference'... thefollowing limitations shall apply in lieuof the limitations [set forth above]".These are 96,000 pounds per day ofBOD5 (daily maximum) and pH withinthe range of 3.0 to 10.0.

For the Louisiana-Pacific Mill (NPDESpermit No. CA0005894] the differencesare similar. In all cases the BOD figurescited pertain to the pulp operations,which are by far the major sources ofBOD at these facilities.

H. The Legal Issue

The California State Water ResourcesControl Board found that because therewould be "no expected or predictablewater quality improvement as the resultof imposition of the EPA guidelines[and ijn light of... the magnitude ofthe chemical and energy requirements,and the potential air and landmanagement problems associated withsludge disposal.., the evidencejustifies the variance requested." (BoardOpinion p. 17). It is clear that the Boarddid not find a "fundamental difference"in terms of non-water quality impact "itself but instead found non-waterquality impact to be a significantbecause of lack of improvement of locdlreceiving water quality. In effect, theState granted an exemption fromminimum national technology-based

6The National Wildlife Federation filedcomments which fully support my denial of the BPTvariances but which urge that I also disapprove theextension of time given the two companies by theState for meeting chromium effluent qualityrequirements derived from the California OceanPlan. This proceeding, however, is not a generalreview of the State-issued permits. It concerns onlythe appropriateness of granting variances from EPAeffluent limitations guidelines, and my decision islimited to this question. I express no opinionwhatever on any other aspect of the Stateproceedings.

standards because of local water qualityconsiderations. This was contrary to theletter and intent of the FWPCA and Ihave no'choice but to disapprove thestate action.

The heart of the Louisiana-Pacific andCrown Simpson presentations to theState Boards was the absence of a needto control BOD and pH. In essence, whatthe companies argue is that becausethey are located on the Pacific Ocean,with its vast dilution and regenerativepowers, one need not be concerned withpollution requirements which assertedlyare designed solely to protect theoxygen levels or pH of receivingstreams. They argue that the oxygdnlevel even in the immediate area of theirdischarge pipes is not a matter ofconcern.

BOD is not a metal or a chemicalcompound or a specific substance thatpollutes the environment. It is a measureof the quantity of oxygen required forthe biological and chemical oxidation ofwater-borne substances under ambientor test conditions. The BOD5 test is aprocedure which provides an estimate ofthe oxygen consumed by micro-organisms utilizing the degradablematter present in a waste under ' •conditions that are representative ofthose that are likely to occur in nature.Standard conditions of time (5 days),temperature, suggested microbial seed,and dilution water for the wastes havebeen defined and are incorporated instandard analytical procedures. Asnoted in the Development Document forthe Effluent Limitation Guidelines (BPT)for the Bleached Kraft, Groundwood,Sulfite, Soda, Deink; and Non-integratedPaper Mills Segment of the Pulp, Paper,and Paperboard Point Source Category,at pages 267 and 268:The BOD of a waste exerts an adverse effectupon the dissolved oxygen resources of abody of water by reducing'the oxygenavailable to fish, plant life, and other aquaticspecies. Conditions can be reached where allof the dissolved oxygen in the water is usedresulting in anaerobic conditions and theproduction of undesirable gases such ashydrogen sulfide and methane. The reductionof dissolved oxygen can be detrimental tofish populations, fish growth rate, andorganisms used as fish food. A total lack ofoxygen due to the exertion of an excessiveBOD can result in the death of all aerobicaquatic inhabitants in the affected area.

The BOD5 test is also an indicator of the totalorganic load that is being discharged to areceiving stream. Compounds contributing tothis total organic waste load found in pulp -and paper mill wastes include terpenes, resinacids, fatty acids, phenols, formic acid,sacharinic acids and other small organicacids. These compounds also contribute tothe toxicity of a pulp and paper mill waste.

There are substantial testimony and anumber of documentary materialsreferred to in the record indicating thatthe waste materials discharged by ,Crown Simpson and Louisiana-Pacificthrough their ocean outfalls are notcausing a significant environmentalproblem with respect to oxygenreduction or pH levels in the receivingwaters. I do not believe that it isnecessary to consider the extent of thatproblem or debate such issues as thelimits of the mixing zone for the 'dischargers.7 For the purposes ofreviewing these applications forvariances, I will assume that thearguments of Crown Simpson andLouisiana-Pacific are correct in thatthere is not a need, based purely onwater quality considerations, to controlthe BOD emanating from these millsbeyond those levels contained in thevariance-based permits. While the factsand arguments are less clear withrespect to the pH requirementscontained in the national effluentlimitations guidelines, I will also assumefor the purposes of this proceeding thatthere is no water quality need to limitthe pH discharge other than ascontained in the California permitsbased on the variances.$ ,

In its March 17,1977, opinion the StateBoard noted that the dischargers had'submitted evidence regarding thechemicals required should they beforced to treat their wastes to meet EPAnational guidelines; the direct andindirect power requirements associatedwith such treatment and the potentialbiological sludge disposal problemswhich would result from the use of EPArecommended technology (Opinionpages 15-18. Again, for the purposes ofthis, variance proceeding I consider as

7I note that the State Board observed that "someof the organic compounds which contribute to theBOD may cause'problems in the receiving water,.. Opinion p. 7. Crown Simpson and Louisiana.

Pacific argue in their commnts that it Is Improper tostate that there is any relationship between effluenttoxicity and BDO and pH. The quotation, however.accurately reflects the fimding of the State Boardand I see nothing Improper in its inclusion in thisopinion.

