The short answer is “yes”, but perhaps not for long.

 On June 23, 2010, the Wisconsin Department of Natural Resources’ (“WDNR”) citizen advisory board approved significant revisions to three rules to regulate the discharge of phosphorus to Wisconsin’s waterways. The result of several years’ work with outside interest groups, these revisions establish numerical standards for point sources and performance standards for non-point sources. Following legislative review, on December 1, 2010, revised chs. NR 102 and 217 which apply to point sources went into effect; and on January 1, 2010, revised ch. NR 151 which applies to non-point sources went into effect.

 On January 3, 2011, newly-elected Governor Scott Walker took office. Among his early concerns, the financial impact on industries and municipalities of compliance with the new phosphorus rules for point sources. Governor Walker initially proposed the rules be substantively rewritten, but subsequently revised that proposal to impose a two-year delay in the effective date of the rules. The two-year delay proposal is now under discussion in the Wisconsin Legislature as part of the Governor’s Biennial Budget bill. At this point, Senate and Assembly leadership are aiming for floor votes on the budget bill in June. So, the new rules are in effect, but the effective date is expected to be delayed. How is that going to work?

 WDNR’s current plans

NR 102 establishes the water quality criteria and NR 217 establishes the procedures for translating those criteria into standards and incorporating those standards into Wisconsin Pollutant Discharge Elimination System (“WPDES”) Permits. WPDES permits are issued for five year terms and, upon reissuance, WDNR incorporates newly-applicable standards or requirements into the reissued WPDES permit. A number of WPDES permits held by municipalities and industrial operations are expiring and due for reissuance. Generally speaking, these fall into two groups: those that are affected by the revised phosphorus rules and those that are not.

1. For WPDES permits that are not affected by the revised rules because they don’t need phosphorus limits or their existing limits won’t change: WDNR’s current plans are to process these applications and reissue the expiring WPDES permits as they ordinarily would.
2. For WPDES permits that are affected by the revised rules because they need phosphorus limits for the first time or their existing limits will change: WDNR’s current plans are to process these applications as far as possible but short of reissuance, with the expectation that the delay in the effective date will be put into place in the next few months. Assuming the delay becomes law, WDNR will reissue these permits on the basis of the phosphorus rules that were in effect before the recent revisions.

What has to happen to put the delay in place?

According to WDNR, two events have to occur for the effective date of the revised rules to be delayed as proposed:

1. First, language delaying the effective date of the revised rules must be enacted into law. The idea currently under consideration is to delay the effective date of the revised phosphorus rules until July 1, 2013.  At this writing, specific language is not publicly available.
2. Second, WDNR must submit and the Environmental Protection Agency (“EPA”) must approve a request to modify the revised phosphorus rules to recognize the delay in the effective date. 

Delaying the effective date is intended to avoid a situation in which EPA steps in to issue federal permits in Wisconsin, based on this scenario: EPA approved the revisions to NR 102 on December 30, 2010. That approval remains in effect unless and until it is revised. If WDNR issues a WPDES permit that should, but does not, incorporate phosphorus limits reflective of the revised NR 102 at this time, EPA could object to it as noncompliant with the Clean Water Act and issue a federal National Pollutant Discharge Elimination System (“NPDES”) permit in its place. That NPDES permit would likely contain phosphorus limits and related requirements more restrictive than WDNR would propose under the revised phosphorus rules.

 It’s an awkward situation at best.

 What happens between now and June 2013?

A lot can happen between now and then, but at least these events are anticipated.

 WDNR expects to use that time to develop guidance that will better explain how the revised phosphorus rules work and how they will impact individual WPDES permittees. While this isn’t likely to satisfy all the concerns that have been expressed about the rules’ impacts, it may help focus the debate.

 At least two other Midwestern states - Minnesota and Ohio - are processing phosphorus rule revisions and may succeed in enacting them. Whatever the outcome in those states, it will inform the process and discussion in Wisconsin.

The dispute in Florida - where environmental advocacy groups sued EPA for failure to address nutrient pollution in Florida and pursuant to consent decree to settle that suit EPA overrode Florida’s process and set federal numerical criteria - will be further along and may provide some more insight on how best to proceed.

 What is in these revised rules?

A lot.  WDNR describes these rule revisions in a memo to the Natural Resources Board for the June 2010 Board Meeting “as part of a comprehensive strategy to address one of the greatest remaining sources of water pollution in Wisconsin – excess nutrients, specifically phosphorus.”

Here are some basic highlights:

Revisions to NR 102 (primarily in NR 102.06) replace the long-standing “narrative standard” with numerical criteria for phosphorus.          

• For 46 specifically identified rivers, the proposed criterion is 100 micrograms per liter (ug/L). 
• For all other streams, unless they are exempted, the proposed criterion is 75 ug/L. 
• For lakes and reservoirs, the proposed criterion ranges from 15 ug/L to 40 ug/L; the lower criterion applies to lakes that support a cold water fishery in the lower portions of the lake; the higher criterion applies to shallow lakes and reservoirs.
• For the open and near shore waters of Lake Superior, the proposed criterion is 5 ug/L; for the open and near shore waters of Lake Michigan (with the exception of a limited segment near the mouth of the Fox River), the proposed criterion is 7 ug/L
• A criterion for a specific river segment or waterbody can be modified by adopting a site-specific rule.

