20070812 Ver 2_Response to Yadkin Riverkeeper and City of Rockingham_20090409

HUNTON
VMIJAMS
HUNTON & WILLIAMS LLP
POST OFFICE BOX 109
RALEIGH, NORTH CAROLINA 27602
TEL 919 •899.3000
FAX 919.833 •6352
CRAIG A. BROMBY
DIRECT DIAL: 919-899-3032
EMAIL: [e-mail]
March 27, 2009 FILE NO: 65215.6
DOC NO: 27039435
Via Hand Delivery and U.S. Mail p 12 @IN M AE
Mr. John R. Dorney MAR, 3 0 2009
North Carolina Department of Environment and Natural Resources
Division of Water Quality DE -WATSM AIM
Suite 250 WE11AtMAMSTOMgE#tBRAIM
2321 Crabtree Boulevard
Raleigh, North Carolina 27604
Re: Comments filed by the Yadkin Riverkeeper and the City of Rockingham on the
request for a 401 certification by APGI
Dear Mr. Dorney:
Alcoa Power Generating Inc. ("APGI") hereby respectfully submits the following reply
to the comments filed by (1) the Duke Law Environmental Law & Policy Clinic on behalf of
the Yadkin Riverkeeper, Inc. ("the Riverkeeper") on February 16, 2009 and (2) the City of
Rockingham, North Carolina ("Rockingham") on February 16, 2009.1
1. Public Trust Policy Arguments Cannot Alter the Legal Scope of Section 401
The Riverkeeper's submission is focused on expanding the scope of this certification
proceeding-which is conducted under and controlled by Section 401 of the Clean Water Act,
33 U.S.C. § 1341-in an attempt to make APGI responsible for water quality issues that are
not connected to or affected by the Yadkin Hydroelectric Project. To that end, the Riverkeeper
argues that North Carolina's Constitution creates a "public trust obligation" under which the
state and its agencies must protect the Yadkin River as a "place of beauty." Riverkeeper
Comments at 1-2. The Riverkeeper claims that, "[a]s applied to decisions under Section 401 of
' The Waccamaw Riverkeeper also submitted brief comments essentially in support of
the comments of the Yadkin Riverkeeper that raised no additional issues beyond those
addressed by the Yadkin Riverkeeper. Thus, implicit in this response to the Yadkin
Riverkeeper is a response to that submission.
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WbL1AMs
Mr. John R. Dorney
March 27, 2009
Page 2
the Clean Water Act the duty to protect the public trust has been delegated by the General
Assembly to the Commission and to its staff at the Department." Riverkeeper Comments at 2.
Although the Riverkeeper attempts to reshape the scope of this proceeding to broadly
protect what it has termed "Public Trust Resources," the scope is indisputably limited to the
explicit authority granted to the state under Section 401. Under Section 401, an applicant for a
hydropower license to construct or operate facilities which may result in any discharge into
navigable waters must provide to the Federal Energy Regulatory Commission a certification
from the state where the discharge originates or will originate that the discharge will meet state
surface water quality standards. 33 U.S.C. § 1341(a)(1) (emphasis added). Section 401 thus
directs the responsible state agency to examine the effect of the facility discharge on water
quality, without authorizing the agency to regulate the activities of other water users through
the individual 401 certification. Therefore, to the extent the Riverkeeper suggests that DWQ
regulate water quality upstream of the Yadkin Project, or that APGI be held responsible for
conditions that do not relate to the Yadkin Project discharge, it seeks action that is far beyond
the scope of this proceeding.
However the Riverkeeper may define the state's "public trust obligation," the state's
statutory obligation under Section 401 is to ensure APGI's Yadkin Project discharges comply
with state water quality standards. Accordingly, the Riverkeeper's "public trust" arguments
provide no basis to divert the proceeding from DWQ's statutory mandate.
