U.S. ENVIRONMENTAL PROTECTION AGENCY 

OFFICE OF INSPECTOR GENERAL 

Catalyst for Improving the Environment 

 Evaluation Report 

Oversight of North Carolina’s 

Renewals of Thermal Variances 

Report No. 11-P-0221 

May 9, 2011 
 

 

Report Contributors: Dan Engelberg 

 Jayne Lilienfeld-Jones 

 Tim Roach 

 Gerry Snyder 

Abbreviations 

BIP Balanced, indigenous population 

CFR Code of Federal Regulations 

CWA Clean Water Act 

DWQ Division of Water Quality 

EPA U.S. Environmental Protection Agency 

MOA Memorandum of agreement 

NPDES National Pollutant Discharge Elimination System 

OIG Office of Inspector General 

OWM Office of Wastewater Management 

Hotline 

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

e-mail: OIG_Hotline@epa.gov write: EPA Inspector General Hotline 

phone: 

fax: 

1-888-546-8740 

703-347-8330 

1200 Pennsylvania Avenue NW 

Mailcode 8431P (Room N-4330) 

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

 

U.S. Environmental Protection Agency 11-P-0221 

May 9, 2011 Office of Inspector General 

At a Glance 

Catalyst for Improving the Environment 

Why We Did This Review 

The Office of Inspector 

General received a Hotline 

complaint alleging that the 

State of North Carolina’s 

National Pollutant Discharge 

Elimination System (NPDES) 

permits do not protect waters 

from harmful environmental 

effects caused by thermal 

discharges. We evaluated North 

Carolina’s and Region 4’s 

compliance with Clean Water 

Act (CWA) requirements for 

protecting surface waters from 

thermal discharges. 

Background 

Power and industrial facilities 

draw water from rivers and 

lakes to cool equipment and 

then discharge those cooling 

waters at a higher temperature 

back into those waterbodies. 

Either a state or the U.S. 

Environmental Protection 

Agency (EPA) may issue a 

variance under CWA Section 

316(a) to allow facilities to 

discharge cooling waters at an 

alternative thermal effluent 

limit that is still protective of 

aquatic life. 

For further information, 

contact our Office of 

Congressional, Public Affairs 

and Management at 

(202) 566-2391. 

The full report is at: 

www.epa.gov/oig/reports/2011/ 

20110509-11-P-0221.pdf 

Oversight of North Carolina’s Renewals of 

Thermal Variances 

What We Found 

Region 4 has not adequately implemented management controls contained in its 

memorandum of agreement with North Carolina. Properly implemented controls 

would assure EPA that NPDES permits would comply with the CWA and 

applicable federal regulations. In four of the six draft permits we reviewed, 

Region 4 did not agree with the North Carolina Division of Water Quality that 

there was sufficient information to support the draft permit limits for 

temperature. Region 4 requested that the state add conditions to the final permits 

so that information could be collected to determine whether the thermal limits 

harm aquatic life. The two other draft permits we reviewed either did not 

contain a thermal variance request, or the region never commented on the 

thermal variance. We also found that the state limited the public’s opportunity to 

review information and comment on these variances by not following regulatory 

requirements for developing complete permit fact sheets and public notices. 

Due to procedural lapses by the North Carolina Division of Water Quality and 

Region 4, it cannot be determined whether waters are protected from harmful 

environmental effects caused by thermal discharges. The state and Region 4 will 

not make further determinations on the thermal variances until these facilities 

request NPDES permit renewals. As a result, until 2015, these facilities will 

continue discharging heated waters as allowed under their current permits and 

thermal variances.

 What We Recommend 

We recommend that the EPA Regional Administrator, Region 4, enforce the 

management controls of the NPDES memorandum of agreement; verify that 

thermal variances are protective of a balanced, indigenous population; and 

verify that permit fact sheets and public notices comply with federal regulations. 

The region agreed with our recommendations. We agree that their actions meet 

the intent of the recommendations. 
 

