20070812 Ver 1_Public Comments_20080502 (2643)

DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES
Division of Water Quality
Application of Alcoa Power Generating
Inc. for Certificate of Water Quality
DWQ Project # 2007-0812
Stanly County
Response of Alcoa Power Generating Inc.
To Public Notice Published April 17, 2008
By and through its undersigned counsel, Alcoa Power Generating Inc. ("APGI") hereby
responds to the Public Notice posted by the North Carolina Department of Environment and
Natural Resources, Division of Water Quality ("DWQ") in the Stanly News and Press on April
17, 2008 pursuant to the North Carolina Water Quality Certification requirements, 15A NCAC
2H .0500 et seq.
1. Introduction and Background
APGI submitted an application to DWQ for a Water Quality Certificate under Section
401 of the Clean Water Act, 33 U.S.C. § 1341, on May 10, 2007 (the "Original 401
Application") in connection with APGI's application before the Federal Energy Regulatory
Commission ("FERC") to relicense the Yadkin Project (Project No. P-2197) pursuant to Part I of
the Federal Power Act, 16 U.S.C. § 791 et seq (the "FPA"). In the context of the FERC
relicensing process, APGI's application to DWQ for a Section 401 Water Quality Certificate
represents a mandatory requirement that has to be met before a new license for the Yadkin
Project can be issued. APGI began the relicensing process in 2002, and has involved many
parties, federal and state governmental agencies and other interests groups, including many
different constituencies of users of the Yadkin Project reservoirs. This effort has resulted in a
very detailed look at how the Yadkin Project's operations have affected and may continue to
impact various groups of people as well as the environment. Ultimately, APGI and most of the
party participants in the relicensing process, including various governments, governmental
agencies, national and local environmental organizations, and homeowner groups, were able to
arrive at the series of overall compromises that have become embodied in the Relicensing
Settlement Agreement ("RSA"), submitted with the Original 401 Application, that will be given
effect once FERC issues a new license for the Yadkin Project.'
Together with its FERC relicensing application, APGI submitted to DWQ considerable
information in support of its application for a Water Quality Certificate.2 Most of this
information was developed in connection with FERC's relicensing process and addressed the
effect of the operation of the Yadkin Project dams on water quality in the project reservoirs and
in the Yadkin River downstream of them. After considering APGI's application and the
comments filed in response thereto, DWQ issued North Carolina 401 Water Quality Certificate
No. 003173 on November 16, 2007 ("401 Certificate No. 003173"). 401 Certificate No. 003173
i With the issuance of a Final Environmental Impact Statement on April 18, 2008, FERC is now in a position
of being able to issue a new license for the Yadkin Project once the requirements of Section 401 are met.
` The Original 401 Application consisted of
a. A completed and signed FERC Section 401 Water Quality Certification Application;
b. The complete FERC relicensing application for the Yadkin Project;
c. The Relicensing Settlement Agreement for the Yadkin Project, as agreed to by A.POI and numerous
signatories, including the North Carolina Department of Environment and Natural Resources;
d. A draft Dissolved Oxygen Monitoring Plan for the Yadkin Project;
e. A draft Tailwater Dissolved Oxygen Monitoring Quality Assurance Plan for the Yadkin Project; and
f. A draft Flow and Reservoir Elevation Monitoring Plan for the Yadkin Project.
2
certified that, under a set of clearly defined conditions, the continued operation of the Yadkin
Project, as proposed, would meet applicable water quality standards. The conditions included by
DWQ in 401 Certificate No. 003173 addressed flow releases, reservoir water levels, tailwater
water quality, sediment and erosion control, and other measures incorporated from the RSA
related to water quality, project operations, instream flows, reservoir shoreline protection, and
compliance monitoring.
In January of 2008, Stanly County, North Carolina challenged 401 Certificate No.