$Crown Simpson and Louisana-Paelfio criticizethe recommended decision for being too equivocalon the question of the water quality Impact of theirdischarges. However, as noted previously, noindependent review of the evidence has beenundertaken, and it would therefore not beappropriate for me to endorse or concur in anyconclusions reached on this subject by the State.Instead, it Is accurate to say only that for the limitedpurposes of deciding the legal issue presented inthis proceeding I assume that limitations on B30and pH more stringent than those Imposed In thevariance-based permits would not Improvereceiving water quality. I find the attack upon thepropriety of this procedure curious, sinceassumption of the existence of facts for limited legalpurposes is a judicial technique of long standing.


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true the Board findings in theserespects. 9

The issue to be resolved isstraightforward: does the Federal WaterPollution Control Act, as amended("FWPCA") allow EPA to varytechnology-based water pollutionregulations simply because the receivingwater quality at particular sites will notbe measurably improved by compliancewith those regulations? Counsel for thecompanies stated the matter this way ina brief before the State Board:

"[Crown Simpson] and [Louisiana-Pacific]are not asking this Board to countenance awholesale return to an ineffectual waterquality approach. Rather, they submit thatthey have affirmatively demonstrated thatthere is a fundamental difference betweenthe marine envirpnment into which theydischarge and all other receiving waters.None of the dilatory or obscurantic tacticssometimes encountered under the old systemare possible when the applicant bears theburden of proving its entitlement to avariance. And while most differences inreceiving waters are ones of degree, whichmay be burdensome administratively todistinguish, the difference between the oceanand inland waters is categorical, so that thedifferentness of the ocean need only bedecided once." (p. 24]

Counsel for Crown Simpson reiteratedthis point during the December hearing(Tr. 101):

What the companies are saying is thatessentially all of the requirements can be metwith the exception, perhaps, of the chromiumheavy metal requirement through the use ofinternal procedures. It can be met at a certaincost To impose the BOD limitation is toimpose on them an enormous additional costwith no environmental benefit.

When Congress enacted the FederalWater Pollution Control ActAmendments of 1972, it brought about amajor change in the approach to waterpollution control. Congress declared inunmistakable statutory language thatcertain key regulations were to be b'asedon pollution control technology, notwater quality. Localized improvement inwater quality as the result of compliancewith technology-based regulations was

9The Board did not make independent findings offact with respect to several of these factors: itmerely stated. "the dischargers submitted evidenceregarding [these factors.]" In effect. I am acceptingas true the assertions of the companies before theState Boards, for the purposes of this proceeding.There was also testimony to the effect that redwoodpulp produces more BOD than any other woodspecies, and that these two mills may be the onlymills using that wood (Tr. 47), but there is noexplanation in the record as to the contribution thisfactor would have to the much higher BOD allowedunder the variance-based permits. Moreover. I notethat this issue was not pressed as an important factby the companies or relied upon by the State Board,and no mention of this factor was made incomments submitted by the companies on therecommended decision.

desired, but the existence of the nexuswas not to be dispositive as to theapplication of those regulations. TheSenate Committee on Public Worksexplained the reasons for the change inapproach:

The water quality standards program Islimited in its success. After five years. manyStates do not have approved standards.Officials are still working to establishrelationships between pollutants and wateruses. Time schedules for abatement areslipping away because of failure to enforce,lack of effluent controls, and disputes overFederal-State standards.

The Committee adopted this substantialchange because of the great difficultyassociated with establishing reliable andenforceable precise effluent limitations on thebasis of given stream quality. Water qualitystandards, in addition to their deficiencies inrelying on the assimilative capacity ofreceiving waters, often cannot be translatedinto effluent limitations-defendable In courttests, because of the imprecision of modelsfor water quality and the effects of effluentsin most waters.

Under this Act the basis of pollutionprevention and elimination will be theapplication of effluent limitations. Waterquality will be a measure of programeffectiveness and performance, not a meansof elimination and enforcement.

The Committee recommends the change toeffluent limitations as the best availablemechanism to control water pollution. Witheffluent limits, the Administrator can requirethe best control technology. he need notsearch for a precise link between pollutionand water quality. 10

S. Rept. No. 92-414, 92d Cong. 1st Sess.at 8 (1971), Committee Print, ALegislative History of the WaterPollution Control Act Amendments of1972, 93d Cong. 1st Seas. (1973) (2 vols.)(hereafter cited as Leg. Hist.) at 1426.

Both the Act and its legislative historyclearly indicate-that Section 301(b)(1)(A)effluent limitations are not to be basedon the nature, quality or location ofreceiving waters. This is demonstratedby Section 301(b) itself. Section 301(b)(1)provides that point sources other thanpublicly owned treatment works mustmeet, "(A) not later than July 1,1977effluent limitations... which shallrequire the application of the bestpracticable control technology currentlyavailable.... and... (C)... anymore stringent limitation, includingthose necessary to meet water qualitystandards... ."(emphasis added). Thebasic structure of the Act is thereforeclear. Technology-based limitationsimposed pursuant to Section

", From 1965 until the enactment of the FWPCA.the quality of interstate waters had been regulatedprimarily by State water quality standards, whichStates were required to promulgata and haveapproved by the Federal Government unde theWater Quality Act or 196.

