This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2007).
STATE OF MINNESOTA
IN COURT OF APPEALS
In the Matter of the Alexandria Lake Area Sanitary District
NPDES/SDS Permit No. MN0040738, Reissuance for the
Expanded Discharge of Treated Wastewater,
Douglas County, Alexandria, Minnesota.
Filed on August 28, 2007
Minnesota Pollution Control Agency
File No. MN0040738
Kevin Reuther, Minnesota Center
for Environmental Advocacy, 26 East Exchange Street, Suite 206, St. Paul, MN
55101 (for relator Minnesota Center for Environmental Advocacy)
Lori Swanson, Attorney General, Alan C. Williams, Assistant Attorney General, 900 Bremer Tower, 445 Minnesota Street, St. Paul, MN 55101 (for respondent Minnesota Pollution Control Agency)
Steven W. Nyhus, Flaherty & Hood, P.A., 525 Park Street, Suite 470, St. Paul, MN 55103 (for respondent Alexandria Lake Area Sanitary District)
James P. Peters, Karna M. Peters, Peters & Peters, PLC, 507 North Nokomis Street, #100, Alexandria, MN 56308 (for amicus curiae L’Homme Dieu Lake Association)
Considered and decided by Worke, Presiding Judge; Kalitowski, Judge; and Minge, Judge.
On appeal from the reissuance of the Alexandria Lake Area Sanitary District’s wastewater-treatment-facility discharge permit, relator Minnesota Center for Environmental Advocacy argues that the Minnesota Pollution Control Agency erred by failing to calculate and impose water quality-based effluent limits for phosphorus as required by federal law. Because the reissued permit violates a federal regulation promulgated under the Clean Water Act, we reverse and remand for further proceedings consistent with this opinion.
This matter arises out of respondent Minnesota Pollution Control Agency’s (MPCA) reissuance of a discharge permit to respondent Alexandria Lake Area Sanitary District’s (ALASD) wastewater-treatment facility. The facility was designed and approved to treat 3.75 million gallons of sewage per day. The facility discharges treated effluent into Lake Winona, which is among a chain of three lakes, including Lakes Agnes and Henry. MPCA has listed Lake Winona as impaired water due to excessive phosphorus levels. The effluent from the facility contributes 89 percent of the phosphorus load in the lake, making Lake Winona unsuitable for its intended aquatic life and recreational activities.
ALASD applied to MPCA for a reissued permit and approval to construct and operate an expanded facility. MPCA approved the issuance of the permit and for expansion, concluding that the expansion will not have a significant environmental impact. The reissued permit allows the facility to expand its capacity to treat 4.70 million gallons of sewage per day. The final permit contains two sets of effluent limits for phosphorus. The interim period begins at permit reissuance and continues until six months after completion of the facility’s expansion. The final period begins and continues until MPCA sets new phosphorus limits based on waste load allocation for the facility into Lake Winona. The total-maximum-daily-load process began in 2006 and is expected to be completed before expiration of the reissued permit.
By writ of certiorari, the Minnesota Center for Environmental Advocacy (MCEA) challenges the reissued permit, arguing that MPCA erred as a matter of law by ignoring the plain language of 40 C.F.R. § 122.44(d)(1) (2006), which requires MPCA to calculate and impose effluent limits for phosphorus necessary to achieve water-quality standards. MCEA contends that MPCA failed to comply with the federal regulation because the reissued permit’s interim and final effluent limits are not “water quality-based” effluent limits and the regulation does not authorize MPCA to wait until after completion of the total-maximum-daily-load process to establish more stringent effluent limits that will protect water quality.
D E C I S I O N
This court reviews a final decision of the MPCA under the Minnesota Administrative Procedures Act, Minn. Stat. §§ 14.63-.69 (2006). Minn. Stat. § 115.05, subd. 11 (2006). We may reverse or modify an agency’s decision only if it is in violation of a constitutional provision, in excess of the agency’s statutory authority or jurisdiction, made upon unlawful procedure, affected by other error of law, unsupported by substantial evidence, or arbitrary or capricious. Minn. Stat. § 14.69.
MCEA argues that MPCA made an error of law in its final decision to reissue a National Pollutant Discharge Elimination System (NPDES) permit to ALASD’s wastewater-treatment facility because the agency failed to comply with the requirements of federal regulation 40 C.F.R. § 122.44(d)(1) (2006). We agree.