003173 under the North Carolina Administrative Procedure Act, N.C. Gen. Stat. Chapter 1508,
in the Office of Administrative Hearings in what became Docket No. 08 EHR 0166. In the
course of discovery and preparations for hearings in Docket No. 08 EHR 0166, APGI received a
letter dated April 16, 2008 from DWQ in which DWQ stated that it had decided to "revoke" 401
Certificate No. 003173 pursuant to 15A NCAC 2H .0507(d)(2) because DWQ believed there had
been a change of conditions regarding 401 Certificate No. 003173. DWQ's public notice on
April 17, 2008 noted that the change of conditions "is a determination by [DWQ] that the prior
public notice of this 401 Certification apparently did not conform with the public notice
provisions of 15A NCAC 2H.0503. ,3 In its April 16`h letter to APGI, DWQ also requested that
APGI withdraw its Original 401 Application and resubmit the application. Proceedings in
3 APGI questions whether the failure of the notice to conform with the public notice provision of 15A NCAC
2H .0503 constitutes a "change of conditions under which the certification was made," such that it would be
appropriate for DWQ to revoke 401 Certificate No. 003173 rather than remedy the defect in the public notice. APGI
is not aware of any other statements by DWQ that provide specifics as to any change in conditions, at least with
respect to the application submitted by APGI.
3
Docket No. EHR 0166 were stayed on April 24, 2008 by order of Administrative Law Judge
Webster.
H. APGI's Position:
APGI respectfully requests that DWQ, upon consideration of these comments and the
comments that may be filed by others in response to the public notice published on April 17,
2008 in the Stanly News and Press, issue a new Water Quality Certificate for the Yadkin Project
on or before May 9, 2008, in substantially the same form as 401 Certificate No. 003173. In
support of this request, APGI respectfully offers the following facts and justifications:
A. Given the scope of Section 401 of the Clean Water Act, as applied to APGI's
application before DWQ, DWQ has all the factual information that it needs to render a
decision in the public interest.
B. It would not be in the public interest, the interests of the RSA signatories, or the
interest of APGI for DWQ to deny APGI's application because (1) DWQ should be able
to process any additional relevant comments and information and issue a new certificate
substantially in the form of 401 Certificate No. 003173 on or before May 9, 2008, the
one-year deadline under 33 U.S.C. § 1341(a)(1); (2) resubmission of a Section 401
application by APGI, and DWQ's process to consider it, would delay FERC relicensing,
and would thereby delay the benefits of the RSA to the parties and the public; and (3)
despite the failure to publish DWQ's public notice, numerous entities commented on the
4
Original 401 Application and the information in those comments should be preserved as
part of a DWQ decision regarding the Yadkin Project.
C. The issues raised by the City of Salisbury and Stanly County have been
adequately addressed in 401 Certificate No. 003173. Other issues, raised chiefly by
Stanly County in 08 EHR 0166, are largely outside of the scope of DWQ's authority and
do not require extensive factual development or determination.
III. Facts and Justifications in Support of APGI's Position
A. Scope of Section 401 Determination and Supporting Information Possessed
by DWQ
Section 401 of the Clean Water Act requires that "[a]ny applicant for a Federal license or
permit to conduct any activity ... which may result in any discharge into the navigable water[s]
shall provide the licensing or permitting agency a certification from the State in which the
discharge originates ...." 33 U.S.C. § 1341(a)(1) ("Section 401 "). North Carolina's regulations
implementing Section 401 require DWQ to make a certification determination "...if construction
and operation of facilities will result in a discharge into navigable waters." 15A NCAC 2H,
Section.0501. DWQ must determine whether a discharge from construction and operation of
facilities "will be conducted in a manner which will not violate applicable water quality
standards" by potentially "remov[ing] or degrad[ing] those significant existing uses which are
present in the wetland or surface water. 4 C.F.R. § 121.2(a)(3); 15A NCAC 21-1.0506(a).
5
"Certification shall be issued where the Director determines water quality standards are met,
including protection of existing uses." 15A NCAC 2H .0506(a).
Under Section 401 and North Carolina's water quality regulations, DWQ must determine
whether, in connection with the FERC relicensing, the discharge resulting from the proposed
operation of the Yadkin Project dams will meet the applicable water quality standards. For
purposes of DWQ's review, a "discharge" pertains to the outflow of the facility construction and
operation. See S. D. Warren Co. v. Maine Board of Environmental Protection, 547 U.S. 370,
377 and 387 (2006) ("S.D. Warren"). In S.D. Warren, the U.S. Supreme Court considered the
definition of "discharge" as that term is used in Section 401 in the specific context of
hydroelectric dam operations. Id. at 373. Interpreting the statute, the Court held that "discharge"
is to be given its ordinary meaning of "flowing or issuing out" as it pertains to water, id. at 377
and 387, and determined that "...a dam does raise a potential for a discharge...." Id. at 373.
