(April 2, 2019) - The U.S. District Court for the District of Montana issued a ruling March 25 in a case brought by environmental groups, which challenged EPA’s approval of Montana’s nutrient variance for municipal dischargers. The variance had been issued to 26 municipalities based on the determination that municipal treatment plants would not be able to afford to meet the Montana’s stringent standards for nitrogen and phosphorus. 

NACWA intervened in the litigation in 2016 to protect the availability of water quality variances nationwide. 

The court made a series of rulings on various aspects of the variance, many of which echo NACWA’s position in the case:

1. The court upheld EPA’s policy that water quality standards can be based on factors other than water quality science, such as cost and attainability.

    

2. The court found that the 2015 variance rule - 40 C.F.R. § 131.14 - “comports with Congress’s intent” and is a permissible reading of the Clean Water Act (CWA), in recognizing that achievement of uses does not always happen immediately.

    

3. The court ruled that EPA’s interpretation of its variance rule to allow consideration of cost – and approval of the Montana variance on that basis – is “reasonable and deserves deference.”This is an important win for the municipal clean water community.

    

4. On the issue of whether the Montana variance was properly founded on a finding of “substantial and widespread economic and social impact,” the court noted that the environmental groups did not challenge the validity of the State’s findings, or of EPA’s determination that those impacts would occur if the variance were not granted.

    

5. On the determination of a “highest attainable condition” (HAC), which places certain interim limits on the municipal dischargers, to apply over the next 17 years, the court noted that the environmental groups did not challenge EPA’s approval of the HAC.

    

6. As to the 17-year time period of the variance, the court found several problems, but its reasoning does not comport with the way variances actually work.

    

   1. First, the court held that the “highest attainable condition” must be the best condition that the discharger can attain at the beginning of the variance period. Therefore, the court held, dischargers cannot be given 17 years to get to that condition – they must meet the HAC (whatever it is) right away.However, this ruling is not supported by the language of the 2015 variance rule.

       

   2. Second, the court held that at the end of the variance, the discharger must be in compliance with the water quality standard.Therefore, the court found that the Montana variance, because it only requires compliance with the HAC limits at the end of the variance period (instead of compliance with the water quality standards) is improper. It is important to note that this is not how variances work – the court seems to be confusing compliance schedules with variances.

       

   3. It appears that in making these rulings as to the variance term, the court was not ruling that the variance itself was illegal, but rather that EPA’s variance rule violates the CWA, because EPA “contradict themselves” on the issue of when the HAC has to be achieved.

       

7. The court finally rejected the environmental group’s claim that the Montana variance functions as a replacement water quality standard that fails to protect designated uses.

The court recognized that there are practical factors that may impede immediate compliance with the variance.  Therefore, the court is asking for guidance from the parties as to timing and scope of remedies to address the issues raised in the ruling.  The parties have been directed to confer in good faith, to try to reach agreement; if they cannot reach agreement, then the parties must submit briefs concerning remedies within 60 days after ruling was issued - by May 24, 2019.  In the interim, the variance is still effective. 

While the ruling was overall very positive for NACWA and the Montana utilities, there is still the need to address the court’s apparent confusion around EPA’s variance rule and how the variance process actually works.  NACWA is conferring with all parties to determine the appropriate next steps and will continue to update membership on developments.  Contact Amanda Waters, NACWA General Counsel, with any questions.