301(b)(1)(A) are independent of localwater quality considerations, but wherelocal water quality-based requirementsare more stringent than 301(b)(1](A)requirements they may be imposedpursuant to Section 301(b](1](C). Thisstatutory structure would be renderedmeaningless if 301(b)(1)(A) limitationscan be downgraded due to water qualityconsiderations. Section 304(b) of theAct, which lists the factors which mustbe taken into account in developingSection 301(b](1)(A) industrial effluentlimitations-from which Crown Simpsonand Louisiana-Pacific seek relief-conspicuously omits any reference towater quality."' Similarly, Section304(d)(1), which requires theAdministrator to publish information on"the degree of effluent reductionattainable through the application ofsecondary treatment" for the purpose ofdeveloping Section 301(b) effluentlimitations for municipal treatmentworks, contains no reference to thenature or quality of the receiving waters.Clearly, Section 301(b)(1)(A) effluentlimitations are not to be based onambient water quality considerations.The Committee hearings andCongressional debates show that therewas no misunderstanding of this vitalpoint by the Congressmen voting for thismajor bill.'1 It perhaps is best summedup in the remarks of RepresentativesClausen. a House conferee:

"Crown Simpson and Louisiana-Pacific arguethat the statutory phrase "effluent reductionbenefits" means water quality impact As will beshown below, this argument is entirely unfounded.See infra at pp. 31-32.

uSa e. a From the Senate Report: Theapplication of Phase I technology to industrial pointsources Is based upon the control technologies forthose sources and to publicly owned sewagetreatment works is based on secondary treatment Itis not based on ambient water qualityconsiderations. [Leg. IL at 1481 (emphasisadded).] The use of any river, lake. stream or oceanas a waste treatment system is unacceptable. [Leg.Hist. at 1425 (emphasis added].]

From the House Report: The determination of thebest practicable control technology currentlyavailable under Section 301(b)(1) is not to begoverned by the existing quality of the receivingwaters. [L*& Hist. at 78&

From the Conference Report: " "The intent ofthe Conferees Is that effiluent limitations applicableto individual point sources within a given categoryor class be as uniform as possible. TheAdministrator Is expected to be precise in hisguidelines under [Section 304(b)]. so as to assurethat similar point sources with similarcharacteristic regardless of their location or thenature of the water into which the discharge ismade. will meet similar effluent limitations. [teg.HisLat 3M(]

From Congressional Debates: Remarks of SenatorMuakie. birm-n Senate Subcommittee on Air andWater Pollution. LAI. Hit at 170. Remarks ofRepresentative Jones (Alabama]. House Conferee.Leg. Hist, at 231. Remarks of Senator Tunney. Leg.Hit at=.

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61628 Federal Register / Vol. 45, No. 182 / Wednesday, September 17, 1980 / Rules and Regulations

Now, and I emphasize this, such "bestpracticable control technology" will berequired even if the quality of the receivingwaters do [sic] not require the imposition ofeffluent limitations consistent with bestpracticable control technology. This is atechnological standard. [Leg. Hist. at 378].

Water quality standards remain avital part of the amended law, but theyare not to be used as a means to avoidcompliance with effluent limitationsguidelines and new source standards;the discharger must comply with allapplicable regulations. The followingappears in the Senate Public WorksCommittee Report:Section 301(b)(1](C) provides adequateauthoiity to apply new information toexisting water quality requirements andupgrade effluent limits accordingly.

In other words, wherever the Administratordetermines that application of the bestpracticable treatment requirements of Phase Iwill not provide for implementation ofexisting water quality standards forinterstate or intrastate streams, he musttighten the requirements against a source ofdischarge or group of sources. Leg. Hist. at1462.

The same is true'of water quality.relatedeffluent limitations under Section 302:Where application of the best availablecontrol technology ... will not attain...[the prescribed] standard of water quality,more stringent effluent limitations oralternative control strategies can be imposed[under Section 302].

Section' 302 is intended to furnish asupplemental basis for improving waterquality, and not be a cause for delay inexecuting the requirements of Section 301, orfor requiring any less stringent effluentlimitations. [Leg. Hist. at 1464, 1466 (emphasisadded)]."

Congressman Wright, a House conferee,expressed his belief that EPA and theStates would approach their regulatoryduties as the Senate had outlined. He

';See also Leg. Hist. at.791 (House Reportcharacterizes Section 302 as providing authority to"supplement any effluent limitations set pursuant to[Section 301(b)(2)l"and notes that proposed effluentlimitations under Section 302 "shall in no caseoperate to delay the application of any effluentlimitation established under Section 301"]; 209(Senator Tunney observes that effluent limitationsare only "a minimum measure of compliance "1; 246(Representatives Harsha. a House conferee, notesthat "The water quality requirements are notintended to be in lieu of the technologicalrequirements for 1977 but are required to be thebasis for water quality control if they are morestringent than the effluent limitations determined by'best practicable control technology currently , ,available'" and that "section 303. . is intended tobe a supplement to the 1977 and 1983requirements."), 1281,1283.1285 (Senator Bentsen, aSenate Committee member, notes that "[where aState or the Administrator finds [Section 301(b)(2)limitations] are insufficient under the criteria ofsection 302. tougher effluent limitations andalternative control strategies must be established.").

-stated that the combination oftechnology-based and water-qualitybased restrictions on discharges was "anew system of cleaning up streams by alimitation upon point discharges, a dualapproach [which] provides thatwhichever is the stronger shall apply."Leg. Hist. at 488.

The Supreme Court recentlyacknowledged the roles water qualityand technological feasibility play underthe FWPCA.

