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In re Dominion Energy Brayton Point, L.L.C.

02/01/2006

Case Number:NPDES Appeal No. 03-12
ELR Citation:36 ELR 41299

Dominion Energy Brayton Point, L.L.C. (Petitioner) seeks review of a final National Pollutant Discharge Elimination System permit decision (Final Permit) for Brayton Point Station (BPS) issued by the U.S. Environmental Protection Agency (EPA) Region 1 (Region) on October 6, 2003, pursuant to the Clean Water Act (CWA or Act), 33 U.S.C. §§1251-1387. The Final Permit authorizes BPS, which is a power plant located in Somerset, Massachusetts, near the border with Rhode Island, to withdraw water from Mount Hope Bay and its tributaries for use by the facility for cooling purposes, and to discharge the then-heated water into the Bay. The Final Permit significantly restricts the amount of water that may be withdrawn and that may be discharged as compared to BPS's current operating conditions. As a result, the Final Permit's limitations will effectively require that all four of BPS's units be retrofitted from once-through, open-cycle cooling systems, to closed-cycle cooling systems that recycle the cooling water, likely costing in the range of $100 million dollars.

The intake and thermal discharge limitations are principally governed by two independent sections of the statute: CWA §316(a), which governs BPS's thermal discharges and pursuant to which the Region granted BPS a variance from the technologybased standards of CWA §301; and CWA §316(b), which governs BPS's cooling water intake structures (CWISs). 33 U.S.C. §§1326(a), (b). Significantly, according to Petitioner, the conditions imposed under each of these independent sections of the statute effectively require Petitioner to convert to closed-cycle cooling. In its petition for review (Petition), Petitioner principally challenges those permit conditions limiting BPS's thermal discharges and cooling water intakes under CWA §§316(a) and (b), 33 U.S.C. §§1326(a) and (b), respectively.

On February 19, 2004, the Environmental Appeals Board (Board) granted review of the Petition, allowing for additional briefing. During the course of these proceedings, the Board has granted amicus curiae (amicus) status to seven entities: the
states of Massachusetts and Rhode Island, the Conservation Law Foundation, Save the Bay, the Utility Water Act Group (UWAG), the Taunton River Watershed Alliance, Inc., and the Kickemuit River Council. On July 23, 2004, the Board denied a request from Petitioner for an evidentiary hearing. In re Dominion Energy Brayton Point, LLC (formerly USGen New England), Brayton Point Station, Order Denying Motion for Evidentiary Hearing, NPDES Appeal No. 03-12, slip op. at 6-10 (EAB July 23, 2004), 11 E.A.D. ___. Oral argument on this matter was held on September 9, 2004. This decision
addresses the substantive issues raised by the Petition and also resolves all other outstanding motions filed in the course of this permit appeal. The Board's major holdings are summarized below.

Held: The Final Permit is remanded as to the following issues:

• The Region's selection of five days as the frequency for temperature exceedance used in deriving the thermal effluent conditions under CWA §316(a) in BPS's Final Permit. The Board finds that the Region did not provide more than a conclusory reason for its selection of this value. Without an articulation of its analysis, the Board cannot properly perform a review of the analysis and cannot determine whether it meets the requirement of rationality. On remand, the Region must either supplement the record with its rationale on this point or modify this value. If the Region selects the latter course, the Region must provide a sufficient explanation for the new value.

• The Region's noise impact analysis--which is an element of the Region's "best technology available" determination under CWA §316(b)--is being remanded to the Region because the Board cannot determine whether Petitioner's concerns about the new noise analysis that the Region had generated in response to comments on the draft permit are legitimate given the current state of the record. On remand, the Region must supplement its response to comments with a rationale that addresses the concerns Petitioner raises on appeal regarding the new noise impacts analysis or modify the permit requirements, as appropriate.

• The production foregone re-analysis performed by one of the Region's consultants in response to comments does not appear to be attached to the consultant's report summary. Because the Region evaluated and relied on this document in developing the Final Permit, the Board concludes that it should properly be part of the administrative record. Thus, on remand, the Region is directed to place its consultant's re-analysis in the administrative record if it is not currently in the administrative record.

• On remand, the Board also directs the Region to amend the Final Permit to correct a typographical error regarding the expression of total iron limits, if this error has not, as yet, been changed via the minor permit modification process.

The Board finds no clear error with respect to all other issues raised in the Petition, including the following major issues:

• The Region did not clearly err in its analysis and approach in determining the "best available technology economically achievable" (BAT) for BPS under CWA §301, 33 U.S.C. §1311. The Board rejects the Region's argument that this issue is moot, but finds that the Region's determinations on this issue appear rational in light of all the information in the record. Petitioner has failed to demonstrate that the Region clearly erred in its BAT analysis or in its consideration of costs in its §301 BAT analysis.