II. APGI is Committed to Ensuring that the Yadkin Project Discharges Will Meet
Applicable Water Quality Standards
The Riverkeeper claims that the Yadkin Project does not meet state anti-degradation
standards due to dissolved oxygen ("DO") standard violations which threaten existing uses of
the waters. The Riverkeeper takes issue with the statement in DWQ's notice that APGI will
address DO issues, arguing that DWQ must follow a standard that requires the restoration of
waters and protection from degradation. In addition, the Riverkeeper argues that one "existing
use" of the waters is as a habitat for state-listed threatened and endangered species, but that
these species have not been adequately evaluated and that fish studies are not available.
Riverkeeper Comments at 6. Rockingham raises concerns about a connection between
contaminated sediment near Badin Lake and levels of polychlorinated biphenyls ("PCBs")
found in fish2 and asserts that DWQ should require implementation of DO measures on an
` The quotations that Rockingham selectively relies on from an article that appeared in
the Charlotte Observer on February 11, 2009, are taken out of context and, more importantly,
used to try to create the false impression that Alcoa Inc. has been shown (or has acknowledged)
HiINTON
WILLiAMS
Mr. John R. Dorney
March 27, 2009
Page 3
accelerated timeframe, i.e. within five years. Rockingham Comments at 6 and 8. Each of
these issues has been sufficiently addressed by APGI, including implementation of DO
remediation measures concurrently with planned generating unit refurbishments.
The Section 401 Certification issued by DWQ on November 16, 2007 (the "2007
Certification") established a schedule for the installation of equipment and the implementation
of measures to enhance tailwater DO based on significant communication and study by and
between DWQ, APGI and other stakeholders. As it turned out, the schedule adopted by DWQ
in the 2007 Certification was the same one set forth and agreed to in the multi-party
Relicensing Settlement Agreement. The schedule required the installation of DO enhancement
equipment on seven generating units. To optimize DO conditions in the most efficient and
cost-effective manner, the schedule contemplates that new DO enhancement technology will be
put in place during unit refurbishments.
Other provisions of the proposed schedule require the adoption of certain operating
regimes to optimize the effectiveness of the new DO enhancement equipment and special
studies to evaluate the effectiveness of the installed technologies. The overall efficacy of the
enhancement program would be monitored in accordance with a DO monitoring plan. If the
DO enhancements were found to be insufficient to achieve water quality standards in all four
development tailwaters, the 2007 Certification provided for preparation of a "Dissolved
Oxygen Corrective Action Plan." This approach will best ensure optimized DO monitoring
and enhancement.
With regard to federal and state-listed threatened and endangered species, APGI has
conducted studies that evaluate both reservoir and tailwater fisheries for such species. The
status and health of the fish communities found in all four Yadkin Project reservoirs and
tailwaters were studied extensively as part of the relicensing process (Normandeau, 2005;
Appendices E-4 and E-5, Application for New License). All four reservoirs were found to
support a healthy warm-water fishery, with a good mix of game species and forage base. In
fact, APGI conducted several studies aimed at understanding the presence and status of RTE
species and their habitats at the Project including a Rare, Threatened and Endangered Species
to have had any ties to any PCBs found in the fish caught in Badin Lake. This
mischaracterizes the limited nature of the findings of the state's study discussed in the article,
and obscures the statements by the state officials in that same article that the PCBs in two of
the three contaminated fish identified in the study results appeared not to have come from
waters near the Alcoa facility but to have originated from upstream portions of Badin Lake.
These fish tissue testing results are discussed further below.
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WH.rIAMs
Mr. John R. Dorney
March 27, 2009
Page 4
Survey (Normandeau 2005; Appendix E-14, Application for New License). With respect to
aquatic species, no state or federally listed fish species are known to occur in the Yadkin
Project reservoirs or tailwaters, although four state listed species of freshwater mussels were
found in the Narrows and Falls tailwaters.