Thus, the scope of DWQ's determination and any conditions it may place on the water quality
certification must be limited to ensuring that discharges from the operation of Yadkin Project
dams under its new license will not violate applicable water quality standards.
DWQ received all information necessary to render such a determination for the Yadkin
Project relicensing in the proceeding that resulted in DWQ's issuance of 401 Certificate No.
003173. The Original 401 Application contained considerable information bearing upon the
effects of dam operation on water quality in the form of relevant studies, including a
comprehensive, multi-year study of Yadkin Project water quality (Appendix E-1, "Yadkin Water
6
Quality Final Study Report"), resource management plans, and other information developed by
or for APGI. The Original 401 Application also included the RSA, the relevant parts of which
were based on several years of information exchange between DWQ, APGI, and other
stakeholders.
DWQ also had access to publicly available information that could have been used in the
development of 401 Certificate No. 003173. This information includes North Carolina
Department of Environment and Natural Resources studies and reports on water quality in the
Yadkin-Pee Dee River basin such as the "Yadkin-Pee Dee River Basin Basinwide Assessment
Report Whole Effluent Toxicity Program" (2002-2006); the "Yadkin-Pee Dee River Basin
Ambient Monitoring System Report" (Jan. 1, 2002 through Dec. 31, 2006); and the "Lake &
Reservoir Assessments - Yadkin-Pee Dee River Basin" (April 2007). DWQ also possessed a
U.S. Geological Survey report evaluating sedimentation and flooding effects in certain Yadkin
Project waters, entitled "Review of selected documents related to flooding at City of Salisbury
facilities on the Yadkin River upstream from High Rock Dam, North Carolina" (September
2007). Moreover, DWQ received information from government and public commenters on the
Original 401 Application that remains relevant, including information from the North Carolina
Wildlife Resources Commission, North Carolina Division of Water Resources, the City of
Salisbury, North Carolina, and Stanly County, North Carolina. Taken together, this body of
information is sufficient to support a determination that would take the same or similar form as
401 Certificate No. 003173.
7
B. Resubmission of a Water Quality Certificate Application
It would not be in the public interest or the interests of the RSA signatories (which, taken
as whole, represent a broad spectrum of the public affected by the operation of the Yadkin
Project) for DWQ to deny APGI's Original Section 401 application and necessitate APGI's
resubmission of the same or a substantially similar application. APGI's Original 401 Application
complied with all requirements for Section 401 applications contained in 15A NCAC 2H .0502,
and was thus accepted for consideration by DWQ. DWQ properly has before it the Original 401
Application and all necessary information in support thereof. Having taken the additional steps
to publish the mandatory 15-day public notice on April 17, 2008,4 and having received payment
from APGI for the costs of advertising the public notice, DWQ now has the ability to consider
the entire record, including any additional comments filed in response to that notice, and issue a
new Water Quality Certificate, substantially in the form of 401 Certificate No. 003173, on or
before the statutory 12-month waiver deadline of May 9, 2008.5
A complete new proceeding to consider APGI's 401 application would only serve to
delay issuance of the new FERC license and for that period deprive the RSA signatories,
including the State of North Carolina and the North Carolina public as a whole, of the many
environmental and economic benefits of the RSA. The terms of the RSA provide benefits to the
a It appears that DWQ's initial attempts to publish notice of APGI's application were ineffective, a
circumstance for which APGI was in no way responsible and for which it should not be penalized in the outcome of
this proceeding.
5 33 U.S.C. § 1341(a)(1) provides in relevant part, "If the State, interstate agency, or Administrator, as the
case may be, 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."
