Court Opinion

ID: 4697502
Source: CourtListenerOpinion
Date Created: 2021-06-22 16:18:15.222454+00
Date Added: 2024-06-11T08:05:46.797352
License: Public Domain

Filed
                                                                                        Washington State
                                                                                        Court of Appeals
                                                                                         Division Two

                                                                                          June 22, 2021
    IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

                                         DIVISION II
 NORTHWEST ENVIRONMENTAL                                            No. 54810-1-II
 ADVOCATES,

                        Appellant,

        v.                                                    UNPUBLISHED OPINION

 STATE OF WASHINGTON,
 DEPARTMENT OF ECOLOGY,

                        Respondent.

       WORSWICK, J. — Northwest Environmental Advocates (NWEA) appeals the superior

court’s order affirming the Department of Ecology’s denial of NWEA’s rulemaking petition for

stricter wastewater treatment plant discharge regulations in Puget Sound and its tributaries.

NWEA argues that Ecology’s denial was outside the agency’s authority and was arbitrary and

capricious because (1) Ecology failed to comply with state law mandating minimum technology

standards for wastewater treatment facilities by denying the rulemaking petition; (2) Ecology

violated the Administrative Procedures Act (APA) by failing to respond to the issues NWEA

raised in its petition; and (3) Ecology’s denial of the petition was arbitrary and capricious. We

disagree and hold that Ecology’s determination was within its statutory authority and was not

arbitrary and capricious. Accordingly, we affirm.
No. 54810-1-II

                                              FACTS

                                  I. HISTORICAL BACKGROUND

A.     Puget Sound Pollution and Wastewater Treatment Plants

       The Puget Sound has pollution problems. Among the sources of pollution in

Washington’s inland salt waters is the addition of nutrients from various sources. The addition

of excess nutrients—especially nitrogen and phosphorous—to Puget Sound is causing the levels

of dissolved oxygen in the water to drop to levels that may be harmful to fish and other aquatic

life. This nutrient load may also contribute to algae growth which further harms water quality

and produces toxins that can be harmful to humans and animals. The nutrient load in Puget

Sound comes from a variety of sources, including the Pacific Ocean, rivers in Canada and

Washington that empty into the sea, and municipal wastewater treatment plants in Canada and

Washington.

       Additionally, human-generated toxins have been released into Puget Sound, including

polychlorinated biphenyls (PCBs), polybrominated diphenyl ethers (PBDEs), polycyclic

aromatic hydrocarbons (PAHs), copper, lead, and zinc. These toxins can accumulate in wildlife,

harming wildlife and having adverse effects on the people who eat it. The same is true of other

introduced toxins such as pharmaceuticals and personal care products that are introduced into the

Puget Sound through wastewater treatment plants.

       There are more than 100 wastewater treatment plants around Puget Sound. Each

treatment plant varies in size and the amount of effluent it discharges into Puget Sound, largely

based on the size of the municipality the plant serves.

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No. 54810-1-II

       Wastewater treatment plants generally use a system of biologically treating sewage

known as “secondary treatment.” This process was first developed at the turn of the Twentieth

Century, and was improved and widely implemented in the United States by the 1970s.

However, a 2008 report by the federal Environmental Protection Agency (EPA) states that

although nearly all wastewater treatment plants provide secondary treatment, conventional

processes “do not remove the phosphorus and nitrogen to any substantial extent.” Supplemental

Administrative Record (Suppl. Admin. R.) at 3990. In recent years, technology has developed

to treat sewage further to remove nitrogen and phosphorus by filtration and chemical treatment.

This enhanced filtration and treatment is known as “tertiary treatment.” A 2010 report published

jointly by Ecology and the EPA stated that tertiary treatment could reduce the amount of

pharmaceuticals and other toxins that pass out of the treatment plants and into Puget Sound.

       Ecology commissioned a 2011 report that studied potential upgrades to wastewater

treatment plants (Tetra Tech report). The Tetra Tech report evaluated six different tertiary

treatment technologies, which it referred to as Objectives A-F. The most stringent of these,

Objective F, analyzed limiting nitrogen to less than 3 mg/L of effluent and phosphorus to less

than 0.1 mg/L using processes that included tertiary treatment.

       The Tetra Tech report evaluated projected costs for implementing each objective but

cautioned that “[t]he accuracy of the estimated costs and rate impacts is in the range of -50

percent to +100 percent.” Suppl. Admin. R. at 1451. For Objective F, the report concluded that

implementation would cause fee increases of between $11.46 and $94.66 in 2010 dollars. Tetra

Tech also estimated the total costs for implementing tertiary treatment based on capital costs and

operation and maintenance (O&M) costs in each of Washington’s 62 Water Resource Inventory

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No. 54810-1-II

Areas (WRIAs). The Puget Sound area WRIAs account for WRIAs 1-19. WAC 173-500-040, -

990.1 Tetra Tech’s estimate for capital and O&M costs for tertiary treatment under Objective F

totaled $4.48 billion in 2010 dollars. Extrapolating this over the -50 percent to +100 percent

accuracy range results in projected implementation costs of Objective F tertiary treatment falling

between $2.24 billion and $8.96 billion in 2010 dollars.

       The Tetra Tech report stated it evaluated “a range of established technologies that are

available and economically reasonable and have been applied in Washington and elsewhere in

the United States.” Suppl. Admin. R. at 1467. However, the Tetra Tech report went on to say it

provided “preliminary analyses” that was an “early step in a public process to determine levels of

nutrient removal that could be required in Washington. Significant additional work is needed

before any such nutrient limits can be adopted.” Suppl. Admin. R. at 1447. The report also

identified costs from externalities and other potential impacts of tertiary treatment.

       For example, the Tetra Tech report concluded that nitrogen removal to a level consistent

with Objective F would produce up to 5 percent more effluent sludge. It also concluded that

energy consumption for tertiary treatment “would require approximately two to three times the

amount of electrical energy currently used by municipal wastewater treatment facilities.” Suppl.

