New York City Department of Environmental Protection (14 SPDES Permits) - Ruling 2, April 23, 2004

Ruling 2, April 23, 2004

STATE OF NEW YORK: DEPARTMENT OF ENVIRONMENTAL CONSERVATION
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In the Matter of Modification
of the Fourteen State Pollutant
Discharge Elimination System (SPDES)
Permits Pursuant to Environmental
Conservation Law Article 17 and 6 NYCRR
Parts 621, 624 and 750 et seq., for
the City of New York's 14 Publicly Owned
Sewage Treatment Plants Operated by
the City of New York Department of
Environmental Protection

RULING ON PROPOSED
ADJUDICABLE ISSUE

(Apr 23, 2004)
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Introduction

The Permittee, New York City Department of Environmental Protection (NYCDEP or Permittee) is a municipal agency operating and having responsibility for the City of New York's 14 water pollution control plants (WPCPs), which treat sewage generated within the City of New York, as well as the City's combined and separate sanitary sewage collection facilities. The City owns the 14 WPCPs. On or about June 27, 2002, the Staff of the Department of Environmental Conservation (DEC Staff) provided the NYCDEP with notice of intent to modify the State Pollutant Discharge Elimination System (SPDES) permits for the 14 WPCPs in accordance with New York State's Environmental Benefit Permit Strategy (EBPS), and commenced negotiations with NYCDEP. By letters dated September 27, 2002 and October 22, 2002, the City (i.e., the City of New York Corporation Counsel and NYCDEP; collectively, the City) preserved its right to object to several of the proposed modifications, and negotiations between the Department Staff and the City continued. The DEC Staff's permit modification process has included lengthy negotiations with NYCDEP, and many of NYCDEP's objections have been resolved or withdrawn as a result of the negotiations.

Following the issues ruling of January 28, 2004 in this matter, no appeals were filed.¹ The January 28 issues ruling granted Department Staff's motion to stay the proposed combined sewer overflow (CSO) issues component of this proceeding for a period of 120 days. In addition, the January 28 issues ruling directed briefing of one proposed issue asserted by the City of New York: whether the schedule for nitrogen effluent reduction in the fourteen draft permits differs from the schedule in the April 2002 nitrogen consent order (DEC Case No. CO2-20010131-7) and, if so, whether this requires any revision of the draft modified permits. This issues ruling addresses the latter issue of nitrogen effluent reduction schedules.

Proceedings

Pursuant to the schedule set forth in the January 28 issues ruling, the City and DEC Staff each filed briefs and replies on this issue, received by March 12, 2004.

The Total Maximum Daily Load analysis (TMDL)² divided the Long Island Sound basin into eleven management zones. The Upper East River and the Lower East River constitute Zones 8 and 9, respectively. The April 2002 nitrogen consent order was the subject of almost two years of negotiations and additionally, was circulated for public review and comment before execution by the City and the NYSDEC Commissioner. The nitrogen consent order does not require any nitrogen-related upgrades at the Lower East River plants. Instead, the nitrogen consent order provides that "DEP may seek to achieve its proposed Zone 9 [Lower East River] reductions by a combination of nitrogen reduction at the Lower East River plants along with nitrogen reductions at the Zone 8 [Upper East River] WPCPs." Nitrogen consent order, at 3.

The City identified several conflicts between the nitrogen consent order and the current draft permits for the four upper East River WPCPs (Section IV of the draft permits) and two lower East River WPCPs³ (Section V of the draft permits), which are summarized in Appendix A of this ruling.

The City cites U.S. v Wayne County, 40 ERC 1257, 1994 U.S. Dist. Lexis 18775, 1994 WL 739020 (E.D. Mich. 1994; not reported in F. Supp.), as an analogous case in which the court held that "during the life of the Consent Decree any National Pollutant Discharge Elimination System (NPDES) Permit issued by plaintiffs to defendants must completely conform to the conditions mandated by the Consent Decree." Wayne County, 1994 WL 739020, at 1. In Wayne County, a state environmental regulatory authority issued NPDES permits for WPCP discharges into the Detroit River, which conflicted with an existing consent decree between the parties. As is the case here, in Wayne County, "the consent decree [recognizes] plaintiff's complaints, while granting defendants time to issue bonds and raise money to build a sewage system that [complies] with the forthcoming NPDES permit. The latter was especially important because, according to the [Clean Water Act and Michigan state law], if defendants do not follow the strictures of a NPDES permit they are susceptible to litigation and significant fines." Wayne County, 1994 WL 739020, at 1.

