Urban Water Supply and the Environment: Extending the Reach of Section 404 of the Clean Water Act
By Leonard Shabman and William Cox
INTRODUCTION
In urban areas, the concentration of water use, limitations of space, and quality of locally available water serve as limits on the development of supplies by individual water users. As a result the construction and operation of public waterworks has become a major responsibility of local government. Historically, cities' water utilities have had the legal authority and political support to define their water needs and to build facilities-- including river intake structures, storage reservoirs, and well fields--to meet those needs. Such facilities have drawn on water sources within and outside the city, often requiring a transfer of water across watershed and political boundaries. Facility development proposals, however, have been met by constant opposition from other water users and those affected by construction, but negotiated agreements between opponents and cities have allowed development to proceed. Today, those who oppose these developments on broad environmental grounds have joined more traditional opponents. Meanwhile, the principal venue for expressing opposition has shifted from court-centered water allocation proceedings to local, state, and federal administrative (regulatory) proceedings, principally the Clean Water Act's (CWA) Section 404 permitting process. This Comment will argue that the criteria used in a 404 permit review and the structure of the regulatory decision processes have made it increasingly difficult for cities to negotiate agreements with project opponents over water needs and the size and location of the facilities to serve those needs.
Throughout this Comment we will illustrate this argument with examples from the Commonwealth of Virginia, drawing primarily from the effort of the area north of Hampton Roads (Northside) to develop new water supply capacity. The adequacy of the water supply for the Hampton Roads area was the subject of a congressionally-requested study authorized in 1974. In 1984, the Army Corps of Engineers (the “Corps”) issued a report acknowledging the need for additional water supplies for the Southside and Northside areas. The recommended plan for Southside concurred with the plans of the City of Virginia Beach to transfer water from Lake Gaston through a seventy-six mile long pipeline to serve its needs. After an extended period involving a series of legal challenges, a Section 404 permit was issued for the transfer.
Two proposals to expand supply on the Northside have been made, but neither has secured full regulatory approval. After initially participating in a regional water supply alliance, James City County applied for a permit to build a dam and reservoir on Ware Creek to serve its own customers. The Corps issued a Section 404 permit. The EPA, however, exercised its veto power under Section 404(c) of the CWA to prohibit permit issuance. The EPA's initial veto was based on the unacceptable environmental impacts at Ware Creek and its view that less environmentally damaging alternatives existed and was accompanied by a suggestion that a regional project would be preferable. Judicial review by a federal district court resulted in a decision favorable to the County. On appeal, the Court of Appeals for the Fourth Circuit remanded the case to the EPA to decide if the veto could be based on unacceptable environmental impacts alone because it held that the EPA had not documented the availability of alternative water supplies. The EPA vetoed the project on environmental grounds alone, resulting in another appeal to the district court--and another decision favorable to the County--and ultimately back to the circuit court, which upheld the EPA's authority to exercise its 404 veto power on the basis of unacceptable environmental impact alone.
As shown by subsequent events, the interagency deliberations leading up to the Ware Creek veto led members of the regional water supply alliance to conclude that the regulatory agencies would favor a regional approach to meeting water needs and reducing environmental effects. In fact, during the Ware Creek proceedings, the regional alliance led by the city of Newport News had continued to plan a regional supply to serve several area jurisdictions. After considering alternatives, the alliance applied for a Section 404 permit to build a reservoir on Cohoke Creek in King William County as a central feature of a long-term water supply plan. The application was justified by an analysis showing that the reservoir would be necessary, even though the plan included water demand management, use of fresh ground water, and desalination of brackish groundwater. The Cohoke Creek reservoir would store water diverted during high-flow periods from the Mattaponi River, one of the main headwaters streams of the York River system. The alliance reached an agreement with the host county for location of the project and secured approval from the Virginia Water Control Board (VWCB) after a positive recommendation from the Department of Environmental Quality and later from the Department of Health. As the application was being reviewed in the Section 404 regulatory process, however, project opponents cited unacceptable impacts to wetlands, fisheries, and Virginia's Native American tribal culture. They also questioned the analysis of future water needs and the possible contributions of demand management and alternative supplies in meeting those needs.