Admin. R. at 1912.

       Tetra Tech also provided guidelines for its cost projections. The report stated that its cost

projections “are likely to vary significantly from real costs of upgrading a particular treatment

plant facility, depending on the facility’s specific conditions.” Suppl. Admin. R. at 1483.

1
 WAC 173-500-040 states the region for each WRIA. WAC 173-500-990 provides a map
showing the location of each WRIA.

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No. 54810-1-II

The report recommended:

       Cost budgets for implementing nutrient removal at any specific facility should be
       based on a site-specific engineering report so that concerns, needs and constraints
       specific to the site, community and facility can be thoroughly addressed. Site-
       specific factors such as wastewater characteristics, site constraints, geotechnical
       conditions, and the condition and layout of the existing facility can have a
       dramatic impact on the ultimate cost of a treatment plant upgrade project.

Suppl. Admin. R. at 1483.

B.     Regulatory Framework

       The federal Clean Water Act (CWA) provides that wastewater treatment plants must treat

effluent to meet secondary treatment standards. 33 U.S.C. § 1311(b)(1)(B). EPA defined

secondary treatment as limiting biological oxygen demand not to exceed a 30-day average of

30 mg/L and a 7-day average of 45 mg/L; total suspended solids not to exceed a 30-day average

of 30 mg/L and a 7-day average of 45 mg/L; and pH (acidity) between 6 and 9. 40 C.F.R §

133.102. The CWA requires that wastewater treatment plants receive a permit before

discharging effluent into state’s waters. 33 U.S.C § 1311(a), 1342(a). EPA’s regulations allow

states to manage this permitting process and enforce CWA compliance. 40 C.F.R. §§ 122.41-43.

The permits must include both technology-based effluent limitations and water quality-based

limitations. 40 C.F.R. § 122.44.

       To implement these standards, our Legislature mandated that Ecology create and manage

a permitting scheme. RCW 90.48.260, 90.48.520. Ecology must issue permits to wastewater

treatment plants in accordance with the CWA, but it may issue permits with more stringent

requirements than those in federal regulations. 33 U.S.C. § 1370; 40 C.F.R. § 122.44(d). Our

statutes require that when issuing a permit, Ecology must ensure that “all known, available, and

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No. 54810-1-II

reasonable methods of treatment”—or AKART—are implemented by treatment plants.2 RCW

90.52.040, 90.54.020.

       In 1987, Ecology adopted WAC 173-221-040, which mandates discharge standards for

wastewater treatment plants. WAC 173-221-040, Wash. St. Reg. 87-23-020 (Dec. 2, 1987).

Ecology’s regulation adopted discharge limits identical to those in EPA’s regulation that defined

secondary treatment. WAC 173-221-040. The regulation also limits fecal coliform discharges.

WAC 173-221-040(2). Ecology also stated in regulation that as a policy all wastewater

discharges must conform to AKART.

                                     II. NWEA’S PETITION

       In November 2018, NWEA petitioned Ecology to revise Chapter 173-221 WAC. NWEA

requested that Ecology redefine AKART to mean tertiary treatment of wastewater effluent, as

described above, for municipal sewage treatment plants discharging into Puget Sound and its

tributaries. NWEA asked that Ecology establish “an effluent quality for nitrogen of not more

than 3 mg/L and an effluent quality for phosphorus of not more than 0.1 mg/L,” a standard

identical to Objective F from the Tetra Tech report. Clerk’s Papers (CP) at 105-06 (citing Suppl.

Admin. R. at 1449). NWEA also argued for mandated tertiary treatment because of its potential

to remove other toxins from wastewater. NWEA also requested that the rule establish a

presumption that tertiary treatment is “reasonable” under AKART and that municipalities would

have to rebut that assumption to implement tertiary treatment and establish alternative

2
 “‘AKART’ is an acronym for ‘all known, available, and reasonable methods of prevention,
control, and treatment.’” WAC 173-201A-020.

                                                6
No. 54810-1-II

technology-based standards. As part of its petition, NWEA submitted exhibits totaling more

than 25,000 pages.

       Ecology denied NWEA’s petition in a January 2019 letter. Ecology stated that it did not

agree that defining AKART as tertiary treatment in Chapter 173-221 WAC was reasonable.

Ecology explained that “[t]reatment technology must be both economically and technically

feasible in order to be AKART.” CP at 119. Ecology stated it was undertaking a study with the

EPA to determine a water quality-based approach to reducing effluent limits “because enhanced

treatment for nutrient removal is neither affordable nor necessary for all wastewater treatment

plants.” CP at 119.

       Ecology listed the alternative measures it was taking to apply AKART to its individual

treatment plant permitting process:

       1. Set nutrient loading limits at current levels from all permitted dischargers in
       Puget Sound and its key tributaries to prevent increases in loading that would
       continue to contribute to Puget Sound’s impaired status.
       2. Require permittees to initiate planning efforts to evaluate different effluent
       nutrient reduction targets.
       3. For treatment plants that already use a nutrient removal process, require
       reissued discharge permits to reflect the treatment efficiency of the existing plant
       by implementing numeric effluent limits used as design parameters in facility
       specific engineering reports.

CP at 119. Ecology stated it decided on this approach because the complex relationships

between discharger-specific nutrient limits and their impact locally and further afield required

further study.

       NWEA filed a petition for review in superior court in February 2019, arguing that

Ecology’s decision to deny the petition was arbitrary and capricious and exceeded Ecology’s

authority. Ecology responded in March, and filed the agency record in June. The agency record

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No. 54810-1-II

included more than 30 documents spanning more than 1500 pages relevant to NWEA’s petition.

NWEA filed a motion for admission of additional evidence to include all the exhibits NWEA

submitted with its petition. Ecology did not oppose the motion and the superior court granted the

motion in November.3

       The superior court held a hearing on NWEA’s petition for review in January 2020. The

court affirmed Ecology’s denial of NWEA’s rulemaking petition. NWEA timely appealed.

