Appalachian Power Co. v. Train

• Citation: 620 F.2d 1040
• Decision Date: 28 April 1980
• Docket Number: No. 74-2096,74-2096
• Parties: , 10 Envtl. L. Rep. 20,319 APPALACHIAN POWER COMPANY, Baltimore Gas and Electric Company, Carolina Power & Light Company, Duke Power Company, Monongahela Power Company, Ohio Power Company, Potomac Edison Company, Potomac Electric Power Company, South Carolina Electric & Gas Company, Virginia Electric and Power Company, West Penn Power Company, Petitioners, v. Russell E. TRAIN, as Administrator, Environmental Protection Agency, Respondent, Alabama Power Company et al., Jersey Central Power & Light Company, Metropolitan Edison Company and Pennsylvania Electric Company, Intervenors. *
• Court: United States Courts of Appeals. United States Court of Appeals (4th Circuit)

Page 1040

620 F.2d 1040

14 ERC 1372, 10 Envtl. L. Rep. 20,319

APPALACHIAN POWER COMPANY, Baltimore Gas and Electric Company, Carolina Power & Light Company, Duke Power Company Monongahela Power Company, Ohio Power Company, Potomac Edison Company, Potomac Electric Power Company, South Carolina Electric & Gas Company, Virginia Electric and Power Company, West Penn Power Company, Petitioners, v. Russell E. TRAIN, as Administrator, Environmental Protection Agency, Respondent Alabama Power Company et al. Jersey Central Power & Light Company, Metropolitan Edison Company and Pennsylvania Electric Company, Intervenors.

No. 74-2096. ^*

United States Court of Appeals, Fourth Circuit.

Argued April 4, 1979.

Decided April 28, 1980.

On Petitions for Review of Actions of the Administrator of the Environmental Protection Agency. ^**

George C. Freeman, Jr., Richmond, Va. (Turner T. Smith, Jr., William A. Anderson, II, E. Gabriel Smith, Hunton & Williams, Richmond, Va., on brief), for petitioners Appalachian Power Co., et al.

James Taylor Banks, Natural Resources Defense Council, Inc., Washington, D. C. (Stephen H. Schroeder, Ronald J. Wilson, Washington, D. C., on brief), for petitioner NRDC.

Richard G. Stoll, Jr., Deputy Associate Gen. Counsel, EPA, Washington, D. C. (Joan Z. Bernstein, Gen. Counsel, James A. Rogers, Associate Gen. Counsel, EPA, James W. Moorman, Asst. Atty. Gen., Land and Natural Resources Division, Bradford F. Whitman, Asst. Chief, Pollution Control Section, Barry J. Trilling, Dept. of Justice, Washington, D. C., on brief), for respondents.

Before BREITENSTEIN ^***, Senior Circuit Judge, and WIDENER and PHILLIPS, Circuit Judges.

WIDENER, Circuit Judge:

These actions arise because of EPA amending its regulations to comply with our mandate in Appalachian Power Co. v. Train, 545 F.2d 1351 (4th Cir. 1976). In Appalachian Power, approximately seventy power companies sought review of the Environmental Protection Agency's (EPA) regulations promulgated under authority of the Federal Water Pollution Control Act (Act). ¹ The power companies now challenge EPA's amendments to parts of 40 CFR Part 423 ² on grounds that they do not fully comply with Appalachian Power. Part 423 sets out the best practicable technology (BPT) limitation standards for the steam electric power industry. Natural Resources Defense Council (NRDC), through its petitions, also seeks a review of certain EPA BPT regulations, not on the ground that Appalachian Power has not been complied with but on the ground that § 301(l), 33 U.S.C. § 1311(l), a 1977 amendment to the Act, prohibits EPA from modifying any of § 301, 33 U.S.C. § 1311, including BPT limitations, for toxic pollutants. It also challenges the EPA variance amendments on the ground that they did comply with Appalachian Power so far as the factors in § 301(c) are referred to in the amended regulations.

In 1972, Congress passed the Federal Water Pollution Control Act (Act) with an ultimate goal of no pollutant discharges into our nation's waters. Toward that ultimate goal, Congress established increasingly stringent standards of pollution control. Phase I of the 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 into effect. ⁴ Several parts of the Act were amended in 1977 but the basic goals and strategies of the Act remain intact. EPA is given broad power under the Act so that it may insure that the phases of improvement can be achieved. In order to carry out its obligation, EPA promulgated regulations setting single number effluent limitations for various industries in order to commence the achievement of the goal of the statute. In duPont, we held that EPA had the authority to promulgate such effluent limitations which are to be considered presumptively applicable. E. I. duPont de Nemours & Co. v. Train, 541 F.2d 1018, 1028 (4th Cir. 1976), aff'd on this point 430 U.S. 112, 97 S.Ct. 965, 51 L.Ed.2d 204 (1977). Through the regulations, applicable unless rebutted, EPA hopes to achieve national uniformity as the goal of no discharge of pollutants is sought. Id. at 1028.

