U.S. ENVIRONMENTAL PROTECTION AGENCY

OFFICE OF INSPECTOR GENERAL

EPA Oversight Addresses 

Thermal Variance and Cooling 

Water Permit Deficiencies But 

Needs to Address Compliance 

With Public Notice Requirements 

Report No. 13-P-0264 May 23, 2013 

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Report Contributors:	 Charles Brunton 

Dan Engelberg 

Tiffine Johnson-Davis 

Jayne Lilienfeld-Jones 

Tim Roach 

Gerry Snyder 

Abbreviations 

CFR Code of Federal Regulations 

CWA Clean Water Act 

CWIS Cooling Water Intake Structure 

EPA U.S. Environmental Protection Agency 

NPDES National Pollutant Discharge Elimination System 

OIG Office of Inspector General 

OW Office of Water 

PQR Permit Quality Review 

Cover photo: Brayton Point Power Facility, Somerset, Massachusetts. (EPA photo) 

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email: OIG_Hotline@epa.gov write: EPA Inspector General Hotline 

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online: http://www.epa.gov/oig/hotline.htm Washington, DC 20460 
 

U.S. Environmental Protection Agency 13-P-0264 

May 23, 2013 Office of Inspector General 

At a Glance
 

Why We Did This Review 

We evaluated the U.S. 

Environmental Protection 

Agency’s (EPA’s) oversight of 

regional and state compliance 

with Clean Water Act (CWA) 

§316(a) and (b) requirements. 

These requirements are in place 

to help protect aquatic 

organisms from the impacts of 

thermal discharges and cooling 

water intake structures. CWA 

§316(b) requires that NPDES 

permits for facilities with cooling 

water intake structures ensure 

that the location, design, 

construction, and capacity of the 

structures reflect the best 

technology available to minimize 

harmful impacts on the 

environment. The permitting 

authority may issue a variance 

under CWA §316(a) to allow 

facilities to discharge cooling 

waters at an alternative, less 

stringent thermal effluent limit 

that is still protective of aquatic 

life. 

This report addresses the 

following EPA Goal or 

Cross-Cutting Strategy: 

 Protecting America’s waters. 

For further information, contact 

our Office of Congressional and 

Public Affairs at (202) 566-2391. 

The full report is at: 

www.epa.gov/oig/reports/2013/ 

20130523-13-P-0264.pdf 

EPA Oversight Addresses Thermal Variance and 

Cooling Water Permit Deficiencies But Needs to 

Address Compliance With Public Notice Requirements

 What We Found 

Since the 1980s, EPA has had an oversight process, known as Permit Quality 

Reviews (PQRs), to promote permit quality and ensure a reasonable degree of 

national consistency with regard to core program requirements. The PQRs 

EPA conducted from 2007 to 2010 identified a number of deficiencies in 

NPDES permits, which EPA made recommendations to improve. Our review of 

EPA’s PQR oversight process found it has generally been effective in 

determining the quality of permits. Like EPA, we found deficiencies in permits 

or supporting documents. For example, 55 percent of the fact sheets in our 

sample did not contain an explanation of the state’s or EPA’s decision in the 

permit that facilities use the best technology available to minimize the 

environmental impact of the cooling water intake structures regulated under 

CWA §316(b). Conversely, 75 percent of the fact sheets we reviewed 

contained an explanation of the state’s or EPA’s decision to approve the 

facilities’ requests for CWA §316(a) thermal variances. A fact sheet briefly 

presents the principal facts and the significant factual, legal, methodological, 

and policy questions considered in preparing the draft permit. 

None of the public notices we reviewed contained all of the required statements 

describing the proposed §316(a) thermal variance. We found that EPA’s quality 

assurance reviews are not designed to address whether public notices for 

permits with a §316(a) thermal variance contain required information under the 

Code of Federal Regulations (CFR) per 40 CFR §124.57. As a result, EPA’s 

quality assurance reviews did not identify deficiencies in public notices. EPA 

established this regulation so that permitting authorities would use public 

notices to inform the public about proposed thermal variances.

 Recommendation and Planned Agency Corrective Action 

We recommend that the Assistant Administrator for Water develop and 

implement oversight mechanisms that will help states and regions consistently 

comply with CWA §316(a) public notice requirements. The Agency agreed with 

our recommendation and committed to implementing corrective actions by 

June 30, 2013. 

