NC0000272_EPA Letter Color Variance Review_20011126

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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
g ,7 REGION 4
l ATLANTA FEDERAL CENTER
61 FORS TH STREET
ATLANTA.GEORGIA30303-3960 RECEIVED
Ev 16 2Dol. NOV 2 6 2001
N.C. ATTORNEY GENERAL
Environmentzl Dlvlsion
Mr. Gregory J. Thorpe;Ph.D.
Acting Director, Division of Water Quality
North Carolina Department of Environment and Natural Resources '
16`17 Mail Service Center Dr% — 32001
Raleigh, North Carolina'27699-1617
Dear Dr. Thorpe:
The purpose of this letter is to provide the results of Environmental Protection Agency's
(EPA's) Clean Water Act Section 303(c) review of the State's action to reissue the variance for
instream color for the Blue Ridge Paper Products, Inc. (Blue Ridge Paper) discharge to the
Pigeon River.
The variance for instream color was reissued by the State on October 10, 2001, with an
effective date to be the same as the effective date for reissuance of National Pollutant Discharge
Elimination System permit No. NC0000272. The October 2001 color variance was certified as
"duly adopted in accordance with N.C.G.S. §143-215.3(e) and 15A 2B.0226, following notice,,
public hearing and consideration by the NPDES Committee of the Environmental Management
Commission" in a letter dated October 16, 2001 from Francis W. Crawley, Special Deputy
Attorney General, Commission Counsel to the EPA Region 4 Regional Administrator. The
basis of the State's 2001 modification to the variance is that"further reductions in color cannot
be made at this time in an economically reasonable manner, and, if required, would produce
serious hardship without equal or greater benefits to the public." [Color Variance, October 10,
2001, page 10)
EPA's initial approval of the variance, which was adopted by the State on July 13, 1988,
was based on the provisions of 40 C.F.R. §13 1.10(g)(6), which state:
States may remove a designated use which is not an existing use, as defined in
§131.3, or establish subcategories of a use if the State demonstrates that attaining
the designated use not feasible because . . . Controls more stringent than those
required by Section 301(b) and 306 of the Act would result in substantial and
widespread economic and social impact.
Since the State's original adoption ol'the variance, more restrictive color limitations have
been established, and the point of compliance with instream color requirements has been moved
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further upstream to a location closer to the Blue Ridge Paper outfall. Also, the 1996 and 1997
modifications of the variance required further evaluation and reporting of the technical,
economic, and operational feasibility of color minimization, color removal, and color treatment
(on both a continuous or intermittent basis), which served as the basis for incremental reductions
of color discharged to the Pigeon River. In regard to compliance with these historical and
current conditions of the variance, the previous discharger (Champion International) and its
successor (Blue Ridge Paper) have complied with all terms of the original variance and the 1996
and 1997 modifications of the variance.
EPA's review of the color variance reissued by the State on October 10, 2001 is based on
the provisions of 40 C.F.R. §131.20, which require the following:
Any water body segment with water quality standards that do not include the uses
specified in Section 101(a)(2) of the Act shall be reexamined every three years to
determine if any new information has become available. If such new information
indicates that the uses specified in Section 101(a)(2) of the Act are attainable, the
State shall revise its standards accordingly.
In 1997, several groups signed an agreement which established specific requirements for
the operation of the Blue Ridge Paper mill and for the wastewater treatment operations at the
mill, and governed certain actions of regulatory agencies relating to the Blue Ridge Paper facility.
This 1997 Settlement Agreement established that the Technology Review Workgroup
(Workgroup) would study available color reduction technologies and report on those
technologies prior to reevaluation of the variance in 2001. The 1997 Settlement Agreement
also recognized that the EPA Technology Team would study options for color reduction at the
Blue Ridge Paper mill, and prepare a report for the Workgroup's use in their evaluations. The
Workgroup's analysis presents a summary of the analysis of available color reduction
technologies that may be employed at the Mill as well as a summary of the estimated economic
impact of the cost of implementing those technologies. The report included review and input
from North Carolina,Tennessee, the Clean Water Fund of North Carolina, Liebergott and
Associates and GL&V Pulp Group, Inc., and Blue Ridge Paper. The report also addresses
relevant technologies evaluated in the Bleach Environmental Process Evaluation and Report.
The Workgroup identified five process improvements capable of further reducing color
discharged from the Blue Ridge Paper Mill, and reviewed the technical feasibility, capital and
operating costs, and potential color reduction capacity of each. Due to the potentially high initial
capital investment costs and ongoing operating expenses of end-of-pipe treatment technologies,
the Workgroup focused on pollution prevention approaches such as color reduction in low flow,
highly color-concentrated waste streams, through manufacturing changes or in-process treatment.
The Workgroup reviewed the EPA Technology Team report, reviewed reports submitted
by Blue Ridge Paper, conducted a site visit to the Blue Ridge Paper Mill in March 2001-,
reviewed the Bleach Environmental Process Evaluation and Report dated June 8, 2001, and

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considered comments from environmental interests and other stakeholder groups in reaching
their conclusions and recommendations. Among other conclusions, the Workgroup found that
the EPA Technology Team report "represents an appropriate evaluation of the potential for
additional color reduction at the Mill over the next permit cycle."
The Workgroup considered these five process improvements for specific inclusion for
implementation or further study.as terms of the variance as well as the recommendation of the
Bleach Environmental Process Evaluation and Report for process optimization on both the
hardwood and softwood fiber lines. Two of these five process improvements (improvements in
bleach filtrate recycle reliability and leak and spill prevention and control - best management
practices) and the process optimization option recommended in the Bleach Environmental
Process Evaluation and Report were concluded to have the "highest certainty for technical
feasibility and color reduction." Implementation activities for these three activities are required
in the conditions of the variance.
The Workgroup identified two other process improvements (ozone addition to an existing
chlorine dioxide bleaching stage on the hardwood fiber line and adding a second stage to the
current oxygen delignification system on the softwood fiber line) as having a "reasonable
certainty for technical feasibility and color reduction."
The variance requires an evaluation of these two technologies as well as a requirement for
Blue Ridge Paper to submit a proposed schedule for implementation of these two process
improvements or installation of technologies required to achieve an e�fluent color reduction of
3,000 - 8,000 pounds per day over and above the color reduction of the "highest certainty'
improvements. The incremental range of color reduction of 3,000 to 8,000 pounds per day is
commensurate with the range of color reduction identified by the Workgroup as possible with the
implementation of the "reasonable certainty" improvements.
The Workgroup also identified a fifth process improvement (color treatment for the
chloride removal process (CRP) purge stream) as having potential for additional color reduction.
Based on the results of previous laboratory trials of color precipitation, Blue Ridge Paper
concluded that lime treatment is not a feasible option for the CRP purge stream. However, the
EPA Technology Team recommended "additional review of other innovative technologies for
treatment of color in the CRP purge stream, such as the application of the X-Filter process
recently implemented at a totally chlorine free (TCF) mill." Based on the Workgroup's
recommendation, the variance requires that Blue Ridge Paper: (1) complete an evaluation of the
technical, economic, and operational feasibility of implementing color reduction technologies
associated with the CRP waste stream, and (2) prepare.a report on those investigations, unless
Blue Ridge Paper identifies a feasible technology for treatment of this waste stream, in which
case the obligation to research additional technologies will be waived.
The conclusions of the Workgroup serve as the basis for the inclusion of color reduction
technologies and targeted ranges of color reduction as requirements in the variance, as well as the

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inclusion of future steps to be completed prior to the next review of the variance.
In addition, EPA used three measures of financial health (gross profit test, discounted
cash flow, and Altman's Z) "to assess the impact of air emissions control technologies and
devices and wastewater compliance costs." Based on analysis of that assessment and the
conclusions reached by the Workgroup, the underlying rationale for EPA's approval of the July
13, 1988 variance has not changed, and there is no information presented which would serve as a
basis to conclude that Section 101(a)(2) uses, i.e., Class C uses and the supporting water quality
criteria for instream color, are attainable at the present time.
EPA initiated informal consultation with the U.S. Fish and Wildlife Service (Service) on
October 12, 2001, under Section 7(a)(2) of the Endangered Species Act. Section 7(a)(2) requires
that federal agencies, in consultation with the Service, insure that their actions are not likely to
jeopardize the existence of federally listed species or result in the adverse modification of
designated critical habitats of such species. Upon completion of consultation, EPA will notify
the State of the results.
Considering the above, the requirements of the Clean Water Act and 40 C.F.R. Part 131 ~
in relation to attainability and the continued progress to meet the full Section 101(a)(2) use have
been met, and the State's action to continue the color variance is approved subject to the results
of consultation under Section 7 of the Endangered Species Act.
If you have'questions concerning this matter, please contact me at 404/562-9326.
Sincerely,
Beverly H. Banister, Director
Water Management Division
cc: Francis W. Crawley

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State of North Carolina
ROYCOOPER Department of Justice REPLY TO:Francis W.Crawley
ATTORNEY GENERAL P. O. BOX 629 Environmental Division
RALEIGH I [e-mail].=us
Telephone:919nI6.6600
27602-0629 rm:919nl"767
October 15, 2001
Robert Williams,Director Certified Mail
Environment Health &Safety Affairs Return Receipt Requested
Blue Ridge Paper Products,Inc.
P. O.Box 4000
Canton„North Carolina 28716
RE: NPDES Committee Decision on the Color Variance for the Canton Mill
Dear Mr.Williams:
The NPDES Committee of the Environmental Management Commission at its October
10,2001 meeting received the hearing officer's report of the public hearing and,upon duly made
motion and vote, approved the color variance with its conditions,for the Blue Ridge Paper
Products mill in Canton. The variance will be effective as of the effective date of the renewed
NPDES Permit No.NC 0000272 for the Canton Mill and the terms of the previously existing
variance will continue in effect until that time. A copy of the Color Variance is enclosed.
Very truly yours,
ci= W.
ancis W. Crawley b
Special Deputy Attorney General
Commission Counsel
cc: William Clarke
Gregory Thorpe
Paul Davis
Davis McKinney
Davis Jenkins
Charles Moore
Roland Dykes

ENVIRONMENTAL MANAGEMENT COMMISSION
NPDES Committee
IN THE MATTER OF REQUEST FOR )
VARIANCE FROM WATER QUALITY )
STANDARD-BASED EFFLUENT ) COLOR VARIANCE
LIMITATIONS BY BLUE RIDGE )
PAPER PRODUCTS,INC. )
CANTON,NORTH CAROLINA )
THIS MATTER came on to be heard before the NPDES (National Pollutant Discharge
Elimination System) Committee of the North Carolina Environmental Management Commission
at its scheduled meeting in Raleigh,North Carolina, on October 10, 2001, for consideration of re-
issuing a color variance, originally granted to Champion International Corporation on July 13,
( ( 1988, and modified on October 9, 1996, on December 11, 1996, and on December 11, 1997;to
Blue Ridge Paper Products, Inc. ("Blue Ridge Paper")the successor corporation.
Upon duly made motion and vote, the NPDES Committee hereby adopts the following
Findings of Fact and Conclusions of Law:
FINDINGS OF FACT
(taken from the October 9, 1996, Order)
1. Pursuant to a request for variance, dated January 12, 1988, submitted by
Champion International Corporation ("Champion"), the NPDES (National Pollutant Discharge
Elimination System) Committee of the North Carolina Environmental Management Commission
granted Champion a variance from the North Carolina water quality standard for color, as that
standard is interpreted by the U.S. Environmental Protection Agency. The variance was
memorialized in the NPDES Committee's Final Decision, dated July 13, 1988.

