City and County of Honolulu Sand Island Wastewater Treatment Plant and Honouliuli Wastewater Treatment Plant (Board decision, August 12, 2010)

Plain-English summary

The City and County of Honolulu operated the Sand Island and Honouliuli wastewater treatment plants under Clean Water Act section 301(h) variances from secondary treatment requirements. EPA Region 9 denied the City's requests to renew the variances after finding that the facilities could not satisfy applicable water-quality and biological-protection criteria. A group of professional engineers challenged the denials and argued that the Region should weigh secondary environmental and financial impacts differently. The Environmental Appeals Board held that the petitioners had not shown clear error, abuse of discretion, or another basis for review, and denied the petition.

Decision snapshot

• Cited authorities: 33 U.S.C. § 1311(h); 40 C.F.R. §§ 124.17, 124.19, and 125.59
• Outcome: The Board denied review of the Region's decisions denying the two section 301(h) variance requests.
• Key point: The EAB reviews permit and variance decisions sparingly and does not replace the Region's judgment when the petitioner has not shown clear error or abuse of discretion.

Full text (EPA EAB public release)

            BEFORE THE ENVIRONMENTAL APPEALS BOARD
         UNITED STATES ENVIRONMENTAL PROTECTION AGENCY              AUGUST 12, 2010
                         WASHINGTON, D.C.
                                                                           [clerk initials]
                                                   )

In re: )
)
City & County of Honolulu )
Sand Island Wastewater Treatment Plant ) NPDES Appeal No. 09-07
Honouliuli Wastewater Treatment Plant )
)
NPDES Permit Nos. HI0020117 & HI0020877 )

-----------------------------)
ORDER DENYING REVIEW

                                        I. Introduction

     Under section 301(h) of the Clean Water Act ("CWA" or "Act"), municipal wastewater

treatment facilities that discharge effluent into deep ocean waters may, in some instances, receive

variances from "secondary treatment" pollution control requirements that otherwise apply to such

sources. Since the early 1990s, the City and County of Honolulu ("CCH") has operated its two

principal wastewater treatment facilities, the Honouliuli Wastewater Treatment Plant and the

Sand Island Wastewater Treatment Plant - pursuant to such variances. During CCH's most

recent round of requests for renewals of these variances, Region 9 of the U.S. Environmental

Protection Agency denied the requests.

     On February 9, 2009, a group of professional engineers (Messrs. James K. Hollke,

Hans J. Krock, James S. Kumagai, and Victor D. Moreland; collectively the "Moreland Group")

filed a petition for review of the two final decisions. See Letter to Environmental Appeals Board

from Moreland Group (dated Feb. 7, 2009) ("Petition"). At the request of the Environmental

Appeals Board ("Board"), the Region filed a response to the Moreland Group's petition on

August 17, 2009. See Response to Petition for Review (dated Aug. 14, 2009).
 II. Issues on Appeal

   The Board must decide whether, under 40 C.F.R. § 124.19(a), the Moreland Group has

established clear error, abuse of discretion, or other grounds for a grant of review of the Region's

decisions to deny CCH's two CWA section 301(h) variance requests.

                                 III. Summary ofDecision

   For the reasons stated below, the Board concludes that the Moreland Group has failed to

identify clear error, abuse of discretion, or other grounds for a grant of review of the two variance

denials. Accordingly, the Board denies the petition for review.

                                  IV. Procedural History

   The Region issued tentative (draft) versions of its decisions on CCH's applications on

March 27, 2007, and December 7, 2007, respectively. In each case, the Region decided not to

renew the variance because, in its view, the facility was unable to satisfy all the requirements of

section 301(h). The Region found that, contrary to CWA § 301 (h)(9), neither facility could meet

applicable water quality standards for ammonia nitrogen, whole effluent toxicity, chlordane, or

dieldrin, or, for Honouliuli alone, enterococcus bacteria, after initial mixing in the waters

surrounding or adjacent to the points at which the effluent is discharged. The Region also

determined that, contrary to CWA § 301(h)(2), CCH failed to demonstrate that its discharges

would not interfere with the attainment or maintenance of water quality that assures the

protection and propagation of a balanced, indigenous population of fish, shellfish, and wildlife,

and of water quality that allows recreation. For these reasons, the Region did not judge the

Honouliuli and Sand Island facilities qualified for further variances from the CWA's secondary

treatment requirements.

