ENVIRONMENT

red Andes is a partner with the law firm, Barnes & Thornburg, in their Chicago, IL office. Rich Bozek is manager of environmental programs at Edison Electric Institute in Washington, D.C.

A Plan for TMDLs

A total maximum daily load (TMDL) is the amount of pollutant that a water body can absorb on a daily basis and still meet applicable water quality standards. The types of pollutants and allowable amount of each vary for each water body that is impaired (i.e., does not meet applicable water quality standards). Within the next 5-10 years, many of more than 40,000 TMDLs will be established across the country. To comply within this timeframe, states may need to set TMDLs without adequate data and with little scientific basis. As a result, those subject to this regulation will face stringent new control requirements that may be technically unsound and often not even necessary to meet water quality requirements.

Perhaps no issue arising under the Clean Water Act (CWA) has garnered as much controversy in recent years as the TMDL program. While much of the attention has focused on the possible effects of this program on agriculture and other "nonpoint" sources (such as run-off from roads and parking lots), the TMDL program is also of great consequence to industries and businesses, including the utility sector. However, utilities can reduce or even sometimes avoid the effects of the program by evaluating their own TMDL situations and developing plans that will lead to solutions. These plans can include a number of different steps, including participation in federal rulemakings, interaction with the states in which facilities are located, and participation in stakeholder processes at the local watershed level.

Know the Limitations
Under the CWA, there are two distinct programs that govern utilities and other businesses holding wastewater discharge permits. First, there are effluent limitations guidelines established by the Environmental Protection Agency (EPA), which are developed on an industry-specific basis and set effluent limits based on what certain control technologies can achieve. The second program deals with situations where application of these limits does not result in water bodies attaining the pollutant levels that are specified in state water quality standards. That is where TMDLs come in.

If the state sets a water quality standard for copper of, say, 10 parts per million, and a particular river has an ambient copper level of 15 parts per million, that water is deemed to be impaired, and the state has the obligation to place it on a formal list of impaired waters as developed under Section 303(d) of the CWA.

Then, the state does a TMDL calculation. This involves figuring out all the possible sources of copper to the river, determining what loadings they add each day, and deriving a total daily, current load—for example, 150 pounds of copper per day. Then, using models or other methods, the state determines the total daily loading that it needs to reach in order for the river's ambient level to drop from 15 to 10 parts per million, resulting in attainment of the standard. This number (say, 100 pounds per day) is the "total maximum daily load." The state then divvies up that number among the various sources on the river. For example, a particular powerplant might receive six pounds as its allocated amount. When that plant receives its next wastewater discharge permit, then it will receive a new limit for copper of six pounds per day, which will likely be significantly less than the amount it was allowed to discharge previously.

Costs for Utilities
Listing a river as impaired and developing a TMDL can affect a utility in several different ways. First and most directly, it may have to invest in additional discharge control equipment in order to comply with its new permit limits. Moreover, since TMDLs cover all sources, it is quite possible that the plant will have to comply with the new limits for its discharge of cooling water. The largest use of water by powerplants is for cooling purposes. Since those flows can run into millions of gallons per day, the control systems can be enormously expensive. Some estimates indicate that a single facility faced with treating its cooling water discharges could spend more than $100 million dollars per year in annualized costs, including capital and operation/maintenance expenses. EPA estimates the cost of the TMDL program to range from $1 billion to $3.4 billion on a 10-year basis. Industry analysts estimate costs to be between $20 billion and $80 billion, with costs to utilities estimated at up to $17 billion.

TMDLs' effects on growth for utilities are more indirect but no less substantial. Under the CWA, there is a general policy that if a water body is impaired, new or increased discharges will not be allowed until a TMDL is done and the allowed loading is allocated among the sources. This means that if a powerplant is discharging mercury and the water body is listed for it as well, the facility would not be allowed to increase its discharge of mercury.

Also, the state would not be able to issue a permit to a company seeking to build a new powerplant if that facility were to discharge any level of mercury. These requirements would result in severe restrictions on modifying or expanding operations or building new facilities to meet higher electricity demand.

This drag on growth extends to the utility's customers as well. Any industrial plants or other businesses that send their wastewater to the impaired river will have the same restrictions on new or increased discharges. Also, municipal sewage treatment plants are subject to these restrictions, which the cities will in turn pass on to their sewer users. If growth is not allowed or is severely limited it will of course affect demand for power, resulting in substantial adverse financial impacts to the power facility.

The TMDL program can also have impacts on relations between power providers and their customers. When a river is listed and a TMDL conducted, each of the dischargers will seek to obtain as much as possible of the total loading that is to be allocated among them. Since the allocations will be less than the amounts the facilities are currently allowed to discharge, the allocation will have enormous financial and operational consequences since they will determine whether the facility has to add control equipment and, if so, how much those controls will cost. Therefore, the process by which the state, with input from stakeholders, passes out the allocations will usually involve active participation by the facilities. It is quite possible that these negotiations will pit a utility, seeking the maximum allocation for its facility, against some of its customers, also seeking the best possible allocations.

What to Do and How
Given these possible impacts, it is critical that utilities understand the TMDL program, assess the ways in which the requirements can affect their operations, and take effective actions to reduce or avoid those impacts. The first step in this process is to review the current status of the program, both on the federal level and in the states where the utility's facilities are located. EPA has a set of rules that govern the TMDL program and a series of guidance documents that interpret them. However, a proposal to revise them is due this summer with a final issuance date of April 2003. Until those new rules are adopted and go into effect, states will be issuing 303(d) lists and completing TMDLs using the existing rules and guidance.

Under the current program, states have to submit their next 303(d) lists to EPA by October 1. Many states are working on these lists right now: Some have been issued for public comment, and the rest will be issued in the next few months. Every utility should obtain a copy of this draft list for every state in which it has facilities. (See the sidebar, "303(d) Lists.")

If a water body on which a facility is located has been included on the 303(d) list for a substance that the facility discharges, the next step is to request that the state provide the factual basis for its determination that the water is impaired. The company then can determine if there are problems, technical or legal, with the proposed listing. These problems could include

• not enough data to find an impairment;
• the data are not of good quality;
• the data are too old; and
• the listing is based on failure to meet acceptable levels of water quality that have been determined by the state without going through a rulemaking.

If there are problems, then comments should be submitted to the state for its consideration as it finalizes the list.

It is also important to keep in mind the ongoing work on the TMDL program at EPA. As noted above, the agency is developing new TMDL rules during 2002 and 2003. In addition, EPA is developing guidance on several components of the TMDL program and other related issues, including permitting requirements on impaired waters and issuance of discharge limits and other requirements for mercury sources.

It is clear that the TMDL program will drive much of the regulatory and permitting activity under the CWA for the next several years on the federal and state levels. The program promises to have a substantial impact on electric utilities in terms of increased costs, limits on growth, and stresses in interactions with customers. However, there are actions that can be taken, both at the individual company level and through advocacy efforts, to reduce or avoid those impacts while still ensuring that waters that are truly impaired receive attention.

© 2008 Edison Electric Institute