Member Pipeline - Regulatory - January 2007 Regulatory Update

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To: Members & Affiliates,
Regulatory Policy Committee
From: National Office
Date: January 9, 2007

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The National Association of Clean Water Agencies (NACWA) is pleased to provide you with the January 2007 Regulatory Update. This Update provides a narrative summary of relevant regulatory issues and actions current to January 9, 2007. Please contact NACWA’s Chris Hornback at 202/833-9106 or or Cynthia Finley at 202/296-9836 or with any questions or information on the Update topics.

Top Stories

Effluent Guidelines Plan Mirrors NACWA’s Comments, Focuses on Emerging Contaminants
EPA’s Final 2006 Effluent Guidelines Program Plan was published in the December 21 Federal Register ( According to the plan, EPA does not intend to revise any existing effluent guidelines in the coming year, but the Agency did identify four industries for study and potential regulation in the future. The Clean Water Act requires EPA to publish this plan every two years. It outlines EPA’s schedule for performing annual reviews of effluent guidelines, and for identifying potential new categories for national pretreatment standards. The Final 2006 Plan includes the results of EPA’s 2006 annual review of effluent guidelines and its initial thoughts on proceeding with the 2007 annual review.

EPA’s decision not to revise any existing effluent guidelines follows the recommendations in NACWA’s November 28, 2005 comments to EPA regarding the Preliminary Effluent Guidelines Program Plan for 2006 ( NACWA stated that no revisions to effluent guidelines and no new national pretreatment standards are required, and that the industries examined in 2006 are appropriately regulated by local pretreatment programs and certification statements. EPA has completed its study of the paper, pulp, and paperboard category and of the tobacco industry, concluding that no new regulations are required. However, EPA plans to continue its study of the steam electric power generating industry in 2007. In its 2005 comments, NACWA stated that revisions to the steam electric power generation effluent guidelines are unnecessary, but “if EPA decides to proceed with a revision, NACWA would recommend that the Agency consider that the prohibition on discharging polychlorinated biphenol compounds (PCBs) be changed to allow for an appropriate concentration limit, in light of the advances in analytical technology that have occurred (and may continue to occur).”

EPA plans to study three additional industries in 2007: the coal mining industry, the coalbed methane industry, and the health services industry. The health services industry study would likely affect publicly owned treatment works (POTWs), since the Agency’s preliminary information shows that nearly all health services discharge to the sewer system. EPA plans to quantify pollutants that it has little information about, such as endocrine disrupting chemicals, pharmaceuticals, and biohazards, as well as pollutants that it has some information about already, such as mercury and silver. Health services facilities that will be studied include hospitals, doctors’ offices, dental offices and laboratories, and veterinary clinics. EPA is currently accepting comments about the 2007 annual review. NACWA will issue more detailed information about the effluent guidelines program plan and will request member input in an upcoming Regulatory Alert.

NACWA Advocacy Results in Decision Not to Regulate Biosolids Incinerators under OSWI
NACWA has learned that EPA will not regulate sewage sludge or biosolids incinerators under the Clean Air Act (CAA) provisions for other solid waste incinerators (OSWI). While the final regulatory decision has not yet been published, NACWA expects the Agency to announce soon that sewage sludge incinerators are not governed by Section 129 of the CAA (covering OSWIs), but will be further regulated under Section 112 governing the safe operation of stationary sources. NACWA submitted comments to EPA on August 14, 2006, reiterating the Association’s long-standing position that sewage sludge incinerators (SSIs) are not subject to regulation as OSWIs under the CAA. NACWA’s involvement in this issue began in 1997, when it commented on an EPA notice of intent to include SSIs as a category of OSWIs regulated by Section 129 of the Clean Air Act. Based largely on information provided by NACWA and its member agencies regarding biosolids incineration and emissions, EPA ultimately excluded SSIs from the final OSWI rule that was published in December 2005. EPA announced in June 2006, however, that it was reconsidering its December 2005 decision in response to a Sierra Club petition, which claimed that EPA had not properly sought comments on its decision to exclude SSIs from Section 129. EPA has now reviewed all of the comments in response to its June 2006 notice and has sent its decision not to regulate SSIs under Section 129 to the White House’s Office of Management and Budget (OMB) for final review. NACWA will alert the membership as soon as the final decision is published.