The reasons for the statutory schemes havebeen described as follows: "Such directrestrictions on discharges facilitateenforcement by making it unnecessary towork backward from an overpolluted body ofwater to determine which point sources areresponsible and which must be abated. Inaddition, a discharger's performance is nowmeasured against strict technology-basedeffluent limitations-specified levels oftreatment-to which it must conform, ratherthan against limitations derived from waterquality standards to which it and otherpolluters must collectively conform." EPA v.State Water Resources Control Board, 426U.S. 200, 204-205, 96 S.,Ct. 202, 2024. 48 L. Ed.2d 578 (footnotes omitted.

E. L duPont de Nemours and Co. v.Train, 430 U.S. 112, 97 S. Ct. 965, 972, n. 3(1977). 14

When Congress intended there to bedeviation from technology standardsdue to water quality considerations, itprovided definite indication of thatintent. Thus, Section 316(a) provides forrelaxation of technology-basedlimitations for thermal discharges, whenthe discharger can demonstrate that theenvironment will be protectedadequately. 5

It is in light of this strongCongressional sentiment against water-

1" Similarly, the U.S. District Court for the CentralDistrict of California recently observed that"Section 301 deals with the technological control ofpollutants at their source, without regard to theireffect on the immediate environment *."Pacific Legal Foundation v. Quarles Civil No. 77-521-HP (July 20.1977). slip op. at 8 (emphasisadded).

"5 That section states: With respect to any pointsource otherwise subject to the provisions of section301 or section 306 of this Act. whenever the owneror operator of any such source, after opportunity for'public hearing, can demonstrate to the satisfactionof the Administrator (or. if appropriate, the State)that any effluent limitation proposed for the controlof the thernal component of any discharge fromsuch source will require effluent limitations morestringent than necessary to assure the projection[sic] and propagation of a balanced, indigenouspopulation of shellfish, fish, and wildlife in and onthe body of water into which the discharge is to be,,made. the Administrator (or, if appropriate, the'State) may impose an effluent limitation under suchsections for such plant, with respect to the thermalcomponent of such discharge [taking into accountthe interaction of such thermal component of suchdischarge with other pollutants that will assure'theprotection and propagation of a balancedindigenous population of shellfish, fish. and wildlifein and on that body of water.

quality based exceptions from nationaltechnology standards that the CrownSimpson and Louisiana-Pacific appealsmust be considered, and against whichthe decisions of the California WaterResources Control Board must beviewed. To the extent that the BoardOpinion assumes regulatory authority torelax implementation of technology-based standards for reasons related towater quality, that Opinion is wrong.Efforts by commenters (particularlyHunton & Williams) to argue otherwiseare unpersuasive. There is nothinginconsistent between the ultimatecongressional goal of cleaner water andthe technology-based approach requiredby Section 301(b)(1J(A) of the Act. Asexplained by Senator Cooper, a SenateConferee:

This is a very direct approach. it Is apragmatic approach. I think we allacknowledge that, in the short run, It mayoften require larger expenditures thenpermitting discharges to the point where thewater can be shown to be degraded for someuse. But I think It is fair to say that after themost thorough examination, the committeaconcluded that the approach adopted In thebill promised to be a far more effectivemeans of attacking the problems of waterpollution control than the 1905 act. Leg. Hist.at 1304.While Hunton & Williams quoteRepresentative Jones' statement thatCongress did not wish "to credit oneenvironmental account and debitanother" so as to "negate the overallbenefit of the achievement of higherwater quality", Leg. Hist. at 232, theyignore the same congressman'sstatement that "With the exception of_modifications of section 301requirements for the discharges of heatwhich may be made pursuant to section316(a), the determination of the 'bestpracticable control technology currentlyavailable'is not to be based upon the'existing quality of the receivingwaters." Leg. Hist. at 231. (emphasisadded). Congress consciously adoptedthe Section 301 approach of uniformminimum levels of controls based ontechnological achievability rather thanreceiving water quality as its chosenmeans to attain the goals set out inSection 101 of the Act. t61 have no

"6Moreover, I think that It should be remembbrdthat the first enumerated goal set out In Section101(a) is "that the discharge of pollutants intonavigable waters be eliminated by 1985." Asthoughtfully explained by Senator Buckley this goalindicates a congressional belief that ultintatelynolevel of discharge of pollutants should be tolerable."Of course.'the bill Itself has abandoned theattempt, as an ultimale goal. of drawing a causalconnection between the discharge of pollutants andthe degradation of our streams. In effect, we aresaying we know so little about the ultimateconsequences of injecting new matter Into water

Footnotes continued on next page


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authority to defy that statutorymandate. 17

Crown Simpson and Louisiana-Pacificargue that this proceeding presents asituation in which the practicalproblems normally associated with awater quality related approach topollution control do not apply, and thattherefore an exception to thetechnology-based approach of Section301(b)(1)(A) is warranted. They contendthat Congress adopted the technology-based approach largely out of concernwith the difficulty of calculating anddefending water-quality basedrequirements, but that this concern doesnot apply here because the burden ofproof in a variance proceeding is on thedischarger rather than EPA and becausethe discharger must show a"fundamental" difference in waterquality impact. Similarly, the fact thatthis is a variance proceeding is said tomean that the congressional desire foruniformity of requirements will not becompromised and that theadministrative burden upon EPA willnot be excessive.