                                           ANALYSIS

       NWEA argues that when Ecology denied NWEA’s petition for rulemaking, Ecology

violated its statutory duty to implement AKART to control the discharge of nutrients and toxins

from wastewater treatment plants. NWEA also argues that Ecology failed to comply with the

APA, and that its decision was contrary to the law and arbitrary and capricious. Ecology argues

that it properly applies the AKART standard in its wastewater discharge permitting processes

and determined that NWEA’s proposed regulation was not economically reasonable. Although

we agree that Ecology is required to apply the AKART standard to wastewater treatment

facilities’ discharges, we defer to Ecology’s determination that NWEA’s proposal was not

economically reasonable.

                                    I. STANDARD OF REVIEW

       The APA provides that an agency’s decision to deny a rulemaking petition is subject to

judicial review as “other agency action.” RCW 34.05.570(4); Rios v. Dep’t of Lab. & Indus.,

3
 NWEA submitted additional information to the superior court under RCW 34.05.562(1): “The
court may receive evidence in addition to that contained in the agency record for judicial review,
only if it relates to the validity of the agency action at the time it was taken and is needed to
decide disputed issues.”

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No. 54810-1-II

145 Wn.2d 483, 491-92, 39 P.3d 961 (2002). We may grant relief for a party aggrieved by an

agency’s discretionary action only if that action is: “(i) Unconstitutional; (ii) Outside the

statutory authority of the agency or the authority conferred by a provision of law; (iii) Arbitrary

or capricious; or (iv) Taken by persons who were not properly constituted as agency officials

lawfully entitled to take such action.” RCW 34.05.570(4)(c). The party challenging an agency’s

action has the burden of showing the invalidity of the action. RCW 34.05.570(1)(a).

          We review Ecology’s decisions from the same position as the superior court. Squaxin

Island Tribe v. Dep’t of Ecology, 177 Wn. App. 734, 740, 312 P.3d 766 (2013). We defer to the

specialized knowledge and expertise of an administrative agency. Squaxin Island Tribe, 177

Wn. App. at 742. However, we do not extend that deference to agency actions that are arbitrary,

capricious, and contrary to law. Skokomish Indian Tribe v. Fitzsimmons, 97 Wn. App. 84, 93,

982 P.2d 1179 (1999).

          Our Supreme Court explained:

          Ordinarily, an agency is accorded wide discretion in deciding to forgo rulemaking
          in an area, and fiscal constraints may reasonably determine whether an agency
          takes action (and, if so, how). But an agency’s allusion to fiscal considerations
          and prioritizing cannot be regarded as an unbeatable trump in the agency’s hand;
          on review, a plaintiff has the opportunity to show that the agency’s failure to act
          was ‘[a]rbitrary or capricious.’

Rios, 145 Wn.2d at 507 (quoting RCW 34.05.570(4)(c)(iii)). The Rios court also explained that

ordering an agency to undertake a rulemaking was an “extraordinary circumstance.” 145 Wn.2d

at 507.

          Accordingly, we avoid exercising discretion that the Legislature entrusted to the agency.

Squaxin Island Tribe, 177 Wn. App. at 742. We therefore review the record on appeal to

“determine whether the agency reached its decision ‘through a process of reason, not whether the

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No. 54810-1-II

result was itself reasonable in the judgment of the court.’” Squaxin Island Tribe, 177 Wn. App. at

742 (quoting Rios, 145 Wn.2d at 501).

                          II. ANALYSIS OF ECOLOGY’S DETERMINATION

A.     Wastewater Discharge Statutes and Regulations

       Multiple statutes and regulations mandate Ecology and other state agencies apply

AKART to keep state waters clean. The Legislature stated that it was our state’s public policy to

use AKART “to prevent and control the pollution of the waters of the state of Washington.”

RCW 90.48.010. In the Water Resources Act of 1971, the Legislature used substantially the

same language to state that AKART should be the standard for treatment prior to entry of wastes

into state waters “[r]egardless of the quality of the waters of the state.” RCW 90.54.020(3)(b).

       Similarly, the Pollution Disclosure Act of 1971 mandates that Ecology require waste be

treated by AKART methods:

       [I]n the administration of the provisions of chapter 90.48 RCW, the director of the
       department of ecology shall, regardless of the quality of the water of the state to
       which wastes are discharged or proposed for discharge, and regardless of the
       minimum water quality standards established by the director for said waters,
       require wastes to be provided with all known, available, and reasonable methods
       of treatment prior to their discharge or entry into waters of the state.

RCW 90.52.040. Moreover, the Legislature mandates that “the department of ecology shall in

issuing and renewing state and federal wastewater discharge permits . . . incorporate permit

conditions which require all known, available, and reasonable methods to control toxicants in the

applicant’s wastewater.” RCW 90.48.520.

       Ecology’s rules governing the permitting process for wastewater treatment facilities also

mandate Ecology follow AKART when issuing permits. WAC 173-220-130(1) requires, in

pertinent part that “[a]ny permit issued by [Ecology] shall apply and insure compliance with all

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of the following, whenever applicable: (a) All known, available, and reasonable methods of

treatment required under RCW 90.52.040, 90.54.020 (3)(b), and 90.48.520.” Ecology also states

that it is its policy that, “[r]egardless of the quality of the waters of the state, all wastes and other

materials and substances proposed for discharge into said waters shall be provided with

[AKART] prior to discharge.” WAC 173-221-020.

        As explained in the Facts section above, Ecology’s domestic wastewater facility

discharge standards are nearly identical to the federal CWA standards that EPA defines as

“secondary treatment.” Compare WAC 173-221-040 and 40 C.F.R § 133.102.