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2. Pursuant to Ordering Paragraph 6 of its Final Decision, the NPDES Committee
established a Variance Review Committee to review the Canton Mill's proposed modernization
program and to recommend any changes to the existing variance. As stated in Ordering
Paragraph 6 of its Final Decision, the NPDES Committee was charged with determining "if
changes in the variance are warranted due to the effectiveness of the treatment system or because
of advances in color reduction technologies for this type wastewater."
3. Modification of the variance as recommended by the Variance Review Committee
would.not result in any discharge of waste that would endanger human health or safety. The
variance for color was to allow discharge of wastewater at levels that would prevent Champion's
contribution to the true color from causing the true color at the North Carolina/Tennessee State
line to exceed 50 true color units at all flows equal to or greater than 126 cfs at the Hepco
Gauging Station. The substance being discharged, for which.the variance was sought, is not
bioaccumulative. The color does not, at the volumes and levels involved here,present a risk of
indirect or direct human impact or broad environmental damage. The waters are not water
supply. Therefore, the discharge would not endanger human health or safety.
4. Reduction of color discharge by application of best available technology was
found to be not economically reasonable and to result in serious hardship without equal or greater
benefit to the public. A detailed and thorough study and evaluation, of color removal
technologies was performed and reported in Champion's 1995 and 1996 Color Removal
Technology Reports submitted to Division as required by the then-existing color variance.
5. Champion completed its mill modernization project which re-configured its
facility as an oxygen delignification, 100% chlorine dioxide substitution (OD-100) bleach mill.

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The project resulted in limited color reduction in its effluent discharge. The end-of-pipe
technologies considered in 1988 and updated for the 1996 review established: a) standard
water/wastewater separation technology (lime, alum, or polymer) had not been applied in a
similar fashion, b) these technologies would result in high capital and operating costs at the mill,
c) color reduction on this type of waste, using these type technologies had no operational
efficiency "track record" (effective under normal paper mill production variations, and consistent
and reproducible color removal), and d) the process color removal effectiveness of OD-100 may
present other in-process reduction opportunities that were not realized as of October 9, 1996.
6. In review of the color data, including the short time since the re-configured mill
became fully operational, it was determined that a more restrictive limitation should apply for
color. Therefore, the more restrictive monthly and annual average color limitations contained in
the Ordering Paragraph 2, of the October 9, 1996, Order, were established.
7. Based on the continued development of color discharge information from the
reconfigured mill, Champion was required to statistically evaluate its monthly average color
discharge, its.annual average color discharge, and the performance of the State line color model.
These evaluation processes were to be ongoing and the results of the evaluations were required to
be reported to the Division of Water Quality ("Division" or"DWQ") prior to each water quality
standards triennial review period. The results of these evaluation processes were to be utilized
by the Division and the next Variance Review Committee to make recommendations to the
NPDES Committee on future revisions to the variance. Champion was to follow the Color Data
Variance Review Requirements proposed by the staff and the hearing officer, in reporting these
evaluations.

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8. Champion was also required to take such actions,as necessary to prevent their
contribution of true color from exceeding 50 true color units'at the North Carolina/Tennessee
State line at all flows equal to or greater than 126 cfs at the Hepco Gauging Station.
Furthermore, the method by which compliance was to be determined continued to be the color
predictive model.
(taken from the December 11, 1996, Order).
9. On October 17, 1996, the Director of the Division of Water Quality transmitted to
the United States Environmental Protection Agency, for its review,the October 9, 1996,order for
Modification of Color Variance Granted on July 18 1988
10. By letter dated December 23, 1996, Tennessee advised EPA that it considered the
f permit to be invalidly issued, and that North Carolina had failed to comply with §402(b)(5) of the
Clean Water Act, 33 U.S.C. §1342(b)(5).- Subsequently, on January 13, 1997, Tennessee filed a
contested case petition with the North Carolina Office of Administrative Hearings challenging.
the permit and color variance. Thereafter, Champion, Cocke County, and Newport were allowed
to intervene in the North Carolina contested case proceeding.
11. In an effort to resolve the .color issue without time- and resource-consuming
litigation,North Carolina, Tennessee, Cocke County,Newport, Champion, and EPA agreed to an
informal negotiation process. The North Carolina contested case proceeding was stayed during
this process. On November 21, 1997, Tennessee Environmental Council and American Canoe
Association were also allowed to intervene in the North Carolina contested case proceeding.
12. The parties to the contested case agreed to measures to achieve additional color
reduction over that required in the permit issued on December 12, 1996 and by the color variance

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adopted on December H, 1996. The parties agreed that the December 1996 Permit and Variance
would be modified to reflect these requirements and effectuated a Settlement Agreement which
would be entered in the contested case.
13. The December 1996 permit and variance required that Champion implement a one
year demonstration of full-scale bleach filtrate recycling (BFR") technology on the mill's pine
line and that, as of December 1, 1998, Champion implement and operate BFRT' technology on
its pine line, unless Champion could demonstrate to the NPDES Committee that BFR` was not
commercially viable.
14. The 1996 permit and variance required Champion to evaluate the potential for
additional minimization of color losses from the manufacturing process and raw material storage
areas (i.e. in-mill color minimization; or, spill prevention/control measures) that might result in
Further color reduction and to report its findings to the NPDES Committee. Reports were to be
submitted by.March 1, 1998 and again by June 1, 2001, so that they could be used by the
Committee in conjunction with the required Variance review process held every three years to
determine if the variance would be readopted or made more stringent. As a part of the efforts to
resolve the challenge to the 1996 permit and variance, a Technology Review Workgroup (TRW')
was formed, comprised of experts on the pulp and paper industry from EPA and representatives
of the environmental agencies for the State of Tennessee and North Carolina.
15. The 1996 permit and variance required Champion to evaluate and report to the
NPDES Committee on end-of-pipe color reduction technologies that could conceivably be
implemented at the mill. The evaluation was to include an incremental color improvement
analysis which concentrated on the technical, economic, and operational feasibility of the

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application of these technologies on a continuous or intermittent basis. The intermittent
application of these technologies was to look particularly at periods of low river flow. These
reports were to be submitted to the NPDES Committee for its consideration as part of the water
quality standards Triennial Reviews to determine whether the variance should be readopted or .
made more stringent. The reports were to identify specific economic and implementation issues
associated with the incremental improvements of color levels expected by installing these
technologies at the mill. They were also to project the expected additional color reduction
possible using the identified technology.
(Events and Activities since Champion conveyed the Canton Mill)
16. On May 14, 1999 the ownership and operation of the Canton Mill along with
'( several related production facilities was transferred from Champion to Blue. Ridge Paper:
Products Inc. ("Blue Ridge Paper"). Subsequent to that change, Blue Ridge Paper in a letter
dated May 7, 1999,requested that DWQ reissue the Canton Mill permit to the new owners. On
July 14, 1999 the DWQ issued to Blue Ridge Paper the NPDES permit for the Canton Mill. In
taking this action, the DWQ reminded Blue Ridge Paper of the new owner's responsibility to
comply with all the requirements of the Settlement Agreement and the 1997 Revised Color
Variance.
17. In accordance with the requirements of the Settlement Agreement, the 1997
Revised Color Variance, and the revised 1996 NPDES Permit for the Canton Mill, Blue Ridge
Paper assumed the responsibility for submission of all reports and evaluations required by these
documents and due after May 14, 1999. Blue Ridge Paper has submitted all required reports and
nas complied with the conditions of the Agreement, Variance and Permit. In a letter dated

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February 21, 2001, Blue Ridge Paper submitted to the DWQ its request for renewal of the
facility's NPDES Permit which is scheduled to expire on November 30, 2001, permit number:
NC0000272. The Division, along with the EPA and the TRW has worked to evaluate the Canton
facility and the information submitted by the permittee in support of its request for renewal of the
permit. It was anticipated by the Division that the variance and the permit would be considered
for re-issuance in the same time frame.
I8. The TRW has been provided copies of all correspondence and report materials,
has visited the facility, consulted with EPA's Technology Team("Tech Team," the group of staff
and consultants assigned by the federal agency to support this review effort), met on site, and
discussed the issues by telephone on several occasions in an effort to provide recommendations
to the parties to the Settlement Agreement and to the NPDES Committee on what revised color
conditions should be placed in the variance and renewal permit for the Canton Mill. Those
efforts culminated in two important documents: the EPA Tech Team Report dated July 25, 2001
and the TRW recommendation report dated August 3, 2001. A critical component of these
evaluations was the report funded jointly by Blue Ridge Paper and a consortium of
environmental groups interested in the mill and its impact on the Pigeon River (Bleach
Environmental Process Evaluation and Report prepared by Dr.Norm Liebergott,PhD,Liebergott
& Associates Consulting Inc. and Mr. Lewis Shackford, GL&V Pulp Group, Inc.). The TRW
and the Tech Team utilized this report in developing their final recommendations.
19. In support of the need for the color variance, Blue Ridge Paper submitted to the
Division a report dated June 1, 2001 and entitled: Analysis of the Impact of Additional Water
Treatment Technology on the Profitability of the Blue Ridge Paper Products, Inc. Canton Mill.

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This evaluation provides the basis for examining the economic impacts that would occur if the
Mill were to be required to provide color reductions beyond those outlined in this Color
Variance.
20. Based on this foundation of information, the Division developed a draft color
requirement for the Canton Mill and submitted that condition along with the draft NPDES permit
and variance to public notice on August 3, 2001. On September 6, 2001, Ms. Marion Deerhake,
EMC and NPDES Committee of the EMC, convened and conducted a public hearing on the draft
permit and an effluent color variance for the Canton Mill. Ms. Deerhake's Hearing Officer
Report and the recommendations made concerning the Color Variance are the basis of the
variance language appearing below, and are further incorporated by reference herein.
21. The Color Variance conditions established as the result of the work of the TRW
will continue the improvements to color in the Pigeon River, leading to reduced pounds per day
of color over the life of the Permit; which is to be issued contemporaneously with this Color
Variance; the discharges allowed do not endanger human health or safety, and actually result in
improved water quality from the previous permitted period of operation; and a continued
variance from the North Carolina narrative water quality standard for color, as interpreted
numerically by the United States Environmental Protection Agency, is necessary due to the fact
further reductions cannot be made at this time in an economically reasonable manner and, if
required, would produce serious hardship without equal or greater benefits to the public.
22. The NPDES Permit No. NC0000272 for the Canton Mill and this Color Variance
are, to the extent feasible, to be issued contemporaneously and the terms of this Color Variance
included as Special Conditions in the permit.

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CONCLUSIONS OF LAW
(from the October 9, 1996, Order)
1. Pursuant to Ordering Paragraph 6 of the July 18, 1988, Final Decision, the
NPDES Committee reviewed the then-existing variance following the Champion Canton Mill
modernization program.
2. The previously existing variance from the North Carolina water quality standard
for color, memorialized in the NPDES Committee's Final Decision, dated July 18, 1988, was
determined to remain in effect except as specifically modified by the October 9, 1996, order.
3. Based on the effectiveness of the treatment system subsequent to the Canton Mill
modernization project and due to the potential for improvements in color reductions by use of
bleach filtrate recycling(BW"), changes to the variance were determined to be warranted.
(from the December 11, 1996, Order)
4. On its own motion and prior to the effective date of the October 9, 1996, order for
Modification of Color Variance Granted on July 18 19M the NPDES Committee amended its
October 9, 1996, order,to satisfy concerns of the United States Environmental Protection
Agency, to clarify its conditions and to make the conditions more restrictive on Champion
International Corporation.
(from the December 11, 1997,Revision to Color Variance)
5. By duly adopted motion and vote, the NPDES Committee Ordered that the Color
Variance to Champion International Corporation be granted as a Revised Color Variance, with an
effective date of December 11, 1997.