The Environment Protection Agency (EPA) promulgated 40 C.F.R. § 122.44(d)(1) under the Clean Water Act (CWA). 33 U.S.C. §§ 1251-1387 (2006). The CWA’s objective is “to restore and maintain the chemical, physical, and biological integrity of the Nation’s waters.” Id. § 1251(a). Under the CWA, point sources that discharge pollutants (effluent) into waters must have a permit. Id. § 1311 (defining general requirements for effluent limitations); Minn. R. 7001.1020, subp. 23 (2005) (defining “point source” as a discernible, confined, and discrete conveyance from which pollutants may be discharged). The CWA gives states the authority to implement the NPDES Program. 33 U.S.C. § 1251(b) (citing to 33 U.S.C. § 1342 that provides requirements for issuance of NPDES permits for discharge of pollutants).
The CWA requires states to establish water-quality standards sufficient to “protect the public health or welfare, enhance the quality of water and serve the purposes of [water pollution prevention and control].” Id. § 1313(c)(2)(A). A state’s water-quality standards must be established “taking into consideration [each body of water’s] use and value for public water supplies, propagation of fish and wildlife, recreational purposes, and agricultural, industrial, and other purposes, and also taking into consideration their use and value for navigation.” Id. Each state must identify those waters within its boundaries that are impaired under the CWA. Id. § 1313(d)(1)(A).
There are two kinds of water-quality standards, numeric or narrative, which states must apply for the purpose of listing a body of water as impaired and for taking corrective action. 40 C.F.R. § 130.7(b)(3) (2006); Minn. R. 7050.0150, subp. 2 (2005). Using a narrative standard, MPCA listed Lake Winona, a Class 2 body of water, as impaired due to excessive phosphorus. See Minn. R. 7050.0200, subp. 3 (2005) (defining “Class 2 waters” as those capable of supporting “aquatic life and recreation”); Minn. R. 7050.0150, subp. 3 (2005) (defining the narrative standard for Class 2 bodies of water, including that there be “no material increase in undesirable slime growths or aquatic plants, including algae”).
Our analysis turns on the meaning of the words in 40 C.F.R. § 122.44(d)(1) within the overall context and purposes of the CWA. When a decision turns on the meaning of words in a regulation it is a question of law, that we review de novo. In re Cities of Annandale and Maple Lake NPDES/SDS Permit Issuance for the Discharge of Treated Wastewater, (“Annandale”), 731 N.W.2d 502, 515 (Minn. 2007). When interpreting a regulation, we look to see whether it is unambiguous; if so, we give no deference to the agency’s interpretation. Id. at 515-16. A regulation is ambiguous if it is susceptible to more than one reasonable interpretation. Id. at 517. Whether a regulation is ambiguous depends on the meaning assigned to the words or phrases according to the regulation’s overall purpose, rather than a reading of those words or phrases in isolation. Id.
We defer to an agency’s interpretation of a regulation if the agency is legally required to enforce and administer the regulation, the regulation is ambiguous, and the agency’s interpretation is reasonable. Id. at 516. In determining whether an agency’s interpretation is reasonable, we consider the agency’s expertise and special knowledge. Id. A regulation’s complexity alone does not make it ambiguous. See Reinsurance Ass’n of Minn. v. Johannessen, 516 N.W.2d 562, 564 (Minn. App. 1994) (providing that an insurance policy is not ambiguous because of its complexity), review denied (Minn. Aug. 24, 1994); (Pauley v. BethEnergy Mines, Inc., 501 U.S. 680, 706, 111 S. Ct. 2524, 2539 (1991) (Scalia, J., dissenting) (“The disputed regulatory language is complex, but it is not ambiguous. . . .”).
Here, it is undisputed that MPCA is legally required to enforce and administer 40 C.F.R. § 122.44(d)(1), which requires each NPDES permit to include conditions necessary to achieve water-quality standards. Under state and federal law, MPCA is the Minnesota agency charged with enforcing and administering the CWA and regulations promulgated by the Environment Protection Agency (EPA). Minn. Stat. § 115.03, subds. 1, 5 (2006); 40 C.F.R. § 123.25(a) (2006); see also Annandale,731 N.W.2d at 516 (holding that a federal regulation that a state agency is charged by state and federal law with day-to-day responsibility for enforcing and administering is properly characterized as and qualifies as the agency’s own regulation). Therefore, we treat 40 C.F.R. § 122.44(d)(1) as MPCA’s own regulation in determining whether to defer to MPCA’s interpretation of the regulation.