I do not share the companies'confidence that merely by castingmatters in the form of a variance that allproblems associated with a water-quality based approach evaporate. Atbest, problems of correlating effluentdischarge levels to water quality and ofmaintaining a measure of nationaluniformity may be reduced. But theseproblems will certainly remain severe.More important, regardless of whetheror not a water-quality based variancewould be meritorious, it would not beconsistent with the statute. Congresswas well aware of the possibility ofsuch a variance and adopted just such a

Footnotes continued from last pagethat it involves a presumption of pollution, and theway to insure ourselves against pollution is throughthe control and ultimate elimination of pollutants:'Leg. Hist. 1332.

"7Hunton & Williams also argue that my decisionin In Re Public Service Compony of NewHampshire (No. 76-7, June 17,1977) ("Seabrook") Isinconsistent with the legal analysis in this decision.In Seabrook at page 13 1 found thatSection 316(b).which concerns cooling water intake structures,does not require use of technology whose cost iswholly disproportionate to the environmentalbenefit to be gained. I see no inconsistency.Sections 301(b(1)(A and 316(b) are quite different.Section 316(b) is explicitly site-specific whileSection 301(b)(1](A). as discussed above, concernsuniform national standards. Moreover. Section316(b) concerns the environmental impact ofentrapment and entrainment while Section301(b)(1)(A) concerns reduction in the amount ofpollutants discharged by industrial point sources. Inestablishing effluent limitations guidelines for thepaper industry the Agency considered cost inrelation to effluent reduction benefits. But the factthat this analysis did not involve consideration oflocal receiving water quality is inconsistent withneither my decision in Seabrookor the languageand history of Section 301(b)(1)(A).

provision for thermal discharges inSection 316(a). The limitation of Section316(a) to heat was, in effect, a deliberaterejection by Congress of the kind ofscheme proposed by the two companieshere."

The question presented is one offundamental importance under the Act.Congress deliberately chose atechnology-based approach and fullyappreciated the fact that under certaincircumstances it would result intreatment beyond that needed to attainor maintain water quality. To retreatfrom this basic congressional scheme inthis proceeding would, despite CrownSimpson's and Louisiana-Pacific's blandassurances to the contrary, set aprecedent which would threaten theintegrity of the Act. 19

The March 17,1977, Order andOpinion of the California WaterResources Control Board does notdirectly dispute the interpretation of theFWPCA which I have presented.Instead, the Board appears to relyheavily on recent judicial discussion ofEPA's variance clause to support itsapproval of variances for CrownSimpson and Louisiana-Pacific.However, I cannot agree with theBoard's determination. One reason isthat I do not believe the cases supportthe legal position adopted by the Board.Second, I believe the Board's action ineffect is the granting of water quality-based variances, which is prohibited.

Essential to a careful review of theBoard's determination are the followingfindings by the Boardr

1. "There do not appear to be anyenvironmental benefits which will bederived by requiring these discharges tomeet either the [California State] OceanPlan or Guideline limitations for BOD orpH." (Board Opinion p. 9)

2. "In appraising the evidence relatedto non-water quality environmentaleffects and energy requirements theBoard must at least in part appraise thesignificance in terms of the potentialenvironmental benefits to be gained as aresult of the imposition of the EPAGuidelines. In this case we haveunrefuted evidence presented by thedischargers and concurred with by theRegional Board Executive Officer thatthe existing discharges result in no

"Congress is now considering amendments tothe Act which would provide relief to publiclyowned treatment works discharging to marinewaters. See H.. 3199. S.1952. These amendmentswould not apply to industrial dischargers.

"While the companies assured the State thattheir arguments applied only to marine discharges,see supra at p. 14. the fact Is that their argumentslogically apply to discharges into any body of waterwith high dispersion characteristics, and thereforethese arguments represent an assault upon one ofthe basic elements of the 1972 amendmants.

water quality problems. Secondly, thereis no expected or predictable waterquality improvement to be achieved asthe result of imposition of the EPAGuidelines. In light of these facts (themagnitude of the chemical and energyrequirements, and the potential air andland management problems associatedwith sludge disposal) we can onlyconclude the evidence justifies thevariance requested." (Board Opinion pp.16-17).

The variances were granted notbecause the non-water qualityenvironmental impacts of BPT were ofthemselves fundamentally different fromnthe impacts considered in thedevelopment of the effluent limitationsguidelines, but instead because thisfactor in relation to the absence ofwater quality problems was deemed tobe fundamentally different. I cannot findany statement by the State Board thatthe non-water quality environmentalimpacts (i.e. sludge, energy etc.] of BPTfor the two mills are fundamentallydifferent in and of themselves.20

The only aspect of the CrownSimpson and Louisiana-Pacific situationwhich was found different from mostother mills is, in effect, that theydischarge directly into the ocean. Thecompanies candidly admitted that this isthe "fundamental" difference in theState proceedings.21

The issue resolves into askingwhether water quality considerationsare valid grounds for variances fromeffluent limitations based upon bestpracticable technology. The answer tothis, as the California Board itselfstated, is that it is not a valid basis:

The argument advanced by the dischargers(variance based on type of the receivingwater) is. in our opinion, the essence of whatCongress intended to avoid with the FederalWater Pollution Control Act Amendments of

'The problems associated with sludge disposalon the Samoa penisula was mentioned by the Boardas if this were possibly a fundamentally differentfactor. But the record is ambiguous on the point. Thecompanies did not rely on this difference in theirrequests for variances to the State. And the Statenever ex Iidy found sludge disposal problems atthe two mills to be fundamentally different fromthose problems considered by EPA in developingthe regulations,

21 See supra at p. 14. Witnesses for the companies.and counsel in their behalf. have stated that thesemills were never considered by EPA in draftingnational regulations. The State Board opinim alsostates this (p. 5). According to a key to theidentificalon of plants used in the preparation of theDevelopment Document, which key has been madeavailable to all who have requested access--including Crown Simpson and Loauia-Pacific.both mills were evaluated by EPA. For example onpage 1N of the Development Document. plant 1s(Crown S m pson) and plant 186 (Lousiana-Pacific)ar listed. Data for production. flow. BODS, and TSSfor the Crown Simpson mill were used in calculatingnational limitations. There were insufficient data forLoulslana.Pacific's mill to be used this way.

