Clean Water Current - January 10
Fourth Circuit Decision Threatens Permit Shield Reliance
In a unanimous decision issued January 4, the United States Court of Appeals for the Fourth Circuit held that narrative water quality standards incorporated by reference into a National Pollutant Discharge Elimination System (NPDES) permit are substantive permit terms, and that permittees must comply with these terms to receive the benefit of the Clean Water Act (CWA) permit shield under section 402(k). The decision, which affirmed a ruling by a federal district court in Ohio Valley Environmental Coalition v. Fola Coal Co., threatens to severely erode the protection afforded by the permit shield and provides a clear path for environmental groups and courts to translate narrative water quality standards into enforceable permit terms.
The 115th Congressional Session opened January 3, focusing immediately on top legislative priorities for the Republican majority, including regulatory reform. The House of Representatives formally elected Speaker of the House Paul Ryan (R-WI) as well as Representative Kevin McCarthy (R-CA) as House Majority Leader and Representative Nancy Pelosi (D-CA) as House Minority Leader; the Senate officially installed Senator Mitch McConnell (R-KY) as Majority Leader and Senator Chuck Schumer (R-NY) as Minority Leader.
Legislative work commenced with Senate votes to approve a budget resolution, and House votes on two pieces of legislation focused on regulatory reform. The first bill, the Midnight Rules Relief Act of 2017 (HR 21), would allow Congress to consider a joint resolution to disapprove multiple regulations that federal agencies have submitted for congressional review, within the last 60 legislative days of a session of Congress, during the final year of a President's term. The second bill, the Regulations from the Executive In Need of Scrutiny Act (HR 26), would require Congressional approval of all major rules issued by Federal Agencies before they could take effect. In addition to this legislative work, the Senate is preparing for hearings on President-elect Trump’s nominees, including his nominee for Administrator of the Environmental Protection Agency, which is expected in the coming weeks.
It seems likely that a regulatory reform package could move quickly in the new Congress. NACWA will be working actively in the coming weeks with Association members and members of Congress to identify responsible reforms that could help municipal clean water utilities meet their environmental and public health obligations.
NACWA joined several California water organizations December 19 to file litigation that challenges EPA’s efforts to impose certain testing requirements for whole effluent toxicity (“WET”) on dischargers without going through the rulemaking process required by the Administrative Procedure Act (APA). EPA has pressured state agencies to adopt the Test of Significant Toxicity (TST), although the applicable regulations do not identify TST as an acceptable methodology, and despite the fact NACWA and other stakeholders have raised significant technical questions about the validity of TST.
The litigation will directly challenge the TST, the use of which will result in an increased cost to members to undertake the additional replicate samples necessary to reduce the likelihood of being found in violation; an increased frequency of false failures in toxicity testing; and, as a result, a higher alleged incidence of noncompliance with NPDES permits, potentially resulting in civil and even criminal liability. Furthermore, the litigation will underscore that rulemaking without notice and comment violates the APA, stifles public participation, and harms Publicly Owned Treatment Works (POTWs) as well as the public in general.
NACWA is concerned that once the TST is used in California POTW permits, it will be more broadly applied in other states. NACWA’s participation provides a national perspective on the concerns over the use of the TST method, the way unpromulgated guidance is being imposed, and the implications this case could have on clean water utilities nationwide. For more details on the case, see NACWA’s Litigation Tracking - Southern California Alliance of Publicly Owned Treatment Works v. EPA.
Procter & Gamble and Nehemiah Manufacturing Co. have settled a class action lawsuit involving their Kandoo “flushable” wipes, one of the first such legal settlements in the country. A judge in the Superior Court of California has approved the settlement on a preliminary basis, with a hearing on the final approval scheduled for March 29.
The lawsuit alleged that consumers paid more for the “flushable” wipes, although the wipes do not break apart quickly enough to be considered flushable. The wipes manufacturers deny any wrongdoing in the settlement, but settled the case to avoid litigation. Consumers who purchased wipes in California between March 2010 and December 2016 can get a $1.00 refund per package purchased, up to $10.00 without receipts and up to $50.00 with receipts or other proof of purchase. Prospective refund recipients must fill out a claim form.
Although NACWA was not involved in this lawsuit and is not currently involved in any other legal action, the Association is tracking the multiple lawsuits against manufacturers of “flushable” wipes as part of its Toilets Are Not Trashcans campaign. This settlement is an important victory for consumers of wipes, and another step towards improvement in the marketing and labeling of wipes.
In today’s Federal Register, EPA is publishing a Notice of Funding Availability (NOFA) for applications for credit assistance under the Water Infrastructure Finance and Innovation Act (WIFIA) program. The NOFA notifies stakeholders of funding availability and solicit Letters of Interest from prospective borrowers seeking credit assistance from EPA. It also establishes relative weights for the selection criteria and outlines the process that prospective borrowers must follow to be considered for WIFIA credit assistance.
As outlined in the NOFA, prospective borrowers may submit letters of interest from January 10 until midnight on April 10.
The Further Continuing and Security Assistance Appropriations Act, enacted in December 2016, provided $17 million in budget authority and $3 million for program administration to EPA for the WIFIA program. The budget authority covers the federal government's anticipated cost of providing a much larger amount of credit assistance. The EPA estimates that current budget authority may provide more than $1 billion in credit assistance and may finance over $2 billion in water infrastructure investment.