 Noteworthy Achievements 

The Office of Water is working to improve the quality of permits through its 

PQR process. Quality assurance evaluations assess whether NPDES permits 

written by states and regions comply with regulations. Through this review 

process, the Office of Water works to promote national consistency in permits, 

identify best practices in state NPDES programs, and recommend 

opportunities for improvement in state and regional permit programs. 
 Nancy K. Stoner, Acting Assistant Administrator 

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 

WASHINGTON, D.C. 20460 

THE INSPECTOR GENERAL 

May 23, 2013 

MEMORANDUM 

SUBJECT: EPA Oversight Addresses Thermal Variance and Cooling Water Permit Deficiencies 

But Needs to Address Compliance With Public Notice Requirements 

Report No. 13-P-0264 

FROM: Arthur A. Elkins Jr. 

TO: 

Office of Water 

This is our report on the subject evaluation conducted by the Office of Inspector General (OIG) of the 

U.S. Environmental Protection Agency (EPA). This report contains findings that describe the problems 

the OIG has identified and corrective actions the OIG recommends. This report represents the opinion of 

the OIG and does not necessarily represent the final EPA position. Final determinations on matters in 

this report will be made by EPA managers in accordance with established audit resolution procedures. 

Action Required 

Your response to the draft report included a proposed corrective action and completion date. The 

recommendation is open with corrective actions underway. We have no objections to the further release 

of this report to the public. We will post this report to our website at http://www.epa.gov/oig. 

If you or your staff members have any questions regarding this report, please contact Carolyn Copper, 

Assistant Inspector General for Program Evaluation, at (202) 566-0829 or copper.carolyn@epa.gov; 

or Dan Engelberg, Product Line Director, at (202) 566-0830 or engelberg.dan@epa.gov. 
 

 

 

EPA Oversight Addresses Thermal Variance and 13-P-0264 

Cooling Water Permit Deficiencies But Needs to Address 

Compliance With Public Notice Requirements 

Table of Contents 

Purpose........................................................................................................................ 1
 

EPA and States Share Responsibility for Regulating Facilities Under 

OW Identified Deficiencies and Regions Are Addressing 

Background ................................................................................................................. 1 

Regulations Governing CWA §316(a) Thermal Variances ................................... 1 

Regulations Pursuant to CWA §316(b) Cooling Water Intake Structures ............ 2 

CWA §316(a) and §316(b) ........................................................................ 2
 

Public Notices Alert the Public to Proposed Permits ............................................ 4
 

EPA’s Office of Water Conducts Permit Quality Reviews ................................... 4 

Noteworthy Achievements ........................................................................................ 5 

Scope and Methodology ............................................................................................ 5
 

Prior Reports ........................................................................................................ 6 

Results of Review ...................................................................................................... 6
 

Administration of CWA §316(a) and §316(b) Needs Improvement ...................... 7 

CWA §316(a) and §316(b) Permit Issues ................................................. 8 

Conclusion .................................................................................................................. 8 

Recommendation........................................................................................................ 9 

Agency Response and OIG Comment ...................................................................... 9 

Status of Recommendations and Potential Monetary Benefits.............................. 10
 

Appendices 

A Permits Reviewed by OIG.................................................................................. 11 

B Agency Response to Draft Report.................................................................... 12 

C Distribution ......................................................................................................... 14
 
 

 

 

 

 

Purpose 

We evaluated National Pollutant Discharge Elimination System (NPDES) 

program permits from U.S. Environmental Protection Agency (EPA) 

Regions 1, 5, and 6, to review the oversight of regions’ and states’ compliance 

with Clean Water Act (CWA) §316(a) and (b) requirements. These requirements 

are in place to help protect aquatic organisms from the impacts of thermal 

discharges and cooling water intake structures.
 

Background 

Power plants and manufacturing facilities account for approximately half of all 

water withdrawals in the United States. Most of the withdrawn water cools the 

steam used to produce electricity. According to the U.S. Geologic Survey’s report 

Estimated Use of Water in the United States in 2005, power and self-supplied 

industrial facilities withdraw an estimated 219 billion gallons of water per day. 

