Federal Court Partially Vacates U.S. EPA’s Steam-Electric Power Plant Effluent Limitations Guidelines

Environmental Alert

(by Donald Bluedorn and Gary Steinbauer)

On April 12, 2019, the Fifth Circuit Court of Appeals issued a decision in Southwestern Electric Power Company, et al. v. EPA, addressing pending claims in consolidated petitions challenging the U.S. Environmental Protection Agency’s revised effluent limitations guidelines for the Steam Electric Power Generating Point Source Category (ELGs).  The Opinion vacated the “legacy” wastewater and “combustion residual leachate” best available technology economically achievable (BAT) standards promulgated by EPA in 2015.  A copy of the Opinion is available here: http://www.ca5.uscourts.gov/opinions/pub/15/15-60821-CV0.pdf.

Under the Clean Water Act (CWA), EPA is responsible for establishing nationwide technology-based standards to govern discharges of pollutants by specific industrial categories.  See 33 U.S.C. § 1314(b).  In November 2015, EPA promulgated revisions to the ELGs after a multi-year study of wastewater management and treatment technologies used by steam-electric power plants since the ELGs were last revised in 1982.  EPA revised the ELGs to regulate six separate wastewater streams: (1) flue gas desulfurization (FGD) wastewater; (2) fly ash transport wastewater; (3) bottom ash transport wastewater (BATW); (4) flue gas mercury control wastewater; (5) combustion residual leachate (leachate); and (6) gasification wastewater.  In addition, the ELGs regulate “legacy” wastewater, which consists of one or more of the above-referenced wastewater streams (commingled or separate) if they are generated before the date determined by the state permitting authority.  For leachate and “legacy” wastewaters, EPA selected impoundments as BAT-level controls.  By contrast, EPA affirmatively rejected surface impoundments as BAT for the other five wastewater streams and imposed limits based on other forms of wastewater treatment or management.

In granting the environmental groups’ challenge to the BAT “legacy” wastewater limits in the ELGs, the Court repeatedly emphasized what it felt was a false distinction that EPA created between “legacy” wastewater and the other wastewater streams regulated under the ELGs.  As noted, “legacy” wastewaters are defined solely by when the wastewater was generated.  Relying primarily on EPA’s inconsistent determinations that impoundments constitute BAT for “legacy” wastewaters yet are considered ineffective and outdated (i.e., not BAT) for the same subsets of wastewaters, the Court held that EPA’s BAT determination for “legacy” wastewaters was arbitrary and capricious.

The Court also rejected EPA’s argument that it lacked data to justify adopting a more advanced treatment technology as BAT for “legacy” wastewaters.  In the rulemaking record for the ELGs, EPA acknowledged that multiple power plants have been using chemical precipitation to treat “legacy” wastewaters.  The Court also cited numerous instances within the rulemaking where EPA concluded that impoundments are ineffective at removing toxic pollutants.  Notwithstanding the typical deference EPA receives in setting BAT limitations, the Court held that EPA’s undisputed statements and scientific conclusions from its own rulemaking record were enough to conclude that using surface impoundments as BAT for “legacy” wastewaters was unlawful under the CWA.

The Court essentially came to the same conclusion when it vacated EPA’s BAT limitations for leachate.  For leachate, EPA adopted impoundments as the technology for BAT-level control in its 2015 revisions; the same technology EPA adopted as the BPT-level of control for leachate when it revised the ELGs in 1982.  The CWA provides that BPT is to be the “average of the best performance levels of existing plants,” whereas BAT is to represent the performance of the “single best-performing plant in an industrial sector.”  According to the Court, EPA unlawfully conflated the more stringent BAT limits with the less stringent BPT when it adopted the 1982 BPT limits at BAT for leachate in 2015.  The Court also rejected EPA’s attempt to justify the leachate BAT determination based on the relatively small amount of pollutants discharged in leachate and the stricter BAT requirements for the other, more voluminous waste streams.  Consequently, even if the CWA allowed EPA to establish BAT for leachate as the previously establish BPT for the same wastewater stream, the Agency’s reasons for doing so were consisted arbitrary and capricious.

The Court’s decision in Southwestern Electric is another significant blow to an EPA rulemaking for the electric power industry.  As reported in our past Alert, the D.C. Circuit recently vacated and remanded significant portions of EPA’s 2015 Coal Combustion Residuals (CCR) Rule, which regulates, among other things, surface impoundments holding CCR generated by power plants.  In addition, the Southwestern Electric decision was issued in the midst of EPA’s efforts to revise the ELGs’ BAT requirements for FGD wastewater and BATW.  The Agency previously indicated that it intends to propose revised requirements for the FGD wastewater and BATW BAT requirements in 2019.  EPA could seek reconsideration or ask the Supreme Court to review the Southwestern Electric Opinion, which could take several months.  In short, time will tell whether the Fifth Circuit’s vacatur and remand of the BAT limits for “legacy” wastewater and leachate will impact EPA’s projected timeline for reconsideration of the BAT requirements for FGD wastewater and BATW.

If you have any questions about the Fifth Circuit’s April 12, 2019 Opinion, please contact Donald C. Bluedorn II at (412) 394-5450 or dbluedorn@babstcalland.com or Gary E. Steinbauer at (412) 394-6590 or gsteinbauer@babstcalland.com.

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