The Cost of Clean: Questions & Answers
The following Questions and Answers provide essential background information on wastewater infrastructure's role in the nation's clean water program.
- What do wastewater treatment plants do?
- What are the most common water quality problems or impairments, and where do they come from?
- What is the federal Clean Water Act?
- What role does the CWA play with respect to POTWs?
- What was the Wastewater Construction Grants Program?
- What is the State Revolving Loan Fund (SRF) program?
- What is the Administration's policy for future capitalization of SRFs?
- What does the term “publicly owned treatment works” include?
- What are municipal separate storm sewer systems?
- What are nonpoint sources of water pollution?
- Does EPA regulate nonpoint sources?
- Does EPA regulate animal feed lots?
- What are wet weather sources?
- What makes clean water infrastructure so expensive?
- Is clean water infrastructure a good investment?
- What sewage treatment and collection facilities are required by the CWA?
- How have federal clean water requirements for local governments changed?
- What are the currently estimated clean water infrastructure costs?
- What clean water infrastructure needs did EPA last report?
- How were the needs in The Cost of Clean determined?
- Is The Cost of Clean different from EPA' Needs Survey? How?
- How are replacement costs calculated?
- How are SRF's counted in The Cost of Clean? Why?
- Is EPA conducting a study on the funding gap?
- What information should future needs surveys obtain?
- Are there other estimates of CSO control costs available?
- What are the estimated costs to control sanitary sewer overflows?
- What other public health related water infrastructure costs are confronting local governments?
- What is the present federal funding commitment to safe drinking water facilities?
- If the current funding situation continues, how will the average person be affected?
- What types of federal funding should be provided?
- What is the current federal funding commitment for rural nonpoint sources?
- Is more money a complete solution to achieving appropriate water quality standards?
- How would increased federal funding for clean water infrastructure improve quality of life in America?
- Does the American public support more money for clean water?
Wastewater treatment plants, or publicly owned treatment works (POTWs), treat domestic and industrial sewage to levels that ensure public health and the biological integrity of the waters that receive discharges from these facilities. The end product is highly treated water discharged to water bodies and biosolids, both of which must meet stringent federal standards.
Water quality impairments come in the form of pollution discharged to streams or the destruction of aquatic life habitat. Sedimentation, excess nutrients, and bacteria most commonly impair rivers and streams, according to the U.S. Environmental Protection Agency's (EPA) national survey of water quality, which was reported to Congress last year. Before the Clean Water Act (CWA), pollution problems were most often associated with “point sources,” discharges from heavy industrial facilities and sewage treatment plants. But after almost 30 years of CWA implementation, pollution from these sources is under control. Now, new water quality challenges confront the country. For instance, municipal and industrial stormwater runoff and concentrated animal feeding operations must now meet tough new standards. And in the future, federal, state, and local governments will be turning their attention to difficult-to-control “nonpoint source” water pollution in urban and rural areas caused by runoff from city streets, agricultural fields, timber harvests, road building, pastures or runoff from other rural lands.
The federal CWA, enacted in 1972 as the Federal Water Pollution Control Act, establishes a national program to restore and maintain the quality of the nation's waters. Point sources of pollution are regulated under the Act while state programs for nonpoint sources are subject to federal funding and technical assistance. The CWA authorized states to establish water quality standards, subject to federal review and approval, to protect public health or welfare and improve the quality of the water. These standards are translated into permit limits, which are issued to municipal and industrial dischargers. Under the CWA, discharges to waters of the United States are illegal without these permits, which ensure that the wastewater discharges present no risk to human health and the environment.
POTWs are considered point sources and, therefore, must meet federally approved state water quality standards in their CWA discharge permits, which are issued by EPA or delegated states under the National Pollutant Discharge Elimination System (NPDES). When it was first enacted and for 15 years thereafter, the CWA established and maintained the Wastewater Construction Grants program to help fund the construction of POTWs to comply with federal requirements. The 1987 amendments replaced the grants with the State Revolving Loan Fund (SRF) program.
The Wastewater Construction Grants Program was established in title II of the 1972 CWA as one of two methods — the other, federal regulation — for improving sewage treatment and water quality in the United States. Grant funding was available to local governments for the construction of POTWs with the water treatment technology to meet federal requirements.
The SRF program was established by Congress to replace the Construction Grants Program in the 1987 Amendments to the CWA. States must match the federal capitalization grant with 20 percent in state funds. While it remains a federal grant program, funds are granted to states to provide loans at reduced interest to local government construction of clean water facilities to meet federal CWA requirements. A source of local funds must be available to repay SRF loans which are then added to state funds for making subsequent loans.