To determine if 40 C.F.R. § 122.44(d)(1) is ambiguous in the context of the CWA, “we must begin with the language of the regulation itself.” Id. at 517. The regulation provides that:
each NPDES permit shall include conditions meeting . . . [w]ater quality standards and State requirements: any requirements in addition to or more stringent than promulgated effluent limitations . . . necessary to: (1) [a]chieve water quality standards established under section 303 of the CWA, including State narrative criteria for water quality.
40 C.F.R. § 122.44(d).
40 C.F.R. § 122.44(d)(1)(vi) and (vii) come into play in MPCA’s application of the regulation.
Where a State has not established a water quality criterion for a specific chemical pollutant that is present in an effluent at a concentration that causes, has the reasonable potential to cause, or contributes to an excursion above a narrative criterion within an applicable State water quality standard, the permitting authority must establish effluent limits.
Id. § 122.44(d)(1)(vi). The state water-quality standard for Lake Winona is based on a narrative criterion, and, while MPCA has proposed a change to Minnesota Rules Chapter 7050 to provide for a numeric criterion, the rule has not yet been changed. MPCA concedes that phosphorus discharge from ALASD’s facility causes, has the reasonable potential to cause, or contributes to an excursion above a narrative criterion. Specifically, MPCA acknowledges that the discharge “causes or contributes to the violation of MPCA’s narrative water quality standard for nutrient conditions in Lake Winona.”
There are three options for using narrative criteria to establish effluent limits within NPDES permits. Id. § 122.44(d)(1)(vi). MPCA chose the following option to establish effluent limits within the facility’s reissued permit:
Establish effluent limits using a calculated numeric water quality criterion for the pollutant which the permitting authority demonstrates will attain and maintain applicable narrative water quality criteria and will fully protect the designated use. Such a criterion may be derived using a proposed State criterion, or an explicit State policy or regulation interpreting its narrative water quality criterion, supplemented with other relevant information which may include: EPA’s Water Quality Standards Handbook, October 1983, risk assessment data, exposure data, information about the pollutant from the Food and Drug Administration, and current EPA criteria documents[.]
Id.§ 122.44(d)(1)(vi)(A). Additionally,
When developing water quality-based effluent limits under this paragraph the permitting authority shall ensure that:
(A) The level of water quality to be achieved by limits on point sources established under this paragraph is derived from, and complies with all applicable water quality standards; and
(B) Effluent limits developed to protect a narrative water quality criterion, a numeric water quality criterion, or both, are consistent with the assumptions and requirements of any available wasteload allocation for the discharge prepared by the State and approved by EPA pursuant to 40 C.F.R. 130.7.
Id. § 122.44(d)(1)(vii); see also Id. § 130.7 (2006) (explaining the total-maximum-daily-load development process); Minn. R. 7052.0010, subp. 42 (2005) (defining “[t]otal maximum daily load” as including the sum of the individual waste load allocations for point sources, setting and allocating the maximum amount of a pollutant that may be introduced into a state’s water and still assure attainment and maintenance of water-quality standards); Id., subp. 45 (2005) (defining waste load allocation as the portion of a receiving water’s loading capacity that is allocated to one of its point sources of pollution).
Under the reissued permit, the facility would be allowed a maximum effluent mass load limit of 11.3 kilograms per day (kg/day) for phosphorus, the same limit imposed under the existing permit. The reissued permit allows a monthly maximum average concentration limit of 0.8 milligrams per liter (mg/liter) and an “intervention limit” of 0.47 mg/liter during the interim period, compared to 1.0 mg/liter for the existing permit. During the final period, the reissued permit allows a maximum effluent mass load limit of 5.4 kg/day with a concentration limit of 0.3 mg/liter. Once the total-maximum-daily-load process has been completed, MPCA intends to calculate and impose new daily effluent limits for both the mass and the concentration of phosphorus discharged from the facility.
