ILLINOIS
POLLUTION
CONTROL
BOARD
May
1,
1980
PHABODY
COAL
COMPANY,
Petitioner,
v.
)
PCB
78—296
ENVIRONMENTAL
PROTECTION
A(~ENCY,
Respondent.
OPINION AND
ORDER OF THE BOARD
(by
Dr.
Satchell)
On October 24,
1979 Peabody Coal Company
(Peabody)
filed a
motion for rehearina and other relief which reauested reconsid-
eration of the Board’s Opinion and Order of September 20,
1979
(35 POD 379).
On November 29,
1979 the Board agreed to recon-
sider
arid requested additional briefs
(36 PCB 159).
On December
8,
1979 Peabody
filed
its additional brief.
On January 28,
1980
the Environmental Protection Agency
(Agency)
filed a motion to
strike the brief and on February
1,
1980 Peabody filed a response.
In an Order entered February
7,
1980 the Board stated that
it
would consider
the
motion to strike
in this Final Order on the
motion to reconsider.
On March
5,
1980 the Agency filed its reply
brief.
This matter came before the Board upon
a petition for review
of conditions of NPDES Permit No.
IL 0059480 which the Agency
granted Peabody for four discharges from a proposed underground
coal mine near Tilden in
St. Clair and Randolph Counties.
The
four conditions
in dispute are summarized below:
1.
Discharge monitoring reports
(DMR’s)
are to be retained
for six months and mailed and received by the A~encybi-
annually on the fifteenth of the month following the end
of the six month period
(Pet. 3~Ex.
2).
2.
The expiration date of the final permit
is December
31,
1980; whereas,
the draft permit was for ~approximate1y
five years”
(Pet.
7;
Ex.
1).
3.
The effluent concentration of total dissolved solids
(TDS)
is limited to
a level that will not cause the
receiving stream to exceed the water quality level for
total dissolved solids
(Pet.
2)
--2—
4.
The daily maximum concentration of
7
mg/i
for
iron
(total)
is not subject to an exception for bypass
discharge
from
facilities
designed
to
contain
or
treat
the pit pumpage and surface runoff which could result
from
a 10-year, 24-hour precipitation event
(Pet.
1;
Dx.
2).
PERMIT DENIAL LETTER
Peabody
contends
that
the Agency erred by
failing
to
comply
with the provisions
of
Section
39(a)
of
the Act which require the
Agency to
transmit to the applicant a detailed statement
as to
the reason the application was denied.
Although Section
39(a)
does not itself apply to NPDES permits, the Board has by regula-
tion required the Agency to comply with these provisions
Pro-
cedural Rule 502 (h) (1).
Peabody contends that, since the Board
has by regulation expanded the right to appeal to include not
only permit denial hut also grant with objectionable conditions,
the Board must necessarily expand the requirement of
a letter of
denial.
This ignores an essential difference between denial and
grant of a permit:
whereas
a single violation of the P~ctor
rules
is sufficient to justify permit denial,
a statement of
reasons for granting a permit with certain conditions and not
others would be indefinitely
long.
Furthermore,
the Procedural
Rules which expand the right of appeal to include oermit grants
and expand the denial letter to cover NPDES permits preserve the
distinction between denial and grant of
a permit
Procedural
Rule
502(b).
The
Board
in
adopting
these
rules
did
not
intend
to
exnand the
requirement
of
the
letter
of
denial
to
grant
of
an
NPDES
permit
with
conditions.
ISSUE
ON
PERMIT APPEAL
A hearing was held at Naahville on April
24,
1979.
Peabody
presented two witnesses and exhibits.
The Agency cross—examined
but presented no evidence.
At the hearing Peabody’s evidence
largely concerned its difficulty
in complying with the permit
conditions.
In the Opinion of September 20, 1979
the Board stated
that,
although this would be relevant in a variance or rulemaking
proceeding, it
is irrelevant in a permit appeal.
The Board held
that the issue
in a petition under Section 40 of the Environmental
Protection Act
(Act)
is whether or not, based upon the facts of
the application,
the applicant has provided proof that the activity
in question will not cause
a violation of the Act or of the regula-
tions.
Oscar Mayer
& Co.
v. EPA,
30 PCB 397.
Oscar Mayer involved
a permit denial.
Peabody contends that the issue
is different on
appeal of
a nermit granted with conditions to which the Petitioner
objects.
—3—
IJPDES ~ermit: conditions are issued exclusively under Section
39(h).
The Gecond paragraph of Section
39(b)
of the Act provides:
“All NPDES permits shall contain those terms and conditions
which may he required to accomplish the purposes and provisions
of
this Act.”