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(Issuance to Blue Ridge Paper)
6. The NPDES Committee has reviewed and considered the Color Variance for
application to Blue Ridge Paper Products, Inc.; and finds that the color variance should be
granted and re-issued during the term of the corresponding NPDES permit.
7. This Color Variance is granted and re-issued pursuant to N.C.G.S. 143-215.3(e);
further reductions in color cannot be made at this time in an economically reasonable manner,
and,.if required, would produce serious hardship without equal or greater benefits to the public.
Based on the foregoing Findings.of Fact and Conclusions of Law, it is hereby ORDERED
that the variance from the,Nor-th Carolina water quality standard for color, as previously
memorialized in the orders of July 18, 1998, October 9, 1996, December 11, 1996, and
December 11, 1997 granted to Champion International Corporation, is re-issued to Blue Ridge
Paper Products,Inc. and now reads as follows:
A. Blue Ridge Paper Products, Inc. is granted this Color Variance, pursuant to
N.C.G.S. 143-2153(e),as a variance to water quality based effluent limitations for color.
B. The Division of Water Quality shall issue NPDES Permit No.NC0000272,for the
Canton Mill, and draft its provisions to reflect all the conditions of this Color Variance including
the following specific wording:
I. The color reduction requirements contained in this.special condition have been
derived directly from the mill's efforts to identify possible reduction measures and
from the EPA Technology Review Workgroup (TRW) (report dated August 3,
2001) and the EPA Tech Team Report(dated July 25, 2001). These requirements
are aimed at securing the highest feasible reduction of the,mill's effluent color
over the.permit cycle and for laying the foundation for zemoval of the color
variance by the expiration date of this permit.

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The EPA Tech Team Report identified three levels of possible color
reduction actions (identified in the report as Highest Certainty, Reasonable
Certainty and Lowest Certainty). Each of these tiers of reductions have identified
specific actions or technologies that when implemented may result in additional
color reductions in the mill's effluent. For example, the color reduction goals of
the condition in Paragraph 6 of this special condition is premised on the
implementation of all the actions of'Highest Certainty.'
Paragraph 7 of this special condition requires the company to evaluate
actions of'Reasonable Certainty'. Identified under 'Reasonable Certainty' are the
technologies of Ozone/Chlorine Dioxide stage for the hardwood bleach line and
second stage oxygen delignification for the pine line. This condition requires the
permittee to examine the technical, economic and operational feasibility of
implementing these technologies. The review of this required evaluation
(Paragraph 7) will be supported by the EPA TRW. Regardless of the outcome of
this feasibility analysis, the permittee is required to achieve 3,000 - 8,000 pounds
per day additional color reduction, except to the extent allowed by Paragraph 6.
This is considered the equivalent reduction of what would be expected from the _
installation of the two technologies identified by the EPA TRW process.
Color Treatment of the Chloride.Removal Process Purge Stream is the
color reduction methodology with the 'Lowest Certainty'. Therefore, this
condition requires the permittee to evaluate potential technologies for treatment of
this wastestream and to implement those if shown technologically, economically
and operationally feasible.
Built into this special condition is a series of regulatory requirements that
the permittee achieve reductions of the mill's effluent color consistent with each
series of reduction actions. This means that following implementation of the
'Highest Certainty' actions the mill's annual color limit must be reduced by 6,000 -
8,000 pounds per day, except to the extent allowed by Paragraph 6. If the
implementation of all the actions identified under 'Highest Certainty' actually
result in better long term effluent quality, this in no way reduces the permittee's
responsibility to achieve the color reductions measured by those action identified
as having 'Reasonable Certainty' of success and determined to,be technically,
economically and operationally feasible under paragraph 7.
The mechanism for applying the overall success of the mill's efforts to
reduce color is demonstrated by the actual color performance. This performance
will be the basis for limitations established following implementation of the
'Reasonable Certainty' category actions and the process of developing the mill's
limitations for the next permit renewal. Again, it is the goal of this special

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condition to achieve the color reductions identified by the EPA TRW and lay the
foundation for removal of the colonvariance by the expiration date of this permit.
2. The average annual discharge of true color for each calendar month shall not
exceed 48,000 pounds per day. The monthly average effluent true color loading
shall not exceed 55,000 pounds per day. For the purpose of this permittvariance
only, "pounds of true color" is calculated by the following equation:
Effluent Flow(mgd)x Effluent True Color Level(Platinum Cobalt Units)x 8.34.
3. All samples collected for color analysis and for use in the above calculation shall
be measured and reported using the procedure referenced in 39 FR 430.11 (b)
(May 29, 1974)- true and apparent color or as amended by the EPA.
4. Blue Ridge Paper, in accordance with activities underway at the'mill and in
response to the work of the EPA Technology Review Workgroup (EPA TRW),
has already begun the process of identifying and implementing technically,
economically and operationally feasible process optimization measures, which can
be taken to further reduce color discharges from the mill. The permittee is
directed to continue evaluating mill operations with the goal of fully identifying
opportunities for preventing and controlling measurable black liquor leaks and
{ spills (Best Management Practices - BMPs). Such BMPs include but are not
limited to:
Continuous improvement of operating practices so more leaks and spills
are recovered rather than discharged to sewer;
Improvement in preparation for planned outages to maximize capture of
tank clean-out waste and routing to recovery;
Reduction of clean water that continuously runs into sewers to prevent
dilution of smaller spills and facilitate recovery of highly colored
wastewaters; and
Improvement in the equipment used for handling of knot rejects to prevent
black liquor leaks into the recovery sumps.
5. As indicated in Paragraph 4, the permittee has already begun the process of
implementing the specific actions and technologies identified by the EPA Tech
Team as having the`Highest Certainty'. The permittee is directed to implement all
the specific actions and technologies the EPA Tech Team Report identified as
having the 'Highest Certainty'. The specific action items identified as having the
'Highest Certainty' include: Process Optimization, Improved black liquor leak &

..... .. ..__ _ . _w -
13
spill collection and control, and BFR reliability improvement. These 'Highest
Certainty' action items and technologies shall be implemented in sufficient time to
generate a sufficient database of representative mill effluent data for statistical
analysis by October 1, 2003.
By October 1, 2003, the permittee shall submit to the North Carolina
Division of Water Quality a report including a statistical analysis of the
permittee's monthly average color discharge,mill performance as related to color,
all available data necessary to derive the lowest achievable annual average and
monthly average color loading limits. By November 1, 2003, the Division of
Water Quality (in consultation with the Technology Review Workgroup) shall
recommend, considering the statistical analysis report submitted by the permittee
and the demonstrated perfonnance of the mill, the lowest achievable annual
average and monthly average color loading effluent limitations. I£ the limits
determined to be achievable are within or below the target range of 40,000 -
42,000 pounds per day as an annual average, the limits shall become effective on
December 1, 2003, by written notification from the Director. If the limits
determined to be achievable by the Division of Water Quality (in consultation
with the Technology Review Workgroup) are above the target range, the Permit
shall be modified in accordance with North Carolina's permitting process to
reflect those limits.
6. Implementation of the 'Highest Certainty' action items or technologies shall
reduce the annual average color discharge limit 6,000 - 8,000 lbs/day, based on
the statistical analysis conducted according to Paragraph 5. Beginning December
1, 2003, upon notification from the Division of Water Quality the annual average
discharge of true color shall not exceed 40,000-42,000 pounds per day.
However, if by November 1, 2003, the Division of Water Quality (DWQ),
in consultation with the Technology Review Committee', and the NPDBS
Committee agree that there are overwhelming technical, economic, or operational
barriers to the Pennittee's ability to attain a 40,000 - 42,000 lbs/day annual color
loading limit,DWQ shall recommend to the NPDES Committee, alternate interim
limits to become effective December 1, 2003. At that time, DWQ shall
recommend a new effective date for achieving an annual average color loading
limit of 40,000 -42,000 pounds per day. These recommendations shall be based
on what DWQ concludes Blue Ridge Paper can reasonably achieve, giving
consideration to the actual demonstrated color levels discharged and the 'Highest
Certainty' action items and technologies implemented pursuant to Paragraphs 4
The Technology Review Workgroup shall act in an advisory role to the North Carolina
Division of Water Quality, and NC DWQ Shall consult with the Technology Review Workgroup
prior to making any*decisions regarding color reduction activities at the Canton Mill.

................14
and 5. Based on DWQ's recommendation'S, the NPDES Committee will
determine an alternate interim limit to become effective on December 1, 2003,
and the new effective date for achieving an annual average color loading limit of
40,000- 42,000 pounds per day. After the NPDES Committee's final decision,
the NPDES Permit will be modified in accordance with North Carolina's
permitting process.
7. The permittee shall submit to the Division of Water Quality, the Technology
Review Workgroup, and the NPDES Committee by December 1, 2003, a report on
the feasibility of achieving a target annual average color reduction Within the
range of 3,000 pounds per day and 8,000 pounds per day from the reduction
achieved by implementation of the 'Highest Certainty' actions. This report shall
include an evaluation of the use of the 'Reasonable Certainty' actions identified in
the EPA Tech Team Report and any'other actions that would result in additional
color reductions, actions taken by the permittee to reduce color loading (since
permit issuance), and the technical, economic, and operational feasibility of
implementing the 'Reasonable Certainty' a'ctions on a continuous or intermittent
basis, in order to achieve a target annual average color reduction within the range
of 3;000 pounds per day and 8,000 pounds per day.As identified in the EPA Tech
Team Report, the 'Reasonable . Certainty' actions are the technologies of
Ozone/Chlorine Dioxide stage for the hardwood bleach line and second stage
oxygen delignification for the pine line. The report shall identify specific
economic and implementation issues associated with the proposed improvements.
The report shall also project expected additional color reduction for each
technology evaluated and maximum color reduction possible using the identified
technologies. The report shall also include a proposed schedule for
implementation of process improvements or installation of technologies required
to achieve an effluent color 'reduction of 3,000 - 8,000 pounds per day. The
permittee shall provide this evaluation/report, together with an updated report on
the results of ongoing and additional,planned color reduction activities, to the
Division of Water Quality, the Technology Review Workgroup and the NPDES
Committee. By February 1, 2004, DWQ (in consultation with-the Technology
Review Workgroup) shall approve or modify the permittee's recommended plan -
for achieving a 3,1000 - 8,000 pounds per day reduction to the target annual
average.
8. By December 1,2005, the permittee shall submit, as related to the implementation
of the process improvements evaluated according to Paragraph 7, a statistical
analysis of Blue Ridge Paper's effluent quality performance. This report shall
include a statistical analysis of the Blue Ridge Paper's monthly average and annual
average color discharge, mill performance as related to color, all available data
necessary to derive the lowest achievable annual average and monthly average
color loading limits.

