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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about the EPA OIG.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, So merset, Massachusetts. (EPA photo)



# Hotline

To report fraud, waste, or abuse, contact us through one of the following methods:

email: OIG_Hotline@epa.gov write: EPA Inspector General Hotline phone:
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Mailcode 2431T
online: http://www.epa.gov/oig/hotline.htm Washington, DC 20460U.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 Defi ciencies But Needs to Address Compliance With P ublic 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 identif ied a number of deficiencies in NPDES permits, which EPA m ade recommendations to im prove. 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 tec hnology available to minimize the environmental impact of the cooling wa ter intake structures regulated under CWA §316(b). Conversely, 75 percent of the fact sheets we reviewed contained an explanation of the stat e’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 propos ed §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 identif y 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 Ad ministrator 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 eval uations 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, Actin g Assistant Administrator UNITED STATES ENVIRONMENTAL PROTECTION AGENCY WASHINGTON, D.C. 20460

THE INSPECTOR GENERAL

May 23, 2013

MEMORANDUM

SUBJECT: EPA Oversight Addresses Thermal Varian ce 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 re port contains findings that describe the problems

the OIG has identified and corrective actions the OI G recommends. This report represents the opinion of the OIG and does not necessarily represent the fina l EPA position. Final determinations on matters in this report will be made by EPA managers in accorda nce with established audit resolution procedures.

Action Required

Your response to the draft re port included a proposed corrective action and completion date. The recommendation is open with correctiv e actions underway. We have no ob jections 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 an y questions regarding this report, please contact Carolyn Copper, Assistant Inspector General for Pr ogram 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 Disc harge Elimination System (NPDES) program permits from U.S. Environmental Protection Agency (EPA) Regions 1, 5, and 6, to review the over sight of regions’ a nd states’ compliance with Clean Water Act (CWA) §316(a) and (b) requirements. These requirements are in place to help protect aquatic or ganisms from the impacts of thermal discharges and cooling wa ter 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. Accordi ng to the U.S. Geologi c Survey’s report Estimated Use of Water in the United States in 2005 , power and self-supplied

industrial facilities withdraw an estimated 219 billi on 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 kill ed by heat, stress, or chemical exposure (entrainment). Larger fish, crustaceans, and even marine mammals may be killed or injured when they are trapped against sc reens at the front of an intake structure by the force of water being drawn into th e system (impingement). EPA estimates that 2.1 billion fish, crabs, a nd 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 pollu tants into U.S. waters by obtaining an NPDES permit. S ection 316(a) author izes the permitting authority (either the authorized state or EPA) to impose alternative, less stringent

effluent limits for the control of the ther mal component of a di scharge in lieu of

the effluent limits that would othe rwise 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 stil l protective of aquati c 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 1alternative 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 cap acity of the CWIS reflects the best technology available to minimize adverse environmental impacts. EPA completed three phases of rulemaking to address c ooling water intakes. The Phase I rule, promulgated in 2001, covers new facilities; Phase II, promulgated in 2004, covers large existing electric ge nerating plants; and Phase III, promulgated in 2006, covers certain existing facilities a nd new offshore and coastal oil and gas

extraction facilities.

EPA suspended the Phase II ex isting 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 regu lations, including 40 CFR 401.14, permit writers must use “best professional judg ment” on a case-by-case basis to identify the best technology available to minimize adverse environmental impacts. According to a recent modification of th e settlement agreement between EPA and an environmental organization, a new set of regulations will be promulgated in

2013. 2 The new rule will cover approxim ately 1,260 existing facilities that withdraw at least 2 million gallons per day of cooling water.

EPA and States Share Responsibil ity 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 gene ral 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 Settlem ent Agreement among the EPA, Plaintiffs in Cronin et. al. v. Reilly, 93 CIV. 314 (LTS) (SDNY), and Plaintiffs in Riverkeepe r. et. al. v. EPA, 06 CIV. 12987 (PKC) (SDNY) (available through the EPA website at: http://water.epa.gov/lawsre gs/lawsguidance/cwa/316b/uploa d/modified-settlem ent-agreement-with -Riverkeeper.pdf ).

3 T he Virgin Islands and Maine are only partially authoriz ed. Maine’s NPDES authority does not include CWA§316(b)

determinations.

13-P-0264 2Figure 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 fact ual, legal, methodological, and policy questions considered in preparing th e 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 re quested, 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 3permit that contains a thermal variance issued under §316(a) needs to describe and justify that variance in its fact sh eet. For a permit issued pursuant to §316(b), the fact sheet must describe and the pe rmit 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 abou t proposed NPDES permits issued by permitting authority (states or EPA). Co mpliance with public notice requirements is important because incomplete or inade quate public notices hinder the public’s awareness and its opportunity for input a nd involvement in permitting authorities’ decisions pertaining to waterbody protections. The permitting authority publishes public notices of draft permits so that th e 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 he aring notification (if applicable). If a facility’s draft permit contains a §316(a) thermal variance, th e public notice must contain specific requirements as iden tified 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 th e 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 re quirements in the CWA and environmental regulations. Between 2007 and 2010, OW condu cted 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 Perm it Compliance System database and the lists of facilities developed during the ru lemaking 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 pr ocess 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 perm its 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 wh ether NPDES permits written by states and regions comply with regulations. Thr ough this review process, OW works to promote national consistency in permits, identify successes in implementation of state NPDES programs, and recommend oppor tunities 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 repres ent permits issued by states and regions, permits from locations with high thermo electric power water withdrawal, and/or permits where there had been no prior EP A OIG audit coverage. Eight permits in our sample contained a thermal varian ce regulated under §316( a). All 29 permits contained a CWIS that is regulated under §316(b). We collected permit documents through requests to region s 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 reach ed or our ability to addr ess our evaluation objectives. To determine states’ compliance with §316(a) and §316(b) regulations, we evaluated state permits and documents th at EPA regional staff reviewed, as well as a sample of state permits and docum ents that were not reviewed by EPA regional staff. Because the §316(b) Phas e 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 Regi on 1 and a summary of draft findings for Region 4. 6 We also contacted the regions fo r 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. Thos e standards require that we plan and perform our review to obtain sufficien t, appropriate evidence to provide a reasonable basis for our findings and c onclusions 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 5believe that the evidence obtained provide s a reasonable basis for our findings and conclusions based on our objective.