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 

WASHINGTON, D.C. 20460 

THE INSPECTOR GENERAL 

May 9, 2011 

MEMORANDUM 

SUBJECT:	 Oversight of North Carolina’s Renewals of Thermal Variances 

Report No. 11-P-0221 

FROM: Arthur A. Elkins, Jr. 

 Inspector General 

TO:	 Gwendolyn Keyes Fleming 

Regional Administrator, Region 4 

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. 

The estimated direct labor and travel costs for this report are $245,398. 

Action Required 

In accordance with EPA Manual 2750, you are required to provide a written response to this 

report within 90 calendar days. You should include a corrective actions plan for agreed-upon 

actions, including milestone dates. Your response will be posted on the OIG’s public website, 

along with our memorandum commenting on your response. Your response should be provided 

as an Adobe PDF file that complies with the accessibility requirements of Section 508 of the 

Rehabilitation Act of 1973, as amended. The final response should not contain data that you do 

not want to be released to the public; if your response contains such data, you should identify the 

data for redaction or removal. 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 have any questions regarding this report, please contact Wade Najjum at 

202-566-0832 or najjum.wade@epa.gov, or Dan Engelberg at 202-566-0830 or 

engelberg.dan@epa.gov. 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

Oversight of North Carolina’s Renewals of 11-P-0221 

Thermal Variances 

Table of Contents 

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

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

Clean Water Act Section 316(a) Variances .......................................................... 1 

North Carolina’s and EPA’s Responsibilities for Implementing 

CWA 316(a) Thermal Variances......................................................................... 1 

Scope and Methodology............................................................................................. 3
 

Results of Review ....................................................................................................... 3
 

Variance Renewals Lack Adequate Support........................................................ 4 

Permit Fact Sheets Were Missing Critical Information ......................................... 5 

Public Notices Were Missing Required Elements ................................................ 6 

Conclusion................................................................................................................... 7
 

Recommendations...................................................................................................... 7 

Agency Response and OIG Comment ...................................................................... 7
 

Status of Recommendations and Potential Monetary Benefits.............................. 8
 

Appendices 

A List of Reviewed Permits................................................................................... 9 

B Agency Comments............................................................................................. 10
 

C Distribution ......................................................................................................... 12
 
 

 

Purpose 

In August 2010, the Office of Inspector General received a Hotline complaint 

alleging that the State of North Carolina’s National Pollutant Discharge 

Elimination System (NPDES) permits do not protect waters from harmful 

environmental effects caused by thermal discharges into lakes. The U.S. 

Environmental Protection Agency (EPA), Office of Inspector General, evaluated 

North Carolina’s and Region 4’s compliance with Clean Water Act (CWA) 

requirements for protecting surface waters from thermal discharges at selected 

facilities. 

Background 

Clean Water Act Section 316(a) Variances 

Power and industrial facilities draw water from lakes and rivers to cool equipment. 

These cooling waters, known as thermal effluents after they are heated, are 

discharged from point sources (such as pipes) back into those waterbodies. Thermal 

effluents are regulated because heat is identified as a pollutant under 40 Code of 

Federal Regulations (CFR) §122.2. A facility may be authorized to discharge 

pollutants into waters of the United States by obtaining an NPDES permit. 

A permitting authority (either a state or EPA) issues NPDES permits, which may 

contain a variance to a thermal effluent limit under 40 CFR, subpart H. This 

variance allows facilities to discharge cooling waters at an alternative 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 

indigenous aquatic community. This demonstration can be a detailed study from 

the permitted facility with supporting data showing that the alternate effluent 

limitation assures the “protection and propagation of a balanced, indigenous 

community of shellfish, fish, and wildlife” as defined in 40 CFR §125.71(c). This 

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

current permit. To obtain a CWA 316(a) thermal variance, a facility must include 

a request for the variance as part of the permit application. The applicant’s request 

to continue a thermal variance must also include a demonstration that the 

alternative effluent limit continues to assure the protection and propagation of the 

balanced, indigenous population (BIP). 