Withdrawing surface waters through cooling water intake structures (CWISs) at 

power plants causes adverse environmental impacts by pulling large numbers of 

fish, larvae, eggs, and other small aquatic organisms into a facility’s cooling 

system. Once pulled in, they may be killed by heat, stress, or chemical exposure 

(entrainment). Larger fish, crustaceans, and even marine mammals may be killed 

or injured when they are trapped against screens at the front of an intake structure 

by the force of water being drawn into the system (impingement). EPA estimates 

that 2.1 billion fish, crabs, and shrimp are killed by impingement and entrainment 

annually. 

The environment may also be impacted when the cooling water is discharged. 

Because the temperature of the effluent is higher than that of the receiving water, 

it may negatively affect plant growth, ecosystem composition, and fish 

reproduction and migration. 

Regulations Governing CWA §316(a) Thermal Variances 

Thermal effluents are regulated because heat is identified as a pollutant under 

CWA 502(6). A facility may be authorized to discharge pollutants into U.S. 

waters by obtaining an NPDES permit. Section 316(a) authorizes the permitting 

authority (either the authorized state or EPA) to impose alternative, less stringent 

effluent limits for the control of the thermal component of a discharge in lieu of 

the effluent limits that would otherwise be required under CWA §301 or §306. 

A variance allows facilities to discharge cooling water at an alternative, less 

stringent thermal effluent limit that is still protective of aquatic life. To obtain a 

CWA §316(a) thermal variance, the operator of a facility must demonstrate to the 

permitting authority that an alternative thermal discharge limit will be protective 

of the balanced, indigenous population of shellfish, fish, and wildlife. This 

13-P-0264 1 
 

 

 

 

 

alternative effluent limit, or variance, is only in effect for the duration of the 

permit. 

Regulations Pursuant to CWA §316(b) Cooling Water 

Intake Structures 

Under CWA §316(b), facilities with NPDES permits and CWISs must ensure that 

the location, design, construction, and capacity of the CWIS reflects the best 

technology available to minimize adverse environmental impacts. EPA completed 

three phases of rulemaking to address cooling water intakes. The Phase I rule, 

promulgated in 2001, covers new facilities; Phase II, promulgated in 2004, covers 

large existing electric generating plants; and Phase III, promulgated in 2006, 

covers certain existing facilities and new offshore and coastal oil and gas 

extraction facilities. 

EPA suspended the Phase II existing facilities rule in 2007 as a result of a ruling 

by the U.S. Court of Appeals for the Second Circuit.1

 Until a new regulation is 

developed, Phase II existing facilities are subject to the only portion of that 

regulation still in effect under the Code of Federal Regulations (CFR) in 

40 CFR 125.90(b). Under current regulations, including 40 CFR 401.14, permit 

writers must use “best professional judgment” on a case-by-case basis to identify 

the best technology available to minimize adverse environmental impacts. 

According to a recent modification of the settlement agreement between EPA and 

an environmental organization, a new set of regulations will be promulgated in 

2013.2 The new rule will cover approximately 1,260 existing facilities that 

withdraw at least 2 million gallons per day of cooling water. 

EPA and States Share Responsibility for Regulating Facilities 

Under CWA §316(a) and §316(b) 

Both EPA and states have responsibilities for protecting surface waters from harm 

under the CWA. EPA has granted authority to 46 states to issue NPDES permits 

and EPA has not granted this authority in 4 states and the District of Columbia, as 

well as with Indian tribes and in U.S. territories.3

 While authorized states issue 

NPDES permits, EPA retains the authority to review permits for compliance with 

regulations. The following chart is a general summary of the permitting process. 

1

 Riverkeeper, Inc. v. EPA, 475 F.3d 83 (2d Cir. 2007), rev’d in part sub. nom. Entergy Corp. v. Riverkeeper, Inc., 556 U.S. 208
 

(2009).

2 Second Amendment to Settlement Agreement among the EPA, Plaintiffs in Cronin et. al. v. Reilly, 93 CIV. 314 (LTS) (SDNY), 

and Plaintiffs in Riverkeeper. et. al. v. EPA, 06 CIV. 12987 (PKC) (SDNY) (available through the EPA website at:
 

http://water.epa.gov/lawsregs/lawsguidance/cwa/316b/upload/modified-settlement-agreement-with-Riverkeeper.pdf). 3 The Virgin Islands and Maine are only partially authorized. Maine’s NPDES authority does not include CWA§316(b) 

 determinations. 