8
citizens of North Carolina in the form of more stable reservoir levels, water quality
enhancements, new or enhanced recreational facilities, more flexible shoreline management
provisions, increased protection of important cultural resources, improvements, improved
management of rare, threatened and endangered species, and funding or support of state and
local projects aimed primarily at preserving lands adjacent to the reservoirs for public use or
improving the recreational use and safety of the reservoirs. However, none of these benefits
become effective according to the terms of the RSA until the RSA is finally approved by FERC
through the issuance of a new license for the Yadkin Project. The public interest is therefore
served best through issuance of a Water Quality Certificate prior to the Section 401 waiver
deadline so that its terms may be unquestionably incorporated in the new Yadkin Project license.
DWQ's expeditious issuance of a Water Quality Certificate is aided by DWQ's ability to
consider information and comments that were filed in response to the Original 401 Application,
but which would have to be resubmitted for consideration if APGI's application were withdrawn.
The public interest is thus preserved by allowing previously filed comments to stand while
providing public notice to ensure due process. Notably, entities such as the City of Salisbury and
Stanly County, as well as the other parties to the FERC relicensing proceeding, had actual notice
of DWQ's Water Quality Certificate proceeding because such notice was provided through
APGI's posting and service to all parties of the "Notice of Filing of Application for Clean Water
Act Section 401 Certification" in FERC Docket No. P-2197 on May 14, 2007 (see FERC
Accession No. 20070514-5101). Therefore, none of these parties were deprived of actual notice
9
or the opportunity to comment on the Original 401 Application and, thus, were not prejudiced by
the failure of DWQ's original attempt to publish public notice. Accordingly, these parties would
not be harmed by DWQ's expeditious consideration of comments received in response to the
April 17, 2008 notice. Thus, DWQ has the ability to reasonably consider the totality of public
comments received in response to the April 17`" public notice and then to issue a Water Quality
Certificate substantially in the form of 401 Certificate No. 003173.
C. Issues Raised by City of Salisbury and Stanly County
There were a number of comments filed in response to the Original 401 Application
regarding sedimentation and flooding effects attributed to the Yadkin Project's High Rock Dam
and Reservoir.6 The City of Salisbury requested that DWQ condition APGI's certification to
address its concerns that sedimentation may negatively impact its water supply intake and that
flooding could damage its water and wastewater treatment facilities. The majority of these
comments and requests for conditions fell outside of the scope of the Section 401 review,
although DWQ prescribed conditions in 401 Certificate No. 003173 requiring APGI to allow
access to and provide for dredging to remove sand and other debris that may accumulate at the
water supply intake whenever accumulation of sand and other debris makes use of the intake
inoperable.7
6 In addition, APGI understands that there may be a large volume of filings in response to DWQ's public
notice that are similar or identical in content. APGI is confident that DWQ will be able to separate wheat from the
chaff.
7 Although APGI did not appeal the dredging conditions in 401 Certificate No. 003173, APGI reserves its
right to assert that the conditions do not fall within the scope of a Section 401 certification, in the event that such an
opportunity is presented.
10
Similarly, Stanly County initially filed comments on November 9, 2007 that largely
concerned groundwater discharges from facilities that are not part of the Yadkin Project and that
are being addressed under the jurisdiction of other laws, rules and programs by agencies of the
State of North Carolina. On May 1, 2008, in response to DWQ's April 17`h notice, Stanly County
made an additional filing ("Stanly County's May I" Filing") in which it argued that, because of
the additional legal arguments presented therein and the volume of additional technical
information Stanly County submitted, DWQ had no reasonable course of action before the May
9, 2008 deadline other than to deny APGI's Section 401 application. APGI vigorously disagrees.
Despite its volume, Stanly County's May 1 s` Filing actually provides very little new
factual information of substance or legal arguments, as demonstrated by the following points:
Stanly County's submission contains a statement by Dr. John Rodgers of Clemson
University, together with copies or citations to a number of technical reports that in some
relate to water quality in the reservoirs of the Yadkin Project. However, Dr. Rodgers'
statement does not indicate that he has any personal knowledge of water quality in
Project reservoirs or that he conducted an independent study of technical literature
relating to water quality in such reservoirs. Rather, Dr. Rodgers' statement only analyzes
the studies that he apparently was given and only offers the bare conclusion, based on
that analysis, that there appear to be serious water quality issues that DWQ needs to
further address. Although he appears to claim otherwise, based on his Curriculim Vitae,
Dr. Rodgers' experience does not include expert work on the specific effects of
hydroelectric operations on water quality.