North Carolina’s and EPA’s Responsibilities for Implementing 

CWA 316(a) Thermal Variances 

In 1975, EPA granted the State of North Carolina authority to issue NPDES 

permits. In 1983, both parties signed a memorandum of agreement (MOA) 

establishing policies, responsibilities, and procedures for administering the 

NPDES program. Today, the North Carolina Department of Environment and 

11-P-0221 1 
 

 

Natural Resources, Division of Water Quality (DWQ), is responsible for surface 

water and ground water protection in the state. DWQ’s Environmental Services 

Section and the Surface Water Protection Section, NPDES Permit Unit, share in 

the review of NPDES permit applications and renewals. 

In North Carolina, the process for requesting an NPDES permit with a thermal 

variance begins with the submission of a facility’s signed application to DWQ. 

For permit requests that include a CWA 316(a) thermal variance, the 

Environmental Services Section described its internal review process. The staff 

members review BIP reports for biological and physical/chemical data provided 

by the facility. The Environmental Services Section then submits its 

determination as to whether there is a BIP to the Permitting Unit, which prepares 

a draft NPDES permit. The Permitting Unit makes the final determination about a 

permittee’s request for continuance of a CWA 316(a) variance. The NPDES 

Permit Unit makes the draft permit available for public review and comment 

through a public notice. EPA Region 4 should also receive a copy of the draft 

permit and any additional information requested for its review. 

In 2007, the State of North Carolina and EPA Region 4 updated their MOA. 

According to the 2007 MOA, Region 4 will oversee the state’s NPDES program 

for consistency with the CWA, state legal authorities, the MOA, the state’s CWA 

Section 106 workplan, and all applicable federal regulations. Under the 2007 

MOA, the region may provide comments, recommendations, or objections to a 

draft NPDES permit. Under 40 CFR §123.44(c)(5), the Regional Administrator 

may object to a draft permit if the Regional Administrator determines that 

provisions of the permit relating to the maintenance of records, reporting, 

monitoring, sampling, or the provision of any other information by the permittee, 

are inadequate to assure compliance with permit conditions. The period of review 

may be up to 90 days from receipt of the proposed permit. If the region chooses to 

object to the draft permit and the state fails to make the changes detailed in the 

objection, the region assumes authority for issuing the NPDES permit under the 

MOA. 

Under the MOA, DWQ sends a copy of the draft permit package to EPA 

Region 4. This package includes a copy of the public notice, the draft permit, the 

application, the fact sheet or statement of basis associated with the permit, and 

notices of public hearings. According to 40 CFR §124.8, the fact sheet shall 

contain, when applicable, a brief summary of the basis for the draft permit 

conditions. The September 2010 Permit Writers’ Manual suggests that the fact 

sheet should include detailed discussions of the development of the permit 

limitations for each pollutant. It must also contain, when applicable, a justification 

for continuing a thermal variance. Under 40 CFR §124.8(a), DWQ must send the 

fact sheet to the permit applicant and to any others requesting a copy. 

To assess the quality of NPDES permits, the EPA Office of Water, Office of 

Wastewater Management (OWM), began conducting permit quality reviews in 

11-P-0221 2 
 

 

2007. OWM shared its findings for reviews conducted in Regions 4, 7, and 9. 

According to OWM, the permit files containing CWA 316(a) thermal variances 

generally did not contain documentation supporting the variances. 

To remind states and regions about responsibilities concerning CWA 316(a) 

variances, OWM issued a 2008 memorandum clarifying the requirements for 

issuing or renewing a CWA 316(a) thermal variance. The memorandum states, “It 

is essential that permitting authorities require applicants to provide as much 

information described in 40 CFR §125.72(a) and (b) as necessary to demonstrate 

the alternative effluent limit assures the protection and propagation of the BIP.” In 

addition to this memorandum, Region 4 sent comment letters about draft permits 

to DWQ. These letters requested that the final permits contain a condition that 

permittees perform additional studies to determine whether the thermal variances 

allow for a BIP. The final permits contained requests for permittees to conduct 

additional studies. 

