Central Hudson Gas & Elec. Corp. v. U.S. E.P.A.
| Decision Date | 03 November 1978 |
| Docket Number | D,Nos. 941,942,s. 941 |
| Citation | 587 F.2d 549 |
| Parties | , 8 Envtl. L. Rep. 20,893 CENTRAL HUDSON GAS & ELECTRIC CORPORATION, Consolidated Edison Company of New York, Inc., Orange and Rockland Utilities, Inc., and Power Authority of the State of New York, Petitioners, v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, Respondent, and Hudson River Fishermen's Association, Intervenor-Respondent. CENTRAL HUDSON GAS & ELECTRIC CORPORATION, Consolidated Edison Company of New York, Inc., Orange and Rockland Utilities, Inc., and Power Authority of the State of New York, Plaintiffs-Appellants, v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, Douglas M. Costle, as Administrator, U. S. Environmental Protection Agency, Eckardt C. Beck, Regional Administrator, Region II, U. S. Environmental Protection Agency, New York State Department of Environmental Conservation, and Peter A. A. Berle, Commissioner, New York State Department of Environmental Conservation, Defendants-Appellees, and Hudson River Fishermen's Association, Intervenor-Defendant-Appellee. ocket 77-4192, 78-6032. |
| Court | U.S. Court of Appeals — Second Circuit |
G. S. Peter Bergen, New York City (Robert J. Glasser, Thomas E. Mark, LeBoeuf, Lamb, Leiby & MacRae, New York City, of counsel), for petitioners-appellants Central Hudson, et al.
Anne Sidamon-Eristoff, Asst. U. S. Atty., S. D. N. Y., New York City (Robert B. Fiske, Jr., U. S. Atty., S. D. N. Y., Patrick H. Barth, Louis G. Corsi, Asst. U. S. Attys., S. D. N. Y., New York City, Warren H. Llewellyn, U. S. Environmental Protection Agency, New York City, of counsel), for respondents-appellees EPA, Costle and Beck.
Albert K. Butzel, New York City (Clifford P. Case, III, Butzel & Kass, New York City, of counsel), for intervenor-respondent-appellee Hudson River Fishermen's Ass'n.
Before FEINBERG and MESKILL, Circuit Judges, and BRIEANT *, District Judge.
Three public utilities 1 and the Power Authority of the State of New York 2 engaged in the generation and sale of electricity in New York have brought suit against the United States Environmental Protection Agency ("EPA"), the New York State Department of Environmental Conservation ("DENCON") and officials of those bodies. The principal relief sought is a declaration that DENCON, rather than EPA, has jurisdiction over pending applications to discharge pollution into the Hudson River. 3 The United States District Court for the Southern District of New York, Robert L. Carter, Judge, dismissed the complaint for lack of subject matter jurisdiction on the ground that the Courts of Appeals have exclusive jurisdiction over the dispute. 444 F.Supp. 628 (S.D.N.Y.1978). By order of this Court, the appeal from the judgment entered in the district court has been consolidated with an original petition for review of a decision by the General Counsel of the EPA which determined that the EPA retained jurisdiction over the applications. 4 We hold that the district court had jurisdiction and that the EPA has jurisdiction over the applications.
Petitioners-appellants ("the utilities") operate four steam-driven electric power generating plants at locations on the Hudson River. 5 This generation of power requires that heat be removed from the system. To accomplish this, each power plant uses a "once-through" cooling system in which water is pumped from the river, circulated through condensers in the plant, and then returned to the river at elevated temperatures. Heat is a pollutant under the Federal Water Pollution Control Act, 33 U.S.C. § 1362(6), and therefore the utilities must obtain and comply with the terms of a National Pollution Discharge Elimination System ("NPDES") permit issued pursuant to 33 U.S.C. § 1342. 6
The Act provides that the Administrator of the EPA may issue a NPDES permit "after opportunity for public hearing." 33 U.S.C. § 1342(a)(1). In recognition of "the primary responsibilities and rights of States," 33 U.S.C. § 1251(b), the Act allows the States to assume control of the administration of the NPDES permit program, provided their own programs meet minimum federal standards. 33 U.S.C. § 1342(b). Once a State has taken over administration of the program, the Administrator of the EPA is directed to "suspend the issuance of permits." 33 U.S.C. § 1342(c)(1).
