Clean Water Current
May 2026 Regulatory Update
Regulatory Perspectives
Affordability at the Forefront: Re-centering Financial Capability in Clean Water Obligations
For decades, affordability has been an undercurrent in federal Clean Water Act (CWA) obligations—acknowledged, but often secondary to the pressing need for clean water utilities to meet expanding Consent Decree costs and growing water quality requirements. Today, that balance could shift with the U.S. Environmental Protection Agency (EPA) again asking for public input on how effectively the Agency is measuring a community’s financial capability to meet CWA goals.
This moment reflects a growing recognition that clean water protection and household affordability are not competing values, but interdependent ones that must be addressed together to ensure durable progress. Rising compliance costs, aging infrastructure, and declining federal investment have converged to make it increasingly difficult to defend not placing customer affordability at the center of these discussions.
EPA’s announcement was not a full rewrite of the existing guidance, but an opportunity for the stakeholder community to provide thoughtful input on a handful of questions asked by the Office of Water. NACWA submitted comments (see story below for more details) but stressed to EPA they don’t have to reinvent the wheel – simply go back and make some tweaks to the 2020 FCA Guidance that was caught up in the presidential transition. The 2020 FCA Guidance included many aspects that NACWA members support, including a decent job of defining and measuring affordability. It was finalized in early January 2020 but never published in the Federal Register – and was eventually withdrawn during the Biden Administration’s regulatory freeze and review process.
NACWA’s comments stress that affordability is shaped by local economic conditions, cumulative water-related costs, and long-term investment needs. Approaches that rely on static, snapshot metrics that are anchored solely to median income or national poverty thresholds risk obscuring the real and uneven impacts that rate increases have on households—particularly low-income households—over time. Incorporating household-level indicators that better reflect economic stress, alongside supplemental cost-of-living information, would strengthen the FCA framework’s ability to capture true burden without lowering environmental standards.
By contrast, forward-looking tools such as cash flow forecasting offer a more realistic lens, allowing communities to plan compliance in a way that mitigates rate shock while sustaining progress toward water quality goals. Flexibility and transparency in this space are essential—not to delay compliance indefinitely, but to ensure that schedules and expectations are grounded in fiscal reality.
All told, the renewed focus on affordability presents an opportunity to recalibrate how clean water regulations are implemented on the ground. NACWA will continue to have these conversations and advocate for the Agency to re-center its efforts by going back to the 2020 FCA Guidance and making some adjustments.
By: Emily Remmel, Senior Director, Regulatory Affairs
NACWA Urges EPA to Strengthen Affordability Framework in Updated Financial Capability Guidance
NACWA submitted comments to the U.S. Environmental Protection Agency (EPA) on May 26 in response to its request for input on the Clean Water Act Financial Capability Assessment (FCA) Guidance. NACWA’s comments emphasized the need for a more accurate and transparent accounting of the impacts of clean water costs on low-income households and urged a more locally responsive framework for evaluating water affordability. The Association applauds EPA’s new effort to revisit the guidance and encouraged the Agency to use the FCA approach it proposed in 2020 as the foundation for future revisions.
In its comments, NACWA emphasized that affordability pressures on clean water utilities continue to intensify, driven by rising costs and growing infrastructure investment needs, expanding regulatory requirements, and declining federal cost share. NACWA explained that wastewater costs have increased faster than inflation over the past two decades, with many communities already facing significant financial strain. Improving the FCA framework is critical to ensuring utilities can meet Clean Water Act requirements without placing undue burdens on ratepayers.
A central recommendation is to refocus the FCA methodology on impacts to low-income households. NACWA strongly supports reinstating the “Lowest Quintile Residential Indicator” (LQRI) approach from the 2020 proposal, which better captures the financial burden on vulnerable populations compared to current metrics. The comments also call for incorporating cost-of-living considerations into affordability assessments to more accurately reflect economic conditions across different communities.
NACWA urged EPA to provide greater flexibility in implementation schedules for communities facing high compliance costs, emphasizing that financial capability exists along a continuum and should reflect local conditions. The association highlighted the value of cash flow forecasting as a more comprehensive and forward-looking tool for evaluating affordability and mitigating rate shock over time. Finally, NACWA recommended eliminating the Financial Alternatives Analysis requirement, citing concerns that it adds unnecessary complexity and imposes subjective, burdensome requirements on utilities that are beyond the bounds of FCA guidance.
Overall, NACWA underscored that a revised FCA framework must ensure environmental progress while being responsive to local economic realities—ensuring communities continue to invest in critical water infrastructure while maintaining affordability for the households they serve. In the coming months, NACWA will continue to discuss these priorities with EPA’s Office of Wastewater Management. That office will be reviewing comments received from this targeted input opportunity over the summer and fall and hopes to develop and release new draft FCA Guidance for public input before the end of this calendar year.
Contact Kristina Surfus at 202-833-4655, or Emily Remmel at 202-533-1839.
NACWA Responds to PFAS Biosolids Claims in Federal Appeals Court
NACWA filed its brief on May 12 to the U.S. Court of Appeals for the District of Columbia Circuit in litigation brought by the Public Employees for Environmental Responsibility (PEER). The lawsuit seeks to force the U.S. Environmental Protection Agency (EPA) to prematurely regulate certain per- and polyfluoroalkyl substances (PFAS) in biosolids due to their alleged adverse effects on human health and the environment.