15
By February 1, 2006, the Division of Water Quality (in,consultation with
the Technology Review Workgroup) shall recommend, considering the statistical
analysis report submitted by the permittee and the demonstrated performance of
the mill, the lowest achievable annual average and monthly average color loading
effluent limitations. If the limits determined to be achievable are within or below
the target range of 32,000 -39,000 pounds per day as an annual average, the limits
shall become effective on March 1, 2006, by written notification from the
Director. If the limits determined to be achievable by the Division of Water
Quality (in consultation with the Technology Review Workgroup) are above the
target range, the Permit shall be modified in accordance with North Carolina's
permitting process to reflect those limits.
9. By December 1, 2004, the permittee shall evaluate color reduction technologies
associated with the Chloride Removal Process (CRP) wastestream. The CRP
analysis shall concentrate on the technical, economic, and operational feasibility
of implementing the applicable technologies on all or a portion of the purge
stream. The report shall identify specific economic and implementation issues
associated with the improvements. The report shall also project expected
additional color reduction for each technology evaluated and maximum color
reduction possible.using the identified technologies. Though not limited to the
( ( following, the report shall include an analysis of the land application of the high
chloride - wastewater, . commercial incineration, coagulant/precipitation
technologies, and solidification for land disposal. The Division of Water Quality
(in consultation with the Technology Review Workgroup) shall evaluate the
feasibility of implementing identified technologies for further color reduction and
shall submit to the NPDES Committee by February 1, 2005, DWQ's
recommendations regarding color reductions associated with the treatment of the
CRP wastestream.
If during the course of this evaluation Blue Ridge Paper identifies a
technical, economic, and operationally feasible color reduction technology that
can be implemented for treatment of the CRP wastestream, the permittee may
request that the Technology Review Workgroup review this technology for
implementation at the Canton mill. If the Technology Review Workgroup
concurs that the identified technology is suitable for the Canton mill and that the
color reductions achievable are adequate, the mill's obligation to research
additional technologies will be waived after formal notification from Blue Ridge
Paper that the identified technology will be installed and placed into operation.
This notification shall include language indicating the permittee's commitment to
the implementation of the technology, along with a schedule for implementation.
The Division of Water Quality will notify the permittee in writing that the
proposed implementation schedule is acceptable.

16
10. By March 1, 2006, the permittee shall submit a report to Division of Water
Quality, the Technology Review Workgroup and the NPDES Committee on the
color reduction efforts as part of the Variance review process (Triennial Review
of North Carolina's Water Quality Standards). This report shall also include an
evaluation of color in the Pigeon River at the Fiberville Bridge, and an evaluation
on the feasibility of complying with North Carolina's Color Standard.
11. The 1997 Settlement Agreement contained,provisions to limit color in the Pigeon
River at the Hepco USGS gauge station. The new effluent limits in this permit are
more stringent than the provisions in the 1997 Permit and Color Variance and will
result in reduced color levels in the Pigeon River. It is possible to calculate the
monthly flow at the Canton gage station- above which instream color at the
Fiberville Bridge will not exceed 50 true color units. Using the 55,000 pounds per
day monthly average true color loading limit (implemented on the effective date
of the permit) the flow at the Canton Gage station, which will provide for color
less than 50 true color units'at the Fiberville Bridge is 171'.8 MGD. Therefore, the
monthly average color in the Pigeon River at the.Fiberville Bridge will be less
than 50 true color units whenever
ver the'monthly average flow (at the Canton gage
station) is greater than171.8 MGD.
12. The governing flow criterion for true color at Canton is 58.1 MGD (30Q2 stream
flow). The flow established, pursuant to Paragraph 10, is greater than this 30Q2
stream flow, therefore, for flows less than the 171.8 MGD at the Canton Gage
station but greater than 193.3 MGD (3 OQ2 flow) at the Hepco gage station, the
monthly average color in the Pigeon River at Hepco will be less than 50 true color
units.
13. Beginning December 1, 2003, the monthly average color in the Pigeon River at
the Fiberville Bridge will be less than 50 true color units whenever the flow at
Canton is greater than the flow established using the following equation and based
on the monthly average effluent limit established per Paragraph 5:
Flow at Canton USGS(MGD) (M.mW Aveuute Effluent Color [AmiLt6Iday-12468.3)+31.6+2.4
308.58
For flows at the Canton Gage station less than the flow established here
but greater than 193.3 MOD at the Hepco gage station, the monthly average color
in the Pigeon River at Hepco will be less than 50 true color units.
14. Beginning March 1, 2006, the monthly average color in the Pigeon River at the
Fiberville Bridge will be less than,50 true color units whenever the flow at Canton
is greater than the flow established using the following equation and based on the
monthly average effluent limit established per'Paragraph 8:

4_.._..
17
Flow—at Canton_USGS(MGD)=[Monthly Avemge EMuent Color L"n tlb/d 12468 1+31.6+2.4
�oe.ss
For flows at the Canton. Gage station less than the flow established here
but greater than 193.3 MGD at the Hepco gage station, the monthly average color
in the Pigeon River at Hepco will be less than 50 true color units.
15. The potential exists that there could still be periods of time corresponding to
periods of lower flow in the river, when color at Fiberville might exceed 50 true
color units. Therefore, the permittee shall continue to implement the approved
Low Flow Contingency Plan for mitigating the occurrence and degree of this
potential exceedence.
16. The permittee shall not increase the mill's pulp production capacity during the
term of this permit, unless the permittee can demonstrate that the increased
production can be achieved while reducing color loading. In addition, increasing
the mill's pulp production capacity may require permit revision in accordance with
North Carolina's NPDES Permitting rules.
17. The NPDES Permit shall be subject to reopening in order to modify the color
requirements based upon the following and in association with the required
triennial reviews:
Any breakthrough in color removal technologies. Such breakthroughs shall
be brought to the NPDES Committee for consideration, by Blue Ridge
Paper and the Division of Water Quality,as soon as they are discovered.
An acceptable statistical analysis of effluent color discharge data
demonstrating significantly better color removal performance than that
currently prescribed in the variance and permit, except as noted herein.
- Successful application of end-of-pipe color reduction technology or in-mill
color minimization effort that results in significant and measurable
reduced mass color discharge.
18. The transfer of this NPDES permit will not proceed until any successor-in-interest
to the current permittee has agreed to accept the provisions of this permit and
request and received from the NPDES Committee a transfer of 2001 Revised
Color Variance.

C. The Division of Water Quality shall include review of this variance as a specific
item in its Triennial Water Quality Standards review, as required by the federal Clean Water Act,
and make appropriate recommendations to the NPDES Committee.
D. This variance shall extend for an indefinite period of time, subject to
consideration during the water quality standards triennial reviews: Any modification or
termination based thereon shall be subjected to the public hearing process required by N.C.G.S.
143-215.3(e).
It is further ORDERED that this Color Variance shall be effective as of the effective date
of the renewed NPDES Permit No. NC 0000272 for the Canton Mill, and the terms of the
previously existing variance shall continue in effect until that time.
This the day of October, 2001.
Charles H. Peterson,Acting Chairman
NPDES Committee

_........._.._..___.__..__:..,... ...:.._.._ __._.__....._.........
19
CERTIFICATE OF SERVICE
This is to certify that I have this day served a copy of the foregoing COLOR VARIANCE
on the parties listed below by the methods indicated, addressed to each as follows:
Robert Williams, Director CERTIFIED MAIL
Environment Health & Safety Affairs RETURN RECEIPT REQUESTED
Blue Ridge Paper Products, Inc.
P. 0. Box 4000
Canton, North Carolina 28716
William Clarke, Esq. CERTIFIED MAIL
Roberts & Stevens . RETURN RECEIPT REQUESTED
P.O. Box 7647
Asheville, North Carolina 28802
Gregory J. Thorpe, Acting Director HAND DELIVERY
Division of Water Quality
N.C. Department of Environment
( ' and Natural Resources
9th floor,Archdale Building
Raleigh,North Carolina 27601-7687
Jennie Odette, Clerk HAND DELIVERY
Environmental Management Commission
N.C. Department of Environment
and Natural Resources
9th floor,Archdale Building
Raleigh,North Carolina 27601-7687
Paul Davis CERTIFIED MAIL
Tennessee Department of RETURN RECEIPT REQUESTED
Environment& Conservation
6th floor, L & C Annex
401 Church Street
Nashville,Tennessee 37243-1534
David McKinney CERTIFIED MAIL-
Tennessee Wildlife Resources RETURN RECEIPT REQUESTED
Ellington Agriculture Center
1 P. O. Box 40747
Nashville, Tennessee 37204

20
Gary A. Davis CERTIFIED MAIL
Tennessee Environmental Council RETURN RECEIPT REQUESTED
P. O. Box 2346
Knoxville, Tennessee 27901-2346
Beverly Bannister CERTIFIED MAIL
U.S. Environmental Protection RETURN RECEIPT REQUESTED
Agency, Region 4
Director of Water Management
100 Alabama Street, SW
Atlanta, Georgia 30303
David Jenkins CERTIFIED MAIL
American Canoe Association RETURN RECEIPT REQUESTED
7432 Alban Station.Boulevard
Suite B-226
Springfield, Virginia 22150
Charles Lewis Moore CERTIFIED MAIL
County Executive RETURN RECEIPT REQUESTED
Cocke County Tennessee
360 Main Street East
Newport,Tennessee 37821
Roland Dykes CERTIFIED MAIL
Mayor of Newport RETURN RECEIPT REQUESTED
P.O. Box 370
Newport,Tennessee 37821
This the 15P'day of October,2001.
ROY A COOPER .
Attorney General
Francis�VCrawley
Special Deputy Attorney General
N. C.Department of Justice
P. 0. Box 629
Raleigh, North Carolina 27602-0629
919/716-6600

ArFs> UNITED STATE
DEC 2 4 1507an
Preston Howard, Director
North Carolina Department of En
and Natural Resources
Division of Water Quality
P.O. Box 29535
Raleigh, North Carolina 27626-0:
Dear Mr. Howard:
This is in reference to the State-adopted revisions to the variance for the instream color
criterion for the Pigeon River. The variance was initially adopted by the State on
July 13, 1988, based on the conclusions of a use attainability analysis conducted by the State,
and was continued by the Environmental Management Commission National Pollutant
Discharge Elimination System (NPDES) Committee on May 12, 1993. The variance was
subsequently revised by the Environmental Management Commission NPDES Committee on
October 9, 1996 and December 11, 1996. All of these variances were approved by
the Environmental Protection Agency (EPA).
Revisions to the variance were adopted by NPDES Committee of the Environmental
Management Commission on December 11, 1997 and submitted for EPA review by letter
dated December 22, 1997. The letter submitting the revisions for EPA review included the
necessary legal certification by the State's Attorney General's Office that the revisions were
duly adopted pursuant to State law.
The applicable federal regulation regarding the State's obligation in the review and
reassessment of variances is contained in 40 CFR Section 131.20(a), which states:
"The State shall from time to time, but at least once every three years, hold
public hearings for the purpose of reviewing applicable water quality standards
and, as appropriate, modifying and adopting standards. Any water body
segment with water quality standards that do not include the uses specified in
Section 10l(a)(2) of the Act shall be re-examined every three years to
determine if any new information indicates that the uses specified in
Section 101(a)(2) of the Act are attainable, the State shall revise its standards
accordingly."
The above provision applies to "water quality standards that do not include the uses
specified in Section 101(a)(2) of the Act." The same procedures and requirements for review
apply to water quality standards which include water body segments with State-adopted
Recycled/Recyclable-Printed with Vegetable Oil Based Inks on 100%Recycled Paper(40%Postconsumer(