Fish testing performed by the NC Department of Health & Human Services (DHHS) in
2008 using testing methods of unprecedented sensitivity found only a small percentage of the
fish caught in the Lake showed any signs of excessive levels of PCBs in their tissue. In acting
on those results, DHHS failed to follow its own self-described standards and procedures in
evaluating those results, including its failure to follow the communication plan it distributed at
the beginning of the testing process. Moreover, the fish tissue test data are consistent with
sources of PCBs upstream of the Narrows Reservoir and not smelting operation formerly
operated by Alcoa, Inc. The North Carolina Division of Waste Management reviewed the fish
data and concluded that they did not demonstrate any tie to the former smelting operation.
Overall, the levels of PCB found in fish recovered from Narrows Reservoir overall are
consistent with concentrations typically found in fish throughout North Carolina, which are
consistent with the relative ubiquity of PCBs in the environment. Thus, the fish data do not
support any claim that the operation of the Yadkin Project dams is the source of the levels of
PCBs measured in fish caught in the Reservoir.
III. The Riverkeeper Misconstrues U.S. Supreme Court Authority in an Attempt to
Expand the Scope of the Section 401 Proceeding.
The Riverkeeper attempts to use the U.S. Supreme Court's holding in S.D. Warren Co.
v. Maine Board of Environmental Protection, 547 U.S. 370 (2006) ("S.D. Warren") as
justification to impose liability on the Yadkin Project for water quality upstream and
downstream of the Yadkin Project, regardless of whether the discharge from the Project
actually affects the quality of the water quality. The Riverkeeper argues under S.D. Warren
that:
it would be erroneous for the Department to limit its
consideration to water quality issues which occur within the
system. Limiting the analysis solely to discharge emerging from
the entire system would be a de facto suspension of water quality
standards within that system. That would be wholly inconsistent
3 APGI has conducted annual surveys of Bald Eagle nesting at the Yadkin Project since
1996.
HUNTON
WH T TAMS
Mr. John R. Dorney
March 27, 2009
Page 5
with the State's constitutional and statutory mandate on
environmental policy.
Riverkeeper Comments at 7.
This is a creative argument, but one which strays a substantial and unjustified distance
from the Court's holding in that case. While the Supreme Court in S.D. Warren concluded that
hydroelectric dams do have a "discharge" subject to Section 401, the case does not support the
Riverkeeper's suggestion that an applicant can be held responsible for the water quality effects
of inflows to the river upstream of the hydroelectric dam. Such an interpretation of S.D.
Warren would be absurd because all Section 401 applicants could then be held jointly and
severally liable for the water quality consequences of anyone else's activity upstream in the
river system. Importantly, the Court's holding in S.D. Warren clearly tied the application of
Section 401 to the effects on the "discharge" from the hydroelectric dam at issue. Thus, the
S.D. Warren court did not attempt to expand Section 401 to make hydroelectric dam operators
liable for upstream water quality issues or water quality conditions that are not created by
discharges from the dam.
The Riverkeeper also argues that PUD No. 1 of Jefferson County v. Wash. Dept. of
Ecology, 511 U.S. 700 (1994) ("PUD No. 1 of Jefferson County"), focuses on the compliance
of the applicant with provisions of the Clean Water Act, as opposed to the compliance with
water quality standards measured in the discharge. The Riverkeeper thereupon suggests that
the smelting activities of Alcoa Inc. should be considered in the instant Section 401
proceeding. Yadkin Riverkeeper Comments at 7. Alcoa Inc. is the parent company of APGI;
it is a legal entity separate from APGI. Addressing smelting activities is Alcoa Inc.'s
obligation, not APGI's. APGI, not Alcoa Inc., is the applicant for the FERC license and the
401 Certification. It could be noted, in any event, that the public records indicate that any such
remedial effects are being vigorously overseen by the relevant sections of the North Carolina
Department of Environment and Natural Resources, including its Division of Waste
Management.
Moreover, even a most expansive view of the Court's holding in PUD No. 1 of
Jefferson County could not support the Riverkeeper's assertions. PUD No. 1 of Jefferson
County does not in any way suggest that an applicant could be held responsible for conditions
created upstream of its facilities or by another entity's action that may affect water quality.
Accordingly, the cases referenced by the Riverkeeper provide no authority for its attempt to
broadly expand the Section 401 proceeding beyond the water quality effects from APGI's
Yadkin Project dam discharges.