Virtually all of the reports covered in Dr. Rodgers' statement were in existence and
available to DWQ when it rendered its decision regarding 401 Certificate No. 003173.
Contrary to Stanly County's May I" Filing (pp.6-7), there is no evidence that DWQ failed
to avail itself of existing public reports when it rendered its earlier decision; rather, Mr.
Dorney relied on the review of those materials by others. The report by Environmental
Services, Inc. regarding the Badin Lake Swim/Picnic Area (Stanly County May I" Filing
at 8) was apparently prepared for Stanly County and submitted in one of the County's
submissions to FERC, but was never previously submitted to DWQ, apparently at Stanly
11
County's election. Finally, the Fish Sampling Work Plan (id.) is not a study at all but
simply a protocol for a study being proposed.
Stanly County's assertions that DWQ's responsibilities and jurisdiction are greater than
what DWQ determined in 401 Certificate No. 003173 are wrong. The Jefferson County
P. U.D. case does not state the extent of DWQ's jurisdiction. Rather, it holds only that
states under Section 401 do have broad authority to condition a Section 401 certificate on
the effects of the discharge. It most definitely does not say, as Stanly County urges at pp.
3-4 of its May 1 s1 Filing, that the state under Section 401 can impose water quality
conditions that are unrelated to the discharge that gives rise to Section 401 jurisdiction in
the first instance. What Stanly County appears to be arguing is that DWQ should
interpret its Section 401 authority in a manner much broader than it has in all the other
Section 401 certificates it has issued to hydroelectric projects in recent years.
Nor is there any detail or substance to accompany Stanly County's naked assertion
(Stanly County May 1 s1 Filing at pp. 4-5) that DWQ's limitation on the scope of its
jurisdiction was self-imposed by virtue of the state's participation in the RSA.
The suggestion that DWQ failed to address dissolved oxygen ("DO") in 401 Certificate
No. 003173 is unfounded and incorrect. In fact, DO is explicitly addressed in Articles
WQ-1 through WQ-4 that are part of the conditions of 401 Certificate No. 003173.
12
IV. Conclusion
For the foregoing reasons, APGI respectfully requests that DWQ, after considering any
additional comments within the scope of such certifications as set forth in Section 401 of the
Clean Water Act and North Carolina's implementing statutes and regulations, issue a Water
Quality Certificate for the Yadkin Project on or before May 9, 2008, that conforms in substantial
measure to 401 Certificate No. 003173. In any event, DWQ should not deny APGI's Section 401
Application.
Res tfully submitted,
David R. Poe
Ahren S. Tryon
Dewey & LeBoeuf LLP
1101 New York Avenue, N.W., Suite 1100
Washington, DC 20005-4213
[phone]
[phone]
[e-mail]
[e-mail]
CYq.? S ?+b
Craig A. Bro'mby
Charles D. Case
Hunton and Williams LLP
One Bank of America Plaza, Suite 1400
421 Fayetteville Street
Raleigh, North Carolina 27601
[phone]
[phone]
[e-mail]
[e-mail]
Attorneys for Alcoa Power Generating, Inc.
13
CERTIFICATE OF SERVICE
This is to certify that a copy of the foregoing document was served via email and U.S,
mail to the following:
Thomas N. Griffin, III
Allison B. Edgar
Parker Poe Adams & Bernstein LLP
Three Wachovia Union Center
Suite 3000
401 South Tryon Street
Charlotte, NC 28202-1935
tomgri ffi n@parkerpoe. com
[e-mail]
V. Randall Tinsley
Brooks Pierce McLendon Humphrey & Leonard LLP
2000 Renaissance Plaza
230 North Elm Street
Greensboro, NC 27401-2438
[e-mail]
Donald W. Laton
Assistant Attorney General,
Environmental Division
N.C. Department of Justice
114 W. Edenton Street
P.O. Box 629
Raleigh, NC 27602-0629
[e-mail]
Dated this the 2"d day of May, 2008.
7v ~
o-c-
Davi R. Poe