13-P-0264 2 
 

 

 

 

 

Figure 1: State NPDES Permitting Process — Key Steps 

Source: Office of Inspector General (OIG) analysis of EPA NPDES 

Permit Writers Manual.
 

The permitting authority reviews the facility’s permit application and prepares the 

draft permit, the fact sheet, and the public notice. A fact sheet briefly presents the 

principal facts and the significant factual, legal, methodological, and policy 

questions considered in preparing the draft permit. Under 40 CFR §124.8(b)(4), 

the fact sheet shall include a summary of the basis for the draft permit conditions, 

and if a CWA§316(a) is requested, reasons why these variances are or are not 

justified must be included under and 40 CFR §124.8(b)(5). For example, any 

13-P-0264 3 
 

 

 

 

permit that contains a thermal variance issued under §316(a) needs to describe 

and justify that variance in its fact sheet. For a permit issued pursuant to §316(b), 

the fact sheet must describe and the permit must require that the location, design, 

construction, and capacity of the structures reflect the best technology available to 

minimize harmful impacts on the environment. 

Public Notices Alert the Public to Proposed Permits 

Public notices inform citizens about proposed NPDES permits issued by 

permitting authority (states or EPA). Compliance with public notice requirements 

is important because incomplete or inadequate public notices hinder the public’s 

awareness and its opportunity for input and involvement in permitting authorities’ 

decisions pertaining to waterbody protections. The permitting authority publishes 

public notices of draft permits so that the public has an opportunity to review and 

comment on a draft permit and permit conditions. According to 40 CFR 

§124.10(d), the public notice must contain basic information about the permitted 

facility, contact information, and public hearing notification (if applicable). If a 

facility’s draft permit contains a §316(a) thermal variance, the public notice must 

contain specific requirements as identified in 40 CFR §124.57. Because of the 

2007 suspension of the Phase II existing facilities rule as described above, we are 

not reporting on public notice compliance related to §316 (b) decisions in this 

report. EPA plans to release new Phase II existing facility rules in June 2013. 

EPA’s Office of Water Conducts Permit Quality Reviews 

EPA’s Office of Water (OW) evaluates the quality of permits through its NPDES 

Permit Quality Review (PQR) process.4 According to OW staff, the PQRs began in 

the mid 1980s. This is a process EPA uses to assess whether NPDES permits are 

developed consistent with applicable requirements in the CWA and environmental 

regulations. Between 2007 and 2010, OW conducted PQRs in eight regions. One 

goal of the PQR was to identify how permitting authorities have incorporated §316 

provisions into permit requirements. The universe of potential NPDES permits for 

review was determined using EPA’s Permit Compliance System database and the 

lists of facilities developed during the rulemaking for §316(b). In consultation with 

the 8 regions, EPA selected 112 permits to review.5 OW found that decisions 

regarding thermal discharge variances under §316(a) and permit conditions 

implementing §316(b) were not well documented in state or EPA permits. 

According to staff in OW, the PQR process provides a list of findings and 

recommendations that are tracked biannually. 

4 NPDES PQR findings for Regions 2, 3, 5, 7, 9, and 10 are available at http://cfpub.epa.gov/npdes/pqr.cfm. 5

 In total, for the §316 core review, 112 permits were reviewed – Region 1 (17), Region 2 (12), Region 3 (16), Region 4 (23), 

Region 5 (19), Region 7 (7), Region 9 (7), and Region 10 (11). 

13-P-0264 4 
 

 

 

 

 

Noteworthy Achievements 

OW is working to improve the quality of permits through its PQR process. These 

quality assurance evaluations assess whether NPDES permits written by states 

and regions comply with regulations. Through this review process, OW works to 

promote national consistency in permits, identify successes in implementation of 

state NPDES programs, and recommend opportunities for improvement in state 

and regional permit programs. 