In its findings of fact pertaining to the reissuance of the permit, MPCA stated that the effluent limits in the reissued permit “are fully consistent and in compliance with applicable state and federal laws and rules, including 40 C.F.R. § 122.44(d)(1).” MPCA asserted that subparagraph (d)(1)(vi)(A) allows it to develop effluent limits based on Minnesota’s “phosphorus rule,” derived from “explicit state policy.” MPCA’s October 2005 fact sheet entitled MPCA Guidance for Issuing NPDES Permits for Discharge to Impaired Waters: Expanding Facilities (October 2005 Guidance).
MPCA’s phosphorus rule provides that when phosphorus discharge to a lake is actually or potentially detrimental to the designated water uses, dischargers must remove phosphorus to the “fullest practicable extent.” Minn. R. 7050.0211, subp. 1a (2005). MPCA asserted that the October 2005 Guidance “states the general policy of the MPCA for implementing [40 C.F.R. § 122.44(d)(1)] as follows: ‘[the federal regulation] has the primary purpose of ensuring that impaired waters are not further degraded before a [total maximum daily load] is complete.’” MPCA argues that its October 2005 Guidance must be read in conjunction with its “interim permitting policy” that addresses how MPCA intends to set effluent limits in NPDES permits for discharges into impaired waters that do not have a total maximum daily load in place.
In modeling the effects of the proposed permit, MPCA’s scientists predicated their work on their understanding that 40 C.F.R. § 122.44(d)(1) requires “freezing of phosphorus mass limits for expanding NPDES permitted facilities that cause or contribute to nutrient impairment in receiving waters.” In an effort to protect the receiving waters from “further degradation,” MPCA froze the permitted mass phosphorus loading from the facility to Lake Winona at 11.3 kg/day until completion of the total-maximum-daily-load process.
To determine the “fullest practicable extent” of phosphorus removal required under its phosphorus rule, MPCA evaluated five scenarios to assess the potential impact of the facility’s expansion: current load, current design flow, currently permitted mass, expanded design flow, and permitted mass freeze. Each scenario calculated the permitted concentration that the facility could discharge while still meeting the permitted mass load of 11.3 kg/day, even though the facility’s actual phosphorus concentration was expected to be 0.3 mg/liter. The study concluded that if the expanded facility continues to have an effluent concentration of 0.3 mg/liter, then the in-lake concentration of phosphorus within Lake Winona will increase. MPCA’s modeling also states that “[i]f the phosphorus concentration of ALASD’s effluent is increased to the maximum allowable concentration at design flow, [MPCA’s] model indicates that the phosphorus concentration of Lakes Winona and Agnes would approximately double.” But MPCA is not concerned about these increases, stating that “since the existing concentration of phosphorus in both lakes is very high, additional phosphorus does not equate to dramatic increase in algal levels.”
MPCA’s reliance on its phosphorus rule and on its October 2005 Guidance and interim permitting policies is misplaced. MPCA’s approach does not comply with 40 C.F.R. § 122.44(d)(1) or the CWA’s purpose to establish and protect the quality of our nation’s waters.
First, the interim and final effluent limits, which MPCA developed as limits representing the “fullest practicable extent” of phosphorus removal under its phosphorus rule, are not “water quality-based” effluent limits within the meaning of 40 C.F.R. § 122.44(d)(1). The “final” limit of 0.3 mg/liter phosphorus concentration is not a water quality-based effluent limit because it was not “derived from” the narrative water-quality standard, as required by subparagraph (vii)(A). Rather, MPCA conducted its modeling with the assumption that the expanded facility would be capable of discharging at under 0.3 mg/liter phosphorus concentration, because the facility’s actual performance result was 0.29 mg/liter phosphorus concentration for the prior three years. Likewise, the 0.3 mg/liter final limit does not comply with the narrative water-quality standard as required by subparagraph (vii)(A). The modeling results show that with a final permit effluent limit of 0.3 mg/liter phosphorus concentration, the in-lake phosphorus concentration within Lake Winona would increase slightly even with the 5.4 kg/day mass load limit for phosphorus allowed by the reissued permit. Id.