Under NR 217, WDNR will establish “water quality based effluent limitations” (“WQBEL”) for phosphorus to replace the current technology-based phosphorus limitations where the quality of the receiving water requires that level of protection. These may be based on the numerical criteria in NR 102, or on a total maximum daily load (“TMDL”) analysis which takes into account all of the sources of phosphorus discharge into a receiving water and apportions the contribution and reduction required of each point and non-point source.

 Other rule components that WDNR considers to be nationally ground-breaking include the ability to establish compliance schedules of 7 or 9 years, rather than being limited to the 5-year life of a given permit; utilizing annual averaging in place of monthly averaging; and an adaptive management strategy that involves point and non-point sources to a receiving water and a stepped approach to compliance that may include pollution trading as a way of apportioning the phosphorus reduction obligations and costs.

 For more overview information from WDNR, see WDNR’s current Phosphorus Rule Summary and Frequently Asked Questions.

 How did we get here?

The history of phosphorus regulation is long and complex. Here are a few historical reference points and more recent key events:

 Wisconsin has regulated phosphorus discharges since the mid-1970s, following enactment of the Federal Water Pollution Control Act Amendments of 1972 (now called the Clean Water Act) and Wisconsin’s counterpart WPDES program authorization in what is now Chapter 283, Wis. Stats. The first effort was to require municipal and industrial dischargers to the Great Lakes Basin to meet technology-based phosphorus limits of one milligram per liter. These technology-based standards reflected what the technology could accomplish, regardless of the size or quality of the water body that received the discharge. In 1992, the application of technology-based phosphorus limits of one milligram per liter was expanded to apply statewide to municipal and industrial dischargers. 

• In 1998, EPA published the National Strategy for Development of Regional Nutrient Criteria, stating EPA’s intent that all states develop numerical nutrient criteria by 2003 or EPA would step in and do it. 
• On November 23, 2009 a group of environmental advocacy groups filed a 60-day Notice of Intent to sue the EPA Administrator under the Clean Water Act for failure to adopt numerical criteria for Wisconsin. 
• On June 23, 2010, the Natural Resources Board (WDNR citizen advisory board) approved revisions to NR 102 and 217 and sent them to the Wisconsin Legislature for review.
• On July 28, 2010, the Wisconsin Senate Committee on Environment held a hearing on the rule revisions andheard testimony both pro and con.  The supportive testimony cited the impacts of phosphorus and nitrogen on water quality and the years of effort.  The opposing testimony cited concerns about specific rule provisions, but more generally concerns about the costs of compliance. The Senate Committee didn’t object to the rules becoming effective.
• On December 1, 2010, revised NR 102 and 217 became effective.
• On December 30, 2010, EPA approved revised NR 102.
• On January 3, 2011, Governor Walker took office.  Included in the Governor’s Biennial Budget Bill (Senate Bill 27/Assembly Bill 40) was the following proposal: 

SECTION 2930. 283.11 (3) (am) of the statutes is renumbered 283.11 (3) (am) 1. and amended to read: 

283.11 (3) (am) 1. Notwithstanding sub. (1) or (2), and except as provided in subd. 2., the department shall promulgate by rule effluent limitations representing the best available demonstrated control technology, processes, operating methods or other alternatives concerning the discharge of phosphorous if the U.S. environmental protection agency has not promulgated an effluent limitation, effluent standard or prohibition concerning this type of discharge.

 SECTION 2931. 283.11 (3) (am) 2. of the statutes is created to read:

283.11 (3) (am) 2. a. In this subdivision, “region” means the geographic region composed of the states of Illinois, Indiana, Michigan, Minnesota, or Ohio.

 b. The department may not promulgate or enforce any rule establishing an effluent limitation for the discharge of phosphorous if that effluent limitation is more stringent than the effluent limitation for the discharge of phosphorous that is established by any state in the region.

• On March 16, 2011, EPA issued a memorandum titled “Working in Partnership with States to Address Phosphorus and Nitrogen Pollution through Use of a Framework for State Nutrient Reductions”.  Signed by EPA Acting Assistant Administrator Nancy Stoner, the memorandum outlines EPA’s commitment to work with states and stakeholders to expedite nutrient reductions to waterways and includes “recommended elements” of such a state framework. 
• On April 21, 2011, Congressman Cliff Stearns, Chairman of the Subcommittee on Oversight and Investigation, wrote to EPA Administrator Lisa Jackson about the situation in Florida.  Stating “There is significant controversy over the basis for the EPA actions, which overrule Florida’s own process for setting the relevant [nutrient] standards” Congressman Stearns requested detailed information from EPA as to the justification for its actions.

 What’s next?

The full story of WDNR’s revised phosphorus rules has yet to be told. Stay tuned for future Client Alerts as developments unfold.