Duke Energy Carolinas, LLC v. S.C. Dep't of Health

• Decision Date: 01 May 2013
• Docket Number: No. 5062.,5062.
• Citation: 404 S.C. 119,744 S.E.2d 194
• Court: South Carolina Court of Appeals
• Parties: DUKE ENERGY CAROLINAS, LLC, Respondent, v. SOUTH CAROLINA DEPARTMENT OF HEALTH AND ENVIRONMENTAL CONTROL, South Carolina Attorney General, American Rivers, and The South Carolina Coastal Conservation League, Defendants, Of whom South Carolina Department of Health and Environmental Control and American Rivers and The South Carolina Coastal Conservation League are, Appellants. Appellate Case No.2010–166486.

404 S.C. 119

744 S.E.2d 194

DUKE ENERGY CAROLINAS, LLC, Respondent,

v.SOUTH CAROLINA DEPARTMENT OF HEALTH AND ENVIRONMENTAL CONTROL, South Carolina Attorney General, American Rivers, and The South Carolina Coastal Conservation League, Defendants,Of whom South Carolina Department of Health and Environmental Control and American Rivers and The South Carolina Coastal Conservation League are, Appellants.

Appellate Case No.2010–166486.

No. 5062.

Court of Appeals of South Carolina.

Heard May 23, 2012.

Decided Dec. 12, 2012.

Withdrawn, Substituted and Refiled May 1, 2013.

Appeal From Administrative Law Court Ralph King Anderson, III, Administrative Law Judge.

Stephen P. Hightower, of Columbia, for Appellant South Carolina Department of Environmental Control.

Christopher K. DeScherer, J. Blanding Homan, IV, and Frank S. Holleman, III, all of the Southern Environmental Law Center, of Charleston, for Appellants American Rivers and South Carolina Coastal Conservation League.

James Wm. Potter, W. Thomas Lavender, Jr., Joan W. Hartley, all of Nexsen Pruet, LLC, of Columbia, for Respondent.

LOCKEMY, J.

In this administrative action, South Carolina Department of Health and Environmental Control (DHEC) appeals the administrative law court's (ALC) decision, arguing that the ALC erred in finding: (1) DHEC's review of Duke Energy Carolinas, LLC's (Duke) water quality certification application was not timely and (2) DHEC waived its right to issue a water quality certification to Duke. American Rivers and South Carolina Coastal Conservation League (Coastal Conservation) (collectively Conservation Groups) also appeal the ALC's decision and contend the ALC erred in: (1) refusing to give effect to Regulation 61–30; (2) finding DHEC's decision untimely; (3) misconstruing Regulation 61–101; (4) ignoring facts that showed Duke was estopped from arguing DHEC's decision was untimely; and (5) failing to find that Duke waived any challenge to DHEC's certification decision and the State's certification authority.¹ We reverse and remand.

FACTS

We first review the relevant statutory framework for these facts. Section 401 of the Clean Water Act (CWA), 33 U.S.C. §§ 1251–1387 (2010), “requires States to provide a water quality certification [WQC] before a federal license or permit can be issued for activities that may result in any discharge into intrastate navigable waters.” PUD No. 1 of Jefferson Cnty. v. Wash. Dep't of Ecology, 511 U.S. 700, 707, 114 S.Ct. 1900, 128 L.Ed.2d 716 (1994); see33 U.S.C. § 1341 (2010). States “shall establish procedures for public notice in the case of all applications for certification by it and, to the extent it deems appropriate, procedures for public hearings in connection with specific applications.” 33 U.S.C. § 1341(a)(1). Further, section 401 of the CWA provides:

If the State ... fails or refuses to act on a request for certification, within a reasonable period of time (which shall not exceed one year) after receipt of such request, the certification requirements of this subsection shall be waived with respect to such Federal application. No license or permit shall be granted until the certification required by this section has been obtained or has been waived as provided in the preceding sentence.

Id.

“The Pollution Control Act [PCA] empowers DHEC to ‘take all action necessary or appropriate to secure to this [s]tate the benefits of the Federal [CWA].’ ” S.C.Code Ann. § 48–1–50(17) (Rev.2008). Section 48–1–30 of the South Carolina Code (Rev.2008) authorizes generally that DHEC shall promulgate regulations guiding the procedures for permits under the PCA. Regulation 61–101was then promulgated pursuant to section 48–1–30 to establish procedures and policies for implementing the WQC requirements of Section 401 of the CWA. S.C.Code Ann. Regs. 61–101 (Supp.2011); S.C. Coastal Conservation League v. S.C. Dep't of Health and Envtl. Control, 390 S.C. 418, 430, 702 S.E.2d 246, 253 (2010).