Scope and Methodology 

We reviewed permit application materials for seven facilities (appendix A). We 

restricted our analysis to DWQ’s compliance with requirements for permits with a 

CWA 316(a) thermal variance, and Region 4’s review of these draft permits. We 

discussed with OWM, Region 4, and the North Carolina Department of 

Environment and Natural Resources the requirements to support a CWA 316(a) 

variance renewal. We also obtained and reviewed the public law, federal 

regulations, and Agency guidance pertaining to CWA 316(a) variances in NPDES 

permit renewals. 

We conducted our review from November 2010 to March 2011 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 believe that the evidence obtained provides a reasonable basis for 

our findings and conclusions based on our objectives. 

Results of Review 

Region 4 has not adequately implemented management controls contained in its 

MOA with North Carolina. Properly implemented controls would assure EPA that 

NPDES permits comply with the CWA and applicable federal regulations. In four 

of the six draft permits we reviewed, Region 4 did not agree with DWQ that there 

was sufficient information to support the draft permit limits for temperature. This 

information was needed so that Region 4 could determine whether proposed 

thermal variances would harm aquatic life. Region 4 requested that the state add 

conditions to the final permits so that information could be collected to determine 

whether the thermal limits harm aquatic life. According to the documents we 

obtained from DWQ, these facilities have been operating with a CWA 316(a) 

11-P-0221 3 
 

 

thermal variance or collecting water temperature data since the mid-1970s 

through the early 1990s. Two other draft permits we reviewed either did not 

contain a thermal variance request or the region never commented on the thermal 

variance. As of January 2011, DWQ reported that the draft permit had not yet 

been developed for one other facility in our sample. We also found that the state 

limited the public’s opportunity to review information and comment on these 

variances by not following regulatory requirements for developing complete 

permit fact sheets and public notices. 

Due to procedural lapses by North Carolina and Region 4, it cannot be determined 

whether waters are protected from harmful environmental effects caused by 

thermal discharges. The state and Region 4 will not make further determinations 

on the thermal variances until these facilities request NPDES permit renewals. 

Region 4 and the public will not be able to assess whether these discharges are 

harming the BIP of the waterbodies until the permits expire in 2015. 

Variance Renewals Lack Adequate Support 

In four of the six draft permits we reviewed, Region 4 did not find sufficient 

support to agree with DWQ’s decision to continue the CWA 316(a) thermal 

variances. To continue a thermal variance, federal regulations allow a permit 

applicant to demonstrate that a BIP does not exhibit any appreciable harm from 

the prior normal operating discharges. For three of these permits, Region 4 sent 

comment letters to DWQ. The region objected to the fourth because it did not 

have sufficient support for the thermal variance. In followup correspondence, 

Region 4 determined that that DWQ satisfied the conditions of the objections. 

During 2010, Region 4 reviewed the draft permits for three facilities and, in each 

case, provided comments to DWQ regarding support for approving the 

permittee’s request to continue with the thermal variance. For each of these draft 

permits, Region 4 stated in its comments that the “report lacks detail and did not 

generate information sufficient to support a Section 316(a) variance determination 

for the next permit cycle.” For these three permits, the region developed a list of 

items to address in the future study plan for the next permit cycle. 

In response to the region’s comments, DWQ inserted a condition into the renewed 

permits requiring facilities to provide their study plans to Region 4. These permits 

do not expire until 2015. 

Region 4 objected to one draft permit because it was concerned with the allowed 

monthly average temperature difference of 13.9 degrees Celsius as compared with 

the receiving waters. DWQ adjusted the permit limit to allow a temperature 

change of 8.5 degrees Celsius, resolving Region 4’s concerns. DWQ issued the 

modified permit on May 26, 2010. 