The third paragraph provides for inclusion of effluent
limitations and other requirements established under Board regula-
tions and the FWPCA.
Permit conditions which are included under
the third paragraph of Section
39(b)
of the Act will be referred
to
as
“mandatory conditions.”
All other permit conditions are
“discretionary conditions.
The mandatory conditions of the third paragraph of Section
39(b)
are not expressly made subject to the requirement of the
second paragraph that they be required to accomplish the purposes
of the Act.
Conditions required under the FWPCA can be imposed
upon the discharger regardless
of the Act because of federal suprem-
acy.
It is the policy of the Act to provide for a single federal!
state permit system
(Section 11 of the Act)
.
The Board therefore
holds that mandatory conditions included in an NPDES permit under
the provisions of the third paragraph of Section
39(b)
of the Act
are not subject to the language of the second paragraph
of Section
39(b).
However, on appeal of a permit grant, the permittee may
seek to show that a discretionary condition is not required to ac-
complish the purposes and provisions of the Act.
Rules
910(e)
and 910(f)
of Chapter
3 require the Agency to
issue permits for fixed terms and to require reporting and monitor-
ing.
They do not, however, mandate the particular conditions
in
this permit which require biannual DMR’s and a December 31, 1980
expiration date.
These details
are within the Agency’s discretion
and are subject to the limitation that they be “required to accomp-
lish the purposes and provisions
of this Act.”
Under some circum-
stances evidence of cost or difficulty
in complying with
a discre-
tionary permit condition may be relevant to this issue.
Since the
Board’s previous opinion did not recognize this,
it is withdrawn.
However, the Board has examined the evidence which Peabody presented
and concludes that it
is insufficient to establish that either the
expiration date or the reporting requirements are not required to
accomplish the purposes and provisions of the Act.
*By applying the label “discretionary”
to a condition the
Board does not mean to infer that the condition
is in fact within
the Agency’s discretion.
“Discretionary conditions”
include those
which are not mandatory and are arguably within the Agency’s dis-
cretion.
-‘-4—
The Board
will
strike
pages
four
through
ten
of
the
additional
brief pursuant to the Agency’s motion of January 28,
1980,
since it
advances
arguments
which
are
inconsistent
with
those
of
the
motion
for reconsideration.
In the stricken parts of the additional brief
and in other places Peabody complains that the Agency has failed to
offer any evidence
in support of the permit conditions.
This ig-
nores Section
40 of the Act which provides that in a permit appeal
the burden
of proof
is upon the petitioner.
WATER OUALITY RELATED EFFLUENT STANDARD FOR TDS
The
permit
contained
the
following
condition:
“The
effluent
concentration
of
TDS
shall
be
limited
to
a
level
that
will
not
cause the receiving stream to exceed the water quality limit in
Rule
203(f)
Illinois
Pollution
Control
Board
Rules
and
Regulations,
Chapter
3:
Water Pollution”
(Permit,
3).
Peabody
objected
to
the
inclusion
of
this
condition.
At
the
hearing
testimony
was
given
concerning
the
difficulty
of
meeting
this
standard.
Rule 605 of Chapter
4:
Mine Related Pollution specifies that
no
effluent
shall
cause
a
water
quality
violation.
The
permit
con-
dition
restates
this
as applied to TDS.
These
rules
were
adopted
by
the
Board
after
proper
notice
and
comment
and
not
by
the
Agency
as
Peabody
contends.
TDS
is
not
regulated
by
the
United
States
Environmental
Protection
Agency.
The
Agency
must
include
the
more
stringent
state
limitation
in
the
permit
under
the
provisions
of
Section
39(b)
of
the
Act
and
Rule
910(a)
of
Chapter
3.
Evidence
of hardship
in complying with
a mandatory permit condition is not
relevant
in
a oermit appeal.
Peabody
is
free to seek
a variance
or rule change.
Peabody also contended that
it is arbitrary and capricious
for
the
Agency
to
single
out
TDS
as
the
only
water
quality
related
effluent standard included in the permit.
The Board assumes that
the Agency determined that there was
a possibility of Peabody
causing
a
TDS
water
quality
violation
hut
that
the
possibility
of
other water quality violations
was
too
remote
to
warrant
inclusion
in the permit.
Peabody contends that the Board went outside the record to
explain the Agency’s action.
However,
under
Section
40 of the Act
the burden of proof
is upon the petitioner.
The Agency’s actions
in issuing a permit are correct unless
the petitioner proves them
otherwise.
Where
the
Agency
offers
no
explanation
of
its
action,
the Board will uphold it if there is a conceivable basis.
It would
impose
an
impossible
burden
on
the
Agency
to
require
it
to
document
and fully explain the entire decision process involved in a routine
action such as permit issuance.