Ecology’s discharge standards go beyond the federal requirement and limit fecal coliform

discharges. WAC 173-221-040(2). Ecology’s wastewater and permitting regulations do not

define secondary treatment other than to state, “This chapter also supplements 40 C.F.R. Part

133; Secondary Treatment Regulation. Wherever this chapter is more stringent than the federal

regulation, the requirements of this chapter shall take precedence.” WAC 173-221-010(2). The

regulations are silent as to tertiary treatment.

B.      Ecology’s Compliance with AKART under RCW 90.48.520

        NWEA argues that by denying its petition for Ecology to define AKART as tertiary

treatment, it is in violation of its statutory duties. Ecology argues that its governing statutes

require that its permitting procedure comply with AKART, not that its regulations define

AKART by a numeric limit. We agree with Ecology.

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No. 54810-1-II

       1. State Law Mandates Wastewater Discharge Permits, and Not Ecology’s Regulations,

Comply with AKART.

       NWEA argues that because tertiary treatment is now available, Ecology’s refusal to

define AKART as tertiary treatment by regulation violates Ecology’s duties under RCW

90.52.040, 90.54.020, 90.48.010, and 90.48.520. Ecology argues that the statutes mandate it

apply AKART on a case-by-case basis when issuing wastewater discharge permits. We agree

with Ecology.

       We give effect to the plain meaning of statutes to determine legislative intent. Ctr. for

Envt. Law and Pol’y v. Dep’t of Ecology, 196 Wn.2d 17, 29, 468 P.3d 1064 (2020). We accord

deference to an agency’s interpretation of a statute only if (1) the agency is charged with the

administration and enforcement of the statute, (2) the statute is ambiguous, and (3) the statute

falls within the agency’s expertise. Bostain v. Food Express, Inc., 159 Wn.2d 700, 716, 153 P.3d

846 (2007). Even then, the agency’s interpretation is not binding on us. Ass’n of Wash. Bus. v.

Wash. Dep’t of Revenue, 155 Wn.2d 430, 447 n.17, 120 P.3d 46 (2005). Policy declarations in

statutes serve as an important guide to us, but they have no operative force. Puget Soundkeeper

All. v. Dep’t of Ecology, 102 Wn. App. 783, 790, 9 P.3d 892 (2000).

       As an initial matter, RCW 90.48.010 and 90.54.020(3)(b) are policy declarations. By its

plain language, RCW 90.48.010 begins, “It is declared to be the public policy of the state of

Washington . . . .” Likewise, RCW 90.54.020 sets out that “[u]tilization and management of the

waters of the state shall be guided by the following general declaration of fundamentals . . . .” It

then states that state water quality shall not be violated except when “overriding considerations

of the public interest will be served.” RCW 90.54.020(3)(b). A “general declaration” of what is

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No. 54810-1-II

in the “public interest” is a policy declaration. Thus, these statutes have no operative force.

Puget Soundkeeper, 102 Wn. App. at 790.

       Turning to RCW 90.52.040, it states that Ecology require waste be treated by AKART

methods “prior to their discharge or entry into waters of the state,” regardless of established

water quality standards. The plain language of this statute means that Ecology must implement

AKART driven by technology, regardless of whether the recipient waters are cleaner than

regulations require. However, it does not direct Ecology to take any specific action regarding

implementing regulations or issuing permits. Although the statute compels Ecology to comply

with AKART, the statute does not clearly mandate that Ecology take the regulatory action

NWEA requested. Indeed, chapter 90.52 RCW, the Pollution Disclosure Act of 1971, does not

mandate that Ecology regulate discharge limits, treatment types, or other wastewater treatment

plant operations. Rather, the operative portion of the act mandates only that commercial waste

dischargers file annual reports on waste discharge amounts to Ecology. RCW 90.52.010. Thus,

although RCW 90.52.040 places an AKART requirement on Ecology, it has nothing to do with

effluent discharge limits, treatment types, or wastewater treatment plant permitting.

Accordingly, although RCW 90.52.040 requires that Ecology implement AKART, the

Legislature left the method by which AKART should be implemented up to Ecology.

       This leaves RCW 90.48.520, which states that “the department of ecology shall in issuing

and renewing state and federal wastewater discharge permits . . . incorporate permit conditions

which require all known, available, and reasonable methods to control toxicants in the

applicant’s wastewater.” This statute does require Ecology to take action that complies with

AKART. However, by its plain language the statute is specific to “issuing and renewing state

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No. 54810-1-II

and federal wastewater discharge permits.” The statute does not require Ecology to promulgate

any rule or regulation or set any limits on effluent discharges. Rather, the statute mandates that

Ecology comply with AKART when issuing permits.

       Division One’s decision in Puget Soundkeeper, 102 Wn. App. 783, supports this

conclusion. There, Ecology issued a discharge permit to a company. 102 Wn. App. at 785.

Puget Soundkeeper appealed the permit to the Pollution Control Hearings Board (PCHB),

arguing that the permit did not comply with AKART. Puget Soundkeeper, 102 Wn. App. at 786.

PCHB upheld the permit, as did the superior court. Puget Soundkeeper, 102 Wn. App. at 786,

795. Puget Soundkeeper explains: “[T]he AKART language in RCW 90.48.520 neither defines

nor specifies how to determine what ‘all known, available, and reasonable methods’ are.” 102

Wn. App. at 793. Division One of this court affirmed, explaining the permit program is driven

by advances in technology and confirmed that permits issued by Ecology must comply with

AKART. Puget Soundkeeper, 102 Wn. App. at 789-90.

       Here, Ecology interpreted RCW 90.48.520 to mandate that Ecology comply with

AKART when issuing permits. And so it must. But like RCW 90.52.040, the statute neither

specifies that Ecology implement regulations defining AKART to meet a particular standard, nor

specifies how to determine what “all known, available, and reasonable methods” are. Ecology

has interpreted RCW 90.48.520 to mandate that AKART be applied in each permit on a case-by-

case basis. Indeed, NWEA admits in its opening brief that “Ecology must make an AKART

determination each time it issues a permit to a discharger.” Brief of Appellant (Br. of Appellant)

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at 26. Thus, we conclude that the Legislature left the method by which to implement AKART up

to Ecology.4

       NWEA cites to Massachusetts v. EPA, 549 U.S. 497, 533, 127 S. Ct. 1438, 167 L. Ed. 2d

248 (2007), to argue that Ecology’s denial of the petition for rulemaking did not conform to its

authorizing statute.5 There, the U.S. Supreme Court held that EPA’s denial of a rulemaking

petition to regulate greenhouse gasses was unlawful because the EPA did not “comply with [a]

clear statutory command” to regulate greenhouse gasses. Massachusetts, 549 U.S. at 533.