Scope and Methodology 

Based on lists containing 262 permits provided by Regions 1, 5, and 6, we 

selected a total of 29 permits to review (appendix A provides a detailed list). We 

selected these permits because they represent permits issued by states and regions, 

permits from locations with high thermoelectric power water withdrawal, and/or 

permits where there had been no prior EPA OIG audit coverage. Eight permits in 

our sample contained a thermal variance regulated under §316(a). All 29 permits 

contained a CWIS that is regulated under §316(b). We collected permit 

documents through requests to regions and states. With one exception, we 

obtained all of the documents requested. We did not receive a copy of the public 

notice for one of the NPDES permits issued by the State of Vermont. This did not 

affect our conclusions reached or our ability to address our evaluation objectives. 

To determine states’ compliance with §316(a) and §316(b) regulations, we 

evaluated state permits and documents that EPA regional staff reviewed, as well 

as a sample of state permits and documents that were not reviewed by EPA 

regional staff. Because the §316(b) Phase II regulations were suspended in 2007, 

we only reviewed public notices for compliance with §316(a) regulations. 

We reviewed §316(a) and §316(b), as well as applicable regulations, to gain an 

understanding of how these sections of the law are implemented. We interviewed 

staff from OW and Regions 1, 5, and 6 about EPA’s oversight of states’ 

compliance with §316 requirements. During our field work we learned about 

OW’s regional PQRs and we incorporated the review of those documents into our 

evaluation. In addition to reviewing PQR reports for Regions 2, 3, 5, 7, 9, and 10, 

we reviewed a draft PQR report for Region 1 and a summary of draft findings for 

Region 4.6 We also contacted the regions for information about oversight of 

NPDES permits and progress implementing changes based on OW’s PQR 

recommendations. 

We conducted our review from January to June 2012 in accordance with generally 

accepted government auditing standards. Those standards require that we plan and 

perform our review to obtain sufficient, appropriate evidence to provide a 

reasonable basis for our findings and conclusions based on our objectives. We 

6

 We did not review PQRs for Regions 6 and 8 since the reports had not been released at the time of our evaluation. 

13-P-0264 5 
 

 

believe that the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our objective. 

Prior Reports 

We reviewed the following reports related to NPDES permits containing §316(a) 

thermal variances and cooling water intake structures regulated under §316(b): 

EPA OIG 

 Report No. 2007-P-00038, Decision Needed on Regulating the Cooling 

Lagoons at the North Anna Power Station, September 20, 2007. 

 Report No. 11-P-0221, Oversight of North Carolina’s Renewals of 

Thermal Variances, May 9, 2011. 

U.S. Government Accountability Office 

	 Report No. GAO-04-589R, Environmental Protection Agency: National 

Pollutant Discharge Elimination System--Final Regulations to Establish 

Requirements for Cooling Water Intake Structures at Phase II Existing 

Facilities, July 22, 2004. 

	 Report No. GAO-10-23, Energy-Water Nexus: Improvements to Federal 

Water Use Data Would Increase Understanding of Trends in Power Plant 

Water Use, October 16, 2009. 

Congressional Research Service 

	 Report No. R41786, Cooling Water Intake Structures: Summary of EPA’s 

Proposed Rule, July 19, 2011. 

Results of Review 

Since the 1980s, EPA has had an oversight process, known as PQRs, to promote 

permit quality and ensure a reasonable degree of national consistency with regard 

to core program requirements. The PQRs EPA conducted from 2007 to 2010 

identified a number of deficiencies in NPDES permits, which EPA made 

recommendations to improve. Our review of EPA’s PQR oversight process found 

it has generally been effective in determining the quality of permits. Like EPA, 

we found deficiencies in permits or supporting documents. For example, 

55 percent of the fact sheets in our sample did not contain an explanation of the 

state’s or EPA’s decision in the permit that facilities use the best technology 

available to minimize the environmental impact of the cooling water intake 

structures regulated under CWA §316(b). Conversely, 75 percent of the fact 

sheets we reviewed contained an explanation of the state’s or EPA’s decision to 

approve the facilities’ requests for CWA §316(a) thermal variances. A fact sheet 

briefly presents the principal facts and the significant factual, legal, 

methodological, and policy questions considered in preparing the draft permit. 