The Administration's stated policy is to capitalize the clean water SRFs through federal grants and repayments so that the funds collectively revolve at $2.0 billion in FY1996 dollars. The Administration also seeks to capitalize state safe drinking water SRFs so that they revolve at $500 million annually. EPA management has stated that this goal has been essentially reached but that the Administration will continue to request capitalization appropriations while in office. EPA and other important clean water partners have recognized the importance of beginning a dialogue on future funding.
Under the federal Clean Water Act, POTWs are not just the wastewater treatment plants themselves. They include a wide array of other infrastructure necessary for collecting, transporting and treating wastewater containing domestic or sanitary sewage and sludge or biosolids resulting from the wastewater treatment process. While the term “clean water infrastructure” includes facilities to control combined sewer overflows (CSOs) from combined sanitary and storm sewer systems and separate sanitary sewer overflows (SSOs), these facilities are not considered as POTWs. Both CSOs and SSOs result from storm events, which cause high volumes of water that overflows from older sewage collections systems.
Municipal separate storm sewer systems collect, treat and discharge stormwater generated by rain events. Stormwater control systems are located primarily in urban and urbanizing areas to control flooding and prevent property damage.
Nonpoint sources of water pollution, also called polluted runoff, result from rainfall that runs off the land and into waterbodies. This runoff can carry with it sediments, nutrients, bacteria, chemicals or metals. Nonpoint sources are not conveyed by a pipe and, therefore, are not strictly regulated by CWA discharge permits. Rather, they are diffuse, difficult to control sources of water pollution that run off farmland, pastures, construction sites, parking lots or timberland. Nonpoint source pollution can be diminished by land management practices such as wetlands preservation and construction; careful application of fertilizer and manure to crops; street sweeping; and soil erosion controls.
The Clean Water Act does not authorize EPA to directly regulate nonpoint sources of pollution in rural or urban areas through the use of discharge permits. The regulation of nonpoint source pollution is left to state and local governments under state law. The primary federal approaches to nonpoint sources are cost sharing and technical assistance through the U.S. Department of Agriculture and through EPA-funded state nonpoint programs under section 319 of the CWA. The present Administration's 1995 CWA reauthorization proposals sought legislation for EPA to have backup authority to regulate nonpoint sources where states fail to act.
EPA regulates large feedlots or animal feeding operations (AFOs) as point sources of pollution under the NPDES permit program. The Agency is developing a technology based federal effluent standard for AFOs which would include a set of best management practices based on the number of animals or environmental impacts of the facilities. Small animal feeding operations will be regulated by states as nonpoint sources. Many state legislatures have enacted legislation to bring AFOs under some level of regulation because of widespread concern over the water quality problems associated with large volumes of untreated animal waste from “factory farms.”
Generally, wet weather sources such as CSOs, SSOs, stormwater systems and nonpoint sources are episodic, short-term discharges generated by rainstorm events. CSOs, SSOs and stormwater can be controlled by transport or treatment facilities, best management practices (BMPs) or a combination of both. Nonpoint sources in rural areas can be controlled by the implementation of BMPs such as improved, “no-tillage” practices on agriculture land; buffer strips to prevent polluted runoff and erosion; or wetlands construction.
A variety of factors contribute to the high cost of clean water infrastructure. First, construction of wastewater treatment and transport facilities is heavy construction requiring site preparation, poured concrete and steel structures, and major piping, pump and other hydraulic machinery. Second, treatment facilities particularly require significant technology to use biological, chemical and hydraulic control aspects of sewage treatment based on site-specific characterizations of wastewater and in order to meet water quality standards. Third, wastewater treatment includes treatment and handling of sewage sludge known as biosolids. Fourth, these highly sophisticated facilities require electronic and other related control systems to ensure cost-effective operation and some redundancy of operation to ensure reliability and to protect public health and the environment.
Clean water infrastructure is a necessary public health and environmental investment, and a sound economic investment. Construction of wastewater facilities is among the highest generators of jobs for all infrastructure categories. Each $1 billion in sewer improvements generates over 57,000 direct and indirect jobs. By comparison, total job creation by highway and road construction is estimated to be approximately 34,000, for each $1 billion. In addition to public health and environmental benefits, wastewater facilities provide major contributions to public and private productivity. Research indicates that public investments in these facilities improve: competitiveness for American industry; private profitability; and wages, which in turn yield higher tax revenues to governments.