Region 4 also reviewed draft permits for two of the three other facilities in our 

sample. In one case, the region did not comment on the thermal variance in the 

11-P-0221 4 
 

 

draft permit. In another one, Region 4 has not yet reviewed the draft permit 

because the state is currently developing it. In the final draft permit we reviewed, 

there is no thermal variance. DWQ told us the receiving water is classified as a 

cooling pond and is not considered a “water of the State”; therefore, the facility 

can discharge at a higher temperature. The permit states that in no case should the 

ambient temperature exceed 32 degrees Celsius as a result of operations. One of 

the two water-sampling locations in the permit is at the discharge point from the 

dam, which we estimate to be approximately 2 miles downstream from the 

facility. 

We discussed this distance with the Region 4 permit reviewer and were told that 

the dam discharge sampling point may not be appropriate, and that this matter will 

be discussed with the state during the next permit renewal. The permit reviewer 

agreed that without a variance, the discharge must meet the water quality 

standards at all points in the lake. 

In the four draft permits we reviewed that contain a thermal variance, Region 4 

concluded that there were insufficient data to support the state’s determination 

that thermal variances will result in no appreciable harm to the waterbodies’ BIP. 

These were all permit renewals rather than new permits; therefore, Region 4 had 

previous opportunities to request that more data be collected to determine the 

effects of these variances. Had the region more closely monitored these draft 

permits as required under the current and previous MOAs, it would be in a 

position to determine whether renewing the thermal variances was appropriate. 

Without this support, we cannot determine whether these waterbodies are 

protected from harmful environmental effects caused by thermal discharges at the 

facilities we reviewed. 

Permit Fact Sheets Were Missing Critical Information 

Most of the draft permits we reviewed were missing critical information needed to 

allow EPA and the public an opportunity for review and comment as required by 

federal regulations. Five fact sheets we reviewed contained insufficient 

information to explain the basis for approving the thermal variance and the 

associated permit limits. As of January 2011, a DWQ permit writer reported that 

one permit is under review and the state has not developed the fact sheet. The 

other draft permit we reviewed did not contain a CWA 316(a) thermal variance, 

so reference to it in the fact sheet was not necessary. Without a complete 

summary of the state’s CWA 316(a) variance decision in the fact sheet, neither 

EPA nor the public has the needed information to understand the state’s rationale 

for approving these thermal variances. 

According to 40 CFR §124.8, every draft NPDES permit that incorporates a 

variance must include a fact sheet. The fact sheet establishes the principal facts 

and the significant factual, legal, methodological, and policy questions considered 

in preparing the draft permit, as well as the basis for the permit limits, including 

11-P-0221 5 
 

 

references to applicable statutory or regulatory provisions. A fact sheet provides a 

critical internal control mechanism because it is a source of information that 

explains a state’s decision to both the region and the public. OWM’s 2008 

memorandum reiterated the importance of facts sheets. The memorandum stated 

that not only is a fact sheet required as part of an NPDES permit containing a 

CWA 316(a) thermal variance, but it must explain why the permitting authority 

believes the variance is justified. The fact sheet should also explain the thermal 

variance history (if it is a renewal) as well as the basis for continuing the variance. 

For the five fact sheets with insufficient information, details about CWA 316(a) 

thermal variances ranged from general information to no information whatsoever. 

In compliance with 40 CFR §124.8(b)(5), DWQ stated why the variance appears 

justified in four of the five fact sheets. DWQ concluded that the waterbody 

receiving thermal waters has a balanced indigenous macroinvertebrate and fish 

community. One fact sheet did not contain this statement. These five fact sheets 

also did not contain a brief summary of the basis for the permit conditions (i.e., 

thermal variances), as required by 40 CFR §124.8(b)(4). Region 4 did not 

comment on the contents of these fact sheets when it reviewed the draft NPDES 

permit packages sent by DWQ. Without complete information in fact sheets, the 

public may not fully know the permit conditions pertaining to the CWA 316(a) 

thermal variance. 