The utilities applied to the EPA for permits between 1971 and 1974. In accordance with EPA regulations, the regional staff of the EPA prepared "tentative determinations" with respect to each application and drafted proposed NPDES permits. 40 C.F.R. § 125.31. The public was notified of The permits which the EPA proposed to issue required, Inter alia, that the thermal discharges now emanating from the power plants be reduced by ninety percent. The parties assume that under current technology this result can be achieved only by reducing the electricity generated or by erecting a closed-cycle cooling system, such as a natural draft wet cooling tower, which would transfer the heat from the cooling water to the air. Such towers were described by the Fourth Circuit Court of Appeals in Appalachian Power Co. v. Train, 545 F.2d 1351, 1357 (1976):
these tentative determinations. 40 C.F.R. § 125.32. After further study, the Regional Administrator of the EPA made a final "determination" with respect to each application. 40 C.F.R. § 125.35(a). In February and July of 1975, the EPA circulated a "Notice of Issuance of Final Determination" with respect to each of the four power plants; annexed to each was a NPDES permit which the EPA "proposed" to issue. The Notice stated that "(t)he Final Determination will become a final NPDES permit, issued and effective (in thirty days as provided in 40 C.F.R. § 125.35(c) and (d)) unless an Adjudicatory Hearing is granted pursuant to 40 C.F.R. § 125.36 . . . ."
Natural draft (wet) cooling towers are enormous concrete cylinders, which may be 350 to 550 feet in diameter and 300 to 600 feet tall. (The height is necessary to create the natural draft required to draw the air through the tower from bottom to top.) The bottom one-tenth of the tower is filled with slats and baffles to break up the water and expose a larger surface area to the air flow so as to increase evaporation. Warm water from the condenser is pumped to the top of the tower, there discharged, and cooled by moving air as it falls to the bottom. It is there collected and returned to the condenser.
(material in parentheses from Id. at n.19). The physical appearance of these towers is now widely familiar as a result of a tragic construction accident in Willow Island, West Virginia. According to the utilities, these towers would involve a capital cost in excess of $350 million to build and annual costs in excess of $100 million. The operation of the towers would consume the energy equivalent of about 720,000 barrels of oil each year. The cost of compliance with the provisions of the EPA permit would eventually be visited upon the customers and users of electric power in New York State, because the Power Authority of the State of New York is required to be self-supporting by the statute that created it, N.Y. Pub. Auth. Law §§ 1005(5) & 1010(7), and the remaining utilities are entitled to earn a fair return based in part on the "fair value of the property of the corporation used and useful" in the public service, N.Y. Pub. Serv. Law §§ 66(16) & 72.
Each of the utilities filed timely requests for adjudicatory hearings before the EPA. 40 C.F.R. § 125.36. The provisions in the permits which the utilities wished to contest related primarily to the limitations on thermal discharges. The requests for hearings were granted, and notice of that fact was given to the public. 40 C.F.R. § 125.36(c)(4).
At a formal prehearing conference between the EPA and the utilities in February of 1977, the utilities raised the question whether the EPA still had jurisdiction to hold the adjudicatory hearings in light of (1) the EPA's recent approval of New York State's program for the administration of the NPDES permit program, and (2) the command in the statute that after a State program is approved the EPA must "suspend the issuance of permits." 33 U.S.C. § 1342(c) (1). The utilities argued that DENCON had jurisdiction over their applications.
An understanding of the utilities' argument requires a familiarity with the provisions of the Water Pollution Control Act regarding the approval of State programs generally and the approval of New York's program in particular. States compete with each other for industry, and the availability of cheap electric power promotes industry in any locality where it can be had. Natural forces of competition between States may have tended in the past to diminish Not later than ninety days after the date on which a State has submitted a program . . . the Administrator shall suspend the issuance of permits . . . unless he determines that the State permit program does not meet (legal requirements).
the ardor of State and local officials for the elimination of water and air pollution caused by the generation of electricity. This makes federal supervision appropriate and, at times, necessary. Nevertheless, it is part of our philosophy of government that the government closest to the people should act in matters of importance in their daily lives to the greatest extent possible, to the exclusion of the federal administrator. Congress was acutely aware of these delicate issues affecting our concept of federalism when, on October 18, 1972, it passed § 402(c)(1) of the Federal Water Pollution Control Act Amendments of 1972, Pub.L.No.92-500, 86 Stat. 882, Codified at 33 U.S.C. § 1342(c)(1), which provides:
There can be no doubt that "(i)t is the policy of Congress that the States . . . implement the permit programs . . . ." Clean Water Act of 1977, Pub.L.No.95-217, § 26(b), 91 Stat. 1575, Amending 33 U.S.C. § 1251(b).
New York submitted its permit...
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