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61630 Federal Register / Vol. 45, No. 182 / Wednesday, September 17, 1980 / Rules and Regulations

1972. The legislative historyof theAmendments reflects a conclusion thatregulation of pollution based on a plant byplant basis was unworkable from a practicalregulatory standpoint. Congress based theAmendments on predefined minimum levelsof treatment technology which were to beapplied regardless of the type of receivingwater. (Opinion, p. 6).

My authority to provide for variancesfrom BPT flows from, and is inherent in,my authority to promulgate effluentlimitations guidelines under Sections301(b)(1)(A) and 304(b)(I)Y2 Thus, inconsidering variances from effluentlimitations I am as constrained by thelanguage and legislative history of theAct with regard to this issue as I am inpromulgating the national limitations.Variances can only be based onfundamental differences in factorswhich are appropriate to technology-based regulations and limitationsderived through the variance processmust still meet the congressionaldefinition of best practicable controltechnology currently available.

I therefore reject as unsound theargument by Crown Simpson andLouisiana-Pacific that because-variancesfrom BPT are not explicitly mentioned inthe Act or its legislative history that Imay completely ignore the statute andthe intentfons of its drafters inadministering the variance provision.But in so doing I do not agree that I havereiidered the variance provisionmeaningless. I find only that thevariance provision cannot be used to dowhat Congress clearly forbade. Thisdoes not mean that where afundamental difference can be shownwith respect to a factor other than waterquality that a variance may not be -

appropriate. =

The State Board also recognized thatwater quality considerations cannot beutilized to grant a variance through aweighing of costs and benefits withregard to an individual mill. The Boardproperly rejected the companies'contention that while their costs ofcompliance are not substantiallydifferent 2 from the costs EPA found

2'For this reason it is entirely appropriate thatvariances from BPT be subject to my approval.

- 2The two companies charge that by rejectingtheir requests I have established that "it is neverappropriate to grant a variance from therequirement of installing a secondary treatmentfacility." If a fundamental difference can be shownin a factor (other than Water quality) and a degreeof treatment less than "secondary" would beappropriate under the Act, then such a reducedrequirement may be established. But whateverrequirement is established for a discharger, whetheror not by variance and whether or not it represents"secondary" treatment, it must. for the July 1. 1977phase of the statutory program, represent "bestpracticable control technology currently available".

21 Opinion p. 14.

would be sustained on an industry-widebasis, their costs weighed against thelocal water quality benefits justify avariance.

The legislative History of the Actfirnmly rejects any individualized cost/benefit analysis, and no court has everrequired it. 5

Crown Simpson and Louisiana-Pacificalso contend that the phrase "effluentreduction benefits" in Section304(b)(1)(B) means "receiving waterquality improvement" and, further, thatEPA conceded as much in'its brief filedin Weyerhaeuser Cov. Castle (No. 76-1674) now pending in the U.S. Court ofAppeals for the D.C. Circuit. But, asexplained by Senator Muskie: .

The modification of subsection 304(b](1) isintended to clarify what is meant by the term"practicable." The balancing test betweentotal cost and effluent reduction benefits isintended to limit the application 6ftechnology only where the additional degreeof effluent reduction is wholly out ofproportion to the costs of achieving suchmarginal level of reduction for any class orcategory of sources.

The Conferees agreed upon this limitedcost-benefit analysis in order to maintainuniformity within a class and category ofpoint sources subject to effluent limitations,and to avoid imposing on the Administratorany requirement to consider the location ofsources withina category or to ascertainwater quality impact of effluent controls, orto determine the eonomic impact of controlson any, individual plant in a singlecommunity.Leg. Hist. at 170 (emphasis added). Seealso Leg. Hst. at 304, 309 (Conf. Rept.).

Thus, it is clear that consideration ofeffluent reduction benefits does notentail consideration of local receivingwater quality improvement. Nothing inEPA's brief in Weyerhaeuser is to thecontrary.

26

2See Leg. HisL at 170 (statement of SenatorMuskie). See also Leg. Hist. at 304, 309 (Conf. Rept.}.The Fourth Circuit in Appalachian Power Co. v.Train, 545 F. 2d 1351 (4th Cir. 1976), although itfound the variance clause too narrow, noted that:"In requiring that EPA give weight to the relevantstatutory factors in developing a subsequentvariance provision, we in no way intend to implythat EPA's regulations must provide for a detailedcost-benefit analysis at the permit granting stage.As we indicated in [duPont v. Train, 541 F. 2d 1018(4th Cir., 1976)], an overall cost-benefit analysis foreach category or subcategory satisfies the mandateof § 304 in this regard. The variance provisionshould, however, allow the permit issuer to considersignificant cost differentials of the particular pointsource involved." 545 F. 2d at 1360, n. 23. In arguingthat Appalachian Power stands for the propositionthat water quality benefits must be considered invariance decisions Crown Simpson and Louisiana-Pacific ignore this (and other) pertinent language ofthat case.