The Clean Water Act requires POTWs, CSOs, and storm water discharge facilities to meet state water quality standards in order to protect designated uses of water bodies for human health, aquatic life or other beneficial uses. POTWs must at a minimum meet technology requirements defined by EPA regulations as “secondary treatment.” Secondary treatment removes organic matter in wastewater that, if discharged, might lower oxygen levels in receiving waters. CSO's must comply with NPDES permits issued using the guidelines in the EPA CSO Control Policy. These guidelines provide for compliance with nine minimum controls and best professional judgement reviews for best available technology or best control technology. CSOs must also comply with the presumptive approach to meeting water quality standards, defined as the equivalent of primary clarification, or the demonstration approach, plus disinfection. To meet these requirements, local governments owning POTWs or CSOs must construct these facilities.
Initially, EPA required local governments with POTWs to construct and implement “secondary treatment,” which is defined as the best available control technology. This step was costly, but with significant levels of federal grant funding, it resulted in a major nationwide improvement in wastewater treatment and water quality. Over the past decade, regulatory requirements expanded from secondary sewage treatment, to compliance with water quality based treatment requirements at sewage treatment plants; control of CSOs and then SSOs; implementation of BMPs and other controls for stormwater systems to comply with NPDES permits established for stormwater facilities under the 1987 CWA amendments.
Clean water infrastructure costs reported by WEF and AMSA in the 1999 Cost of Clean total at least $330 billion for new facilities including those required to meeting the enforceable requirements of the federal CWA. In addition to this staggering need, local governments must continue to pay for the operations and maintenance of their facilities, which is predicted to rise at an average of 3.8 percent per year over the next 20 years.
EPA's 1996 Needs Survey reported $139.5 billion in wastewater infrastructure needs based on eligible costs under the CWA. On March 18, 1999, however, EPA released preliminary, revised estimates that indicate $199.6 billion in wastewater needs over 20 years. This recent revision substituted $81.9 billion in SSOs reported by the EPA Sewer System Overflow Study for $10.3 billion in previously reported sewer infiltration and inflow correction estimated needs. The Agency currently reports on the following needs: $44.0 billion for remaining secondary treatment and advanced treatment for attainment of water quality standards; $21.6 billion for new collector and interceptor sewers; $44.7 billion for CSOs; and $7.4 billion for stormwater.
Total needs were the sum if three components: (1) EPA's needs estimates from their 1996 Needs Survey, (2) operations and maintenance costs projected over the next 20 years based on historical actual municipal expenditures, and (3) costs to replace aging wastewater infrastructure, which are not counted in EPA's Needs estimates.
Yes, the AMSA/WEF Needs Survey is different from EPA's Needs Survey because EPA's Needs Survey counts only municipal wastewater expenditures that are needed to comply with the Clean Water Act and are eligible for funding under Title VI of that Act. Under this definition of needs, which is mandated by language in the Clean Water Act, EPA does not count most needs to replace infrastructure — particularly collection systems — or needs to operate and maintain wastewater infrastructure. These are real costs that municipalities must pay for.
Wastewater assets were assumed to be replaced once they exceeded their useful lives. Historical data on municipal expenditures for wastewater capital facilities like treatment plants, collection systems, and pumping stations and other fixed assets like vehicles, machinery, and equipment were accumulated into annual values of total capital stock — essentially the value of the nation's wastewater infrastructure. These estimates of capital stocks or capital “assets” were then depreciated by asset class, according to average lives within each class — 50 years for sewers and collection systems, 25 years for treatment facilities, and 10 years for other assets (one 27-year depreciation period averaged across the mix of assets “in the ground” over the past several decades). Annual costs of replacement, then, is equal to annual values of depreciation.
The Cost of Clean estimates investment needs over the next 20 years, independent of the way that any investment might be financed. So, the needs estimate, per se, does not deal with SRF funding, just as it does not deal with any other type of financing like municipal bonds, state grants or pay-as-you go financing of operation costs or capital facilities. However, the AMSA/WEF analysis does examine the historical role that SRF financing has played in helping to meet the overall financing needs of the nation's municipal wastewater systems and has included federal SRF capitalization grants to states in charts that depict the relative role of federal and local financing of wastewater treatment facilities over time.
EPA is conducting a Needs Gap Study which will identify the difference between wastewater facility needs and present expenditures. Recently released preliminary figures suggest that EPA will substantially revise its 1996 needs estimate of $139.5 billion. Most expect EPA's revised figures to approximate the estimates in AMSA and WEF's The Cost of Clean.