Peabody
further
argued
that
under
the
second
sentence
of
Water Rule 910(b)
the Agency should have made a waste load alloca-
tion
in
imposing
a
water
quality
related
effluent
standard.
The
Agency offers no interpretation of this rule in its brief, but
from
its
actions
the
Board
can
infer
that
it
believes
the
waste
load allocation is optional in this case.
This would be another
limitation on Peabody’s permit, and it could be a very restrictive
limitation
if
the
Agency
is
to
he
obliged
to
specify
a
number
which Peabody must meet at all times to avoid causing a water qual-
ity violation during times of low flow.
The Board therefore holds
that Water Rule 910(h)
does not mandate a waste
load allocation
for
this
water
quality
related
TDS
effluent
standard.
Peabody
will
be
granted
leave
to
file
a
supplemental
permit
application
request-
ing a waste
load allocation.
Peabody
also
objected
that
inclusion
of
the
TDS
water
quality
condition
in
the
NPDES
permit
subjected
it
to
greater
possible
penalties
than
violation
of
the
water
quality
standards
of
Rule
203.
Although the penalties of NPDES permit violation are greater
than for violation
of the
Act
and rules,
the
penalties
are
pro-
vided by statute.
Furthermore,
one of the purposes
of the permit
system is to put the discharger on full notice of its cleanup re-
sponsibilities
so there is no question
as
to inadequate notice or
confusion
regarding
the
law’s
requirements.
NRDC
v.
Train,
396
F. Supp.
1393,
1400
(1975).
The permit condition in question
furthers
this
policy
of
notice
and
specificity.
CATASTROPHIC
RAIN
Peabody objected that while the thirty day average maximum
concentration for iron was subject to an exemption for bypass dis-
charges from facilities designed to contain a 10-year,
24-hour
precipitation event, the daily maximum concentration was not.
At
the
hearing
Peabody
presented
evidence
that
sound
engineering
practice
and
federal
mine
safety
regulations
require
that
holding
ponds be designed to bypass
a 10—year,
24-hour precipitation event
(R.
31).
An
engineer
offered
an
opinion
that,
unless
the
iron
daily maximum were also excepted,
it would be impossible
to design
to
so bypass
(R.
26).
Hardship
is not at issue on appeal of a
mandatory permit condition.
The iron permit condition was based on effluent standards
contained
in Rule 606 of Chapter
4 and United States Environmental
Protection Agency
(USEPA) regulations found at
40 CFR 434.42.
The
Illinois standard is
7 mq/l which
is applicable
at all times unless
treatment
is provided.
The federal standard
is 3.5 rng/l on a thirty
day average and 7.0 mg/i on a daily maximum.
The federal standard
is subject to an exemption for 10—year, 24—hour precipitation events.
—6
The Agency applied the more stringent
federal
limitation
of
3.5
mg/i on
a thirty day average.
However, with respect to the daily
maximum,
the
Agency
took
the position that the Illinois standard
of
7 mg/i was more stringent than the federal standard of 7.0
mg/l because the former was not subject
to the 10—year, 24—hour
precipitation event exception.
The Agency therefore included the
following “hybrid standard”
in the permit:
30
Day
Average
Daily
Maximum
Iron
*3•5 mg/i
7 mg/i
*Subject to 10-year, 24-hour precipitation event exception.
Rule 910(a)
of Chapter
3 and Section
301(b) (1)
(C)
of the FWPCA
require
inclusion
of
any
more
stringent
limitation
established
pursuant to state law or regulations.
The Agency’s position is
that
this
requires
it to write
a permit condition which will ensure
that neither federal nor state law pertaining to a parameter can be
violated without a violation of the permit condition.
An alter-
native interpretation
is that the Agency
is to look at state law,
determine if state regulation of a parameter
is more stringent than
federal regulation,
and if
so, write a permit condition which
is
based
on
state
law,
but
otherwise
ignore
the
state
law.
Peabody contends that the creation of
a
hybrid
standard
con-
tained in the permit condition amounts
to substantive rulemaking
by the Agency in excess of the authority delegated to it by the
Act.
However,
if the
Agency’s
interpretation
of
Section
39(b)
is
correct,
then
it
has
been
authorized
by
the
Act
to
write
permit
conditions
more
stringent
than
either
the
federal
or
state
effluent
limitations
in
this
situation.
The
Board
will
therefore
address
the issue as one of interpretation of Section
39(b)
of the Act.
The
phrase
“any
more
stringent
limitation”
is
compatible
with
the
interpretation
that
the
Agency
is
to
examine
state
limitations,
determine
whether
they
are
more
stringent
than
the
federal
guide-
lines
and,
if
so, aaply them verbatim
(Rule 910(a)
of Chapter
3 and
Section
301(b)
(1) (C)
of
the
FWPCA.)