Worse yet, the reissued permit’s interim limits of 0.8 mg/liter concentration and 11.3 kg/day mass load would result in a more-than-doubling of the in-lake phosphorus concentration of Lake Winona, confirming that the 0.8 mg/liter concentration does not comply with the narrative water-quality standard. MPCA calculated the 0.8 mg/liter effluent limit as the “worst-case scenario” of effluent concentration if the facility discharged phosphorus up to the 11.3 kg/day mass limit permitted during the interim period. The 11.3 kg/day permitted mass load was merely the mass load limit in the existing permit, which MPCA’s reissued permit allowed the facility to continue until six months after completion of the expanded facility or until total-maximum-daily-load completion. If construction of the expanded facility is delayed, then the effluent discharge of phosphorus will be allowed to continue at these higher limits, thus, further increasing the impaired status of the lake. The increased in-lake phosphorus-concentration levels projected by MPCA’s modeling for both the interim and final permits confirm that the effluent limits do not meet “water quality standards” as required by 40 C.F.R. § 122.44(d)(1). The excess phosphorus concentration, whether it is more than the algae can absorb, will serve to keep the in-lake concentration further removed from attaining the required water-quality goal.
When it reissued the discharge permit to ALASD, MPCA violated federal law because it did not calculate phosphorus effluent limits that MPCA demonstrated “will attain and maintain” the narrative water-quality criteria and “fully protect” the water’s designated uses. See 40 C.F.R. § 122.44(d)(1)(vi)(A). A state may not reissue a permit “[w]hen the imposition of conditions cannot ensure compliance with the applicable water quality requirements.” Id. § 122.4(d) (2006). We conclude that the interim and final effluent limits in the reissued permit for the ALASD facility are not conditions that will ensure compliance with water-quality standards, as required by federal law; those limits are based on what the proposed facility is designed to achieve, rather than what is required for the lakes to attain and maintain water quality.
Second, MPCA’s intent to wait until completion of the total-maximum-daily-load process does not satisfy 40 C.F.R. § 122.44(d)(1). MPCA’s assertion that “40 C.F.R. § 122.44(d)(1) has the primary purpose of ensuring that impaired waters are not further degraded before a [total maximum daily load] is complete” conflicts with the language of the regulation that requires a NPDES permit to set “requirements in addition to or more stringent than promulgated effluent limitations guidelines or standards under [the CWA] necessary to: (1) Achieve water quality standards . . . including State narrative criteria for water quality.” 40 C.F.R. § 122.44(d)(1). Nowhere in the CWA or the regulation itself is it stated or suggested that the goal should be to avoid further degradation of impaired waters; merely holding the line on existing pollution levels is not enough. The regulation requires effluent limits that are “developed to protect a narrative water quality criterion” and “will fully protect the designated use” of the body of water. 40 C.F.R. § 122.44(d)(1)(vi)(A) and (vii)(B).
MPCA incorrectly interprets the regulation as allowing it to defer development of more stringent effluent limitations that will meet water-quality standards until after it completes the total-maximum-daily-load process. See id. § 122.44(d)(1)(vii)(B) (“Effluent limits developed to protect a narrative water quality criterion . . . [must be] consistent with the assumptions and requirements of any available wasteload allocation. . . .”). (Emphasis added.) Because MPCA has not yet completed the total-maximum-daily-load process with its individual waste load-allocation components, MPCA argues that it is not required to set more stringent effluent limits until that process has been completed. The EPA, in its preamble to the rule changes to 40 C.F.R. § 122.44(d)(1), made it clear that MPCA may not wait to set more stringent effluent limits, but that it must do so at the time the permit is issued:
[A]ny effluent limit derived under paragraph (vi) must satisfy the requirements of paragraph (vii). Paragraph (vii) requires that all water quality-based effluent limitations comply with ‘appropriate water quality standards,’ and be consistent with ‘available’ waste load allocations. Thus for the purposes of complying with paragraph (vii), where a wasteload allocation is unavailable, effluent limits derived under paragraph (vi) must comply with narrative water quality criteria and other applicable water quality standards.
National Pollutant Discharge Elimination System, Surface Water Toxics Control Program, 54 Fed. Reg. 23868-01, 23878 (June 2, 1989) (emphasis added).