Appalachian Power involved a review of many of EPA's regulations promulgated to aid in the application and enforcement of the Act. Only our holding dealing with BPT variance regulations is pertinent to our decision here. Among other provisions under attack in Appalachian Power was EPA variance clause providing that a variance from the 1977 standards set out in the regulations would be granted when "the factors relating to equipment or facilities involved, the process applied, or other such factors related to such discharger are fundamentally different from those factors considered in establishing the guidelines." ⁵ Costs were excluded from consideration by EPA's interpretation of its own regulation. We struck down the clause because EPA's refusal to consider costs resulted in too restrictive a view of the minimum content of the variance. Under the 1983 standards set out in the Act, for example, costs were to be a relevant factor. Following our decision in duPont, we reasoned that the Act contemplated progressively more stringent standards as the country moved closer to the goal of elimination of pollutant discharge. Therefore, the 1977 standards were not intended to be any less flexible than the 1983 standards. As a result, we remanded the regulation to EPA for the agency to come forward with a meaningful variance clause taking into consideration at least the statutory factors set out in §§ 301(c), 33 U.S.C. § 1311(c); 304(b)(1)(B), 33 U.S.C. § 1314(b)(1)(B); and 306(b)(1)(B), 33 U.S.C. § 1316(b)(1)(B). ⁶ Appalachian Power at 1359-60.

After the Supreme Court's decision in E. I. duPont de Nemours & Co. v. Train, 430 U.S. 112, 97 S.Ct. 965, 51 L.Ed.2d 204 (1977), we modified our decision in Appalachian Power to exclude the requirement of a variance for new sources, but declined to modify the opinion further. ⁷ In March 1978, EPA proposed its amendment to the BPT variance provision. 43 FR 8812-13 (1978). After a comment period, this rule was made final on September 22, 1978. EPA amended 40 CFR Parts 423.12(a), 423.22(a), 423.32(a) and 423.42 by adding the following paragraph:

In accordance with the decision in Appalachian Power, 545 F.2d 1351, 1358-60 (4th Cir. 1976), EPA's legal interpretation appearing at 30 FR 30073 (1974) shall not apply to this paragraph. The phrase "other such factors" appearing above may include significant cost differentials and the factors listed in section 301(c) of the Act.

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

In October 1978, EPA published a notice rescinding its no-cost interpretation of 1974. 43 FR 50042. In October 1978, the utilities filed this action. ⁸

The utilities challenge the EPA amendment to the BPT variance provisions, contending that the mandate of Appalachian Power has not been met by the addition of "significant cost differentials and the factors listed in section 301(c) of the Act." Specifically, the utilities argue that Appalachian Power requires EPA to consider 304(b)(1)(B) factors including "total cost . . . in relation to effluent reduction benefit."

The utilities concede that the addition of "significant cost differentials and the factors listed in section 301(c) of the Act" to the existing variance provisions on its face could fulfill the Appalachian mandate. They argue, however, that EPA has made it clear that effluent reduction benefits are not a relevant factor under the regulation. The utilities urge that EPA's interpretation of effluent reduction benefit is much too narrow in that it considers only costs in relation to the degree of effluent reduction with no consideration of receiving water quality. Such an interpretation, they urge, is impermissible in light of Appalachian.

No variance has been applied for here. Therefore, the utilities' only authority offered to show EPA's application of its newly amended regulations is the February 6, 1979 recommendation of the Assistant Administrator for Water Enforcement of the EPA tentatively turning down Cincinnati Gas and Electric Company's application for a variance for its W. C. Beckjord Station, as well as the case of In re Louisiana-Pacific Corp., 10 ERC 1841 (1977). That document, the utilities contend, shows EPA's rejection of water quality as a factor in considering effluent reduction benefits pursuant to Appalachian. There, Cincinnati Gas' application for a variance from ph limitations was turned down because no fundamental difference was found to justify a less stringent standard. In commenting on receiving water quality, the Office of Enforcement of the EPA included in its recommendation to the Administrator the following:

The Administrator has determined In the matters of Louisiana Pacific Corporation NPDES No. CA0005894 and Crown Simpson Pulp Company NPDES No. CA0005882 10 ERC 1841 (September 16, 1977) ("Louisiana Pacific") that EPA is not authorized to grant a FDF variance providing relief from technology-based limitations guidelines due to the characteristics of the receiving water. The type of receiving water or the fact that the receiving water quality will not be harmed by the discharge or measurably improved by installing control equipment are not legally fundamental differences.

Recommendation on Variance Ruling FDF 78-01 at pp. 7-8.

We think the utilities' reliance on the recommendation in the Cincinnati Gas and Electric variance recommendation is misplaced. First and principally, the Administrator has not yet taken any action with respect to the variance. That being so, we do not believe that, even assuming the utilities' construction of the recommendation to be correct, the recommendation of the Office of Enforcement to the Administrator is legally binding on the Agency. While it may have considerable significance, legal as well as practical, to...