It
is
also
compatible
with
the
Agency’s
interpretation.
The
Agency’s
explanation
assumes
that
there are two Illinois iron standards:
a daily maximum standard
and a thirty day average standard.
The effluent standards are not
written
that
way.
Rule
606
of
Chapter
4
sets
a
standard
of
7
mg/i
for iron.
Rule 601 sets forth the averaging rule.
Since Peabody
—7--
provides
no
treatment
other
than
impoundment
the
7
mg/i
standard
must
he
met
at
all
times.
Application
of
logic
is
required
to
derive
the
result
that
Illinois
has
a
daily
maximum
standard
of
7 mg/i and a thirty day average standard of
7 mg/i.
These “stan-
dards” are not actually found in the rules.
Because the averaging rule
for mine waste iron where no
treatment
is provided
is very simple,
it is possible to derive
the thirty day average and daily maximum with confidence.
Other
parameters have
more
complicated
averaging
rules.
There
is
no
guarantee
that
it will always
be
possible
to
derive
Illinois
stan-
dards
which
can
be
compared
directly
with
the
federal
standards.
The
Board
in
its
rulemaking
implicitly
weighed
the
cost
sav-
ings to industry from the higher thirty day average versus the
expenses involved in not having a 10-year, 24—hour precipitation
event exception.
The Board adopted the looser regulation of the
thirty
day
average
while
USEPA
decided
on
a
tighter
thirty
day
average with an exception more favorable
to industry.
Under the
Agency
interpretation
the
industry
is
denied
the
looser
thirty
day
average it got from the Board and the more favorable exception
it
got
from
USEP.A.
The
cost
of
compliance
with
the
hybrid
standard
is
greater
than
either
the
Board
or
USEPA
regulations
and
neither
the
Board
nor
USEPA
actually
intended
this
result.
The exceptions associated with the effluent standards often
cover
unusual
situations
beyond
the
discharger’s
control.
Ten-
year,
24—hour precipitation events will occur on the average once
every 3652.5 days whether the parameter
is exempted or not.
Writ-
ing permit conditions
to cover such situations absorbs an inordinate
amount of staff time while accomplishing very little
in terms of
environmental protection.
It adds
a level of complexity to the law
which generates uncertainty and numerous permit appeals.
The fact that the Board and USEPA did not arrive at precisely
the
same
regulation
is
not
surprising
considering
the
many
trade-
offs
involved.
However,
each
regulation
is
presumed
to
provide
sufficient
environmental
protection
alone
regardless
of
isolated
circumstances
under
which
one
but
not
the
other
might
be
violated.
Having considered these factors along with the language of
the
Act, FWPCA, Chapter
3 and Chapter
4,
the Board concludes that
the preferable construction
is that in writing NPDES permit condi-
tions
for
parameters
governed
by
both
federal
guidelines
and
state
effluent
standards,
the
Agency
is
to
examine
the
state
effluent
standard and decide if it is more
stringent
than
the
federal
guide-
line as applied to the facility in question.
If the state effluent
—8—
standard is more stringent
it is
to be applied, otherwise the
permit
condition
is
to
be
based
on
the
federal
guideline
without
further
consideration
of
the
state
effluent
standard.
Since
the
Agency
has not determined whether
federal or state
regulation or iron effluents
is more stringent,
this case must be
remanded for further action not inconsistent with this Opinion.
Peabody will be given
leave
to file
a supplemental permit applica-
tion requesting inclusion of specific permit terms.
The Agency
will consolidate any such auplication with this remand.
This Opinion supplanting the Opinion of September 20,
1979
constitutes the Board’s findings of fact and conclusions of law
in this matter.
ORDER
1.
The Order of September
20,
1979
is vacated.
2.
Pages four through ten of Petitioner Peabody Coal
Company’s additional brief are stricken.
3.
The permit appeal is remanded to the Environmental
Protection Agency for a determination as
to whether
state effluent standards or federal guidelines for
iron are more stringent and for further action not
inconsistent with the Board’s Opinion.
4.
The remaining permit conditions
are affirmed provided
that Petitioner
is civen leave
to file a supplemental
permit application requesting specific modifications.
5.
The Agency shall consolidate any such supplemental
permit application with this remand.
IT
IS SO ORDERED.
I, Christan
L.
Moffett, Clerk of the Illinois Pollution
Control Board,
hereby certify the above Opinion and Order
ere
adopted on the
L~+
day of
___________,
1980 by a vote of
~
ristan L. Moff
Clerk
Illinois Poilutio
ontrol Board