       But Massachusetts v. EPA is distinguishable because of that very command. In

Massachusetts, the Clean Air Act mandated that EPA “shall by regulation prescribe . . .

standards applicable to the emission of any air pollutant.” 549 U.S. at 506 (quoting 42 U.S.C. §

7521(a)(1)). No such command exists here in RCW 90.48.520. Here the Legislature directed

Ecology to implement AKART when issuing permits; it did not specify that Ecology should

prescribe AKART standards by regulation. Accordingly, NWEA’s argument fails and we are

not persuaded that Ecology is required to define AKART standards in a regulation.

4
  Because AKART is a technology-based requirement, it is constantly changing. Mandating that
Ecology conduct a rulemaking here could lead to an absurd result where Ecology must conduct a
rulemaking for every technological advancement. Such an outcome would place an
unreasonable burden on the agency.
5
  The APA states: “The legislature also intends that the courts should interpret provisions of this
chapter consistently with decisions of other courts interpreting similar provisions of other states,
the federal government, and model acts.” RCW 34.05.001.

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       2. Ecology Determined that Defining AKART as Tertiary Treatment is not Economically

Reasonable.

       NWEA argues that because secondary treatment is an older technology, it is no longer

AKART, and that because tertiary treatment is AKART, Ecology is required to update its

regulations. Ecology argues that it determined tertiary treatment is not economically reasonable

and therefore not AKART in all circumstances. We defer to Ecology’s expertise.

       AKART standards are meant to foster the use of new treatment technology, but do not

necessarily require using the best treatment technology available. Puget Soundkeeper, 102 Wn.

App. at 792. The term “reasonable” in the AKART standard limits Ecology to requiring a

treatment system that is both technically and economically feasible. Puget Soundkeeper, 102

Wn. App. at 793. The AKART standard under RCW 90.48.520 neither requires municipalities

develop new technology nor limits Ecology to mandating numeric limits in permits. Puget

Soundkeeper, 102 Wn. App. at 792-93. Municipalities and other entities applying for discharge

permits must plan to implement treatment systems that are technically and economically

achievable. Puget Soundkeeper, 102 Wn. App. at 794. Ecology adopts those that are feasible as

AKART. Puget Soundkeeper, 102 Wn. App. at 794-95.

       In Squaxin Island Tribe, the Tribe petitioned Ecology to engage in rule making regarding

watershed flow rates. 177 Wn. App. at 736. Ecology denied the Tribe’s petition, explaining that

budget cuts limited the agency’s ability to do comprehensive work on the matter and that

additional information was needed before a comprehensive rulemaking could be undertaken.

Squaxin Island Tribe, 177 Wn. App. at 739. The superior court ruled that Ecology’s denial was

arbitrary and capricious. Squaxin Island Tribe, 177 Wn. App. at 739. After examining the

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No. 54810-1-II

evidence Ecology considered before issuing its denial, we reversed, explaining that Ecology

reached its decision through a process of reason, and deferred to Ecology’s wide discretion to

choose and schedule rulemaking efforts. Squaxin Island Tribe, 177 Wn. App. at 743, 747-48.

       Here, Ecology determined that defining AKART as tertiary treatment in chapter 173-221

WAC was not economically reasonable. As in Squaxin Island Tribe, Ecology also explained that

it was undertaking further studies on water quality-based approaches and nutrient removal. The

record before Ecology also showed that mandating tertiary treatment under Objective F in the

Tetra Tech report as NWEA petitioned could cost up to $8.96 billion in 2010 dollars. It was

within Ecology’s agency expertise to decide that a projected multi-billion dollar cost was not

reasonable to mandate for all Puget Sound area municipal wastewater treatment facilities. We do

not determine for ourselves that Ecology’s conclusion was reasonable, but we decide that

Ecology concluded that a multi-billion dollar cost was economically unreasonable through a

reasoned process.

       NWEA’s arguments to the contrary are inapt. NWEA argues that Ecology relies

exclusively on WAC 173-221-040 when issuing permits and that Ecology has therefore adopted

secondary treatment as AKART. EPA defined secondary treatment in 40 C.F.R § 133.102 and

Ecology adopted those same discharge standards in WAC 173-221-040. NWEA reasons that

because tertiary treatment has been determined to be AKART for select municipalities, Ecology

should have adopted NWEA’s petition to define AKART as tertiary treatment. NWEA’s

arguments fail for several reasons.

       First, as explained in section 1 above, RCW 90.48.520 does not mandate that Ecology

establish AKART standards through regulation, but rather mandates that Ecology issue permits

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in compliance with AKART. Moreover, nothing in the controlling statutes or regulations

equates secondary treatment with AKART. If secondary treatment no longer complies with

AKART, then tertiary treatment—or whatever treatment currently complies with AKART—must

be met through Ecology’s permitting process.

       Second, NWEA argues that PCHB has already determined that tertiary treatment is

AKART for municipal sewage discharges in certain municipalities and that Ecology has not been

complying with AKART when issuing permits to municipalities. To support this argument,

NWEA cites PCHB’s decision in Sierra Club v. Department of Ecology, where PCHB

determined tertiary treatment was AKART for a wastewater treatment plant in Spokane. No. 11-

184, 2013 WL 4490310 (Wash. Pollution Control Hr’gs Bd. July 19, 2013). NWEA also cites

several municipalities’ fact sheets for wastewater discharge permits that state the effluent

performance standards in chapter 173-221 WAC constitute AKART.