Prior Reports

We reviewed the following reports rela ted to NPDES permits containing §316(a) thermal variances and cooling water inta ke 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 Syst em--Final Regulations to Establish Requirements for Cooling Water Inta ke 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 Unde rstanding 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. Th e 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 determ ining 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 explanat ion 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 consid ered in preparing the draft permit.

13-P-0264 6None of the public notices we reviewed contained all of the required statements describing the proposed §316(a) thermal va riance. We found that EPA’s quality

assurance reviews are not de signed 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 assu rance reviews di d not identify deficiencies in public noti ces. EPA established this re gulation so that permitting authorities would use public notices to inform the public about proposed thermal variances. Incomplete or in adequate public notices hi nder the public’s awareness and its opportunity for input and involvement in permitting authorities’ decisions pertaining to waterbody pr otections under §316(a).

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

We reviewed eight permits and associat ed 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 ove rsight deficiencies. This is notable since the OIG has reported oversight of state programs as an EPA management challenge for the past several years. Re gion 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 requir ements and justification in these four permits were well documented in the permit and fact sheet. The other four permits were issued by Illinois, Ohio, Michiga n, 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 appr ove the thermal variance. The states modified the final permits to addre ss these concerns. A lthough the Vermont permit was not reviewed by Region 1, the permit and fact sheet s 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 f acility must meet requirements under §316(b) to minimize adverse environmental impacts as determined by the director on a case-by-case, best professional judg ment basis. The permitting authority’s justification must be documen ted in the fact sheet, while the permit must lay out the final decision. However, the fact sh eets for 55 percent of the permits we reviewed did not contain this justificati on. 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 no tices contained all of the required statements describing the proposed §316(a) thermal variance. We found similar deficiencies during our 2 011 review of North Carolin a permits containing §316(a) thermal variances. While the OW’s PQRs examined whether other types of

13-P-0264 7permits complied with state and local public notice requirements, the checklist for permits containing a §316(a) thermal vari ance did not contain specific questions to verify that the public notice comp lied with the applicable regulation (40 CFR §124.57). As a result, OW did not id entify 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 Re gions Are Addressing CWA §316(a) and §316(b) Permit Issues

OW found that decisions regarding ther mal discharge variances under §316(a) and permit conditions implementing §316(b) we re not well documented in state or EPA permits. The PQR reports did not identif y the cause of these deficiencies but presented the regions with recomme ndations to improve compliance with regulatory requirements. The general reco mmendation was for regions and states to re-evaluate §316(a) therma l variances and §316(b) re quirements at each permit renewal and document the basis in the perm it 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 implem enting OW’s recommendations. All eight regions indicated that they are impl ementing the PQR recommendations, which are tracked by OW on a semiannual basis. We believe OW’s recommendations pertaining to §316(a) and (b) and regiona l follow-up are sufficient and that no further action is necessary at this point.



### Conclusion

OW has made strides in addressing CW A §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. Providi ng 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 a bout thermal variances in public notices indicate a need for greater transparen cy 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 f acilities regulation is final and state directors begin implementing the new rule.

13-P-0264 8

### Recommendation

We recommend that the Assistan t 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 re port based on technical comments received to the draft report.

EPA’s comments noted that reviewi ng and granting CWA §316(a) thermal variances is a comprehensive and tec hnical process based on biology, which proves to be a difficult endeavor fo r NPDES permit writers who are often engineers by training. EPA’s comme nts pointed out that CWA §316(b) determinations of best technology availa ble are complicated by a reluctance of permit writers to require the installati on 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 a ssociated 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 deficien cies, 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 Status 1 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 1Appendix 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 we re prepared by Region 1 for non-authorized states.

** “X” - A list of facilities evaluated as part of the PQR re view will not be available until the Region 6 PQR report
is finalized.

13-P-0264 11Appendix B



## Agency Response to Draft Report

MAR - 5 2013

MEMORANDUM

SUBJECT: Response to the Office of Inspect or 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 resp ond 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 re port and its recommenda tions. This memorandum addresses the report’s recomme ndations; Attachment 1 provi des 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 Intende d 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, plea se contact Randy Hill, Ac ting Director of the

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

13-P-0264 12Attachment

cc. Randy Hill Dan Engelberg Deborah Nagle

13-P-0264 13Appendix 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 Congressi onal and Intergovernmental Relations

Associate Administrator for External Affairs and Environmental Education Regional Administrator, Region 1

Audit Follow-Up Coordina tor, 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