Public Notices Were Missing Required Elements 

The public notices for five of six draft permits did not contain the required 

statements describing the proposed thermal variance. Because one facility does 

not have a thermal variance, the public notice did not need information about 

thermal variances. A final permit request was not under review by DWQ, and a 

public notice had not been issued. Statements about thermal variances alert the 

reader that one is being proposed for the facility. It provides a comparison of the 

water-quality-based limit and the less-stringent proposed limit allowed under the 

variance. The regulations require that a public notice for a draft permit with a 

thermal variance contain statements that address the following: 

1. The thermal component of the discharge is subject to effluent 

limitations under CWA Section 301 or 306 and a brief description, 

including a quantitative statement, of the thermal effluent limitations 

proposed under Section 301 or 306. 

2. A Section 316(a) request has been filed and that alternative, lessstringent effluent limitations may be imposed on the thermal 

component of the discharge under Section 316(a), and a brief 

description, including a quantitative statement, of the alternative 

effluent limitations, if any, included in the request. 

According to the regional staff person who reviews the state’s draft permits, the 

public notice should discuss the thermal variance. The permit reviewer said the 

11-P-0221 6 
 

 

 

state may not send a copy of the public notice with the draft permit, but it is 

sometimes attached to the fact sheet. She was not aware that the public notices we 

reviewed did not meet the regulatory requirements. Failing to include this 

information in the public notice significantly reduces the public’s awareness of 

the state’s decision to allow a thermal variance in the permit. 

Conclusion 

We cannot determine whether North Carolina’s approval of permits with CWA 

316(a) thermal variances protects aquatic populations. The region determined that 

the thermal limits for four of the six facilities we reviewed were renewed based on 

insufficient documentation of proposed thermal variances. The process for issuing 

six of the seven facilities’ permits did not follow important process safeguards. 

North Carolina and Region 4 have not followed a number of requirements 

contained in federal regulations, leading to incomplete documentation of the 

state’s decision to approve these variances. After Region 4 determined that North 

Carolina had not gathered the information needed to determine whether variances 

were warranted, it developed a list of items to address in future study plans for the 

next permit cycle. In our opinion, the region should have noted the deficiencies in 

North Carolina’s fact sheets and public notices in previous permit renewal 

packages. Incomplete fact sheets and public notices limit the public’s ability to 

make informed judgments about, comment on, or dispute these decisions by 

North Carolina. These facilities will continue discharging heated waters as 

allowed under their current permits and thermal variances for the next 4 years. 

Consequently, Region 4 and the public will not know whether these discharges 

are harming the BIP of the waterbodies until the permits come up again for 

renewal. 

Recommendations 

We recommend that the Regional Administrator, Region 4: 

1.	 Enforce the management controls of the NPDES MOA. 

2.	 Verify that thermal variances are protective of a balanced, indigenous 

population. 

3.	 Verify that permit fact sheets and public notices comply with federal 

regulations. 

Agency Response and OIG Comment 

The region agreed with our recommendations. We agree that their actions meet 

the intent of the recommendations. 

11-P-0221 7 
 

 

 

 

 

 

 

 

 

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 

2 

3 

7 

7 

7 

Enforce the management controls of the NPDES 

MOA. 

Verify that thermal variances are protective of a 

balanced, indigenous population. 

Verify that permit fact sheets and public notices 

comply with federal regulations. 