DEC Staff responds that unreported cases such as Wayne County should be given little weight (other than for the purpose of establishing res judicata, estoppel or the law of the case), as is the practice of the U.S. Court of Appeals for the Sixth Circuit (including the District Courts of Michigan). In addition, DEC Staff cites two more recent cases than Wayne County to convey the complexity of the Wayne County litigation, which litigation dates back to the late 1970's.

Finally, DEC Staff distinguishes the present matter from Wayne County, in that the nitrogen consent order contains an explicit reservation of rights. The nitrogen consent order ¶XI(A) provides, in part, that "[t]he DEC reserves its right to seek the imposition of more stringent nitrogen limits than those set forth in this Order through the SPDES permit process, to the extent required to do so under applicable law." However, it also provides that "[t]he City reserves its right to contest the imposition of such limits through that process." Nitrogen consent order ¶XI(A).

DEC Staff cites ECL 17-0811(1) and (5), and 6 NYCRR 750-1.11(a)(5)(ii) for the proposition that when a TMDL and specific waste load allocations (WLAs) for point sources have been established, any NPDES (or SPDES) permit issued to a point source must be consistent with the terms of the TMDL and WLA.
However, the City asserts that the nitrogen consent order represents DEC's acknowledgment that the compliance schedule is consistent with the terms of the TMDL and is intended to achieve compliance with the requirements of the CWA.

The nitrogen consent order acknowledges that:

These provisions support the City's assertion that the nitrogen consent order represents a negotiated agreement between the City and the Department of Environmental Conservation and establishes the best timetable to achieve the goals of the TMDL. Therefore, the City contends that pursuant to 6 NYCRR 750-1.11(a)(5)(ii), the nitrogen consent order and its compliance schedule must be incorporated into the draft SPDES permits because they are necessary to implement a TMDL/WLA established pursuant to section 303(d) of the CWA and 40 CFR Part 130.7.⁴

In addition, ECL 17-0813 provides that "SPDES permits issued pursuant hereto may contain compliance schedules. Such compliance schedules shall require that the permittee within the shortest reasonable time consistent with the requirements of the [Clean Water] Act conform to and meet; 1. applicable effluent limitations. 2. any further limitations necessary to insure compliance with water quality standards adopted pursuant to state law. 3. standards of performance for new sources. 4. ocean discharge criteria adopted by the federal government pursuant to the [Clean Water] Act. 5. toxic and pretreatment effluent standards." (footnotes omitted).

DEC Staff contends that a consent order is not a permit, and consequently, the nitrogen consent order does not abrogate Staff's discretion to impose more stringent conditions in the modified draft SPDES permits. As a matter of law, DEC Staff is correct that a consent order is not a permit and Staff retains authority to issue or modify a permit with conditions that differ from those in a consent order. Furthermore, the terms of the nitrogen consent order contain specific language regarding the parties' respective rights in the event of modification of the nitrogen consent order compliance schedule.

Ruling: The City's identification of provisions of the modified SPDES permits that conflict with the nitrogen consent order compliance schedule are set forth in Appendix A. The nitrogen consent order was the result of extensive negotiation, over a period almost two years, and represents the parties' agreement that the compliance schedule represents the most reasonable and appropriate approach to meet the anticipated TMDL-driven LISS-based nitrogen limits. The City already has committed to the WPCP upgrades identified in the nitrogen consent order and has begun implementation of the upgrades.

In view of these circumstances, the Department's execution of the nitrogen consent order represents the Department Staff's acknowledgment that the nitrogen consent order compliance schedule represents the most reasonable and appropriate approach to meet the anticipated TMDL-driven LISS-based nitrogen limits. To that extent, Wayne County, supra, cited by the City, provides some precedent. Moreover, DEC Staff has provided no explanation for why Staff seeks to impose the more stringent nitrogen conditions identified in the draft permits, or why more stringent conditions are necessary to achieve water quality standards consistent with the TMDL.