                                             -2­

After holding public hearings and accepting public comments on the tentative decisions,

the Region issued its final decisions on January 5, 2009, denying the section 301 (h) waivers for

the two facilities on the grounds just summarized. See U.S. EPA Region 9, [Final] Decision of

the Regional Administrator on CCH's Honouliuli Wastewater Treatment Plant Application for a

Modified NPDES Permit Under Section 301 (h) ofthe Clean Water Act (Jan. 5, 2009)

(AR. H.l.2); U.S. EPA Region 9, [Final] Decision ofthe Regional Administrator on CCH's

Sand bland Wastewater Treatment Plant Application for a Modified NPDES Permit Under

Section 301 (h) ofthe Clean Water Act (Jan. 5,2009) (AR. R.l.2). The Region also published

responses to the comments submitted during the public comment periods. See, e.g., U.S. EPA

Region 9, Response to Comments from the Public, Honouliuli Wastewater Treatment Plant

(Jan. 5,2009) (AR. H.l.6) [hereinafter R-RTC]; U.S. EPA Region 9, Response to Comments

from the Public, Sand Island Wastewater Treatment Plant (Jan. 5,2009) (AR. S.I.6) [hereinafter

SI-RTC].

                                       V. Analysis

A Standard ofReview

   Under the 40 C.F.R. part 124 permitting regulations, the Board ordinarily will not review

decisions related to an NPDES permit - including grants or denials of section 301 (h) variances

unless the decisions are based on clearly erroneous findings of fact or conclusions of law, or

involve important matters of policy or exercises of discretion that warrant Board review.!

   1 See 40 C.F.R. § 125.59(i)(4)(i) ("[a]ny section 301(h) modified permit shall[] ** * [b]e·

issued in accordance with the procedures set forth in 40 CFR part 124"); id. § 125.59(i)(5)
("[a]ppeals of section 301(h) determinations shall be governed by the procedures in 40 CFR
part 124").

                                            -3­

40 C.F.R. § 124.l9(a); see In re Arecibo & Aguadilla Reg 'I Wastewater Treatment Plants,

12 E.A.D. 97, 115 (EAB 2005) (explaining that procedural rules governing the issuance of

NPDES permits also apply to 301 (h) determinations); In re Gov't ofD. C. Mun. Separate Storm

Sewer Sys., 10 E.A.D. 323, 341-43, 345-47,357 (EAB 2002) (remanding portions ofNPDES

permit pursuant to section 124.19(a)). The Board wields its power of permit review "sparingly,"

in keeping with Agency policy that most permit conditions be finally determined at the permit

issuer's level. 45 Fed. Reg. at 33,412; accord In re City ofMoscow, 10 E.A.D. 135, 141 (EAB

2001). Importantly, the petitioner bears the burden of demonstrating that review is warranted.

40 C.F.R. § 124.19(a); see, e.g., In re Dominion Energy Brayton Point Station, LLC, 12 E.A.D.
,
490, 588-90 (2006) (remanding NPDES permit where petitioner established that permit issuer

failed adequately to explain the maximum number of allowable monthly water temperature

exceedances); In re Wash. Aqueduct Water Supply Sys., 11 E.A.D. 565, 578-86 (EAB 2004)

(remanding NPDES permit where petitioner raised substantial questions about representativeness

of sampling data).