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2
variances to water quality criteria. A variance should be used instead of specifying
non-Section 101(a)(2) uses where a State believes the standard can ultimately be attained.
Consistent with the provision above, the State's re-examination of the 1996 variance
was conducted using new information collected subsequent to the December 11, 1996 revision
of the variance by the Environmental Management Commission NPDES Committee. The
recommendations for revision of the variance were made well in advance of the schedule
specified in the 1996 variance, which required reconsideration of the variance provisions by the
NPDES Committee by July 1, 1998. Given the review of the variance and the revisions which
are the subject of this letter, reconsideration of the variance in 1998 is no longer necessary.
EPA's review of variances involves the same substantive and procedural requirements
as removing a Section 101(a)(2) use, i.e., pursuant to the requirements of 40 CFR
Section 131.10. The re-examination of the 1996 variance resulted in a December 1997
variance that includes conditions limiting the amount of effluent color that can be discharged
on a monthly and annual basis, requirements for filing interim reports to the Technology
Workgroup and the North Carolina NPDES Committee regarding further in-plant color
reduction, implementation of specific best management practices for in-mill control of color in
the manufacturing process, and continued improvement of existing process and related
technologies which could improve the efficiency of all water-using equipment and operations
throughout the mill. The December 1997 variance also requires full implementation of the
BFR technology on the min's pine line, the initiation of implementation of the Eo stage of the
BFR technology on the mill's hardwood line by no later than January 1, 1999, and an
evaluation of these operations on the mill's hardwood line by December 1, 1999. The
revisions to the variance also include a condition that the permittee will not increase the mill's
current pulp production capacity during the permit term, unless this can be done in a way that
also reduces color loading.
The December 1997 variance requires a instream level of 50 true color units be met at
the North Carolina/Tennessee state line until December 1, 1998, when effluent color
limitations (60,000 pounds per day as an annual average and 69,000 pounds per day as a
monthly average) will take effect to assure that a maximum of 50 true color units will be met at
the state line. The above annual and monthly average limitations are based on the
implementation of the Near-Term Package of in-mill color reduction measures, and will
become effective permit conditions on December 1, 1998, unless the Technology Review
Workgroup determines, and the NPDES Committee agrees, that there are overwhelming
technical, economic or operational barriers to the attainment of these limits.
The terms of the water quality color variance establish a reporting date of
January 1, 2001 to address the feasibility of further reduction of effluent color levels to the
range of 48,000 to 52,000 pounds per day, and a date of April 1, 2001 for a recommendation
by the Technology Review Workgroup of the lowest achievable annual average and monthly
color loading effluent limitations for the discharge. If the recommended limits are within the

pppppp�
3
above target range, the limits shall be effective on May 1, 2001. Should the limits determined
to be achievable by the Workgroup not fall within the target range, the NPDES permit for the
mill shall be modified to reflect those limits.
The December 1997 variance also includes the following conditions for instream color:
effective December 1, 1998, color in the Pigeon River at the Hepco gage
shall be less than 50 color units whenever monthly average flows are greater
than 330 cfs."
The variance also requires that instream monitoring data will be used to evaluate the
effectiveness of the above effluent loading limits in achieving these levels and frequencies of
instream color, as well as the development of a contingency plan for mitigating the occurrence
and degree of instream levels of color exceeding 50 true color units at the HepCo gage during
periods of lowest stream flow in the Pigeon River.
The State's establishment of effluent limitations for color which are effective from the
present time until October 31, 2001, is consistent with the provisions of 40 CFR
Section 131.10(g)(6). The provisions in the 1996 variance for reconsideration of the variance
during the 2001 triennial review of State water quality standards have been retained. This
reconsideration involves an evaluation of actual reduction of in-mill color loadings in
conjunction with an evaluation of end-of-pipe color reduction technologies on a continuous
and intermittent basis.
It is EPA's determination that the December 1997 water quality color variance
complies with the provisions of Section 303 of the Clean Water Act and 40 CFR Part 131.
Therefore, EPA is approving the variance as a revision to State water quality standards.
I appreciate the extensive resources that you and other staff in the North Carolina
Department of Environment and Natural Resources have expended in the process of revising
the variance. These efforts reflect the highest level of dedication and spirit of consensus-
building needed to resolve environmental issues of the most complex and controversial nature.
If you have questions concerning EPA's approval of the variance, please contact me at
404/562-9330.
Sincerely,
Robert F. McGhee, Director
Water Management Division
cc: Mr. Forrest R. Westall
Mr. Paul E. Davis

ppppp� �k&ff
State of North Carolina
MICHAEL F. EASLEY Deparlment of Justice
A'170RNEY OENFRAL P.0. BOX 626)
RALEIGH
27602 629 Reply to: Daniel C. Oakley
Environmental Division
[phone]
[phone](Fax)
December 22. 1997
1 DEC 2 9 tjf,a:
Mr. John Hankinson. Jr.
,._
Region IV Administrator � ;tcy� `:� 'UA�U�fSL
U.S. Environmental Protection Agency �AJAt Or�wc" f
100 Alabama Street, SW
Atlanta, Georgia 30303
Re: Champion International Corporation, Canton Mill;
Revised Color Variance
Dear Mr. Hankinson:
On October 15, 1996, 1 advised your office that, under the provisions of a Color Variance
granted to Champion International Corporation, for its Canton Mill, on July 13, 1988, and GS.
143-215.3(e), the North Carolina Environmental Management Commission, acting through its
NPDES Committee, had modified the terms of the existing variance. The order providing for the
modifications was attached for your reference. On December 9, 1996, you confirmed by letter to
Assistant Secretary Linda Rimer that additional more restrictive clarifications were necessary for
EPA approval. The NPDES Committee considered amendments to its October 9, 1996,
modification order, in its session held on December 11, 1996; and an Amended Order for
Modification of Color Variance Granted on July 13, 1988, was issued. That Amended Order was
approved by you on December 26, 1996.
A contested case proceeding, filed with the North Carolina Office of Administrative
Hearings. followed the December 11, 1996, Amended Order. That proceeding has now been
resolved by all parties. On December 11, 1997, the NPDES Committee considered and approved
a Revised Variance, subject to receipt of an executed Settlement Agreement leading to the
termination of the contested case proceeding. That Settlement Agreement has now been
received.

ppppp�
Mr. John Hankinson, Jr.
December 22, 1997
Page 2-
The revision of the color variance was undertaken in accordance with established North
Carolina law and procedure, and will effect changes in the Color Variance contemporaneously
with the effective date of re-issued NPDES Permit No. NC 0000272, which is January 1, 1998.
Please advise if you require any further information.
Very truly yours,
Daniel C. Oakley
Senior Deputy Attorney General
DCO/so
cc: Preston Howard
Andy Vanore
Hampton Dellinger
21427

ENVIRONMENTAL MANAGEMENT COMMISSION
NPDES Committee
-U
IN THE MATTER OF REQUEST FOR )
VARIANCE FROM WATER QUALITY )
STANDARD-BASED EFFLUENT ) REVISED COLOR VARIANCE
LIMITATIONS BY CHAMPION )
INTERNATIONAL CORPORATION, )
CANTON, NORTH CAROLINA )
THIS MATTER came on to be heard before the NPDES (National Pollutant Discharge
Elimination System) Committee of the North Carolina Environmental Management Commission
at its scheduled meeting in Raleigh, North Carolina, on December 11, 1997, pursuant to the
NPDES Committee's proposal to revise an existing color variance originally granted to
Champion International Corporation on July 13, 1988, and modified on October 9, 1996, and on
December 11, 1996.
The NPDES Committee, in executive session, considered the proposed Revised Color
Variance and the terms of the Settlement Agreement, described herein. The NPDES Committee
reconvened its open session and authorized its Chairman to execute both the Settlement
Agreement and this Revised Color Variance upon receipt of the Settlement Agreement fully
executed by all other parties.
Upon duly made motion and vote, the NPDES Committee hereby adopts the following
Findings of Fact and Conclusions of Law:

2
FINDINGS OF FACT
(from the October 9, 1996, Order)
1. Pursuant to a request for variance, dated January 12, 1988, submitted by
Champion International Corporation ("Champion"), the NPDES (National Pollutant Discharge
Elimination) Committee of the North Carolina Environmental Management Commission granted
Champion a variance from the North Carolina water quality standard for color, as that standard is
interpreted by the U.S. Environmental Protection Agency. The variance was memorialized in the
NPDES Committee's Final Decision, dated July 18. 1988.
2. Pursuant to Ordering Paragraph 6 of its Final Decision, the NPDES Committee
established a Variance Review Committee to review the Canton Mill's proposed modernization
program and to recommend any changes to the existing variance. As stated in Ordering
Paragraph 6 of its Final Decision, the NPDES Committee was charged with determining "if
changes in the variance are warranted due to the effectiveness of the treatment system or because
of advances in color reduction technologies for this type wastewater."
3. The Variance Review Committee convened three times, and presented the results
of its review and consideration of Champion's effluent color discharge to the NPDES Committee
at its March 13, 1996, meeting in Raleigh,North Carolina.
4. The Variance Review Committee made several recommendations to modify the
existing variance to the NPDES Committee, through a verbal presentation at the March 13, 1996,
meeting, and through memoranda dated March 7, 1996, from Greg Thorpe ("Review of Proposed
Modifications to Champion's Canton Mill Color Variance by the NPDES Committee"), and
March 6, 1996, from Dennis C. Lollin ("Consideration of Proposed Modifications to Champion

3
International Corporation's Color Variance for the Canton Mill NPDES Permit"), which are
incorporated herein by reference.
5. Based on a consideration of the Variance Review Committee's reports and
recommendations, the NPDES Committee voted to propose modifications to the existing
variance, and directed its staff to carry out the public notice, comment and hearing process
required by G.S. 143-215.3(e) and Ordering Paragraph 8 of its July 13, 1988, Final Decision.
6. A public hearing was conducted by Mr. Harlan Britt, appointed as hearing officer
for the NPDES Committee and for the contemporaneous NPDES permitting process, on June 6,
1996, in Haywood County, North Carolina.
7. The hearing officer made several recommendations to modify the existing
variance to the NPDES Committee, through a verbal presentation at the October 9, 1996,
meeting, and through a memorandum dated October 2, 1996, which is incorporated herein by
reference.
8. Modification of the variance as recommended by the Variance Review Committee
would not result in any discharge of waste that would endanger human health or safety. The
variance for color is to allow discharge of wastewater at levels that will prevent Champion's
contribution to the true color from causing the true color at the North Carolina/Tennessee State
line to exceed 50 true color units at all flows equal to or greater than 126 cfs at the Hepco
Gauging Station. The substance being discharged, for which the variance was sought, is not
bioaccumulative. The color does not, at the volumes and levels involved here, present a risk of
indirect or direct human impact or broad environmental damage. The waters are not water
supply. Therefore, the discharge would not endanger human health or safety.