Additional information on the WIFIA program, including a copy of the Notice of Funding Availability and more information on the application process, is available at https://www.epa.gov/wifia. Please feel free to forward this notice to interested state and local officials.
NACWA’s Air Quality Workgroup will discuss EPA’s proposed updated National Emissions Standards for Hazardous Air Pollutants (NESHAP) for publicly owned treatment works (POTWs) during a conference call on January 11. The proposed rule was published in the Federal Register on December 27, 2016, and comments are due on February 27 of this year. EPA has identified six wastewater treatment facilities as subject to the POTW NESHAP.
EPA is gearing up for the start of electronic reporting by biosolids generators subject to the Agency’s biosolids regulations. Starting February, Part 503 filers must use the EPA’s Electronic Reporting Tool (NeT) to electronically submit their Part 503 annual program report to EPA. EPA administers the biosolids program in 42 states, and the agency estimates that this requirement will impact about 4,500 facilities. EPA has started outreach to Part 503 annual report filers by mailing out a postcard with basic information and instructions on how to file their annual program report.
EPA is offering training on the following dates to provide annual report filers an overview of the Biosolids Annual Report and relevant background information. The training will explain key registration and security processes and provide a demo of how to complete the Electronic Biosolids Form.
Biosolids Generators and Preparers Training dates/times:
Utilities must go to EPA’s NeT Zendesk to register for a webinar-based training.
Don’t miss the fourth webinar in the Enabling the Water Resources Utility of the Future (UOTF) Series scheduled for Wednesday, February 1, 1:00 pm - 2:30 pm ET. The webinar will focus on the importance of organizational culture for utilities interested in innovating and moving in the direction of the UOTF. Darren Gore, Director of the Murfreesboro, Tennessee Water and Sewer Department and NACWA Board Member, Leisa Thompson, General Manager for the Metropolitan Council Environmental Services in Saint Paul, MN will provide perspectives on what their utilities are doing in this space. The flyer for the webinar includes more information and a link to register.
The National Stormwater Advocacy Network (NSAN) held a call December 19, 2016 to discuss EPA’s final Phase II municipal stormwater rule and NACWA’s new legal whitepaper on municipal stormwater fees. The Phase II rule, finalized in early December,2016 modifies provisions of general stormwater permits that cover small municipal stormwater systems. The NSAN reviewed key changes made to the final rule from the proposed rule, and it also agreed that tracking implementation of the new rule will be important moving forward.
The group additionally received a presentation on NACWA’s new publication, Legal Considerations for Enacting, Implementing, and Funding Stormwater Programs: Navigating Litigation Floodwaters, which contains information on legal cases challenging municipal stormwater fee programs. The document provides important resources to municipal stormwater utilities on current legal trends impacting fee programs, and it includes suggestions on how to best craft a fee structure that will survive legal challenge.
The Brookings Institute recently released its Investing in Water: Comparing Utility Finances and Economic Concerns Across U.S. Cities report, which looked at how drinking water and clean water utilities across the nation are dealing with economic challenges. The report details a financial analysis of 97 municipal drinking water utilities and, using a handful of economic indicators such as debt-to-asset ratios and changes in Median Household Income, found that many of these utilities are facing a mixed picture in terms of their financial security.
In addition to exploring some of the financial markers of large-sized utilities, the report delved into the thorny issue of affordability as it relates to infrastructure investment. In line with NACWA’s assessment in the Cost of Clean Water Index, the report highlights the consistent rate hikes over the past decade, as well as the intrinsic connection between these rates and affordability challenges for lower-income households.
With forward-looking vision, the report highlights several innovative financing options, including public-private partnerships and “green bonds.” Along with these tools, the report prescribes a “One Water” approach, where drinking water, wastewater and stormwater utilities work in tandem to solve these complex issues. As an example, the report cites the One Water LA 2040 plan, which includes NACWA Member Agency, the City of Los Angeles - LA Sanitation. Overall, the report provides a broad overview of the challenges facing the water sector, as well as proactive suggestions moving forward.
The Congressional Research Service (CRS) released a report on December 30, 2016 summarizing a variety of water infrastructure financing and funding options that were proposed in legislation during the 114th Congress, which wrapped up at the end of 2016. Among the funding sources discussed are additional resources for the state revolving loan funds, advancing a Water Infrastructure Finance and Innovation Act (WIFIA) program, and creation of a clean water trust fund.
The report noted that while there is broad support among multiple stakeholders for additional water infrastructure funding, there are disagreements on the best approach. Although the report summarizes legislative actions during the 114th Congress, it provides a good source of information for continued advocacy on these issues in the new 115th Congress.
NACWA joined with other groups from the water sector and several national environmental activist groups last week, to discuss potential areas of shared interest and collaboration. The meeting, which was organized by the Water Environment Federation (WEF) and American Rivers, focused on areas where the groups could collaborate to advance clean water priorities. Among the areas of discussion were water infrastructure funding and financing, as well as community affordability concerns. There was broad consensus that these topics were priorities for both the water sector and the environmental community, and the groups planned additional discussions going forward.
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