5 Colo. Code Regs. § 1002-82.14
Background
These changes have been adopted by the Commission to resolve a dispute as to whether the State currently has adequate authority to conduct the full certification required by section 401 of the federal Clean Water Act in connection with federal authorization of any activity that may result in any discharge into state surface waters. The revised language is intended to assure that the State has full authority to conduct the section 401 certifications required by the Federal Act. Language in the previous Statement of Basis and Purpose (2.4.11) that may have indicated more limited authority is hereby overridden.
This dispute arose due to a controversy regarding section 401 certification in connection with issuance of a section 404 permit for a proposed new reservoir project. Along with clarifying the State's intent to conduct the full section 401 certification, these amendments resolve the issue of how water quality standards and conditions are to be applied to the operation phase of water supply projects when conducting such reviews. The purpose of the new and amended provisions in section 2.4.5 is to establish broad authority to address water quality impacts, with a proviso intended to assure consistency with C.R.S. 25-8-104.
The Commission expressly recognizes that the character of a body of water changes from that of a flowing stream to that of a reservoir as the result of an impoundment. It is the intent of the Commission to integrate new state waters which result from impoundments into the existing classification and standards system, as appropriate. Whenever a reservoir is constructed, the Division shall evaluate factors such as the proposed uses and public access to such reservoir, and request that the Commission adopt classifications and standards to protect the uses of the new water body where appropriate.
Control Regulations
At the hearing there was considerable debate whether the Commission should adopt some portion or all of these amendments solely pursuant to the authority in C.R.S. 25-8-202(1) (i.5) (relating to regulations governing 401 certification activities), or rather pursuant to the authority in C.R.S. 25-8-205 (relating to control regulations). In order to help minimize the risk of any legal challenge to these amendments, the Commission has decided to adopt these changes pursuant to the provisions of both sections.
In adopting these amendments, the Commission has considered the factors listed in C.R.S. 25-8-205(2). The amendments and the regulation as a whole are necessary to assure that applicable federally-permitted activities will be in compliance with State water quality classifications and standards, and other water quality control requirements. The regulation does not specify treatment requirements that are automatically applicable to any particular types of discharges. Rather, the regulation relies principally on a list of management practices, monitoring requirements and mitigation requirements (in section 2.4.5) that may be applied in a particular case as necessary to assure compliance with applicable requirements. The inclusion of a wide variety of potential conditions is intended to assure that project-specific conditions can be formulated that will assure compliance with water quality standards and any other applicable requirements (e.g. other control regulations) in the most practical, economically and technically feasible manner available. The Commission believes that the amended regulation is consistent with existing federal water quality control requirements.
The regulation as amended, through the list of potential conditions, provides flexibility to take into account the continuous, intermittent, or seasonal nature of a discharge to be controlled in developing conditions for individual projects. It is the intention of the Commission that these differences be taken into account by the Division in developing such project-specific conditions. Similarly, under the regulation as amended the Division will have flexibility to take into account the presence or absence of dilution flows, and the capacity of the receiving water to assimilate the discharge, in fashioning conditions for a project.
Essentially all of the potential conditions in section 2.4.5 are safety precautions that may need to be taken in specific situations to protect water quality. The need to apply any specific conditions to an individual project to assure compliance with applicable water quality requirements should be assessed by the Division when acting on 401 certification requests.
Emergency Adoption
The Commission finds that the adoption of the amended regulation on an emergency basis is imperatively necessary for the preservation of the public welfare and that compliance with normal notice requirements would be contrary to the public interest. The State has a substantial interest in maintaining its autonomy in establishing and implementing an appropriate water quality control program for Colorado, including the application of water quality standards and other water quality control requirements, especially in view of Colorado's complex, interrelated water quality and water quantity management systems. Expeditious approval of environmentally sound water development projects is an important state interest that should not be left to EPA control.
The public interest in State-rather than federal-water quality control decision-making is evidenced by the legislature's adoption of the Water Quality Control Act, including a specific direction that the Commission adopt regulations to provide for State 401 certification determinations. Because there is not time to comply with the normal 60-day notice requirement for control regulations, this emergency action has become necessary to assure full and appropriate State decision-making with respect to two or three major water supply projects currently in the permitting process. There is a substantial public welfare interest in avoiding the uncertainty and duplication of review that is likely to occur without this emergency action. Substantial time and costs are likely to be associated with dual review procedures and delays in project authorization and construction.