EPA's Needs Gap Survey should report on all clean water infrastructure needs from the local government perspective, not just those eligible under the original grants program because local governments and their sewer ratepayers must meet all needs to ensure reliable service as well as compliance with the CWA. The survey should also quantify the funding necessary to reduce nonpoint source pollution, the country's major contributor to water pollution.
The 1996 EPA estimate of CSO needs for 1100 CSO communities is $44.7 billion was based on needs identified in NPDES permits plus needs modeled by EPA. Actual municipal costs to meet the EPA CSO Control Policy may be significantly higher. Moreover, additional costs to meet best available treatment requirements based on best professional judgement reviews, could further expand technology requirements and costs for CSO correction. Some would put total CSO needs at over $100 billion subject to a range of water quality and engineering judgements.
The EPA 1996 Needs Survey puts infiltration and inflow correction costs, to avoid SSOs at $10.3 billion. The 1999 EPA Sewer System Overflow Study revealed that $80.1 billion is needed nationwide to correct SSOs.
The EPA 1998 Needs Survey was conducted on costs to meet the Safe Drinking Water Act. The First Report to Congress for that survey, dated January 1997, reported total 20-year needs of $138.4 billion for transmission and distribution, treatment, storage, source and other costs. The American Water Works Association reported in1998 estimated drinking water facility needs of $325 billion. Moreover, communities must be able to fund other critical infrastructure needs such as schools, roads, parks and transit.
The 1996 Amendments to the Safe Drinking Water Act established a drinking water state revolving fund program and authorized grant funding of $1 billion annually for drinking water facility construction and source water protection.
Sewer bills will rise. Currently, local governments pay 90 percent of the costs for clean water infrastructure. But soon, if the current federal funding policy continues, 95 percent of the costs to meet clean water infrastructure needs for wet weather control and for water quality standards compliance will fall to local communities. These costs will be passed along to citizens in the form of higher bills, which will support the debt incurred by local governments from bonds or SRF loans. The actual federal contribution will be limited to 5 percent in the form of reduced interest on SRF-financed loans and a limited number of targeted grants provided by Congress.
A combination of SRF loans and federal grants for wet weather and other municipal water quality-related infrastructure should be enacted by Congress for the construction of wastewater collection and treatment facilities. The grants program achieved remarkable results. But local utilities have reached the point where they cannot pay more without significantly increasing local wastewater service fees. In light of the enormous needs to meet federally enforceable requirements and high sewer bills across the country, grant funding is necessary. To move the national clean water program forward, grants are not only critical, but they would underscore the nation's commitment to clean water.
Federal funding for implementation of rural nonpoint source control programs best management practices is concentrated in the U.S. Department of Agriculture, the Environmental Protection Agency and the National Oceanic and Atmospheric Administration (NOAA). For the present 1999 fiscal year, the Congress funded these programs at the following levels: Department of Agriculture – the Conservation Reserve Program for BMP implementation by farmers, $1.76 billion and the Environmental Quality Incentives Program, $174 million; EPA – CWA section 319 Nonpoint Source Management Program Grants, $200 million; and NOAA Coastal Nonpoint Program, $17 million. The Administration has requested additional funding for these programs and for Better America Bonds which include nonpoint source funding in the FY 2000 Budget. The 2000 Budget also includes suggested statutory language authorizing states to reserve 20 percent of their clean water SRF programs for 60 percent grants under the CWA section 319 nonpoint program.
In addition to more federal funding, three actions are needed to achieve appropriately protective water quality standards: (1) increased action to control nonpoint sources of pollution including stronger enforceable controls at the state level; (2) increased site-specific biological, chemical and physical data to strengthen scientific appropriateness of water quality standards; and (3) improvements in the cost-effectiveness of treatment and transport technologies and best management practices.
Increased federal funding for clean water infrastructure would move the national clean water program forward and allow local governments to address the next phase of water quality challenges. The funding commitment authorized in the 1972 Clean Water Act allowed POTWs to install secondary treatment, significantly advancing their environmental performance. A return to significant levels of grant funding for local governments' wastewater needs would accelerate implementation of CSO and SSO controls and achieve unprecedentedly high levels of water quality for Americans to enjoy. The resulting benefits to environmental quality, recreation, drinking water sources, and fish and other aquatic life would be felt in communities across the country.
National polls over the years have indicated strong support for more funding for clean water infrastructure. This was most recently reported in the national poll conducted by the Rebuild America Coalition which found that 66 percent of those surveyed favored federal spending on infrastructure as a strong investment in America's future.