4
9. Reduction of color discharge by application of best available technology is still
not economically reasonable and results in serious hardship without equal or greater benefit to
the public. A detailed and thorough study and evaluation of color removal technologies was
performed and reported in Champion's 1995 and 1996 Color Removal Technology Reports
submitted to the Division as required by the existing color variance.
10. Champion completed its mill modernization project which re-configured its
facility as an oxygen delignification, 100% chlorine dioxide substitution (OD-100) bleach mill_
The project resulted in limited color reduction in its effluent discharge. The end-of-pipe
technologies considered in 1988 and updated for the 1996 review established: a) standard
water/wastewater separation technology (lime, alum, or polymer) has not been applied in a
similar fashion, b) these technologies would result in high capital and operating costs at the mill,
c) color reduction on this type of waste, using these type technologies has no operational
efficiency "track record" (effective under normal paper mill production variations, and consistent
and reproducible color removal), and d) the process color removal effectiveness of OD-100 may
present other in-process reduction opportunities that were not realized as of October 9, 1996.
11. A schedule for continued color minimization was determined to be necessary.
Members of the public, EPA and the State of Tennessee commented that the variance document
proposed in the public notice did not include any milestones for continued color reduction.
Therefore, a schedule, contained in the Ordering Paragraph 4, of the October 9, 1996, Order, was
established.
12. In review of the color data, including the short time since the re-configured mill
became fully operational, it was determined that a more restrictive limitation should apply for

5
color. Therefore, the more restrictive monthly and annual average color limitations contained in
the Ordering Paragraph 2, of the October 9, 1996, Order, were established.
13. Based on ,the continued development of color discharge information from the
reconfigured mill, Champion was required to statistically evaluate its monthly average color
discharge, its annual average color discharge, and the performance of the state line color model.
These evaluation processes were to be ongoing and the results of the evaluations were required to
be reported to the Division of Water Quality prior to each water quality standards triennial
review period. The results of these evaluation processes were to be utilized by the Division and
the next Variance Review Committee to make recommendations to the NPDES Committee on
future revisions to the variance. Champion was to follow the Color Data Variance Review
Requirements proposed by the staff and the hearing officer, in reporting these evaluations.
14. As provided in Findings of Fact #8, supra, Champion was also required to take
such actions as necessary to prevent their contribution of true color from exceeding 50 true color
units at the North Carolina/Tennessee state line at all flows equal to or greater than 126 efs at the
Hepco Gauging Station. Furthermore, the method by which compliance was to be determined
continued to be the color predictive model.
(from the December 11, 1996, Order)
15. On October 17, 1996, the Director of the Division of Water Quality transmitted to
the United States Environmental Protection Agency, for its review, the October 9, 1996, order for
Modification of Color Variance Granted on July 18, 1988.
16. On December 9, 1996, the United States Environmental Protection Agency
advised the Division of Water Quality and the NPDES Committee, by letter from Regional

6
Administrator John Hankinson to Assistant Secretary Linda Rimer, that a further modification of
the color variance with certain more restrictive clarification's to the order was acceptable to the
agency.
17. The Division of Water Quality and Champion International Corporation advised
the NPDES Committee that the changes proposed by the United States Environmental Protection
Agency were acceptable.
18. The following changes to the conditions of the modified variance were more
restrictive on the company, and were accepted by the NPDES Committee in its December 11,
1996, Order:
(Words recommended for removal are stricken through and additional wording is
in bold.)
Conditions identified below of the "Ordered" section of the October 9, 1996, order
of the NPDES Committee were modified to:
CONDITION 2.II
H. The average daily discharge of true color for each calendar month shall not
exceed 132,34I 125,434 pounds per day. The average annual effluent true color
loading shall not exceed 124,-923 98,168 pounds per day. For the purpose of this
permit/variance only, "pounds of true color" is calculated by the following
equation:
Effluent Flow (mgd) x Effluent True Color Level (Platinum Cobalt Units) x 8.34.
CONDITION 4
4. Champion shall continue to study, evaluate, and pursue and operate color
removal technologies and report its findings to the NPDES Committee and the
Division of Water Quality in accordance with the following schedule:

7
DATE ACTIVITY
�g
January 1, 1997 The Company will implement a one year CE)FnFaeieial
demonstration of full scale bleach filtrate recycling
(BFRTm) technology on the mill's pine line.
March 1, 1998 In conjunction with the scheduled Triennial Review of N.C.
Water Quality Standards the Company shall:
1. Submit a status report to the NPDES Committee
on the technical, economic, and operational feasibility of
the BFRTrm technology, including those analyses prepared
for other permitting agencies concerning its effect's on air
emissions.
2. Evaluate and report to the NPDES Committee on
the application of end-of-pipe color reduction technologies
and additional minimization of color losses from the
manufacturing processes and raw material storage
areas. The evaluation shall include an incremental
color improvement analysis. This analysis will
concentrate on the technical, economic, and operational
feasibility of the application of these technologies on a
continuous or intermittent basis. The intermittent
application of these technologies and minimization
efforts must look particularly at periods of low river
flow. The report will identify specific economic and
implementation issues associated with the incremental
improvement of color levels expected by installing and
adopting these technologies.and minimization efforts at
the mill., The report will also project the expected
additional color reduction for each technology and
in-mill minimization effort evaluated and the maximum
color reduction possible using the identified technology
or action.
3. Champion will evaluate color reduction
strategies for further optimization of BFW" technology
and report on the feasibility of implementation on the
hardwood line.
F n ..te ..I storage
�E6tH--AimiiizuEt�l"d �
areas.

8
December 1, 1998 Based an the ._...:Its c° the a_.... --strati,,. prejeet .....''4he
presented in the epsel;;qiss ,.a the status FepeA, Champion
will deeide a�a repert an the deeisie_ to fully implement
and operate on a continuing basis the BFR' technology
as a fully eeFAFnereial preeess on the mill's pineweed line.,
unless the Company can demonstrate to the NPDES
Committee that BFRT" is not a commercially viable
process at this location. .
March 1, 2001 Champion will evaluate and report on end-of-pipe color
reduction technologies in conjunction with the Triennial
Review of N.C. Water Quality Standards. The evaluation.
shall include an incremental color improvement
analysis. This analysis will concentrate on the technical,
economic, and operational feasibility of the application
of these technologies on a continuous or intermittent
basis. The intermittent application of these technologies
must look particularly at periods of low river flow. The
report will identify specific economic and
implementation issues associated with the incremental
improvement of color levels expected by installing these
technologies at the mill. The report will also project the
expected additional color reduction for each technology
evaluated and the maximum color reduction possible
using the identified technology.
June 1, 2001 Champion will submit a report to the NPDES Committee
and N.C. DEHNR, Division of Water Quality, on the
comparative evaluation of the above collective efforts as
part of the Variance review process (Triennial Review of
North Carolina Water Quality Standards).
CONDITION 5
5. The Division will provide a status summary report on color removal at the
Canton Mill to the NPDES Committee and the Variance Review Committee
to the a ...letion e f the T.:eraii l Water Quality et.,..a.,.,l.. .rev'ew, within
30 days of the availability of Champion's reports as required above. The
Variance Review Committee, utilizing the information available,will, by July
1, 1998, and July 1, 2001, make recommendations to the NPDES Committee
concerning revisions to the color variance. Those recommendations will
include lower limits for the monthly average and annual average color
limitations applicable to the mill due to color removal performance and the
Committee's position on additional revisions needed in the variance to reflect

9
the application of BFW", end-of-the pipe treatment and in-mill color
reduction technologies. Based on the instream color data available at that
time, the Committee will also provide recommendations on the applicability
of any instream color compliance point in N.C. The NPDES Committee will
review the available information, the recommendations of the Variance
Review Committee and the staff recommendations in proposing any changes
to the variance.
CONDITION 6
6. In conjunction with subsequent triennial water quality standards reviews,
the Division will nominate a variance review committee. The NPDES Committee
will have final approval of the selection of this Committee. Committee
membership may consist of Department Staff and individuals considered
authorities on pulp and paper technology or environmental aspects of that industry
from the university or research communities. The Committee will also include
in its membership a representative of Tennessee's Department of
Environment and Conservation who shall be appointed by the Governor of
Tennessee. That review committee's report and recommendation will be
examined by the NPDES Committee for a decision on the adequacy of the
existing variance. The NPDES Committee will determine if changes in the
variance are warranted due to the effectiveness of the treatment system or because
of advances in color reduction technologies for this type wastewater. All
revisions adopted by the NPDES Committee will require the modification of the
Company's NPDES Discharge Permit.
CONDITION 7
7. The variance proceeding, and the NPDES Permit Number NC0000272,
shall at all be subject to reopening in order to modify the color requirements
based upon the following and in association with the required triennial
reviews:
1. a Any breakthrough in color removal technologies. Such breakthroughs
shall be brought to the NPDES Committee for consideration, by
Champion and the Division of Water Quality, as soon as they are
discovered.
2. An acceptable statistical analysis of effluent color discharge data
demonstrating significantly better color removal performance than
that currently prescribed in the variance and permit.
3. Successful application of end-of-pipe color reduction technology or
in-mill color minimization effort that results in significant and
measurable reduced mass color discharge.
e

10
(from the Settlement Agreement referenced herein)
19. EPA Region 4 subsequently approved the amended color variance modification
by letter dated December 26, 1996.
20. By letter dated December 23, 1996, Tennessee advised EPA that it considered the
permit to be invalidly issued, and that North Carolina had failed to comply with §402(b)(5) of the
Clean Water Act, 33 U.S1C. §1342(b)(5). Subsequently, on January 13, 1997, Tennessee filed a
contested case petition with the North Carolina Office of Administrative Hearings challenging
the permit and color variance. Thereafter, Champion, Cocke County, and Newport were allowed
to intervene in the North Carolina contested case proceeding.
21. In an effort to resolve the color issue without time- and resource-consuming
litigation, North Carolina, Tennessee, Cocke County, Newport, Champion, and EPA agreed to an
informal negotiation process. The North Carolina contested case proceeding was stayed during
this process until September 26, 1997. On November 21, 1997, the Tennessee Environmental
Council and the American Canoe Association were also allowed to intervene in the North
Carolina contested case proceeding.
22. The parties to the contested case have agreed to measures to achieve additional
color reduction over that required in the permit issued on December 12, 1996 and by the color
variance adopted on December 11, 1996 [at times referred to herein as "the December 1996
Permit and Variance"]. The parties agreed that the December 1996 Permit and Variance will be
modified [at times referred to herein as "the 1997 Permit and the Revised Variance"] to reflect
these requirements and effectuate a Settlement Agreement which would be entered in the
contested case. Except as modified by the Settlement Agreement, all other provisions of the

11
December 1996 Permit and Variance, including the monitoring and reopener provisions, will be
maintained in the 1997 Permit and Revised Variance.
23. The December 1996 permit and variance required that Champion implement a one
year demonstration of full-scale bleach filtrate recycling (BFRT') technology on the mill's pine
line and that, as of December 1, 1998, Champion implement and operate BFR"' technology on
its pine line, unless Champion could demonstrate to the NPDES Committee that BFR` was not
commercially viable. Champion has nearly completed the process of the required demonstration
phase of BFRT .
24. The 1996 permit and variance required Champion to evaluate the potential for
additional minimization of color losses from the manufacturing process and raw material storage
areas (i.e. in-mill color minimization; or, spill prevention/control measures) that might result in
further color reduction and to report its findings to the NPDES Committee. Reports were to be
submitted by March 1, 1998 and again by June 1, 2001, so that they could be used by the
Committee in conjunction with the required Variance review process held every three years to
determine if the variance would be readopted or made more stringent. As a part of the efforts to
resolve the challenge to the 1996 permit and variance, a Technology Review Workgroup was
formed, comprised of experts on the pulp and paper industry from EPA and representatives of the
environmental agencies for the states of Tennessee and North Carolina.
25. The 1996 permit and variance required Champion to evaluate and report to the
NPDES Committee on end-of-pipe color reduction technologies that could conceivably be
implemented at the mill. The evaluation was to include an incremental color improvement
analysis which concentrated on the technical, economic, and operational feasibility of the

12
application of these technologies on a continuous or intermittent basis. The intermittent
application of these technologies was to look particularly at periods of low river flow. These
reports were to be submitted to the NPDES Committee for its consideration as part of the water
quality standards Triennial Reviews to determine whether the variance should be readopted or
made more stringent. The reports were to identify specific economic and implementation issues
associated with the incremental improvement of color levels expected by installing these
technologies at the mill. They were also to project the expected additional color reduction
possible using the identified technology. The first such evaluation/report, which was due March
1, 1998, has essentially been completed as a result of the Technology Review Workgroup's
efforts. A subsequent evaluation/report was to be due March 1, 2001.
CONCLUSIONS OF LAW
(from the October 9, 1996, Order)
1. Pursuant to Ordering Paragraph 6 of the July 18, 1988, Final Decision, the
NPDES Committee reviewed the existing variance following the Champion Canton Mill
modernization program.
2. The previously existing variance from the North Carolina water quality standard
for color, memorialized in the NPDES Committee's Final Decision, dated July 18, 1988, was
determined to remain in effect except as specifically modified by the October 9, 1996, order.
3. Based on the effectiveness of the treatment system subsequent to the Canton Mill
modernization project and due to the potential for improvements in color reductions by use of
bleach filtrate recycling (BFR'"), changes to the variance were determined to be warranted.