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Wfli Aw
Mr. John R. Dorney
March 27, 2009
Page 6
IV. There is no Evidence that DWQ Has Somehow Failed to Exercise its Jurisdiction
under Section 401
The Riverkeeper claims that "the State does not have discretion to limit the scope of its
review," and that DWQ "cannot meet its legal obligations should it refuse to look at the entire
project." Riverkeeper Comments at 8. These are sweeping assertions unsupported by statute
or precedent.
First, Section 401 certification in this case is required only because of the application
for reissuance of the FERC license, which is a license that involves a discharge. States are
required to certify that the discharge will comply with the provisions of the Clean Water Act.
The focus of the state proceeding is thusly limited to the effects of the discharge resulting from
the license issued pursuant to the federal statute. A state may include in its 401 certification
effluent limitations and monitoring requirements necessary to assure compliance with the
Clean Water Act and may also include "other appropriate requirement[s] of State law," but it is
not entitled under Section 401 to deny certification on the grounds of those additional
limitations or requirements. Accordingly, DWQ cannot make its determination on certification
over issues that are unrelated to the effect of the Yadkin Project dam discharges on water
quality, as that would be outside the authority granted under Section 401.
Second, the Riverkeeper has not put forth any evidence that DWQ has failed to
properly exercise its jurisdiction. Instead, its filing urges DWQ to take action on issues beyond
the agency's jurisdiction under Section 401. Finally, the majority of the issues raised by the
Riverkeeper concern allegations against Alcoa Inc., not the applicant, or attempts to make
APGI culpable for upstream water quality issues that cannot be controlled by the Yadkin
Project. Even if Section 401 and the cases thereunder were to be interpreted as expansively as
the Riverkeeper suggests, DWQ would still be required to regulate and certify only the
discharge-related activities of the applicant, APGI.
V. The Riverkeeper Attempts to Apply Inapplicable Requirements from a Separate
Federal Environmental Law to the Section 401 Proceeding
The Riverkeeper makes several arguments that essentially urge DWQ to import
requirements reviews conducted by federal agencies under the National Environmental Policy
Act ("NEPA"), but which are outside the scope and requirements of Section 401 and are, in
fact, irrelevant to Section 401 certification reviews. First, the Riverkeeper argues that DWQ
must examine the cumulative effects of all permits issued to the applicant, including an
existing NPDES permit for a treatment system. Yadkin Riverkeeper Comments at 9-10. This
argument is devoid of merit and wholly unsupported by the language of Section 401 or case
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W I AMs
Mr. John R. Dorney
March 27, 2009
Page 7
law. Nothing in Section 401 requires consideration of the "cumulative effects" of other
permits combined with the Section 401 permit, nor does Section 401 permit DWQ to
reconsider or reopen any other certification or permit in the context of this proceeding.
Second, the Riverkeeper states that "[t]he correct and logical basis for examining the
environmental impact of the Project is to first estimate the present state of the Yadkin River
without the hydroelectric dams and reservoirs and then determine what environmental impacts
are attributable to the existence of the Project." Yadkin Riverkeeper Comments at 10. This
"baseline" environmental impact assessment is not required under Section 401 and is
unnecessary to evaluate whether project discharges currently comply with state water quality
standards. While this is a familiar concept under the federal NEPA process, it is inapplicable
and outside the scope of review in this proceeding and, if the concept were applied in the 401
certification process, would be erroneous and contrary to law.
Third, the Riverkeeper argues that the FERC Final Environmental Impact Statement
("FEIS") is inadequate because it fails to consider listed endangered species, chemical
contamination in Badin Lake and its impact on endangered species and bald eagles, continued
water quality violations in Badin Lake, and the possibility of removing the dam as an
alternative. Riverkeeper Comments at 11-13. In addition, the Riverkeeper claims that the
FEIS's "no action" alternative is an improper baseline, and the proper baseline is the natural
river environment. While these arguments may have been relevant to the baseline
environmental determinations to be made by FERC under NEPA, they are far outside the scope
of the Section 401 certification proceeding. This proceeding cannot be used to alter the FEIS.