B. The Moreland Group Failed to Meet the Standardfor Review

   In its petition for review of the section 301(h) variance denials, the Moreland Group

argues that the Region "cavalierly dismissed" its comments on the draft decisions, which, it

asserts, it had presented in good faith and on the basis of protecting public health and the

environment at the .least cost, both financially and with regard to detrimental secondary impacts

on the environment. Petition at 1. The Moreland Group had commented that construction of

secondary treatment is akin to construction of a greenhouse gas factory and thus the costs

                                             -4­

(including consideration of environmental costs) of denying CCH's section 301(h) waivers

outweigh the benefits provided by any anticipated water quality improvement.

   In response to the Moreland Group's comments (and to similar comments filed by

others), the Region explained that the section 301(h) variance renewal process is driven by

specific statutory criteria established by Congress, and those criteria do not include a weighing of

secondary environmental impacts (such as greenhouse gases) or fmancial impacts. Those

specific elements, the Region noted, therefore cannot affect a section 301 (h) variance decision in

the way the Moreland Group advocates. See H-RTC cmts. P2, PII, P22, P27, at 2-3, 7, 11-12,

13-14; S1-RTC cmts. PI, P4, P6, P14, P31-34, P44, at 2-4,8,14-16, 19. Despite this fact, the

Region explained further:

           [1]t is EPA's objective to minimize any negative impacts and
           maximize beneficial impacts that might result from plant upgrades
           required by the CWA, and to share lessons learned from experience
           across the county to ensure that CCH is aware of available
           environmentally sound technologies. With respect to greenhouse
           gas emissions and energy demand, for example, many modem
           wastewater treatment plants utilize gases created during secondary
           treatment to generate electricity, thus reducing operating costs,
           energy demand, and emissions at wastewater treatment plants, as
           discussed in the December, 2006 EPA document, "Opportunities
           for and Benefits of Combined Heat and Power at Wastewater
           Treatment Facilities." Energy demands, potential emissions, and
           sludge volume are matters that will need to be reviewed in detail
           during the design of treatment plant upgrades. EPA intends to
           work with CCH to ensure that treatment plan upgrades are made in
           a manner that takes advantage of state-of-the-art energy
           efficiencies used throughout the [United States].

H-RTC cmt. P27, at 13-14; SI-RTC cmt. 44, at 19.

   On appeal, the Moreland Group contends that the Region failed to perform "a rigorous

evaluation of the costs and benefits of its action of denying" CCH's two variance applications.

                                            -5­

Petition at 2. The Moreland Group continues to claim that the Region has discretion to conduct

such evaluations in its analyses of CWA section 301(h) variance applications. As support for

this proposition, the Moreland Group references a general policy memorandum issued to Agency

employees by the present Administrator, which states that EPA decisions must be based on the

best available science; that under the environmental laws, EPA has room to exercise discretion;

and that EPA actions must be transparent. Id. at 1-2 (quoting Memorandum from Lisa P ..

Jackson, Administrator, U.S. EPA, to EPA Employees). The Moreland Group also references

two CWA provisions that, in its judgment, indicate that EPA has positive authority to exercise

discretion in its section 301(h) decisionmaking: (1) CWA § 217,33 U.S.C. § 1297, which directs

the Agency to ensure that any cost-effectiveness guidelines it adopts in certain contexts also

provide for the identification and selection of cost-effective alternatives; and (2) CWA

§ 304(b)(1 )(B), 33 U.S.C. § 1314(b)(1 )(B), which directs the Agency to consider certain costs

and benefits in evaluating the "best practicable control technology" for point sources other than

publicly owned treatment works. Petition at 2.