MPCA further attempts to justify waiting until total-maximum-daily-load completion to establish more stringent effluent limits by arguing that it has incorporated a “schedule of compliance” as a condition in the reissued permit by requiring the facility to “comply with permit conditions which are determined by the MPCA to be consistent with the [facility’s] waste load allocation for phosphorus.” See Minn. R. 7001.0140, subp. 1 (2005) (requiring MPCA to reissue a permit if it determines that the facility “comply or will undertake a schedule of compliance to achieve compliance with all applicable state and federal pollution control statutes and rules”); 40 C.F.R. § 122.47(a) (2006) (“permit[s] may, when appropriate, specify a schedule of compliance leading to compliance with CWA and regulations”). But MPCA misconstrues the meaning of “schedule of compliance.” “[S]chedule of compliance means a schedule of remedial measures including an enforceable sequence of actions or operations leading to compliance with an effluent limitation, other limitation, prohibition, or standard.” 33 U.S.C. § 1362 (17) (2006); Minn. Stat. § 115.01, subd. 16 (2006); see also Black’s Law Dictionary 1319 (8th ed. 2004) (defining “remedial” as an action intended to correct a defect or enforce a substantive right). There is no enforceable sequence of actions in the reissued permit leading to compliance with water quality-based effluent limits. There are no mandated dates by which MPCA must complete the total-maximum-daily-load process or develop effluent limits based on the total maximum daily load it develops. MPCA has not established a schedule of compliance in the permit by simply providing that once Lake Winona’s total maximum daily load is approved, the facility shall comply with permit conditions determined by MPCA to be consistent with the facility’s waste load allocation for phosphorus.
If MPCA had developed effluent limits that “comply with” and “protect” the narrative water-quality standard and that “fully protect” the designated use of the affected lakes, as required by 40 C.F.R. § 122.44(d)(1)(vi)(A) and (vii), then setting a schedule for the facility to comply with those effluent limits to “attain and maintain” the narrative water-quality standard would be an appropriate application of the regulation. Even if MPCA were allowed to wait until completion of the total-maximum-daily-load process before establishing effluent limits that are water quality-based effluent limits within the meaning of the CWA and 40 C.F.R. § 122.44(d)(1), the permit has no date by which the facility would be required to be in compliance with those limits. In addition, by deferring the establishment of more stringent effluent limitations, MPCA has risked that the facility will not be able to comply with effluent limits that are developed after total-maximum-daily-load completion.
We conclude that 40 C.F.R. § 122.44(d)(1), although complex, is unambiguous when viewed in the overall context of the CWA. MPCA’s interpretation of the regulation is not reasonable, and under the circumstances, its application of its phosphorus rule, October 2005 Guidance, and interim permitting policy failed to result in the establishment of effluent limits that are in accord with federal law. But, we are mindful that the regulation allows MPCA some latitude to determine the appropriate procedures for developing water quality-based effluent limits. See National Pollutant Discharge Elimination System; Surface Water Toxics Control Program, 54 Fed. Reg. at 23876, 23079 (stating that under subparagraph (vi) “the permitting authority [may] use any criteria that protect aquatic life and human health”; under subparagraph (vii) “the permitting authority [has] the flexibility to determine the appropriate procedures for developing water quality-based effluent limits”). We note that MPCA has not applied a provision that would have enabled it to establish the required water quality-based effluent limits.
MPCA could “[e]stablish effluent limits using a calculated numeric water quality criterion . . . . derived using a proposed State criterion.” 40 C.F.R. § 122.44(d)(1)(vi)(A). MPCA has proposed a numeric water-quality standard for phosphorus effluent concentration to measure whether its narrative standard for Class A waters such as Lake Winona is being met. The proposed criterion calls for an in-lake phosphorus-concentration limit that is less than what MPCA estimates for Lake Winona’s condition under the reissued permit. Even though the proposed standard has not yet been adopted, MPCA’s regulations require it to use all readily available and reliable data to determine whether a facility’s phosphorus discharge complies with the narrative standard, by measuring the in-lake phosphorus concentration, supported by two indicators measuring the abundance of algae and water clarity. Minn. R. 7050.0150, subp. 5 (2005). If MPCA sets effluent limits based on the proposed numeric criterion, the reissued permit would be substantially more stringent. We do not reach the question of what consideration MPCA should give to this approach on remand.
Reversed and remanded.