13
(from the December 11, 1996, Order)
4. On its own motion and prior to the effective date of the October 9, 1996, order for
Modification of Color Variance Granted on July I& 1988. the NPDES Committee.amended its
October 9, 1996, order, to satisfy concerns of the United States Environmental Protection
Agency, to clarify its conditions and to make the conditions more restrictive on Champion
International Corporation.
5. In order to settle the pending contested case concerning the color variance, the
NPDES Committee may amend its previously issued orders, to satisfy concerns raised by parties
to the contested case.
Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby ORDERED
that the variance from the North Carolina water quality standard for color, as previously
memorialized in the orders of July 18, 1988, October 9, 1996, and December 11, 1996, continues
in effect, as hereby revised to read as follows:
1. Champion's petition for a variance is granted, pursuant to G.S. 143-214.3(e), as a
variance to water quality based effluent limitations for color.
2. The Division of Water Quality shall issue NDPES Permit No. NC0000272, for the
Canton Mill, and draft its provisions to reflect all the conditions of this revision including the
following specific wording.
I. Until December 1, 1998, when revised effluent color limitations
take effect that assure color levels at the State line meet 50 true color units,
Champion shall take such action as necessary to prevent their contribution
of true color from causing the true color at the North Carolina/Tennessee
State line from exceeding 50 true color units at all flows equal to or
exceeding 126 cfs (81.4 MGD, the seven-day, ten-year low flow level) at
the Hepco Gauging Station.

14
Compliance with this requirement shall be measured through a calculation
of instream true color levels at the North Carolina/Tennessee state line by
the following equation:
Sh= (WTP../ 8.34) + ((HEt- WTPf1 I)
(-0.224 x LOG(HE,)+ 0.781)
HEfx 10
Where:
WTP,; = Monthly average Waste Treatment Plant discharge color.
Calculated as the average of all daily loading values (pounds of true color
per day) for a calendar month.
WTPI = Monthly average Waste Treatment Plant discharge flow (mgd).
HEf= Monthly average HEPCO, North Carolina flow (MGD). Daily flow
values less than 81.4 mgd shall be entered as 81.4 mgd.
Sly = Monthly average Instream true color at North Carolina/Tennessee
border (state line).
D�= Color concentration of all dilution streams (13 C.U.).
The SL, shall be calculated for each calendar month. The SL, values for
each month shall not exceed 50 true color units. Any exceedance of 50
true color units for this average value shall be considered a violation of
this permit/variance.
II. Beginning January 1, 1998, the monthly average discharge of true
color from the mill shall not exceed 95,000 lbs./day. For the purpose of
this permit/variance only, "pounds of true color" is calculated by the
following equation:
Effluent Flow (mgd) x Effluent True Color Level (Platinum Cobalt Units)
x 8.34.
III. The method of analyses used to measure true color shall be the
procedure referenced in FR 39 430.11(b) (May 29, 1974).
IV. This model limitation may be extended beyond December 1, 1998,
if the NPDES Committee establishes, in accordance with the Settlement
Agreement, alternate interim limits which require the model to be used to
assure compliance with 50 c.u. at the State line.

15
3. The Division of Water Quality shall include review of this variance as a specific
item in its Triennial Water Quality Standards review, as required by the federal Clean Water Act,
and make appropriate recommendations to the NPDES Committee.
4. From the previous orders of July 18, 1988, October 9, 1996, and December 11,
1996, the following scheduled item remains in effect:
March 1, 1998 Champion will submit a status report to the NPDES
Committee on the analyses prepared for other permitting
agencies concerning the effects of the BFR'm technology on
air emissions.
5. Based upon the agreements and commitments contained in the Settlement
Agreement, the following provisions are made a part of this Revised Variance:
A) Based on the results of the demonstration effort, Champion shall continue
the full operation of the BFRT°" technology on the mill's pine line on a continuing basis,
subject to the process set forth in Paragraph 5F.
B) The Technology Review Workgroup shall replace the previously existing
North Carolina Variance Review Committee and shall be maintained during the life of
the 1997 Permit in order to make the recommendations and determinations which the
Revised Variance and Settlement Agreement calls for such Workgroup to make. The
Technology Review Workgroup shall, at all times, be chaired by EPA and be comprised
of three technical representatives from EPA with expertise on the pulp and paper
industry, two environmental agency representatives from the State of Tennessee, and two
environmental agency representatives from the State of North Carolina. The Workgroup
shall make itself available to consult with and provide information to community
representatives at appropriate times. In addition, consistent with any limitations under

16
law or regulation relating to confidential business information, copies of all written
reports and recommendations generated pursuant to the Revised Variance and Settlement
Agreement shall be provided to the parties to the Agreement at least 20 days before any
recommendation or determination by the Workgroup becomes final. The Workgroup
shall review any comments or input received on such documents prior to making its final
recommendations or determinations. Any comments or input received by the Workgroup
shall be made available to all parties to the Settlement Agreement.
C) Working with the Technology Review Workgroup, Champion has already
begun the process of identifying and implementing possible prevention and control
measures which can be taken to further reduce color discharges from the mill. Champion
is directed to further evaluate mill operation so as to fully identify opportunities for
preventing and controlling measurable black liquor leaks and spills (best management
practices - BMPs). This evaluation will include gathering more extensive and detailed
data on sources of color within the mill to substantially improve the accuracy of
measurements to improve the mill's existing BMP program, and to complete efforts to
identify, quantify and substantially improve the accuracy of a mass balance of sources of
leaks and spills of black liquors, including unmeasured sources and discharges during
periods of fiber line disruption. Such BMPs include: further upgrading and integrating of
sewer monitoring (e.g., additional flow measurement and sampling stations to facilitate
more comprehensive and daily monitoring of sources) and automated mill process control
systems with operational procedures and management oversight to reduce black liquor
leaks and spills; continuing operator training; identifying and implementing additional

17
controls for known but unmeasured sources (e.g., evaporator set, knot rejects bin, etc.) of
liquor losses; modifying the digester area to facilitate capturing leaks and spills; diverting
clean water discharges; and capturing and recycling liquors during fiber line disruptions
through detailed scheduling of planned outages and contingency planning for unplanned
outages. Champion also is directed to thoroughly evaluate additional measures to modify
its process operations and controls to remove or reduce sewer generated color.
D) Champion shall provide a report to the Technology Review Workgroup
and the NPDES Committee no later than June 1, 1998. This report will identify a
strategy and time line for implementing those color reduction measures identified in
Paragraph 5C until the target effluent limitations in Paragraph 5H are met or all measures
in Paragraph 5C have been fully implemented. The report will include an explanation of
and rationale for both the implementation strategy and the proposed time line. The report
will also identify those measures which will be implemented in the event that the effluent
limitations set out in Paragraph 5F are not achieved by the color reduction measures
specified in that paragraph.
E) Four BMPs which have already been identified as having both a high
potential for achieving color reducing and a high level of implementability are: (a)
installation of replacement digester recirculation pumps and a spill collection sump; (b)
installation of a pine courtyard Parshall flume slide gate; (c) installation of weak black
liquor tank containment, and; (d) correction of evaporate set demister clogging,
installation of condensate instrumentation and sampling ports for the evaporator set, and

18
assurance of continued dry conveying of knot rejects. Champion shall fully implement
all four of these BMPs by June 1, 1998.
F) The 1996 permit and variance required that the annual average effluent
true color loading should not exceed 98,168 lbs/day and that the monthly average true
color loading should not exceed 125,434 Ibs/day. Based on current demonstrated
achievable levels which have resulted from measures that Champion has already
undertaken to reduce color from the Mill, beginning January 1, 1998, the monthly
average discharge of true color from the Mill shall not exceed 95,000 lbs/day. Based on
an analysis of the available data from the BFR` demonstration project and the spill
prevention/control measures that have already been identified by Champion and the
Technology Review Workgroup as being implementable in the near-term, it is anticipated
that full-scale implementation of BFR` on the pine line combined with the four BMPs
identified in Paragraph 5E will reduce annual average color loading by approximately
40% below the limits in the December 1996 Permit. Therefore, the 1997 Permit and
Revised Variance will require that, beginning December 1, 1998, the annual average
discharge of true color shall not exceed 60,000 lbs/day and the monthly average true
color loading shall not exceed 69,000 lbs/day. However, if by October 1, 1998, the
Technology Review Workgroup determines, and the NPDES Committee agrees, that
there are overwhelming technical, economic or operational barriers to Champion's ability
to attain the above-stated color loading limits, the Technology Review Workgroup shall
recommend to the NPDES Committee the alternate interim limits to become effective
December 1, 1998. The Workgroup shall, at the same time, also recommend to the

19
NPDES Committee a new effective date for achieving an annual average color loading
limit of 60,000 lbs/day. These recommendations shall be based on what the Workgroup
concludes Champion can reasonably be expected to achieve, giving due consideration to
the demonstrated discharge levels which the mill has, in fact, achieved and taking into
account the evaluations conducted pursuant to Paragraph 5C and the report submitted by
Champion pursuant to Paragraph 5D. Based on the Workgroup's recommendations, the
NPDES Committee, will determine the alternate interim limits to become effective on
December 1, 1998, as well as a new effective date for achieving an annual average color
loading limit of 60,000 lbs/day. The permit will then be modified in accordance with
North Carolina's permitting process to reflect these determinations.
G) The 1996 permit and variance required Champion to evaluate color
reduction strategies for further optimization of BFR'' technology and to report on the
feasibility of implementation on the hardwood line. Champion shall begin
implementation of that portion of the BFR'' technology which involves the recycling of
the Eo stage of the hardwood line by no later than January 1, 1999. Champion further
shall provide an evaluation of that implementation as well as the potential for full
implementation of the BFRT' technology on the mill's hardwood line to the Technology
Review Workgroup and the NPDES Committee by December 1, 1999. The evaluation
will include data reflecting the color reduction benefit gained from the partial
implementation and a projection of potential color reduction benefit to be gained from
full implementation of the BFR technology on the hardwood line.