O 

O 

O 

Regional Administrator, 

Region 4 

Regional Administrator, 

Region 4 

Regional Administrator, 

Region 4 

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

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

U = recommendation is undecided with resolution efforts in progress 

11-P-0221 8 

1 
 

 

Appendix A 

List of Reviewed Permits 

Facility permit documentation reviewed as part of Hotline complaint: 

1. Asheville Coal Power Plant (NC0000396) 

2. Belews Creek Steam Station (NC0024406) 

3. Blue Ridge Paper Products Canton Mill (NC0000272) 

4. Buck Steam Station (NC0004774) 

5. Cliffside Steam Station (NC0005088) 

6. Marshall Steam Station (NC0004987) 

7. McGuire Nuclear Power Plant (NC0024392) 

11-P-0221 9 
 

 

 

 

Appendix B 

Agency Comments 

MEMORANDUM 

SUBJECT:	 Draft Report: 

Oversight of North Carolina’s Renewals of Thermal Variances 

 OIG Project No. 2011-0003 

FROM: Gwendolyn Keyes Fleming 

 Regional Administrator 

TO: Wade Najjum 

Assistant Inspector General for Program Evaluation 

This is in response to your memorandum to me dated April 5, 2011, regarding an Office 

of Inspector General (OIG) draft report on several final National Pollutant Discharge Elimination 

System (NPDES) permits issued by the North Carolina Department of Natural Resources 

(NCDNR). The permits contain provisions for thermal variances to comply with requirements of 

Section 316(a) of the Clean Water Act (CWA). 

 Below are recommendations in the draft report with our responses: 

1.	 OIG Recommendation: Enforce the management controls of the NPDES Memorandum 

of Agreement. 

EPA Response: We concur. Section IV.B.3. of EPA Region 4’s Memorandum of Agreement 

(MOA) with NCDNR states, “EPA may provide to the State written comments on, 

recommendations with respect to, or objections to the issuance of the draft permit.” 

Regional review of a particular draft NPDES permit, or type of permit, is a discretionary 

oversight activity. It is also within the Region’s discretion to object, comment, or choose not 

to comment to a draft NPDES permit. Based on information available at the time we 

reviewed the draft permits, we implemented the MOA by providing comments on and 

recommendations with respect to proposed 316(a) thermal variances. We recommended that 

during the next permit term facilities should collect targeted data that would assist the State 

in determining if the thermal component of the effluents was allowing maintenance of a 

balanced and indigenous population (BIP) of fish, shellfish and wildlife in the receiving 

water body near the discharge point. This data will be more detailed than the data previously 

used by the State in its determination of compliance with CWA Section 316(a). 

11-P-0221 10 
 

 

 

 

 

2.	 OIG Recommendation: Verify that thermal variances are protective of a balanced, 

indigenous population. 

EPA Response: We concur. By the end of each permit’s term, as directed by EPA in our 

comment letters on the draft permits, the State will have specific data to determine if the 

receiving water body is able to maintain a BIP. EPA will review the data and verify that the 

thermal variances are protective of a balanced and indigenous population. 

3.	 Verify that permit fact sheets and public notices comply with federal regulations. 

EPA Response: We concur. In accordance with the MOA, EPA may review draft permits, or 

in the limited circumstances described in Section IV.B.6., proposed permits. In the future, 

EPA will review draft permits with CWA 316(a) variances to ensure that the permit fact 

sheets and public notices contain the necessary elements and language to adequately inform 

the public of thermal discharges in relationship demonstrating the maintenance of a BIP. 

Thank you for the opportunity to comment on this draft report. Please contact Jim 

Giattina, Director of the Water Protection Division at Giattina.Jim@epa.gov or at 

(404) 562-9345, if you have any questions about our response. 

11-P-0221 11 
 

 

Appendix C 

Distribution 

Office of the Administrator 

Regional Administrator, Region 4 

Assistant Administrator for Water 

Agency Followup Official (the CFO) 

Agency Followup Coordinator 

General Counsel 

Associate Administrator for Congressional and Intergovernmental Relations 

Associate Administrator for External Affairs and Environmental Education 

Director, Office of Regional Operations 

Audit Followup Coordinator, Region 4 

Director, Water Protection Division, Region 4 

11-P-0221 12