• The Region did not clearly err in its determination that Petitioner failed to demonstrate that Petitioner's proposed variance under CWA §316(a) met the applicable standard, which requires effluent limitations stringent enough to assure protection and propagation of a balanced indigenous community in the receiving waters. In coming to this conclusion, the Board finds no clear error in the Region's determination regarding the balanced indigenous population under CWA §316(a) or in the general approach used by the Region in its biological assessment.

• Except as to the Region's selection of a monthly exceedance value of five days, which the Board remands for a further explanation and with respect to which the Board necessarily reserves judgment, the Board finds that the Region did not clearly err in the various determinations it made in establishing a variance under §316(a). These determinations include the Region's general approach in performing a biological assessment, its selection of a cutoff temperature of 24EC, its selection of 10 percent for the percentage of Bay that may be impacted by the effluent, and other factual issues underlying its development of the variance.

• The Region's application to BPS of the "best technology available for minimizing adverse environmental impact" (BTA) standard under CWA §316(b), using the Region's best professional judgment, is not clearly erroneous. (This conclusion is subject to the Region satisfactorily responding to the noise impact analysis issue being remanded.) We do not find persuasive Petitioner's arguments that the Agency has rejected closed-cycle cooling as BTA, that the Agency's long-standing practice has been that BTA for existing plants is open-cycle cooling, or that Petitioner has been subject to impermissible "disparate treatment."

• Petitioner concedes that the Agency's recent rulemaking governing CWIS at existing power plants (referred to as the "Phase II Rule"), which was issued after the Region had issued the Final Permit and while this appeal was pending before the Board, by its terms, does not apply to this permit. The Board concludes, to the extent that it may have the discretion to remand permit conditions for reconsideration in light of legal requirements that change before a permit becomes final agency action, it is not appropriate to remand the permit to the Region in this case for several reasons. These reasons include the fact that the Phase II Rule clearly was not intended to be applied and does not apply retroactively, the rule is currently being appealed in the federal courts, what BPS would be required to do under the Phase II Rule (had it been applicable) is unclear, and requiring application of the Phase II Rule BTA standard would invariably lead to an extended further delay, with substantial continued harm to Mount Hope Bay in the interim.

• Under the CWA, the Region is required to apply the more stringent of the §316(b) technology standard or any applicable state water quality standard (WQS). The Region concluded that both Massachusetts' and Rhode Island's WQSs essentially require closed-cycle cooling at BPS. The Board concludes that this determination was not clearly erroneous, and thus Massachusetts' and Rhode Island's WQSs constitute additional, independent bases for the cooling water intake limits in BPS's Final Permit.

• The Board does not find the Region's approach in considering costs and in performing the "wholly disproportionate" cost analysis under CWA §316(b) in the development of BPS's permit to be clearly erroneous. With respect to specific challenges to various cost estimates made by the Region, the Board concludes that Petitioner has failed to demonstrate clear error on the part of the Region.

• With respect to the Region's biological benefits determinations under CWA §316(b), the Board finds that the Region did "duly consider" the issues raised in the comments and that the Region's approach in estimating biological benefits appears rational in light of the information in the administrative record. In addition, the Board does not find the Region's overall approach to the benefits analysis, including its decision to consider and give weight to invariably lead to an extended further delay, with substantial continued harm to Mount Hope Bay in the interim.

• Under the CWA, the Region is required to apply the more stringent of the §316(b) technology standard or any applicable state water quality standard ("WQS"). The Region concluded that both Massachusetts' and Rhode Island's WQSs essentially require closed-cycle cooling at BPS. The Board concludes that this determination was not clearly erroneous, and thus Massachusetts' and Rhode Island's WQSs constitute additional, independent bases for the cooling water intake limits in BPS's Final Permit.

• The Board does not find the Region's approach in considering costs and in performing the "wholly disproportionate" cost analysis under CWA §316(b) in the development of BPS's permit to be clearly erroneous. With respect to specific challenges to various cost estimates made by the Region, the Board concludes that Petitioner has failed to demonstrate clear error on the part of the Region.

• With respect to the Region's biological benefits determinations under CWA §316(b), the Board finds that the Region did "duly consider" the issues raised in the comments and that the Region's approach in estimating biological benefits appears rational in light of the information in the administrative record. In addition, the Board does not find the Region's overall approach to the benefits analysis, including its decision to consider and give weight to qualitative non-use benefits and nonmonetized benefits, to be clearly erroneous.