XCEL ENERGY - CLEAN WATER ACT SECTION 404 TRAINING - Davis Graham & Stubbs LLP DGSLAW.COM

XCEL ENERGY – CLEAN WATER ACT SECTION 404 TRAINING

Davis Graham & Stubbs LLP
DGSLAW.COM                                                          1

WHAT TRIGGERS SECTION 404?

 Point Source Discharge
 Of fill material
 Into regulated WOUS
 Most wetlands
 Unless – activity is exempt

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WHAT IS A REGULATED “DISCHARGE OF FILL
               MATERIAL”?

 Point Source – includes shovel, backhoe,
  bucket, dam
 Discharge: Addition of fill material into
  WOUS
      – Ex’s: rock, sand, soil, plastics, construction debris,
        overburden from excavation
      – Excludes trash/garbage, waterborne pollutants
 Has the effect of:
      – Replacing any portion of a WOUS w dry land
      – Changing the bottom elevation of any portion of a
        WOUS
Davis Graham & Stubbs LLP
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WHAT IS A REGULATED “DISCHARGE OF
               DREDGED OR FILL MATERIAL”? (CONT.)

 Movement of fill material (e.g., leveling
  wetland even if elevation of WOUS decreases)
 Excavation generally regulated (“Tulloch
  Rule”), but incidental fallback excluded
 Temporary fills: restored to pre-construction
  contours and elevation
 Sidecasting – typically regulated

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WHAT IS A REGULATED “DISCHARGE OF FILL
               MATERIAL”? (CONT.)
 Release of sediments through dams (Corps
  guidance)
      – Not regulated:
             suspended sediment/upper to middle gates
             Incidental to normal operation
      – Regulated:
             bottom gates
             significant amounts
             Impacts viability/health of downstream system (timing)
      – Focus on effect to downstream
      – NWP 18: < 25 c/yds (PCN > 10 c/yds)

Davis Graham & Stubbs LLP
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WHAT IS A REGULATED “DISCHARGE OF FILL
               MATERIAL”? (CONT.)

 Other utility-related activities
      – Trenching
      – Grading
      – Construction of ROWs
      – Maintenance
      – Stormwater BMPs

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LEGAL CHALLENGES TO ‘SINGLE AND
               COMPLETE PROJECT’

 June 29, 2012 – Sierra Club sues the Corps –
  “improper issuance” of NWP 12 for the 485
  mile Keystone Pipeline Gulf Coast Project
 Over one-thousand water crossings
 Argue:
      o Contrary to General Permit authority under CWA
        section 404(e)
      o Violation of NEPA and the APA

Davis Graham & Stubbs LLP
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LEGAL CHALLENGES TO ‘SINGLE AND
               COMPLETE PROJECT’ CONT.

 Section 404(e) – General Permit for any
  category of activities:
      – Similar in nature
      – Minimal adverse environmental effects when
        performed separately
      – Minimal cumulative adverse effect on the
        environment

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LEGAL CHALLENGES TO ‘SINGLE AND
               COMPLETE PROJECT’ CONT.
 Sierra Club challenge to NWP 12 itself:
      – Definition of “single and complete linear project”
        allows limitless water crossings with no public notice
        and comment
      – NWP 12 allows conversion of forest wetland as
        “temporary” (new in Feb, 2012)
      – NWP allows “piecemealing” of linear projects, but
        prohibits “piecemealing” of non-linear projects
      – Does not challenge the concept of “temporary”
 Relief requested: Declare NWP 12 null and void

Davis Graham & Stubbs LLP
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LEGAL CHALLENGES TO ‘SINGLE AND
               COMPLETE PROJECT’ CONT.
 Ouachita Riverkeeper, Inc v. Bostick (April
  2013)
      – Upholds Corps’ use of NWP 12 for wastewater
        pipeline in Arkansas
      – Forested wetlands: loss of function is not the same as
        loss of waters for acreage calculation
      – All soil removed returned to pre-existing
        contours/elevation
 Significance: for NWP acreage, consider loss of
  function vs. loss of waters & permanent vs.
  temporary

Davis Graham & Stubbs LLP
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ENFORCEMENT OPTIONS

 Broad CWA authority to Obtain Information
          CWA 308 Information Requests
          Broad right of access to inspect
          Agency documents open to the public

– EPA Compliance Orders
          Stop/Restore/Get Permit
          Sackett

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ENFORCEMENT - CIVIL

     Penalties:

     − Administrative:
           −   Class I ($10k/violation up to $25k)
           −   Class II ($10k/vio./day up to $125k) – hearing allowed

     − Judicial
           −   Up to $37,500 per day, per violation (no cap)
           −   Violation begins when dredged or fill material is unlawfully discharged into
               WOUS and continues each day the illegal discharge remains in place
           −   Injunctive relief: restoration/mitigation

     Penalty Criteria/Policy:
     − Seriousness                                   - Economic benefit
     − History of violations                         - Good faith efforts
     − Economic impact of penalty                    - Other matters

Davis Graham & Stubbs LLP
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ENFORCEMENT - CRIMINAL

     Negligent discharge (less severe)
           o Degree of care of ordinary person in same/similar circ.
           o $37,500/day
           o 1 year in prison
     Knowing discharge (more severe)
           o Aware of conduct, not that conduct was illegal
           o [Need $$$]
     Knowing endangerment (most severe)
           o     Up to $250,000
           o     15 years in prison
     False Statement
     “Blacklisting”
           o     EPA designates violator as ineligible for any federal contracts (with
                 any agency)
           o     Affects ability to obtain federal ROWs, sales contracts, grants etc.

Davis Graham & Stubbs LLP
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ENFORCEMENT - CRIMINAL

 Who?
          Person that discharges or causes discharge
          Corporate personnel:
           –     authority to exercise control over the corporation’s activity
                 that is causing the discharge
           –     Not just the CEO (range of responsible corporate
                 employees)
           –     Independent contractors
          Supervisory boards (and the like) may have
           “imputed” knowledge of employees

Davis Graham & Stubbs LLP
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ENFORCEMENT - MOU

− Both EPA and the Corps have statutory authority
  to enforce the 404 Program

− 1989 MOA attempts to clarify the agencies’
  roles:

      • Corps generally takes lead for permit violations

      • EPA generally takes lead for unpermitted violations

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ENFORCEMENT - MOA

− But, under 1989 MOA, EPA has very broad discretion to take lead:
      •   Repeat violators

      •   Flagrant violations

      •   Upon Corps’ recommendation

      •   Upon EPA request!

− Not always clear if or when EPA will assert its enforcement authority

− EPA involvement likely at larger sites, controversial sites or areas, in
  egregious cases, or involving industries under scrutiny (e.g., mountain top
  mining, oil and gas)

Davis Graham & Stubbs LLP
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ENFORCEMENT – PRACTICAL TIPS

 Take proactive steps to promptly resolve with Corps

 Consider voluntary disclosure under EPA Audit Policy

 Identify appropriate mitigation and after-the-fact
  permitting options before approaching either agency

 If EPA gets involved, take immediate steps to avoid
  elevation internally or to DOJ

Davis Graham & Stubbs LLP
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