Pursuant to paragraph 3(a) of the Consent Decree in the above-referenced matter, the U.S. Environmental Protection Agency ("EPA" or "the Agency") provides this second Quarterly Status Report concerning its actions to propose and take final action with respect to regulations under § 316(b) of the Clean Water Act ("CWA").

In the past quarter, EPA has continued to collect data to determine what is an "adverse environmental impact" and what is the "best technology available" to minimize such impacts under § 316(b). On March 18 and 19, 1996, EPA attended a conference on "Managing for Biodiversity" sponsored by the Electric Power Research Institute. At the conference, EPA learned of additional sources of information on aquatic biodiversity and fish population models. EPA is now pursuing these sources. In addition, EPA has begun to analyze four major databases to help define the scope of the regulated community under § 316(b).

On March 7, 1996, the Agency workgroup that is developing the § 316(b) regulations met for an all day conference in Washington, D.C. to review progress on the rule to date and to further refine the regulatory issues for research and data collection. Twenty EPA experts, including biologists, engineers, 316(b) permit writers, an economist, and a lawyer participated in the conference. The Agency has formed three subgroups of these twenty individuals. The subgroups will address: 1) which industries and types of facilities should be the subject of this regulatory proceeding; 2) how to determine an "adverse environmental impact;" and 3) what are the options for "best technology available" to minimize any identified adverse impacts. The subgroups have been meeting regularly during the past month. Their first major task is to develop questions to be included in a survey questionnaire under § 308 of the CWA, which will be sent to facilities that employ cooling water intake structures. The survey results will be used in environmental and economic analyses of the regulatory options for the § 316(b) regulations.

EPA notes that Congress still has not enacted a full year appropriation for the Agency for fiscal year 1996, which began on October 1, 1995. The levels of funding available to EPA under the short term funding measures (continuing resolutions) that have been enacted in this fiscal year are substantially reduced from fiscal year 1995 levels. As EPA reported in the last Quarterly Status Report, EPA employees, including staff working on the § 316(b) regulatory proceeding, were on furlough from November 14 through November 19, 1995 and December 18, 1995 through January 7, 1996 during the broader government shutdowns. Contractor personnel likewise were instructed to stop work during the same period. In addition, a blizzard shut down federal offices in the Washington area, including EPA headquarters, for four days during the week of January 8, 1996. An important effect of these shut downs was a loss of momentum, which magnified the effect of actual time lost. For example, workgroup meetings were canceled, delaying progress on the development of the rule. Also, it was necessary to execute formal documentation to restart contract support, which added to the time lost. EPA will inform the Court and the parties if future furloughs or funding shortfalls make it impossible for the Agency to meet the requirements of the Consent Decree.

The undersigned, James F. Pendergast, is acting Director of the Permits Division of EPA's Office of Wastewater Management. The Permits Division has primary responsibility for discharging EPA's duties under the Consent Decree.



James F. Pendergast