       But this case is not about whether Ecology complied with AKART when issuing permits,

it is about whether Ecology is required to promulgate a regulation based on NWEA’s proffered

definition of AKART. As Ecology rightly argues, if NWEA believes Ecology has issued a

discharge permit that does not comply with AKART, NWEA may first appeal the permit to the

Pollution Control Hearings Board.6

6
  NWEA also argues that treatment “beyond secondary” has been implemented in municipalities
around Puget Sound and that such treatments are therefore AKART. But as explained above,
those are data points that speak to Ecology’s AKART standards when issuing permits, not when
promulgating regulations.

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No. 54810-1-II

       Next, NWEA argues that tertiary treatment is AKART because it was determined to be

economically reasonable in the Tetra Tech report. But Ecology made a reasoned conclusion to

the contrary.

       NWEA relies on a statement in Ecology’s Tetra Tech report that technologies to upgrade

municipal wastewater treatment plants “are available and economically reasonable and have

been applied in Washington and elsewhere in the United States.” Suppl. Admin. R. at 1467; Br.

of Appellant at 35. But NWEA’s argument ignores other language in the Tetra Tech report that

it was “preliminary analyses” and that “[s]ignificant additional work is needed before any such

nutrient limits can be adopted.” Suppl. Admin. R. at 1447. The Tetra Tech report went on to

explain costs from externalities associated with tertiary treatment, such as increased energy

consumption and effluent sludge production. Finally, the report recommended site-specific

engineering and cost projections.

       Thus, although the Tetra Tech report states that tertiary treatment technology is available,

it does not reach a formal conclusion that tertiary treatment is economically reasonable for all

municipalities. Indeed, the report contemplates case-by-case determinations as described in

Puget Soundkeeper, 102 Wn. App. at 794-95. This aligns with Ecology’s interpretation of its

role in mandating AKART through the permitting process under RCW 90.48.520.

       NWEA cites Bellingham v. Dep’t of Ecology, No. 84-211, 1985 WL 21854 (Wash.

Pollution Control Hr’gs Bd. June 19, 1985), to argue that the fee increases projected in the Tetra

Tech report were reasonable. To the extent we consider decisions of the PCHB as persuasive,

Bellingham works against NWEA.

                                                19
No. 54810-1-II

       In Bellingham, Ecology refused to concur to the city’s application for a waiver from an

effluent limitation requirement. Bellingham at *1. As PCHB explained, “[Ecology] wants

Bellingham to upgrade its sewage treatment plant to secondary treatment. The City does not

want to do it. At the heart of the dispute is the problem of cost.” Bellingham at *1. An EPA

cost projection determined implementing Ecology’s plan would result in a user fee increase from

$10.50 to $27.38 in 1985 dollars. Bellingham at *6-7. Ecology determined that this increase

was reasonable under the circumstances and the PCHB agreed. Bellingham at *5, *15-16. But

the PCHB reached this conclusion after reasoning that Ecology “provided for case-by-case

evaluation of each municipal discharge to determine if the generalized determination is

appropriate for that source at the time the question is asked.” Bellingham at *15.

       NWEA argues that because an increase to $27.38 in 1985 dollars ($65.44 in 2018 dollars)

was reasonable in Bellingham, it follows that the $94.66 increase in fees projected in the Tetra

Tech report is also reasonable, and that tertiary treatment is therefore AKART. But this ignores

that the PCHB based its decision on Ecology providing a case-by-case evaluation of

municipalities’ discharges. Not only does the logic in Bellingham align with Ecology’s

interpretation of its statute mandating case-by-case analysis but the facts there were

distinguishable: Ecology used its case-by-case analysis to require stricter effluent limits for the

city—the opposite of the result NWEA warns against in its petition.

       Finally, NWEA argues that this case is like Rios v. Department of Labor and Industries,

145 Wn.2d at 505. But Rios is distinguishable. There the Department of Labor and Industries

declined to adopt a regulation for mandatory pesticide monitoring after previously

recommending—but not mandating—the same testing in an earlier regulation. Rios, 145 Wn.2d

                                                 20
No. 54810-1-II

at 487-89. When promulgating the earlier regulation recommending the monitoring, the

Department concluded the monitoring program was “necessary and doable.” Rios, 145 Wn.2d at

508. Our Supreme Court concluded in that “extraordinary circumstance” the Department

violated its duties under its controlling statute. Rios, 145 Wn.2d at 507-09.

       There are no such extraordinary circumstances here. Although Ecology’s Tetra Tech

report stated that tertiary treatment is “available and economically reasonable,” Tetra Tech

equivocates and caveats this language throughout the report, noting that “[s]ignificant additional

work is needed” before requiring such limits. Suppl. Admin. R. at 1447, 1467. Moreover,

Ecology did not adopt the Tetra Tech report’s conclusions in a regulation as the Department of

Labor and Industries did in Rios. Thus, NWEA’s argument fails.

C.     Ecology’s Compliance with the APA

       NWEA argues that Ecology’s denial fails to comply with the APA because Ecology did

not adequately state the reasons for the denial or state the alternative means by which it would

address NWEA’s concerns. NWEA also argues that Ecology’s denial was arbitrary and

capricious because it was taken without regard to the attending facts and circumstances. We

disagree.

       1. Ecology Complied with APA Requirements under RCW 34.05.330 when it Denied

NWEA’s Petition.

       NWEA argues that Ecology failed to comply with the APA under RCW 34.05.330(1).

We disagree.

       RCW 34.05.330(1) provides:

       Within sixty days after submission of a petition, the agency shall either (a) deny
       the petition in writing, stating (i) its reasons for the denial, specifically addressing

                                                  21
No. 54810-1-II

       the concerns raised by the petitioner, and, where appropriate, (ii) the alternative
       means by which it will address the concerns raised by the petitioner, or (b) initiate
       rule-making proceedings.