2On pages 50-51 of that brief any notion to thecontrary was explicitly repudiated: "Petitioner'ssuggestion that the method by which the pollutantparameters for the pulp and paper industry wereselected is inconsistent with EPA's argument that it

Moreover, the DevelopmentDocument, at page 566, shows that EPAanalyzed "Costs of BPCTCA vs. EffluentReduction Benefits" not In terms ofreceiving water quality improvement butin terms of the amount of pollutionremoved from discharges.

Where the State Board erred was Infinding grounds for-variances on thebasis of non-water qualityenvironmental impacts. As I havealready observed, the Board did not'findthese impacts, of themselves, to befundamentally different from theimpacts considered on a national basis.Instead, the Board found these impactsto be the basis for variances whenweighed against, or considered in lightof, the lack of environmentalimprovement. Crown Simpson andLouisiana-Pacific argue in theircomments that the State did not relyupon local water quality considerationsin its decision and that it did in fact finda fundamental difference in terms ofnon-water quality impact alone. But thecompanies cite only to Stateobservations that there would be non-water quality environmental impacts asa result of compliance with EPA effluentlimitations guidelines, not to any findingof fundamental difference on thispoint.

2 7

may not base effluent limitations on receiving waterquality Is also without merit. As discussed at lengthin Section VI of the Final Development Document,EPA based its selection of pollutant parameters onits consideration of a number of factors, Petitionerscorrectly note that one of those factors was theenvironmental harm caused by the particularpollutant. But it must be emphasized that theAgency's evaluation of that factor was limited to aconsideration of harmfulness In a generic sense.That analysis is far different from the site-specificwater quality assessment which petitioners wouldrequire pf the Agency. EPA has never required, norhas any Court, that the pollutants It regulates havean equally harmful effect In all water bodies, ThatBOD and pH are generally harmful Is not disputedby petitioners and is documented In the record,

"Moreover, harmfulness was only one element InEPA's selection of BOD and p- for the paperindustry. At least as important a factor was thehistoric measurement of those two parameters bythe industry itself-including mills with marinedischarges. BOD was selected for the additionalreasons that the BOD5 test provides an Indirectmeasure of other pollutants In mill waste streamsand that systems for the removal of 110D alsoremove these other, indirectly measured pollutants,including long term BOD, oil and grease, foam, anda number of compounds which contribute totoxicity. There is nothing Inconsistent between thisanalysis and the general legislative historyforbidding the establishment of effluent limitationsbased on the assimilative capacities of receivingwaters." (Footnotes and citations omitted,)

"Extensive analyses of the non-water qualityenvironmental impacts of the efluent limitationsguidelines for the pulp and paper industry, Includingsludge landfilling and incineration, air pollution,noise effects, and energy Impacts, were performedby EPA and are reflected in the DevelopmentDocument. See, e.g., pages 349-354, 433-440. 400-483, 490-494, 504-500, 512 524-538. Perhaps onereason why no finding of fundamental difference in

Footnotes continued on next page


Federal Register / Vol. 45, No. 182 / Wednesday, September 17, 1980 1 Rules and Regulations 61631

I find the State's conclusion as to thepropriety of granting the variances to bebased on non-water qualityenvironmental impacts only in light ofwater quality considerations, and notindependently.28

First of all, the Act does not requirethat non-water quality environmentalimpact (or energy requirements) beweighed against environmental benefit.This factor is only to be given

Footnotes continued from last pagenon-water quality environmental impact alone wasfound by the State was the testimony of Dr. HermanR. Amberg, Director of Environmental Sciences forCrown Zellerbach Corporation (part owner of theCrown Simpson Company, a witness on behalf ofLouisiana-Pacific and Crown Simpson. In responseto questions posed by Mr. Sam Johnson, a staffengineer for the State, at the December 22 1976,hearing he said. (Tr. 79. 80 82):

Mr. JOHNSON: Q. With regard to the issue ofvariance fundamental differences, is there anydifference in your plant and the plants that wereexamined by EPA with regard to age of the facilitiesthat would support a variance?

A. No, sir.Q. The process employed?A. It's essentially the same process.Q. The engineering aspects of the control

technology?A. I don't think so. rm not that familiar with the

25 mills that they used.Q. The process changes required by the

guidelines?A. rm not sure.Q. Is the installation of the technology specified

by EPA in the development document as BPCTCAwithin the economic capacity of your company?

A. Yes.Q. How does your plant compare in the area of

non-water quality environmental impacts with theplants that EPA utilized in developing theguidelines?

A. I don't think there's that much difference.However, I should point out, too, that those plantsthat EPA considered, there was a need forsecondary treatment in that they did improve waterquality. There was a bona fide need forimprovement of the water quality while here therewill be no benefit as far as water quality isconcerned.