PEER is appealing an October 2025 decision from the D.C. District Court upholding arguments made by NACWA and the U.S. Department of Justice (DOJ) that EPA has no mandatory duty to issue limits on PFAS in biosolids as part of its statutory obligation under Clean Water Act (CWA) Section 405(d) to review its biosolids regulations every two years for purposes of identifying potential toxic pollutants.
NACWA intervened early in the case over PEER’s objection to ensure that the public clean water utility perspective was heard in such consequential biosolids litigation. In its appellate brief, NACWA added to arguments made last week by DOJ by outlining for the D.C. Circuit the significant human health and environmental interests at stake, as well as the importance of transparency, sound science and public input to regulatory decisions concerning biosolids that directly impact critical infrastructure and the affordable provision of clean water services nationwide.
Pointing to the plain language found in CWA Section 405(d), extensive judicial precedent, and common sense, NACWA’s brief makes the case that any potential risks posed by PFAS in biosolids must be—and in fact are being—evaluated using EPA’s longstanding risk assessment and regulatory processes. Private parties should not, NACWA argues, be permitted to inappropriately use the CWA’s citizen suit provision to bypass these public processes to the detriment of sound, science-based decision-making.
PEER will have the opportunity to respond to NACWA and DOJ’s briefs, and then a date for oral argument before a yet-to-be-selected three-judge panel will be set for later in the year.
NACWA is being represented by NACWA Legal Affiliate Beveridge & Diamond PC in the litigation. The Association will continue to keep members apprised of developments in the litigation as they occur.
Contact: Amanda Aspatore at 202-833-1450.
NACWA Asks EPA to Reconsider Facility Response Plan Requirements for Hazardous Substances
NACWA asked the U.S. Environmental Protection Agency (EPA) to make changes to its requirements for facilities to develop Clean Water Act Hazardous Substance Facility Response Plans (FRPs) in comments submitted on May 19 in response to the Agency’s advanced notice of proposed rulemaking. EPA published a rule in 2024 requiring FRPs for certain industries, including some clean water utilities, for a “worst-case discharge” of hazardous substances if located within a certain proximity to a water of the United States.
NACWA’s primary recommendation was that the threshold for developing an FRP be changed to maintain focus on the facilities that represent the greatest risks to public health and the environment. EPA had originally proposed a threshold of 10,000 times the reportable quantity for CWA hazardous substances, but in the final rule, EPA changed the threshold to only 1,000 times the reportable quantity. This requires many more facilities to develop FRPs, which places an unnecessary burden on both the facilities and regulators without a commensurate environmental benefit. Read the full story in the Clean Water Current.
Beyond Wipes: International Water Group Considers Flushability of Consumer Products
The International Water Services Flushability Group (IWSFG) met mid-May to discuss the potential of expanding its flushability specifications to consumer products other than wipes. The IWSFG consists of NACWA and other water sector associations from the U.S., Canada, Japan, Australia, New Zealand, and Spain.
The IWSFG previously developed flushability specifications for wipes, which NACWA supports since they are protective of municipal sewer systems and treatment plants. These wipes specifications are gaining traction as an increasing number of wipes manufacturers are providing their test results to the IWSFG, demonstrating that they meet the group’s flushability specifications. Read the full story in the Clean Water Current.
Contact: Cynthia Finley, 202-533-1836.
Regulatory Policy
EPA Office Gathering Feedback on PFAS Concentrations in Soils
In early May, the U.S. Environmental Protection Agency’s Office of Land and Emergency Management (OLEM)—which oversees hazardous waste sites, brownfields, underground storage tanks, and Superfund sites—hosted several stakeholder engagement sessions to gather feedback on the “management of surface soils containing low concentrations of PFAS.” For these discussions, OLEM defined “low concentrations” as levels found in U.S. soil not located near any known PFAS sources.
The sessions welcomed input from states and territories, environmental groups, non-governmental organizations, businesses, tribal organizations, and local governments. However, there were no sessions specifically designed for the agricultural community or clean water agencies that land apply biosolids.
NACWA submitted brief written comments to EPA on May 29 emphasizing the importance of OLEM collaborating closely with the Office of Wetlands, Oceans, and Watersheds within the Office of Water regarding any regulatory policy or guidance that could establish a background acceptance level of PFAS in soils. Such actions could significantly impact biosolids management policies for land application. Read the full story in the Clean Water Current.
Contact: Emily Remmel, 202-533-1839.
NACWA Discusses Forthcoming Nutrient Memo, PFAS Criteria Development with EPA
NACWA met with the U.S. Environmental Protection Agency’s (EPA) Office of Wetlands, Oceans and Watersheds (OWOW) on May 7 to discuss important forthcoming federal actions impacting the clean water sector.
Central to the meeting was an upcoming EPA memo on nutrients, which is expected to outline how nutrient progress is measured – with a particular focus on addressing legacy phosphorus – as well as address the Agency’s continued commitment to states and local communities on ways to finance nutrient reductions. The memo is not expected to outline any new regulatory requirements.
EPA staff also provided NACWA with an update on ongoing criteria development efforts, notably the draft human health water quality criteria for perfluorooctanoic acid (PFOA), perfluorooctane sulfonic acid (PFOS), and perfluorobutanesulfonic acid (PFBS)—three key PFAS compounds at the forefront of EPA’s PFAS OUTreach initiative. Read the full story in the Clean Water Current.
Contact: Emily Remmel, 202-533-1839.