       The purpose of this provision is to require an agency give notice to the interested parties

and enable a reviewing court to determine whether the agency’s stated reasons for denying the

petition were arbitrary, capricious, an abuse of discretion, or otherwise contrary to law. Squaxin

Island Tribe, 177 Wn. App. at 741. We therefore evaluate Ecology’s explanation under RCW

34.05.330(1) to determine whether Ecology fulfilled its purpose of facilitating judicial review.

Squaxin Island Tribe, 177 Wn. App. at 741.

       a. Ecology Stated its Reasons for Denying the Petition.

       NWEA argues that Ecology failed to specifically address NWEA’s concerns regarding

reducing toxic pollutants. Ecology argues that its determination that NWEA’s requested

technology is not economically reasonable also applies to NWEA’s request that toxic pollutants

be reduced. We agree with Ecology.

       NWEA’s petition was based on Objective F from Ecology’s own Tetra Tech report.

Objective F was based on tertiary treatments. The Tetra Tech study also projected costs for

implementing such technologies. A 2010 joint report from EPA and Ecology determined that

tertiary treatment can reduce toxins in wastewater. It was therefore within Ecology’s expertise to

determine that tertiary treatment and toxin reduction were linked. Accordingly, when Ecology

denied NWEA’s petition for not being economically reasonable, Ecology responded to NWEA’s

concerns about both tertiary treatment and toxin reduction.

       Ecology’s response to NWEA stated that it was denying the petition because Ecology did

not agree that defining AKART as tertiary treatment for all wastewater treatment plants by

                                                22
No. 54810-1-II

regulation was economically reasonable. Ecology also explained that “[t]reatment technology

must be both economically and technically feasible in order to be AKART.” CP at 119. This

response provided NWEA with sufficient notice as to why Ecology was rejecting its petition.

This response also provides us with enough information determine whether Ecology’s

conclusion was arbitrary, capricious, an abuse of discretion, or otherwise contrary to law because

we can compare Ecology’s determination against the record. Thus, Ecology adequately stated its

reasons for denying the petition under RCW 34.05.330(1)(a)(i).

       b. Ecology Stated Alternative Means by which it Will Address NWEA’s Concerns.

       NWEA appears to argue that Ecology failed to state the alternative means by which it

will address NWEA’s concerns. NWEA admits that Ecology addressed alternative measures but

argues that because the alternatives do not conform to AKART Ecology’s response was

inadequate. We disagree.

       In its response, Ecology listed the alternative measures it was taking to apply AKART to

its individual treatment plant permitting process:

       1. Set nutrient loading limits at current levels from all permitted dischargers in
       Puget Sound and its key tributaries to prevent increases in loading that would
       continue to contribute to Puget Sound’s impaired status.
       2. Require permittees to initiate planning efforts to evaluate different effluent
       nutrient reduction targets.
       3. For treatment plants that already use a nutrient removal process, require
       reissued discharge permits to reflect the treatment efficiency of the existing plant
       by implementing numeric effluent limits used as design parameters in facility
       specific engineering reports.

CP at 119. Ecology stated it decided on this approach because the complex relationships

between discharger-specific nutrient limits and their impact locally and further afield required

further study.

                                                23
No. 54810-1-II

       As explained in part B above, AKART specifically applies to Ecology’s permitting

process under RWC 90.48.520. Ecology’s stated alternative measures are directly applicable to

tertiary treatment, especially as it relates to nutrient reduction. Thus, assuming for the sake of

argument that tertiary treatment is AKART, Ecology’s alternatives responded directly to

NWEA’s concerns. Moreover, there is no requirement that an agency’s stated alternatives align

with the strict regulatory mandate a petition requested. Accordingly, Ecology appropriately

listed alternatives under RCW 34.05.330(1)(a)(ii).

       2. Ecology’s Denial of NWEA’s Petition was not Arbitrary and Capricious.

       NWEA argues that Ecology’s denial of its petition was arbitrary and capricious. Br. of

Appellant at 43. It argues Ecology denied the petition because it preferred to abandon AKART

determinations and take a water quality-based approach and because Ecology failed to consider

the information supporting the petition. NWEA also argues that Ecology’s decision not to adopt

a rebuttable presumption that tertiary treatment should be mandatory for municipalities was

arbitrary and capricious. We disagree.

       When a petition for rulemaking is denied, we may grant relief only where the agency

action is outside the statutory authority of the agency, arbitrary, or capricious.

RCW 34.05.570(4)(c)(ii)-(iii); Rios, 145 Wn.2d at 491-92. An agency’s action is arbitrary or

capricious if it is taken without reason and without regard to the attending facts and

circumstances. Squaxin Island Tribe, 177 Wn. App. at 742. “[N]either the existence of

contradictory evidence nor the possibility of deriving conflicting conclusions from the evidence

renders an agency decision arbitrary and capricious.” Rios, 145 Wn.2d at 504.

                                                  24
No. 54810-1-II

       a. Ecology Did not State That it Was Abandoning AKART Requirements.

       NWEA argues that Ecology has demonstrated that it is not acting in compliance with the

statutory mandate to apply AKART. NWEA argues that because Ecology’s denial stated it was

taking a water quality-based approach rather than apply AKART broadly for Puget Sound, it was

choosing not to apply AKART to wastewater dischargers. But Ecology determined that defining

tertiary treatment as AKART and applying that to the whole of Puget Sound was not

economically reasonable, not that it was abandoning AKART for a water quality-based

approach.

       Ecology’s denial stated that “enhanced treatment for nutrient removal is neither

affordable nor necessary for all wastewater treatment plants.” CP at 119. Ecology explained it

was undertaking a study with the EPA to determine a water quality-based approach to reducing

effluent limits. Nowhere did Ecology state that it would not apply AKART when issuing permits

to wastewater dischargers. Reading the whole of Ecology’s denial, we conclude that Ecology

determined that a water quality-based metric was better for measuring overall waterway health in

the whole of Puget Sound, not that Ecology intends to replace AKART standards in individual

permitting decisions with a water quality metric. Thus, Ecology’s denial was not arbitrary,

capricious, or contrary to law for suggesting a water quality-based approach was more

appropriate for measuring the Puget Sound water quality impairments.

       b. Ecology Properly Considered NWEA’s Petition.

