Appalachian Power Company v. Train

No. 74-2096 (4th Cir. July 16, 1976)

ELR Digest

Petitioners seek review, in an action brought under § 509(b)(1) of the Federal Water Pollution Control Act Amendments of 1972 (FWPCA), 33 U.S.C. § 1359(b)(1), of EPA regulations promulgated under §§ 301, 304, 306 and 316(a), 33 U.S.C. §§ 1311, 1314, 1316 and 1326(a), establishing effluent limitations for thermal discharges from steam electric generating plants. An examination of the regulations leads the court to conclude that several provisions fail to meet the requisite standards and must therefore be remanded for reconsideration.

The agency's action must be judged under the "arbitrary and capricious" standard of review prescribed by § 706(2)(A) of the Administrative Procedure Act, 5 U.S.C. § 706(2)(A), and explicated in Appalachian Power Co. v. EPA, 477 F.2d 495, 3 ELR 20310 (4th Cir. 1973). The grounds upon which the agency acted must be clearly disclosed in, and substantiated by, the record. Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 1 ELR 20110 (1971). Congress vested EPA with the power to choose among alternative strategies for pollution control, but the agency must ordinarily be held to at least literal compliance with the provisions of the FWPCA.

The court rejects petitioners' argument that the regulations are excessively rigid in that they establish nationally uniform effluent limitations, pointing to its earlier decision in E.I. DuPont de Nemours & Co. v. Train, 6 ELR 20371 (4th Cir. Mar. 10, 1976) that such limitations are only presumptively applicable. Petitioners are correct, however, in claiming that the variance clause provisions, 40 C.F.R. §§ 423.12(a), 423.22(a) and 423.32(a), are unduly restrictive because they allow only technical and engineering factors, not the cost of control measures, to be considered in granting a variance. The requirements for backfitting existing power plants with closed cycle cooling, 40 C.F.R. § 423.12(1)(n), as amended in 40 Fed. Reg. 7095, are invalid, since the record is devoid of evidence that EPA determined, through an explicit consideration of the benefits it will produce in relation to the associated costs, that backfitting will result in "reasonable, economically achievable" progress toward the national goal of eliminating the discharge of all pollutants. On remand, the agency must state benefits or expected benefits for the various alternatives considered, and explicate the basis for any scientific opinion or assumption upon which it relies. EPA must also fully consider any changes in the projected availability of capital for financing backfitting or in electricity demand projections. The agency inadequately explained its view that it lacked legal authority to exempt categorically from the backfitting requirements a number of nuclear power plants for which NEPA environmental impact statements has been prepared.

Restrictions on the use of new and existing cooling lakes, 40 C.F.R. § 423.13(1), as amended in 40 Fed. Reg. 7095, 40 C.F.R. §§ 423.15(1) and 423.25(1), must likewise be invalidated in view of EPA's recognition in other documents that they represent an acceptable method of closed cycle cooling, and in view of the agency's failure to fully evaluate the total environmental impact that the use of cooling towers or other recirculating systems which substantially increase water consumption would have, especially on the more arid regions of the nation. In the absence of statutory language or legislative history indicating that compliance with state water quality standards should be deemed to satisfy the requirements of § 316(a), the court upholds EPA's position that specific site conditions must determine whether the proposed effluent limitations are more stringent than necessary to assure propagation of a balanced, indigenous population of fish and wildlife. EPA's limitations on suspended solids in rainfall runoff from construction and material storage areas, 40 C.F.R. § 423.40-.43, are remanded with directions that the agency clarify their scope, apply them to "point sources" only, consider the costs of controlling ash pile and construction site runoff, and establish that the required control techniques can achieve the required effluent reduction. The court also finds that EPA has failed to show that dry fly ash transport systems are a "demonstrated" form of technology available to all sources, and the prohibition on water transport, 40 C.F.R. §§ 423.15(e) and 423.25(e), must therefore be re-examined by the agency. Noting that EPA has no power to require removal of pollutants already present in a plant's intake water, the court finds it unnecessary to remand provisions on this point, 40 C.F.R. § 125.28, and instead simply construes them to allow a credit for pollutants already in the water and thus impose net rather than gross discharge standards.

Judge Breitenstein dissents from the court's remand of the variance provision, contending that it allows consideration of economic capability, and that in any event the court should await a concrete factual controversy before ruling on the question.

The full text of this opinion is available from ELR (93 pp. $11.73, ELR Order No. C-1080).

Counsel for Petitioners
George C. Freeman, Jr.
Turner T. Smith
William A. Anderson
Andrea S. Bear
Hunton, Williams, Gay & Gibson
700 East Main St.
Richmond VA 23212
(804) 649-3661

Spencer C. Relyea
Worsham, Forsythe & Sampels
2001 Bryan Tower, Suite 2500
Dallas TX 75201
(214) 748-9365

Counsel for Respondent
Thomas F. Bastow
Edmund B. Clark
Alfred T. Ghiorzi
Department of Justice
Washington DC 20530
(202) 737-8200

Ray McDevitt
Bruce Diamond
Office of General Counsel
Environmental Protection Agency
Washington DC 20460
(202) 755-2500

Widener, J., joined by Rives^* and Breitenstein,^** JJ.

[OPINION OMITTED BY PUBLISHER IN ORIGINAL SOURCE]

* Senior Circuit Judge, Fifth Circuit, sitting by designation.

** Senior Circuit Judge, Tenth Circuit, sitting by designation.