Moreover, it has been argued by some, including EPA, that if control regulations are not adopted on an emergency basis by the Commission, the 401 certification review for these projects will be conducted by EPA and that EPA will have no authority to apply water quality standards to the operational aspects of the projects. Therefore, in view of this legal uncertainty the emergency adoption is necessary to assure that there will be a meaningful and substantive 401 certification review for all aspects of these water supply projects. This requires not only amending the definition of "401 certification", but also adopting appropriate revised and additional provisions to assure an adequate State review.
Specific Amendments
Several non-substantive, editorial changes have been made to make the regulation clearer and more understandable. Among the substantive changes, the definition of "401 certification" has been revised to assure that the State has authority to conduct the full 401 certification required for projects, including addressing the operational phase of projects. The definition of "compliance or comply" has been revised to clarify that while certain temporary exceedences of standards is allowed, there should be certain limits on the extent of such temporary impacts. This is necessary in order for water quality requirements to be applied meaningfully to the long-term operations of projects, as well as to the short-term construction phase to which the regulation originally applied.
The definition of compliance, Section 2.4.4 , and the introductory language of section 2.4.5 have been revised to clarify the Commission's intention that water quality classifications and any other applicable water quality control requirements be complied with (along with effluent limitations and water quality standards) in issuing 401 certifications. The phrase "other water quality control requirements" refers to control regulations or other duly adopted and enforceable regulations. Certain other introductory language in section 2.4.5 also has been revised since the list of potential conditions in that section no longer is limited solely to "management practices."
Language has been added to conditions 3 and 4 in section 2.4.5 to allow these conditions to be applied to the operation phase of projects, as well as the construction phase. New condition 18 provides more general authority for the Division to impose requirements to assure compliance with applicable water quality requirements. The provision provides that the impacts of both the discharge of pollutants and hydrologic modifications may be addressed. There was considerable controversy over the inclusion of "hydrologic modifications," due to the potential impact on water rights. The Commission has addressed this concern by the inclusion of the proviso that any conditions imposed must be consistent with section 25-8-104 of the Water Quality Control Act. There may be hydrologic modification impacts that can be mitigated without materially injuring water rights. The Commission believes that it has a responsibility to assure the maximum practical water quality protection that does not conflict with the provisions of section 25-8-104. Moreover, because of the wide variety of factual circumstances that may exist, the Commission has decided it is preferable at this time to leave the formulation of specific conditions in a manner that is consistent with section 25-8-104 to case-by-case determinations, rather than attempting to address all potential circumstances in this regulation.
New condition 19 also provides important additional flexibility in the section 401 certification process. There may be situations where there would be a lack of compliance with applicable effluent limitations, water quality classifications and standards, or other water quality control requirements, which can not be avoided by imposition of conditions 1 through 18. In these circumstances, without condition 19 the Division would have no alternative but to deny certification, except where denial would be in conflict with Section 25-8-104 of the Water Quality Control Act.
The intent of the language added to the end of section 2.4.7 is to assure that potential certification denials are handled in a manner consistent with section 25-8-104 of the State Act. This recognizes that in some circumstances a project may have water quality impacts that could be mitigated only by being inconsistent with section 25-8-104, and provides that due to section 25-8-104 the 401 certification will not be denied in such circumstances. In such cases, the Division shall identify any such water quality impacts for which mitigation is not being required by the State, due to the State policy established in section 25-8-104, and recognize that this result is in conformance with State policy.
Fiscal Impact
Because a section 401 certification requirement has already been in place under the federal Clean Water Act and because the certification reviews have already been conducted by the Division pursuant to this regulation, no substantial fiscal impact is anticipated from this amendment for most projects. To the extent that the new and revised requirements in section 2.4.5 require monitoring and mitigation of water quality impacts that was not required previously for some projects, these changes could increase project costs for some applicants. However, the Commission finds that such conditions would result in corresponding environmental benefits by assuring compliance with water quality standards. Because of the wide variety of factual circumstances that may occur, it is not possible to quantify either the costs or the benefits at this time. Moreover, since without these conditions in some instances the Division's only alternative would be to deny certification, these new provisions will in such circumstances have a positive economic impact in allowing projects to proceed. To the extent that some aspects of section 401 certification might otherwise have been performed by the Environmental Protection Agency instead of the State, this amendment should reduce the costs of the regulatory process to applicants who would otherwise have to deal with both agencies to obtain 401 certification.
5 CCR 1002-82.14