       NWEA argues that Ecology did not review the documents NWEA submitted with its

petition before denying the petition. We disagree.

                                               25
No. 54810-1-II

       An agency’s failure to consider information supporting a proposed regulation may be

arbitrary and capricious. Nw. Sportfishing Indus. Ass’n v. Dep’t of Ecology, 172 Wn. App. 72,

89-90, 288 P.3d 677 (2012). The agency record “shall consist of any agency documents

expressing the agency action, other documents identified by the agency as having been

considered by it before its action and used as a basis for its action.” RCW 34.05.566(1).

However, the superior court may admit evidence in addition to the agency record that relates to

or explains the agency’s decision-making process. RCW 34.05.562; Aviation West Corp. v.

Dep’t of Labor & Indus., 138 Wn.2d 413, 419, 980 P.2d 701 (1999).

       Ecology filed an agency record with the court that included more than 30 documents

spanning more than 1500 pages. The record included NWEA’s petition, Ecology’s denial letter,

the Tetra Tech report, and various other technical documents relating to water quality, algae

growth, toxicity, and nutrient removal. Crucially, the Tetra Tech report relates directly to

NWEA’s petition, describing both the standards on which NWEA based the petition (Objective

F) and the projected costs of implementing the plan. AR at 160-68, 214-17. Indeed, Ecology’s

denial of the petition was based on its determination that mandating NWEA’s request would not

be economically reasonable. This decision is supported by the Tetra Tech report, which Ecology

included in the agency record. The extent of this record is enough to show that Ecology took a

reasoned approach to its analysis.

       NWEA submitted exhibits with its petition totaling more than 25,000 pages. These were

not included in Ecology’s record. NWEA filed a motion in the superior court to admit these

voluminous exhibits. Ecology did not oppose the motion and the superior court admitted the

additional documents. NWEA argues that because Ecology left thousands of pages that it

                                                26
No. 54810-1-II

included in its petition out of the agency record presented to the superior court, Ecology

necessarily “admits that it ignored thousands of pages of information supporting NWEA’s

request for rulemaking.” Br. of Appellant at 49. But beyond asking us to draw inferences from

what Ecology left out of the agency record, NWEA makes no showing that Ecology ignored any

of the documents NWEA submitted. Even if Ecology relied only on the shorter record it

compiled, the documents therein support Ecology’s decision and show that Ecology’s action was

not taken without reason and without regard to the attending facts and circumstances. Thus,

Ecology’s determination was not arbitrary and capricious.

       c. Ecology’s Decision not to Adopt NWEA’s “Rebuttable Presumption” to Mandate

Tertiary Treatment was Not Arbitrary and Capricious.

       NWEA argues that Ecology failed to respond to NWEA’s request that Ecology mandate a

“rebuttable presumption” that treatment plants use tertiary treatment. Br. of Appellant at 40.

NWEA argues that if tertiary treatment meets the AKART standard, then Ecology’s

determination to not adopt the rebuttable presumption was arbitrary and capricious because

Ecology did not find tertiary treatment and a rebuttable presumption “necessary.” Br. of

Appellant at 40. Ecology argues that it was not arbitrary and capricious to decline to adopt the

rebuttable presumption because a mandate requiring such a presumption is not necessary in

treatment plants where tertiary treatment is not economically reasonable. We agree with

Ecology.

       Although Ecology stated that “enhanced treatment for nutrient removal is neither

affordable nor necessary for all wastewater treatment plants,” it explained this in the context of

describing an EPA nationwide study of such plants. CP at 119 (emphasis added). Moreover,

                                                27
No. 54810-1-II

Ecology stated in its denial letter that it was denying NWEA’s petition because a water-quality

based approach was necessary and that tertiary treatment is not economically and technically

feasible for all municipalities, not that a presumption to mandate tertiary treatment was

unnecessary. Because Ecology concluded that defining AKART as tertiary treatment was not

economically reasonable, it necessarily would not adopt a rebuttable presumption that tertiary

treatment was mandatory. Thus, because Ecology’s decision that defining AKART as tertiary

treatment was not economically reasonable was not arbitrary and capricious, it follows that its

decision to not to adopt a rebuttable presumption mandating such treatment was not either.

Accordingly, Ecology’s approach was reasoned and taken in regard to the attending facts.

                                       ATTORNEY FEES

       NWEA argues that we should award it fees and costs under RCW 4.84.350. We

disagree.

       RCW 4.84.350(1) provides that “a court shall award a qualified party that prevails in a

judicial review of an agency action fees and other expenses, including reasonable attorneys’ fees,

unless the court finds that the agency action was substantially justified or that circumstances

make an award unjust.” Here, NWEA does not prevail and is therefore not entitled to fees.

                                         CONCLUSION

       We defer to Ecology’s determination that defining tertiary treatment as AKART for all

municipalities is economically unreasonable. Although Ecology is required to comply with

AKART when issuing discharge permits, which may result in Ecology mandating tertiary

treatment, the controlling statutes do not mandate that Ecology adopt such standards by rule. We

hold that Ecology’s denial letter complied with the APA because it stated its reasons for denying

                                                28
No. 54810-1-II

NWEA’s petition and stated the alternative means by which it will address NWEA’s concerns.

We also hold that Ecology’s denial was not arbitrary and capricious. Accordingly, we affirm.

       A majority of the panel having determined that this opinion will not be printed in the

Washington Appellate Reports, but will be filed for public record in accordance with RCW

2.06.040, it is so ordered.

                                                                    Worswick, J.
 We concur:

 Lee, C.J

 Sutton, J.

                                               29