13-P-0264 6 
 

 

None of the public notices we reviewed contained all of the required statements 

describing the proposed §316(a) thermal variance. We found that EPA’s quality 

assurance reviews are not designed to address whether public notices for permits 

with a §316(a) thermal variance contain required information under 40 CFR 

§124.57. As a result, EPA’s quality assurance reviews did not identify 

deficiencies in public notices. EPA established this regulation so that permitting 

authorities would use public notices to inform the public about proposed thermal 

variances. Incomplete or inadequate public notices hinder the public’s awareness 

and its opportunity for input and involvement in permitting authorities’ decisions 

pertaining to waterbody protections under §316(a). 

Administration of CWA §316(a) and §316(b) Needs Improvement 

We reviewed eight permits and associated fact sheets containing CWA §316(a) 

thermal variances. Most of the permits in our sample complied with §316(a) 

regulations and we did not identify any oversight deficiencies. This is notable 

since the OIG has reported oversight of state programs as an EPA management 

challenge for the past several years. Region 5 provided oversight of state-issued 

permits by reviewing the draft permit and OW conducted permit quality reviews 

that included permit analyses of §316(a) in Regions 1 and 5. Region 1 issued four 

of these permits. The thermal variance requirements and justification in these four 

permits were well documented in the permit and fact sheet. The other four permits 

were issued by Illinois, Ohio, Michigan, and Vermont. In Ohio and Illinois, 

Region 5 raised concerns during its review of the draft permit about the lack of 

support for the state’s decision to approve the thermal variance. The states 

modified the final permits to address these concerns. Although the Vermont 

permit was not reviewed by Region 1, the permit and fact sheets contained 

sufficient explanation of the thermal variance. 

Alternatively, 17 out of 29 (59 percent) of the state and EPA permits and 16 out 

of 29 (55 percent) of the fact sheets we reviewed did not comply with 40 CFR 

§125.90(b). This regulation states that a facility must meet requirements under 

§316(b) to minimize adverse environmental impacts as determined by the director 

on a case-by-case, best professional judgment basis. The permitting authority’s 

justification must be documented in the fact sheet, while the permit must lay out 

the final decision. However, the fact sheets for 55 percent of the permits we 

reviewed did not contain this justification. Instead of requiring facilities to install 

the best technology available, about a quarter of the state permits in our sample 

required facilities to collect information about the impacts of existing structures. 

The public notices we reviewed also did not comply with regulations. We 

reviewed public notices for the permits containing a §316(a) thermal variance 

(see appendix A). None of the public notices contained all of the required 

statements describing the proposed §316(a) thermal variance. We found similar 

deficiencies during our 2011 review of North Carolina permits containing §316(a) 

thermal variances. While the OW’s PQRs examined whether other types of 

13-P-0264 7 
 

 

permits complied with state and local public notice requirements, the checklist for 

permits containing a §316(a) thermal variance did not contain specific questions 

to verify that the public notice complied with the applicable regulation 

(40 CFR §124.57). As a result, OW did not identify this deficiency in state and 

regional permit packages. Because of the 2007 suspension of the Phase II existing 

facilities rule as described above, we are not reporting on public notice 

compliance related to §316(b) decisions in this report. 

OW Identified Deficiencies and Regions Are Addressing CWA §316(a) 

and §316(b) Permit Issues 

OW found that decisions regarding thermal discharge variances under §316(a) 

and permit conditions implementing §316(b) were not well documented in state or 

EPA permits. The PQR reports did not identify the cause of these deficiencies but 

presented the regions with recommendations to improve compliance with 

regulatory requirements. The general recommendation was for regions and states 

to re-evaluate §316(a) thermal variances and §316(b) requirements at each permit 

renewal and document the basis in the permit and fact sheet. Prior determinations 

are also to be documented in the fact sheet and reflected in the current permit, as 

appropriate. We contacted the eight regions which have final or draft PQR reports 

to determine their progress in implementing OW’s recommendations. All eight 

regions indicated that they are implementing the PQR recommendations, which 

are tracked by OW on a semiannual basis. We believe OW’s recommendations 

pertaining to §316(a) and (b) and regional follow-up are sufficient and that no 

further action is necessary at this point. 

