The Texas Commission on Environmental Quality (the “TCEQ”) recently rejected the City of Waco’s challenge to a CAFO permit finding that the City did not have standing as an “affected person” under the Texas Water Code. O-Kee Dairy (“O-Kee”) applied to the TCEQ seeking an amendment to its concentrated animal feeding operation (“CAFO”) permit that would enlarge its cattle head-count, increase its retention control structure (“RCS”) capacity, and increase the number of acres for land application of waste and wastewater. The amendment, if granted, would not only allow O-Kee to increase the size of its operation, but would also require O-Kee to conform to more stringent regulations recently set by the TCEQ in compliance with Environmental Protection Agency (“EPA”) standards.

The TCEQ made a preliminary finding in support of the permit and opened a period of public notice and comment. After the close of the comment period, “affected persons” were allowed to challenge the permit. The City sought to challenge the permit claiming that it was an “affected person” under the Code because it would be “significantly and adversely affected” by O-Kee’s discharges that flowed downstream into Lake Waco.

CAFOs are alleged to be potential contributors to increasing concentrations of phosphorus in the North Bosque River watershed (the “watershed”). O-Kee is located on a segment of the watershed that flows into Lake Waco. Lake Waco provides drinking water for nearly 160,000 people in and near the City. The TCEQ has designated the specific water segment where O-Kee is located as impaired under water quality standards governing nutrients and aquatic plant growth. The impairment stems from high levels of nutrients in the water, namely phosphorus. Significant quantities of phosphorus can cause taste and odor problems in drinking water.

The City argued that the increase in cattle sought by O-Kee would also increase the phosphorus concentrations thereby creating public health problems by affecting drinking water quality. The City also claimed that the increase would cause more manure and wastewater runoff to enter the water and raise the City’s water treatment costs. The TCEQ denied the hearing request because the City did not qualify as an “affected person” under Texas’ Water Code. The City appealed the TCEQ’s decision to no avail. The district court affirmed TCEQ’s decision.

The Texas Court of Appeals for the Third Circuit found substantial evidence in the record to support the lower court’s ruling and affirmed that the City was not an “affected person.” The court found competent evidence that an amendment to O-Kee’s CAFO permit would require O-Kee to conform to more stringent regulations regarding discharges and waste management. For example, O-Kee would have to increase its RCS to hold 12.2 inches of rainfall rather than 7.3 inches. The new regulations also changed application rates for manure and wastewater to be based on phosphorus limits rather than nitrogen limits. Basically, the regulations would reduce amounts of phosphorus discharge and runoff ultimately flowing into Lake Waco. As such, the City failed to substantiate its arguments regarding the adverse affect or the increase of cost purportedly stemming from O-Kee’s increased cattle herd.