Further, nothing in Section 401 prevents DWQ from considering information in the FEIS in
arriving at its certification decision.
Furthermore, contrary to the Riverkeeper's claims and as noted earlier, APGI has
conducted studies on threatened and endangered species at the Yadkin Project. Although those
studies did not specifically evaluate potential contamination of bald eagles, APGI has
monitored bald eagle nesting and production at the Yadkin Project for nearly 10 years and has
found no adverse impact to the bald eagles.
VI. The Theories Suggested by the Riverkeeper and Rockingham Regarding
Suspension of Contaminated Sediments in Badin Lake are Unsubstantiated
The Riverkeeper states that "[e]xperts have commented that PCBs have a strong affinity
for sediments and that dam operation activities increase suspension of sediments in
impoundments and downstream waters." Riverkeeper Comments at 10. Similarly,
Rockingham asserts that "[c]learly several contaminants in Badin Lake may be mobilized and
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WILLIAMS
Mr. John R. Dorney
March 27, 2009
Page 8
transported by dam operations posing risks to humans and biota downstream." Rockingham
Comments at 4. However, these statements are completely unsubstantiated and, moreover, are
contradicted by the known data. Beyond any theoretical shortcoming of these hypotheses,
neither the Riverkeeper nor Rockingham has presented any evidence that the Yadkin Project
dam operations cause a buildup of PCBs in Badin Lake sediment.
PCB build-up in riverbed or reservoir sediment is controlled by transport and deposition
mechanisms. In order for PCBs to pose a water quality issue, sediments contaminated with
PCBs must experience significant movement and resuspension. In the context of a Section 401
proceeding, the issue is specifically whether the operation of the hydroelectric dam is linked to
the movement and resuspension of contaminated sediments so as to affect water quality.
Rockingham and the Riverkeeper have not provided any data that would support a link
between the operation of the Yadkin Project and PCB contamination.
Moreover, the sediment study completed by APGI in December, 2008 (URS 2009)
demonstrates that this is not the case. In this study which looked at PCB concentrations along
transects between the cove on which the Badin Plant (a possible source of PCBs) is located, the
results indicate that the elevated concentrations of PCBs found at some of the cove sites are
contained within the immediate area of the cove, and are not moving upstream toward the main
reservoir channel, and certainly have not made their way to the dam. This is consistent with
what one would expect based on the characteristics of Narrows Reservoir and operational
parameters of the associated dam, which create a low likelihood of movement and resuspension
of any significant quantity of PCB-contaminated sediment. In terms of dam operations, the
only operational effect that is likely to result in significant movement and resuspension of
sediments would be drawdowns that repeatedly expose sediments to the effects of wave action
and erosion. However, Narrows Reservoir is more than 100 feet deep and fluctuates less than
6.6 feet in total; normal fluctuations are limited to less than 3 feet. These fluctuations expose
none of the sediments in the deep parts of the reservoir near the location of the dam. The
sediments in front of the dam are more than 100 feet below the intakes to the powerhouse.
There is no physical mechanism that would cause or allow sediments at that depth to rise up to
a level where they might be taken into the intakes and released downstream. Thus, there is no
basis to conclude that Yadkin Project operations create or contribute to PCB contamination
issues that would be appropriate for consideration in this proceeding; Rockingham and the
Riverkeeper provide no information to the contrary.
VII. Conclusion
APGI respectfully requests that DWQ take the foregoing reply comments into
consideration when evaluating the submissions from the Riverkeeper and Rockingham. As
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WHIIA1vrs
Mr. John R. Dorney
March 27, 2009
Page 9
established in its comments on the Proposed 401 certification, APGI believes that the record in
this matter compels the issuance by DWQ of a 401 Certification similar in all substantive
aspects to the Certification issued in November, 2007.
Sincerely yours,
Craig A. Bromby
cc: Coralyn Benhart, Esq.
Mr. Gene Ellis