Regulation 61–101 requires that any applicant for a federal license or permit, including those issued by Federal Energy Regulatory Commission (FERC), to conduct any activity which during construction or operation may result in any discharge in navigable waters, must obtain a water quality certification from DHEC. S.C.Code Ann. Regs. 61–101(A)(2). Further, it establishes a time frame for review of the applications, stating

[DHEC] is required by Federal law to issue, deny, or waive certification for Federal licenses or permits within one (1) year of acceptance of a completed application unless processing of the application is suspended. If the Federal permitting or licensingagency suspends processing of the application on request of the applicant or [DHEC] or of its own volition, suspension of processing of application for certification will also occur, unless specified otherwise in writing by [DHEC]. Unless otherwise suspended or specified in this regulation, [DHEC] shall issue a proposed decision on all applications within 180 days of acceptance or an application.

S.C.Code Ann. Regs. 61–101(A)(6). Review can begin when an applicant has presented DHEC with a complete application in the manner specified by Regulation 61–101. S.C.Code Ann. Regs. 61–101(C)(1). An application must contain the names and addresses of adjacent property owners. S.C.Code Ann. Regs. 61–101(C)(1)(f).

Regulation 61–101(C)(2) states

[i]f [DHEC] does not request additional information within ten (10) days of receipt of the application or joint public notice, the application will be deemed complete for processing; however, additional information may still be requested of the applicant within sixty (60) days of receipt of the application.

Moreover, Regulation 61–101(C)(4) provides

[w]hen [DHEC] requests additional information it will specify a time for submittal of such information. If the information is not timely submitted and is necessary for reaching a certification decision, certification will be denied without prejudice or processing will be suspended upon notification to the applicant by [DHEC]. Any subsequent resubmittal will be considered a new application.

The Environmental Protection Fund Act (Fund Act), sections 48–2–10 to 48–2–90 of the South Carolina Code (Rev.2008 & Supp.2011), was enacted for the purpose of creating a fund whose “monies must be used for improved performance in permitting, certification, licensing, monitoring, investigating, enforcing, and administering [DHEC's] functions.” S.C.Code Ann. § 48–2–40 (Rev.2008). The Fund Act applies to the processing of all environmental permits, licenses, certificates, and registrations authorized by the PCA, Clean Air Act, Safe Drinking Water Act, Hazardous Waste Management Act, Atomic Energy Act, and the Oil and Gas Act. S.C.Code Ann. § 48–2–30(B) (Rev.2008 & Supp.2011). WQCs are also covered by the Fund Act. S.C.Code Ann. § 48–2–50(H)(1)(b) (Supp. 2011).

The Fund Act contains a provision entitled, “Processing of permit application; maximum time for review,” which mandates that DHEC promulgate regulations governing the timeliness, thoroughness, and completeness of DHEC's processing of application subject to the Fund Act. S.C.Code Ann. § 48–2–70 (Rev.2008). Section 48–2–70 states

[u]nder each program for which a permit processing fee is established pursuant to this article, the promulgating authority also shall establish by regulation a schedule for timely action by [DHEC] on permit applications under that program. These schedules shall contain criteria for determining in a timely manner when an application is complete and the maximum length of time necessary and appropriate for a thorough and prompt review of each category of permit applications and shall take into account the nature and complexity of permit application review required by the act under which the permit is sought. If the department fails to grant or deny the permit within the time frame established by regulation, the department shall refund the permit processing fee to the permit applicant.

§ 48–2–70. DHEC promulgated the Environmental Protection Fees, S.C.Code Ann. Regs. 61–30 (2011), in accordance with the Fund Act. Its purpose and scope is described as follows:

This regulation prescribes those fees applicable to applicants and holders of permits, licenses, certificates, certifications, and registrations (hereinafter, “permits”) and establishes schedules for timely action on permit applications. This regulation also establishes procedures for the payment of fees, provides for the assessment of penalties for nonpayment, and establishes an appeal process to contest the calculation or applicability.S.C.Code Ann. Regs. 61–30(A). Regulation 61–30 also provides in pertinent part that “[a]pplication fees shall be due when the application is submitted. The Department will not process an application until the application fee is received.” S.C.Code Ann. Regs. 61–30(C)(1)(b). Further, the regulation maintains that

[t]he schedule shall be tolled when the Department makes a written request for additional information and shall resume when the Department receives the requested information from the applicant. If an applicant fails to respond to such a request within 180 days, the Department will consider the application withdrawn and the application fee will be forfeited. The Department shall notify the applicant no later than 10 days prior to expiration of the 180–day period.

S.C.Code Ann. Regs. 61–30(H)(1)(c).

On June 5, 2008, Duke filed an application with DHEC to obtain a WQC for a FERC license authorizing Duke's continued operation of the Catawba–Wateree Hydroelectric Project in South Carolina. The application was submitted without the required names and addresses of the adjacent property owners. Additionally, Duke did not provide the regulatory application fee.

On June 27, 2008, Duke supplied DHEC with several lists that contained the names of interested citizens and stakeholders who had contacted Duke and requested notification of...