20
H) Based on the work that Champion and the Technology Review Workgroup
have already done in the area of in-mill color reduction measures, it is anticipated that
further color reductions, beyond those to be obtained by the BFR`"' on the pine line in
combination with the four BMPs identified in Paragraph 5E, could be expected after
implementation of the BMPs and measures to reduce and/or remove sewer generated
color identified in Paragraph 5C, and partial BFR"' (e.g.., recycle of EO filtrate) on the
hardwood line. This combined package of in-mill color reduction measures (i.e., the four
BMPs in Paragraph 5E, the additional BMPs and sewer-generated color reduction
measures identified in Paragraph 5C as implemented pursuant to Paragraph 5D, full
implementation of BFR on the pine line, and partial BFR on the hardwood line) shall
hereinafter collectively be referred to as the Near-Term Package. It is further anticipated
that full implementation of the Near-Term Package could be effectuated by June 1, 2000,
resulting in a target color annual average loading within a range of 48,000-52,000
lbs/day. Champion shall submit to the Technology Review Workgroup by January 1,
2001, a report on the feasibility of achieving a target annual average color loading limit
within the range of 48,000-52,000 lbs/day based on full implementation of the
Near-Term Package. This report shall include all available data necessary to derive the
lowest achievable annual average and monthly color loading limits. By April 1, 2001, the
Technology Review Workgroup shall recommend, considering the feasibility report
submitted by Champion and the demonstrated performance of the mill, the lowest
achievable annual average and monthly color loading effluent limitations. The
Workgroup evaluation and recommendation report shall be submitted to the NPDES

21
Committee and the other parties to the Settlement Agreement. If the recommended limits
are within the target range, the limits shall become effective on May 1, 2001, by written
notification from the Director of the North Carolina Division of Water Quality. If the
limits determined to be achievable by the Workgroup are not within the target range, the
Permit shall be modified in accordance with North Carolina's permitting process to reflect
those limits. The Workgroup's recommendation of limits under this Paragraph shall take
into account appropriate effluent variability.
1) The 1996 Permit and Variance contain provisions to limit color in the
Pigeon River at the NC-TN state line to a maximum monthly average of 50 true color
units. The new effluent limitations in this Agreement at Paragraphs 5F and 5H are more
stringent than the provisions in the 1996 Permit and Variance and will result in color
levels at the state line well below 50 true color units. It is possible to calculate the
monthly flow at the Hepco gauge above which in-stream color will not exceed 50 true
i color units for any specific color discharge from the Champion facility. Using the 69,000
tbs/day monthly average true color loading limit anticipated in Paragraph 22 to become
effective December 1, 1998, the flow which will provide for color less than 50 true color
units at the Hepco gauge is 330 cubic feet per second (cfs). Therefore, the scope and
magnitude of the 1996 Variance are reduced by this Revised Variance to provide that:
effective December 1, 1998, color in the Pigeon River at the Hepco gauge shall be less
than 50 true color units whenever monthly average flows are greater than 330 cfs. Should
alternate interim limits be set pursuant to Paragraph 5F, or when monthly limits are
established pursuant to Paragraph 5H, the above variance conditions will be revised in

22
accordance with the above approach. Champion shall cooperate fully with any periodic
independent monitoring (including activities such as splitting samples) requested by EPA
or the State of North Carolina. In-stream monitoring data gathered during the 1997
Permit term will be evaluated at the end of the 1997 Permit term to determine whether the
limits established under the Permit, in fact, attained the color levels as expressed in the
Variance. This information will be used to develop new requirements for the next permit
which further reduce color levels in the Pigeon River.
J) As Paragraph 5I recognizes, there could still be some periods of time,
corresponding to periods of lower flows in the river, when color at the Hepco gauge
might exceed 50 true color units. Champion shall develop a contingency plan for
mitigating the occurrence and degree of these potential exceedences which correlates
measures designed to achieve mitigation with periods of lowest flow, with particular
attention being given to periods of higher recreational use in the river. In developing the
plan, Champion shall evaluate any reasonable means, including scheduling of
maintenance, intermittent treatment, and production curtailment, which would achieve
additional color reductions during temporary periods of lower flows in the river when
color at the Hepco gauge might exceed 50 true color units. The contingency plan shall be
submitted by December 1, 1998, for review by the Technology Review Workgroup.
Champion has agreed to work in good faith with the Workgroup to resolve any issues
which arise during this review in order to achieve a mutually acceptable plan. By
February 1, 1999, the Technology Review Workgroup will recommend to the NPDES
Committee either approval of or modifications to the plan. The NPDES Committee will

23
approve the contingency plan, either as submitted or with the changes the Committee
determines are appropriate. The plan shall become effective upon approval, which shall
be no later than March 1, 1999.
K) Champion commits to, and North Carolina will direct, the continuing
improvement of existing process and related technologies which could improve the
efficiency of all water-using equipment and operation throughout the mill, with the goal
of meeting North Carolina's water quality standards under the Clean Water Act without a
variance.
L) By March 1, 2001, Champion will evaluate and report on end-of-pipe
color reduction technologies in conjunction with the Triennial Review of N.C. Water
Quality Standards. The evaluation shall include an incremental color improvement
analysis. This analysis will concentrate on the technical, economic, and operational
feasibility of the application of these technologies on a continuous or intermittent basis.
The intermittent application of these technologies must look particularly at periods of low
river flow. The report will identify specific economic and implementation issues
associated with the incremental improvement of color levels expected by installing these
technologies at the mill. The report will also project the expected additional color
reduction for each technology evaluated and the maximum color reduction possible using
the identified technology. Champion shall provide this evaluation/report, together with
an updated report on the results of all ongoing and any additional planned color reduction
activities, to the Technology Review Workgroup and the NPDES Committee March 1,
2001. The Technology Review Workgroup shall evaluate this combined report and make

24
recommendations to the NPDES Committee for further color reduction targets for
inclusion in the next NPDES permit. By June 1, 2001, Champion will submit a report to
the NPDES Committee and N.C. DENR, Division of Water Quality, on the comparative
evaluation of the above collective efforts as part of the Variance review process
(Triennial Review of North Carolina Water Quality Standards). Further, based on the
continued development of color discharge information from the reconfigured mill,
Champion will statistically evaluate its monthly average color discharge, its annual
average color discharge, and the performance of the mill in relation to color discharged.
This evaluation process shall be ongoing and the results of the evaluation shall be
reported to the NPDES Committee with the June 1, 2001, report. The results of this
evaluation process will be utilized by the Technology Review Workgroup to make
recommendations to the NPDES Committee for revisions to the 1997 permit and
variance.
M) Neither Champion nor any successor-in-interest to Champion's ownership
and/or operation of the Canton Mill will increase the mill's current pulp production
capacity during the permit term, unless this can be done in way that also reduces color
loading.
N) Champion's Canton Mill already meets or exceeds the technology
requirements of the Pulp and Paper Cluster Rule for limits on dioxin. The 1997 Permit
shall require that the Canton Mill continue to meet those requirements. All other
requirements of the Cluster Rule, including any monitoring requirements, will apply to
Champion in accordance with time frames established pursuant to the Rule

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6. The variance proceeding, and the NPDES Permit No. NC 0000272, shall be
subject to reopening in order to modify the color requirements based upon the following and in
association with the required triennial reviews:
A) Any breakthrough in color removal technologies. Such breakthroughs
shall be brought to the NPDES Committee for consideration, by Champion and the
Division of Water Quality, as soon as they are discovered.
B) An acceptable statistical analysis of effluent color discharge data
demonstrating significantly better color removal performance than that currently
prescribed in the variance and permit.
C) Successful application of end-of-pipe color reduction technology or
in-mill color minimization effort that results in significant and measurable reduced mass
color discharge.
7. This variance shall extend for an indefinite period of time, subject to
consideration during the water quality standards triennial reviews. Any modification or
termination based thereon shall be subjected to the public hearing process required by G.S.
143-2153(e).
It is further ORDERED that Champion and any successor-in-interest to Champion's
ownership and/or operation of the Canton Mill use their best efforts in good faith to implement
the BFR` technology, BMPs and other color reduction measures in accordance with the terms
of this Revised Variance and the Settlement Agreement, and to achieve the effluent limitations
required by and to be determined by this Revised Variance and the Settlement Agreement, as
well as the effluent limitation targets required by Ordering Paragraph 511; and that any

26
successor-in-interest shall request the NPDES Committee to transfer this Revised Variance to it
prior to the transfer of the NPDES Permit No. NC 0000272.
It is further ORDERED that this Revised Color Variance shall be effective as of the
effective date of the modified NPDES Permit No. NC 0000272 for the Canton Mill, and the
terms of the previously existing variance shall continue in effect until that time.
This the Zed day of December, 1997.
Daniel V. Besse, Chairman
NPDES Committee

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CERTIFICATE OF SERVICE
This is to certify that I have this day served a copy of the foregoing REVISED COLOR
VARIANCE on the parties listed below by the methods indicated, addressed to each as follows:
Benjamin S. Bilus CERTIFIED MAIL
Senior Associate Counsel RETURN RECEIPT REQUESTED
Champion International Corp.
One Champion Plaza
Stamford, Connecticut 06921
William Clarke CERTIFIED MAIL
Roberts & Stevens RETURN RECEIPT REQUESTED
P.O. Box 7647
Asheville, North Carolina 28802
A. Preston Howard, Jr., Director HAND DELIVERY
Division of Water Quality
N.C. Department of Environment
and Natural Resources
9th floor, Archdale Building
Raleigh, North Carolina 27601-7687
Jennie Odette, Clerk HAND DELIVERY
Environmental Management Commission
N.C. Department of Environment
and Natural Resources
9th floor, Archdale Building
Raleigh, North Carolina 27601-7687
Paul Davis CERTIFIED MAIL
Tennessee Department of RETURN RECEIPT REQUESTED
Environment& Conservation
6th floor, L & C Annex
401 Church Street
Nashville, Tennessee 37243-1534

I 78
David McKinney CERTIFIED MAIL
Tennessee Wildlife Resources RETURN RECEIPT REQUESTED
Ellington Agriculture Center
P. 0. Box 40747
Nashville, Tennessee 37204
Gary A. Davis CERTIFIED MAIL
Tennessee Environmental Council RETURN RECEIPT REQUESTED
P. 0. Box 2346
Knoxville,Tennessee 27901-2346
Mike McGhee CERTIFIED MAIL
Director of Water Management RETURN RECEIPT REQUESTED
100 Alabama Street, SW
Atlanta, Georgia 30303
Barry Turner CERTIFIED MAIL
Deputy Attorney General RETURN RECEIPT REQUESTED
Tennessee Attorney General's Office
435 Fifth Avenue North
Nashville, Tennessee 37243-0485
James L. Conner, II CERTIFIED MAIL
J. Conner& Associates RETURN RECEIPT REQUESTED
Old Library Office Building
311 East Main Street
Durham, North Carolina 27701
J. Jeffrey McNealey CERTIFIED MAIL
Porter, Wright, Morris & Arthur RETURN RECEIPT REQUESTED
41 South High Street
Columbus, Ohio 43215
Clyde A. Dunn CERTIFIED MAIL
Dunn&Tucker Associates RETURN RECEIPT REQUESTED
317 East Main Street
Newport, Tennessee 37821
Roy T. Campbell, Jr. CERTIFIED MAIL
Campbell & Hooper RETURN RECEIPT REQUESTED
335 East Main Street
Newport, Tennessee 37821

t
9
David Bookbinder CERTIFIED MAIL
General Counsel RETURN RECEIPT REQUESTED
American Canoe Association, Inc.
7412 Alban Station Boulevard
Suite B-226
Springfield, Virginia 22150
John D. Runkle CERTIFIED MAIL
Attorney for RETURN RECEIPT REQUESTED
American Canoe Association, Inc.
& Tennessee Environmental Council
P.O. Box 3793
Chapel Hill, North Carolina 27515
This the 234 day of December, 1997.
MICHAEL F. EASLEY
Attorney General
Daniel C. Oakley
Senior Deputy Attorney General
Environmental Division
P. 0. Box 629
Raleigh, North Carolina 27602-0629
919/716-6600
/21160