The Corps commissioned its own independent study of the region's water supply needs and possible reservoir alternatives. The applicant took that report under advisement and modified the analysis supporting its permit application. In the end, the Norfolk district of the Corps agreed with project opponents and denied the 404 permit. The district argued that the region had not demonstrated an immediate need for additional capacity and, if the capacity was in fact needed, there were alternatives that had fewer potential adverse environmental and cultural effects. After the decision was announced, then-Governor James Gilmore objected to the district engineer's decision and secured a review by the next level of authority in the Corps organization, the North Atlantic Division office. That office overturned the district's decision and approved the permit, subject to the regional alliance securing the remaining state approvals. Final state approval seemed certain, given Virginia's long-standing support for the project. Project opponents persisted, however, and late in 2003 the Virginia Marine Resources Commission (VMRC) concluded that the intake would have possible adverse effects on juvenile shad populations. Therefore, the issuance of a Section 404 permit was inconsistent with the state's coastal zone management plan.
Recent political changes had some impact upon this decision. Appointments made by a new governor, Mark Warner, altered the Marine Resources Commission membership. This change in state executive branch leadership and views toward the project was made clear by Governor Warner's ready acceptance of the VMRC decision, contrasted by the active role Governor Gilmore had taken in asking the Division to review the District Engineer's permit denial. Since that decision was made, the reservoir's proponents successfully challenged the VMRC process in court and have since been granted a formal hearing before the VWBC. If the VMRC reverses its ruling the EPA might well exercise its veto, as it did in the Ware Creek case, given that the EPA supported the district's original decision.
As noted, this case study will be the principal illustration for the subsequent argument regarding changes in water supply decision processes. The next section of this Comment will serve as a summary of the calculations that a city typically employs to define a capacity expansion need and the decision logic used to select a preferred alternative. We will next describe the overall regulatory framework, of which CWA Section 404 is the centerpiece. In particular, we will describe how the “sequencing” and “public interest review” analysis and decision logic used in a Section 404 permit review differ from the analysis and decision logic that cities rely on to make water supply expansion decisions. The Comment will then expand upon the idea that cities traditionally have relied on negotiating agreements with opponents of their water supply plans, but that the Section 404 permitting process makes negotiating agreements on water supply plans increasingly difficult. This Comment will conclude with a reflection on the consequences of Section 404 for the urban water supply investment planning process and decision-making.
In urban areas, the concentration of water use, limitations of space, and quality of locally available water serve as limits on the development of supplies by individual water users. As a result the construction and operation of public waterworks has become a major responsibility of local government. Historically, cities' water utilities have had the legal authority and political support to define their water needs and to build facilities-- including river intake structures, storage reservoirs, and well fields--to meet those needs. Such facilities have drawn on water sources within and outside the city, often requiring a transfer of water across watershed and political boundaries. Facility development proposals, however, have been met by constant opposition from other water users and those affected by construction, but negotiated agreements between opponents and cities have allowed development to proceed. Today, those who oppose these developments on broad environmental grounds have joined more traditional opponents. Meanwhile, the principal venue for expressing opposition has shifted from court-centered water allocation proceedings to local, state, and federal administrative (regulatory) proceedings, principally the Clean Water Act's (CWA) Section 404 permitting process. This Comment will argue that the criteria used in a 404 permit review and the structure of the regulatory decision processes have made it increasingly difficult for cities to negotiate agreements with project opponents over water needs and the size and location of the facilities to serve those needs.
Throughout this Comment we will illustrate this argument with examples from the Commonwealth of Virginia, drawing primarily from the effort of the area north of Hampton Roads (Northside) to develop new water supply capacity. The adequacy of the water supply for the Hampton Roads area was the subject of a congressionally-requested study authorized in 1974. In 1984, the Army Corps of Engineers (the “Corps”) issued a report acknowledging the need for additional water supplies for the Southside and Northside areas. The recommended plan for Southside concurred with the plans of the City of Virginia Beach to transfer water from Lake Gaston through a seventy-six mile long pipeline to serve its needs. After an extended period involving a series of legal challenges, a Section 404 permit was issued for the transfer.