   The applicable permitting rules, set forth in 40 C.F.R. part 124, require permit issuers to

"[b]riefly describe and respond to all significant comments." 40 C.F.R. § 124.17(a)(2). As

interpreted by the Board, this rule means that permit issuers must establish that they considered

parties' comments but need not necessarily agree with the comments or change the permit terms

or conditions to reflect them. E.g, In re Newmant Nev. Energy Investment, LLC, 12 E.A.D. 429,

448 (EAB 2005); In re KnaufFiber Glass, GmbH, 8 E.A.D. 121, 161 (EAB 1999); In re NE Hub

Partners, LP, 7 E.A.D. 561, 583 (EAB 1998).

                                             -6­

Upon consideration, the Board holds that the Moreland Group's arguments on appeal fail

to meet the standard of review for this proceeding. First, the law makes plain that the only factors

a pennit issuer may base a section 301(h) variance decision upon are the ones the Region analyzed

in its tentative and final decisions. See CWA § 301 (h), 33 U.S.C. § 131 I (h). None of the sources

the Moreland Group raises on appeal counter the very specific standards EPA is directed to

consider for secondary treatment variances. Accordingly, the Region did not err or abuse its

discretion by failing, at this stage ofthe pennitting process, to evaluate the factors of concern to

the Moreland Group.

   Second, the record clearly indicates that the Region adequately considered and responded

to the Moreland Group's concerns about collateral environmental impacts of secondary

wastewater treatment systems and the costs and benefits to the environment as a whole. The

Region directly responded tothese points, explaining that although these matters could not, as a

matter of law, affect its decision to grant or deny a variance application, questions about collateral

impacts and costs and benefits would all be of much importance during the permit implementation

stage. See, e.g., H-RTC cmts. P2, PIl, P22, P27, at 2-3, 7, 11-12, 13-14; SI-RTC cmts. PI, P4,

P6, P14, P31-34, P44, at 2-4,8, 14-16, 19. A petitioner's dissatisfaction with a pennit issuer's

reasonable answer is not grounds for a grant of review of a pennit decision. E.g., In re Envtl.

Disposal Systems, Inc., 12 E.AD. 254, 286-87 (EAB 2005) (holding that where administrative

record establishes that pennit issuer heard and evaluated concerns raised during comment period,

petitioner's disagreement with pennit issuer's conclusions "is not material" under applicable

standard of review).

                                              -7­

VI. Conclusion

    In conclusion, the. Board holds that the Moreland Group has failed to identify clear error,

abuse of discretion, or other grounds for a grant of review of the two CWA § 301(h) variance

denials.

                                         VII. Order

    For the foregoing reasons, the Board denies the Moreland Group's petition for review,

denoted NPDES Appeal No. 09-07. So ordered.

                                          ENVIRONMENTAL APPEALS BOARD 2

Dated:--"f,--~I_2--L/~--=O,--} __ By:----.!-.:h~~"=-"""'-.--=U"""-"-<~=- - =- =-/~=-. . . .
""'---_

                                                          Kathie A. Stein
                                                       Environmental Appeals Judge




    The three-member panel deciding this matter is comprised of Environmental Appeals
       2

Judges Edward E. Reich, Charles J. Sheehan, and Kathie A. Stein. See 40 C.F.R. § 1.25(e)(1).

                                              -8­

CERTIFICATE OF SERVICE

  I hereby certify that copies of the foregoing Order Denying Review in the matter of City

& County of Honolulu, NPDES Appeal No. 09-07, were sent to the following persons in the
manner indicated:

By First Class U.S. Mail, Return Receipt Requested:

Victor D. Moreland, Ph.D., P.E.
1378 Mahiole Street
Honolulu, Hawaii 96819-1748

By EPA Pouch Mail:

Ann S. Nutt, Esq. Stephen J. Sweeney, Esq.
Assistant Regional Counsel, Region 9 Office of General Counsel
U.S. Environmental Protection Agency U.S. Environmental Protection Agency
75 Hawthorne Street 1200 Pennsylvania Avenue, N.W.
Mail Code ORC-2 Mail Code 2355A
San Francisco, California 94105-3901 __ Washington, D.C. 20460

    AUG 1 2 2010