Dr. Amberg's comments apply equally to the twomills. His counsel asked him- "And just to clarify forthe entire part of your testimony, are the Louisiana-Pacific and Crown Simpson Mills sufficientlysimilar so that what you have testified to withrespect to Crown Simpson would equally apply toLouisiana-Pacific?' -is response was "Yes." (Tr. 67,68.1

"However, I do find well taken the companies'admonition that I should not make a finding that theState couldnot had it properly interpreted the Act,have found fundamental difference with regard tonon-water quality environmental impact. I have notindependently reviewed the factual record. Itherefore express no opinion as to whether the twomills could be found fundamentally different interms solely of non-water quality environmentalimpacL This is a matter properly addressed in thefirst instance by the State. Further, this decisiondoes not stand for the proposition that fundamentaldifference in this factor cannot justify a variance.Concerns along this line expressed by SouthernCalifornia Edison Company and others are based ona misunderstanding of the legal analysis which isthe basis for my denial of the variance requests atissue here. There is no reason why, in a proper case,a fundamental difference in non-water qualityenvironmental impact could not justify a variance.

"consideration". Section 304(b)(1)B)."Moreover, it should be obvious thatTihere this factor is deemedfundamentally different, not in its ownright but only because water qualityeffects are different, then the distinctionbetween a variance granted on thisbasis and one granted directly for waterquality reasons is only a form of words.

A water quality based variancecannot be granted merely because it isin the guise of a non-water qualityenvironmental impact based variance.Appalachian Power Co. v. Train, supra,does not support the State's Opinion onthis point. Nothing in that court'sopinion authorizes any balancing ofnon-water quality benefits with waterquality benefits, or any localizedconsideration of water qualityimprovement. In fact, the court rejecteda request by Consolidated EdisonCompany that it be relieved frommeeting the effluent limitations for itsplant because of the high cost of non-water quality environmental impacts ofthe regulations as applied to it asweighed against an asserted lack ofwater quality improvement in New YorkHarbor. The court responded."[S]o far as [Con Ed's] petition may be readas a request for leniency because of thealready polluted condition of the harbor. itmust be rejected. The 1972 amendments tothe statute changed the system from that ofcontrol of the quality of the body of water toeffluent limitations as we have before noted.545 F. Zd at 1378.

Moreover, as noted previously, theFourth Circuit specifically noted that"we in no way intend to imply thatEPA's regulations must provide for adetailed cost-benefit analysis at thepermit granting stage." See note 27supra. I do not understand how theopinion in the Appalachian Power casecan be held to stand for a principlespecifically disavowed by the Court.e In

" Crown Simpson and Louisiana-Pacific arguethat non-water quality environmental impact canonly be considered by means ora balancing withwater quality improvement and that myinterpretation of Section 304(b)(li)1) Is strained. Onthe contrary. I read Section 304(b})(B) quitefaithfully. Where Congress intended one factor to beconsidered In relation to another, such as cost andeffluent reduction benefits, it so specified, Where itdid not do so I take the omission to be deliberate.

3"In any event, the continuing vitality of thecriticism of the variance clause in AppalochianPower is now in doubt in light of the recent decisionof the Supreme Court in E L duPont do NAeoursand Co v. Train, 430 U.S. 112, 97 S. CL 95 (1977). Inthat case the Supreme Court reviewed an earlierdecision of the Fourth Circuit concerning EPAeffluent limitations and noted that "considerstion ofwhether EPA's variance provision has the properscope would be premature." 97 S. Ct. at 975. n. 19.Seaolso. NaturalResources Defense Council v.EPA, 537 F. Zd 642, 847 (Zd Cir. M);, AmericanPetroleum Institute v. EPA. 540 F. 2d 1023 (l0th Cir,1978).

fact, the Second Circuit squarely facedthis issue and held that:The EPA... need not document specificallythe benefits to society from the curtailment ofpollutants from a particular point source.Congress has established as a national goalthe complete elimination of pollutantdischarges by 1985.... The EPA must leadindustry toward that goal through the 1977and 1983 standards, and the agency'sdiscretion is necessarily broad.California ,-Hawaiian Sugar Companyv. Environmental Protection Agency 553F. 2d 280, 289 (CA. 2, April 14, 1 977 ).31

ConclusionProviding relief from technology-

based effluent limitations guidelines duesolely to the characteristics of particularreceiving waters is not within myauthority. I am convinced that the lawdoes not permit exemption of CrownSimpson and Louisiana-Pacific fromeffluent limitations guidelines on therecord before me, in which I discern thetype of receiving water as being the"fundamental difference" betweenCrown Simpson's and Louisiana-Pacific's Samoa Peninsula mills on theone hand, and other pulp and papermills, on the other.

Accordingly, I deny the variancerequests and disapprove the effluentrestrictions contained in NPDES Permit -

No. CA0003= paragraph B4, andNPDES Permit No. CA 0005894,paragraph B5.

Dated: September 15, 1977.Douglas Costle,Administrator.[FR De. 8-20544 Fied 9-15-M &4s amiBlIdO CODE 658"1-U

FEDERAL COMMUNICATIONS

COMMISSION

47 CFH Part 68

Connection of Terminal Equipment tothe Telephone Network- Correction

AGENCY Federal CommunicationsCommission.ACTION: Correction to final rule.

SUMMARY: The FCC is correctingtypographical errors that appeared in itsFirst Report and Order regardingconnection of telephone equipment.systems, and protective apparatus tocertain private line services. Correctionis being made to § 68.306, § 68.310, and§ 68.312.EFFECTIVE DATE: April 30,1980.

31 See also FMC Corp. v. TramL. 53 F. 2d9M 9W3(4th Cir. 197a in which the court rejected theargument that EPA can only regulate pollutantswhich it finds to be harmful to receiving waters


Documents

17, 1980 61617 with applicable tariffs. Copies of...D.C. 20460, 202-472-5746. SUPPLEMENTARY INFORMATION: EPA is under a court order to promulgate regulations establishing ocean discharge