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EPA Studies Financing Strategies to Help Treatment Plants Manage Overflow Rules

CHICAGO--The Environmental Protection Agency is investigating innovative financing options to help wastewater treatment agencies comply with sewer overflow rules, EPA's assistant administrator for water said June 2.

Benjamin Grumbles told leaders of various state and local water treatment agencies that EPA is well aware of the substantial infrastructure improvement costs involved with meeting control policies addressing combined sewer overflows (CSOs) and sanitary sewer overflows (SSOs).

Under the agency's "sustainable infrastructure initiative," he said EPA is examining creative financing tools to help communities access the funds needed for required improvements. Grumbles noted that the Department of Treasury and the Internal Revenue Service are working with EPA on this effort.

"We are in the process of brainstorming and reviewing key proposals about innovative financing," Grumbles said during a water quality compliance conference presented by the Wet Weather Partnership and the National Association of Clean Water Agencies (NACWA).

Grumbles said the infrastructure initiative is focused primarily on the "demand side," which involves policies and system enhancements designed to reduce demand on the nation's existing water treatment infrastructure. But Grumbles said EPA is also investigating options residing on the infrastructure "supply side." Such discussions are focusing on access to capital, removing financial barriers and providing financial incentives for infrastructure improvements. He said the agency would also seek to assess congressional support for such financial programs.

Grumbles did not discuss any specific financial proposals. Neither did the assistant administrator reveal a timeline for releasing an agency plan on such issues.


CSO Control Policy

CSOs occur in communities that have older sewer systems that combine both stormwater and sanitary sewage in the same pipe. These combined systems overflow during wet weather, releasing untreated wastewater into rivers and streams to prevent excess flows from overwhelming treatment facilities. The overflows typically cause the receiving waterways to become contaminated with pathogens and pollutants in violation of water quality standards.
According to NACWA, annual CSO volume is approximately 850 billion gallons. A CSO Control Policy was issued by EPA in 1994. While the policy has helped reduce such occurrences, additional improvements are required. EPA has estimated that $50.6 billion is still needed over the next 20 years to meet the goals of the policy. Similarly, EPA estimates that $88 billion will be needed over the same period to manage SSOs.


Financial Constraints on Smaller Communities

Grumbles said EPA is also sympathetic to the resource constraints on smaller CSO communities. Not only do such communities have special financial problems, but they often require technical support in the development of their long-term control plans.
To assist such communities, Grumbles noted that EPA is developing a "small community affordability analysis." He said the analysis would function similar to the IRS' "EZ" forms for taxpayers with a small, standard list of tax issues.

"This would be a way to respond directly to the concerns of smaller communities about the difficulties and technical challenges of working through the process of long-term control plans," he said. "We are developing a template to aid in the preparation and submittal of CSO planning information to permit writers and regulatory authorities."

Grumbles said EPA has no specific target date for releasing the affordability analysis. He stressed, however, that the project is an important priority for the agency.


'Peak Weather Flows' Policy

With respect to upcoming regulatory proposals, Grumbles said EPA's proposed "peak weather flows" policy would be finalized shortly.
Last December, EPA proposed for public comment a new policy for managing peak flow events resulting from adverse weather conditions at municipal wastewater treatment plants. The policy follows the joint recommendations of NACWA and the Natural Resources Defense Council.

The proposed policy outlines limited circumstances when certain management techniques may be used by municipal wastewater treatment facilities to address such peak flow situations. The policy also specifies how the management of peak flows should be documented in National Pollutant Discharge Elimination System (NPDES) permits.

Grumbles said finalizing the policy is a "front burner" priority for the agency. He said the final product would be released in a few months.


Exemptions for Water Transfers

Grumbles also pointed to the release earlier in the week of a proposed rule exempting certain transfers of water from requirements under Section 402 of the Clean Water Act. He encouraged interested parties to comment on the proposal.
Grumbles said the rule, which was proposed June 1, seeks to codify an agency position expressed in an August 2005 legal opinion. The rule holds that water transfers are excluded from regulation under the NPDES permitting program. The exempted water transfers pertain to any activity that conveys domestic waters to another water body within the United States without subjecting the water to intervening industrial, municipal, or commercial use.

"We issued a proposed codification of that principle yesterday to have an expressed exclusion from the 402 permitting process on water transfers," Grumbles said. "That is going to go through a comment period. It is already getting some provocative comments."



By Michael Bologna