Conclusion 

OW has made strides in addressing CWA §316(a) and (b) permit deficiencies 

through its permit quality reviews and through recommendations for improved 

regional oversight. However, we found that none of the state and regional public 

notices in our sample contain all of the required statements describing the 

proposed §316(a) thermal variance. We also found that OW did not identify these 

deficiencies during the PQR process. We concluded that this is a weakness in 

OW’s PQR process and oversight. Providing the public with the proper notice, 

as regulations require, is a central part of better protecting the environment and 

public health through public engagement and by obtaining information and input 

from the public. The information gaps about thermal variances in public notices 

indicate a need for greater transparency and EPA oversight of states’ public 

notices. Improving that aspect of oversight of state NPDES permits can be 

achieved through an improved PQR review process. Further, by increasing 

oversight of public notices, regions can help states comply with public notice 

requirements once the §316(b) existing facilities regulation is final and state 

directors begin implementing the new rule. 

13-P-0264 8 
 

 

 

 

Recommendation 

We recommend that the Assistant Administrator for Water: 

1. Develop and implement oversight mechanisms that will help states and 

regions consistently comply with CWA §316(a) public notice requirements. 

Agency Response and OIG Comment 

The Agency agreed with our recommendation and provided a timeline for 

implementing corrective actions. We revised the final report based on technical 

comments received to the draft report. 

EPA’s comments noted that reviewing and granting CWA §316(a) thermal 

variances is a comprehensive and technical process based on biology, which 

proves to be a difficult endeavor for NPDES permit writers who are often 

engineers by training. EPA’s comments pointed out that CWA §316(b) 

determinations of best technology available are complicated by a reluctance of 

permit writers to require the installation of new technologies, which may require 

expensive capital investments, prior to finalization of standards for existing 

cooling water intake structures under CWA §316(b). The comment concluded 

with a statement that EPA is working to finalize these standards by June 27, 2013, 

under a modified settlement agreement. 

We acknowledge the technical challenges associated with permit determinations 

for thermal variances under CWA §316(a), and the difficulties in implementing an 

NPDES permit program when parts of the CWA §316(b) regulations are under 

development. We also recognize that the permit quality review process is 

designed to identify and correct deficiencies, which in time should aid in the 

implementation of the new CWA §316(b) regulations. 

13-P-0264 9 
 

 

 

 

 

 

 

 

 

Status of Recommendations and 

Potential Monetary Benefits 

POTENTIAL MONETARY 

RECOMMENDATIONS BENEFITS (in $000s) 

Rec. 

No. 

Page 

No. Subject Status1 Action Official 

Planned 

Completion 

Date 

Claimed 

Amount 

Agreed-To 

Amount 

1 9 Develop and implement oversight mechanisms that 

will help states and regions consistently comply 

with CWA §316(a) public notice requirements. 

O Assistant Administrator 

for Water 

6/30/13 

O = recommendation is open with agreed-to corrective actions pending 

C = recommendation is closed with all agreed-to actions completed 

U = recommendation is unresolved with resolution efforts in progress 

13-P-0264 10 

1 
 

 

 

 

 

 

 

 

 

 

 

 

Appendix A 

Permits Reviewed by OIG 

Permit number and facility Region State 

§316(a) and (b) 