Two proposals to expand supply on the Northside have been made, but neither has secured full regulatory approval. After initially participating in a regional water supply alliance, James City County applied for a permit to build a dam and reservoir on Ware Creek to serve its own customers. The Corps issued a Section 404 permit. The EPA, however, exercised its veto power under Section 404(c) of the CWA to prohibit permit issuance. The EPA's initial veto was based on the unacceptable environmental impacts at Ware Creek and its view that less environmentally damaging alternatives existed and was accompanied by a suggestion that a regional project would be preferable. Judicial review by a federal district court resulted in a decision favorable to the County. On appeal, the Court of Appeals for the Fourth Circuit remanded the case to the EPA to decide if the veto could be based on unacceptable environmental impacts alone because it held that the EPA had not documented the availability of alternative water supplies. The EPA vetoed the project on environmental grounds alone, resulting in another appeal to the district court--and another decision favorable to the County--and ultimately back to the circuit court, which upheld the EPA's authority to exercise its 404 veto power on the basis of unacceptable environmental impact alone.
As shown by subsequent events, the interagency deliberations leading up to the Ware Creek veto led members of the regional water supply alliance to conclude that the regulatory agencies would favor a regional approach to meeting water needs and reducing environmental effects. In fact, during the Ware Creek proceedings, the regional alliance led by the city of Newport News had continued to plan a regional supply to serve several area jurisdictions. After considering alternatives, the alliance applied for a Section 404 permit to build a reservoir on Cohoke Creek in King William County as a central feature of a long-term water supply plan. The application was justified by an analysis showing that the reservoir would be necessary, even though the plan included water demand management, use of fresh ground water, and desalination of brackish groundwater. The Cohoke Creek reservoir would store water diverted during high-flow periods from the Mattaponi River, one of the main headwaters streams of the York River system. The alliance reached an agreement with the host county for location of the project and secured approval from the Virginia Water Control Board (VWCB) after a positive recommendation from the Department of Environmental Quality and later from the Department of Health. As the application was being reviewed in the Section 404 regulatory process, however, project opponents cited unacceptable impacts to wetlands, fisheries, and Virginia's Native American tribal culture. They also questioned the analysis of future water needs and the possible contributions of demand management and alternative supplies in meeting those needs.
The Corps commissioned its own independent study of the region's water supply needs and possible reservoir alternatives. The applicant took that report under advisement and modified the analysis supporting its permit application. In the end, the Norfolk district of the Corps agreed with project opponents and denied the 404 permit. The district argued that the region had not demonstrated an immediate need for additional capacity and, if the capacity was in fact needed, there were alternatives that had fewer potential adverse environmental and cultural effects. After the decision was announced, then-Governor James Gilmore objected to the district engineer's decision and secured a review by the next level of authority in the Corps organization, the North Atlantic Division office. That office overturned the district's decision and approved the permit, subject to the regional alliance securing the remaining state approvals. Final state approval seemed certain, given Virginia's long-standing support for the project. Project opponents persisted, however, and late in 2003 the Virginia Marine Resources Commission (VMRC) concluded that the intake would have possible adverse effects on juvenile shad populations. Therefore, the issuance of a Section 404 permit was inconsistent with the state's coastal zone management plan.
Recent political changes had some impact upon this decision. Appointments made by a new governor, Mark Warner, altered the Marine Resources Commission membership. This change in state executive branch leadership and views toward the project was made clear by Governor Warner's ready acceptance of the VMRC decision, contrasted by the active role Governor Gilmore had taken in asking the Division to review the District Engineer's permit denial. Since that decision was made, the reservoir's proponents successfully challenged the VMRC process in court and have since been granted a formal hearing before the VWBC. If the VMRC reverses its ruling the EPA might well exercise its veto, as it did in the Ware Creek case, given that the EPA supported the district's original decision.
As noted, this case study will be the principal illustration for the subsequent argument regarding changes in water supply decision processes. The next section of this Comment will serve as a summary of the calculations that a city typically employs to define a capacity expansion need and the decision logic used to select a preferred alternative. We will next describe the overall regulatory framework, of which CWA Section 404 is the centerpiece. In particular, we will describe how the “sequencing” and “public interest review” analysis and decision logic used in a Section 404 permit review differ from the analysis and decision logic that cities rely on to make water supply expansion decisions. The Comment will then expand upon the idea that cities traditionally have relied on negotiating agreements with opponents of their water supply plans, but that the Section 404 permitting process makes negotiating agreements on water supply plans increasingly difficult. This Comment will conclude with a reflection on the consequences of Section 404 for the urban water supply investment planning process and decision-making.