Therefore, a dispute between Department Staff and the Applicant over a substantial term or condition of the draft permit exists. 6 NYCRR 624.4(c)(1)(i). An adjudicable issue is raised regarding Staff's discretion to modify the nitrogen consent order compliance schedule as set forth in the modified draft permits, in view of the Department's acknowledgment that the nitrogen consent order compliance schedule represents the most reasonable and appropriate approach to meet the anticipated TMDL-driven LISS-based nitrogen limits. The issue is whether the modified permit conditions are necessary to implement the TMDL/WLA, pursuant to 6 NYCRR 750-1.11(a)(5)(ii); in other words, what new information, law, regulations, guidance or other relevant facts or circumstances have occurred since the execution of the nitrogen consent order in April 2002 that would necessitate the proposed modifications of the nitrogen consent order compliance schedule.

Appeals

A ruling of the ALJ to include or exclude any issue for adjudication, a ruling on the merits of any legal issue made as part of an issues ruling, or a ruling affecting party status may be appealed to the Commissioner on an expedited basis.⁵ Ordinarily, expedited appeals must be filed with the Commissioner in writing within five days of the disputed ruling.⁶

Allowing additional time for the filing of appeals and replies, as authorized by 6 NYCRR 624.6(g), any appeals must be received by the Commissioner (Office of the Commissioner, N.Y.S. Department of Environmental Conservation, 625 Broadway, Albany, New York, 12233-1010) before 3 p.m., on May 10, 2004. All replies to appeals must be received before 3 p.m., on May 17, 2004. One copy of each appeal or reply must be filed with the Commissioner. In addition, send three copies of any appeal and reply to the Administrative Law Judge. Participants who use word processing equipment to prepare their brief and/or reply must also submit a copy of their appeal and/or reply to the Administrative Law Judge in electronic form, by E-mail attachment formatted in either Adobe Acrobat, WordPerfect for Windows or Microsoft Word for Windows.

Alternatively, parties may file an electronic copy via E-mail at "kjcasutt@gw.dec.state.ny.us," to be followed by one paper copy to the Commissioner and three paper copies to the ALJ by first class mail, all postmarked by the date(s) specified above. This alternative service will satisfy service upon the Commissioner and the ALJ.

Also, send one copy of any appeal or reply to each person on the distribution list for this case. The participants shall ensure that transmittal of all filings is made to the ALJ and all others on the distribution list at the same time and in the same manner as transmittal is made to the Commissioner. No submissions by facsimile/telecopier will be allowed or accepted.

Appeals should address the ALJ's rulings directly, rather than merely restate a party's contentions.

_____________/s/_______________
Kevin J. Casutto
Administrative Law Judge

Dated: April 23, 2004
Albany, New York

To: NYCDEP SPDES Distribution List
(dated December 15, 2003)

¹ The procedural history of this Staff-initiated permit modification action is recounted in the January 28, 2004 issues ruling.

² In December 2000, the states of Connecticut and New York issued "A Total Maximum Daily Load Analysis to Achieve Water Quality Standards for Dissolved Oxygen in Long Island Sound." On April 3, 2001, the U.S. Environmental Protection Agency (USEPA) approved the TMDL for implementation.

³ The Upper East River WPCPs are Hunts Point, Bowery Bay, Tallman Island and Wards Island; the two Lower East River WPCPs are Newtown Creek and Red Hook.

⁴ It appears that the City mistakenly cited 6 NYCRR 750-1.11(a)(5)(i), rather than 6 NYCRR 750-1.11(a)(5)(ii). Section 750-1.11(a)(5)(ii) references CWA § 303, which in turn authorizes states to develop priority rankings for those waters within its boundaries for which effluent limitations are not stringent enough, and to establish, in accordance with the priority rankings, a total maximum daily load for those pollutants which the EPA identifies as suitable for such calculation. See 33 USC § 1313(d)(1)(A) and (C) (CWA § 303(d)(1)(A) and (C)).

⁵ 6 NYCRR 624.8(d)(2).

⁶ 6 NYCRR 624.6(e)(1).

APPENDIX A

¹ Interim limits in the draft SPDES permits decrease every five years. The interim limits in the nitrogen consent order decrease upon commencement of operation of upgraded facilities at the various WPCPs. Therefore, more than one limit under the nitrogen consent order may apply during a five-year permit period.

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