regulated status 

Draft permit 

reviewed 

by region * 

Part of OW’s 

PQR ** 

NH0020338 – FPL Energy Seabrook, 

LLC 1 NH (a) and (b) N/A Yes 

VT0000264 – Entergy Nuclear 

Vermont Yankee 1 VT (a) and (b) No Yes 

MA0003654 – Brayton Point 1 MA (a) and (b) N/A No 

MA0004928 – Mirant Canal 1 MA (a) and (b) N/A Yes 

MA0004898 – Mirant Kendall Station 1 MA (a) and (b) N/A Yes 

CT0000957 – Pfizer 1 CT (b) only No Yes 

CT0026476 – Algonquin Power 1 CT (b) only No No 

ME0002160 – VERSO Bucksport 1 ME (b) only No Yes 

ME0021521 – S.D. Warren Company 1 ME (b) only No No 

NH0000655 – Pulp and Paper of 

America (aka Fraser Papers) 1 NH (b) only N/A Yes 

CT0020389 – Anocoil Corp. 1 CT (b) only No No 

ME0000272 – Wyman Station 1 ME (b) only No Yes 

VT0020893 – Ryegate Associates 1 VT (b) only No Yes 

CT0003263 – Millstone 1 CT (b) only Yes Yes 

IL0002224 – Excelon Dresden 5 IL (a) and (b) Yes No 

OH0009261 – DP&L OH Hutchings 5 OH (a) and (b) Yes No 

WI0002381 – Alliant Nelson Dewy 5 WI (b) only No No 

MI0001457 – Entergy- Palisades 

Power Plant 5 MI (b) only Yes No 

MI0005827 – AEP Cook 5 MI (a) and (b) Yes Yes 

MI0038105 – Wyandotte Electric 

Power 5 MI (b) only No No 

IN0000337 – US Steel 5 IN (b) only No No 

OH0002461 – BP-Husky Toledo 5 OH (b) only Yes No 

OK0000451 – OG&E Seminole 6 OK (b) only Yes X 

LA0002887 – CLECO 6 LA (b) only Yes X 

TX0119288 – Lamar Power Partners 6 TX (b) only No X 

LA0002925 – SWEPCO 6 LA (b) only Yes X 

TX0001066 – Luminant 6 TX (b) only No X 

LA0007439 – Entergy Waterford 6 LA (b) only Yes X 

TX0070068 – Coleto Creek 6 TX (b) only No X 

Source: OIG analysis.

 * “N/A” - Not Applicable, denotes permits that were prepared by Region 1 for non-authorized states. 

** “X” - A list of facilities evaluated as part of the PQR review will not be available until the Region 6 PQR report 

is finalized. 

13-P-0264 11 
 

 

Appendix B 

Agency Response to Draft Report 

MAR - 5 2013 

MEMORANDUM 

SUBJECT: Response to the Office of Inspector General Draft Audit Report, EPA Is 

Addressing Thermal Variance and Cooling Water Permit Deficiencies But Needs 

to Evaluate Public Notices (Project No. OPE-FY12-003) 

FROM: Nancy K. Stoner 

Acting Assistant Administrator 

TO: Carolyn Copper 

Assistant Inspector General for Program Evaluation 

Thank you for the opportunity to review and respond to the Office of Inspector General (OIG) 

draft audit report, EPA Is Addressing Thermal Variance and Cooling Water Permit Deficiencies 

But Needs to Evaluate Public Notices. The purpose of this memorandum is to transmit the Office 

of Water’s (OW) response to the OIG draft report and its recommendations. This memorandum 

addresses the report’s recommendations; Attachment 1 provides detailed comments on the 

report. Below is the recommendation in the draft report with our response: 

OW Response to Report Recommendations: 

Agreements 

No 

. 

Recommendation High-Level Intended Corrective Action(s) Estimated 

Completion by FY 

1 Develop and implement 

oversight mechanisms 

that will help states and 

regions consistently 

comply with CWA § 316 

(a) public notice 

requirements. 

OW will include an item on the National 

Pollutant Discharge Elimination System 

(NPDES) Permit Review Checklist so 

that future NPDES Permit Quality 

Reviews will serve as an oversight 

mechanism to assess consistency of 

applicable NPDES permits with CWA § 

316(a) public notice requirements. 

Third Quarter FY 

2013 

OW welcomes the opportunity to continue working with OIG to implement these 

recommendations. If you have any questions, please contact Randy Hill, Acting Director of the 

Office of Wastewater Management, at (202) 564-0748. 

13-P-0264 12 
 

 

Attachment 

cc. Randy Hill 

Dan Engelberg 

Deborah Nagle 

13-P-0264 13 
 

 

 

Appendix C 

Distribution 

Office of the Administrator 

Assistant Administrator for Water 

Agency Follow-Up Official (the CFO) 

Agency Follow-Up Coordinator 

General Counsel 

Associate Administrator for Congressional and Intergovernmental Relations 

Associate Administrator for External Affairs and Environmental Education 

Regional Administrator, Region 1 

Audit Follow-Up Coordinator, Office of Water 

Regional Administrator, Region 5 

Regional Administrator, Region 6 

Audit Follow-Up Coordinator, Region 1 

Audit Follow-Up Coordinator, Region 5 

Audit Follow-Up Coordinator, Region 6 

13-P-0264 14