On April 12, 2019, the Fifth Circuit issued its opinion in Southwestern Elec. Power Co. v. EPA, ordering EPA to reconsider parts of its 2015 Effluents Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category (“2015 ELG Rule”). The opinion resolves a challenge brought by environmental groups regarding the rule’s effluent limitation guidelines for “legacy” wastewater and for combustion residual leachate from landfills or settling ponds.

The 2015 ELG Rule established the Best Available Technology Economically Available (BAT) discharge standards for a variety of wastewater streams from power plants. Under the Clean Water Act, the BAT standards must make reasonable further progress in eliminating pollution and must generally be beyond the prior Best Practicable Control Technology standards (BPT). The BPT standards for the steam electric industry were last set in 1982 and were for the most part based on the use of surface impoundments for settling treatment. For most wastewater streams, the new 2015 ELG Rule set the BAT standard based on either zero discharge or a combination of chemical precipitation and biological treatment. But for “legacy” wastewater (wastewater from five streams generated before a specific date which is to be determined by the facility’s discharge permitting agency) and leachate, the rule continued with its choice of surface impoundments as BAT.

The court found this decision arbitrary for two reasons. First, in the challenged rule itself, EPA acknowledged the inability of surface impoundments to treat certain pollutants, especially soluble ones, and marshalled significant evidence that other technologies could be more effective. Second, the court indicated that “reasonable further progress” from the 1982 BPT required additional treatment technologies beyond settling. Although EPA could conclude that impoundments were not only BPT but also BAT, the court held, it needed to provide a strong and clear justification for the decision.

The court’s decision mandates EPA to rethink its 2015 ELG Rule, but EPA has some flexibility in doing that. For example, EPA can keep the current discharge limits for legacy wastewater and leachate, or it can opt for a new BAT standard. If, however, EPA decides to keep the current standard, it will need to take a hard look at the evidentiary record and its legal theories. The court’s opinion may also make it more difficult for EPA to relax discharge limits for other waste streams now under reconsideration.