EPA Proposes Permit Fee Rule, NACWA to Comment
On January 4, 2007 (72 Fed. Reg. 293), EPA proposed a rule to establish financial incentives to encourage states to fund a larger portion of their National Pollutant Discharge Elimination System (NPDES) permit programs through fees ( Assuming an increase in funding for the Section 106 program above the fiscal year (FY) 2006 level ($169 million), the proposed rule would set aside three percent of the FY 2006 state allotment, resulting in a $5.1 million incentive fund. States that collected permit fees of at least 75 percent of the total state NPDES program costs would be eligible to receive an allotment of these incentive funds. Only states that collected 100 percent of total NPDES program costs from permit fees would receive a full share. The rule would take effect in FY 2008, and comments on the proposal are due to EPA by March 5, 2007.

NACWA issued a Regulatory Alert on January 5 ( that contains more details about the proposal and requests member input. NACWA is interested in hearing from members about:

  1. How this incentive program and a move toward increased permit fees would impact member utilities;

  2. To what degree such a move would hinder or benefit municipalities’ relationships with their state counterparts; and

  3. Whether, based on the proposal, this issue is a priority for utilities at the local level.

Please send your responses to the above questions and/or your utility’s comments on the proposal to NACWA’s Counsel, Nathan Gardner-Andrews, at by February 16, 2007.


EPA Expands Data, Adds Wastewater Treatment Category to Water Security Tool
EPA’s Office of Ground Water and Drinking Water has expanded the Water Contaminant Information Tool (WCIT), a secure, online database that provides information about chemical, biological, and radiological contaminants of concern for drinking water and wastewater utilities. The total of 93 contaminants of concern in WCIT includes 45 new contaminants that were added as part of the database’s expansion. EPA also added four new data categories to WCIT: wastewater treatment, drinking water treatment, environmental impacts, and infrastructure decontamination. As the Agency noted in its release, improving the data on WCIT “enables water utilities, public health officials and federal, state and local agencies to better plan for and respond to intentional or accidental contamination events.” Wastewater utilities can access the site but, given the sensitivity of the WCIT data, access to the tool is tightly controlled via password-protection. To apply for access to WCIT, visit EPA’s website at This and other security developments will be discussed at the Security & Emergency Preparedness Committee meeting on Wednesday, January 31, 2007, from 3:45 - 5:30 pm at NACWA’s Winter Conference in St. Petersburg, Fla.

Final Draft Plan for Water Sector Security in Last Stages of Review
The final draft Sector Specific Plan (SSP) for the water sector was sent to the White House for approval on December 8, 2006. The SSP has two primary audiences, the Department of Homeland Security (DHS), which will use the plan to develop programmatic and funding priorities across all sectors, and water sector utility managers, who can use it as an informative tool for their security management programs and planning efforts. The document was targeted for release by the end of 2006, but completion is now expected later this month. The SSP was a joint effort led by EPA with significant input from a Work Group of water/wastewater sector organizations, including NACWA, that are represented on the Government Coordinating Council (GCC) and the Water Sector Coordinating Council (WSCC). The SSP partners explored and developed the sector’s vision, security goals, protective programs, and research priorities, and identified the process through which sector security progress and critical assets are to be measured and prioritized. The Work Group also described in detail the unique characteristics and risk landscapes of drinking and wastewater systems. In late December the WSCC sent a letter supporting the draft final version of the SSP, with the condition that no major changes are made by the White House in its review of the document. NACWA will notify members when the SSP is released in its final form.

Utility Management

NACWA Attends EPA Forum on Watershed Approaches to Utility Management
NACWA participated in a forum December 4-5, 2006 to help EPA examine ways to better facilitate watershed approaches to utility management. Although NACWA was invited to attend the EPA forum as an observer, a number of NACWA’s member agencies were asked by the Agency to participate and present case studies, including the Philadelphia Water Department (Pa.), Sanitation District No. 1 (Ky.), San Antonio Water System (Tex.), Portland Bureau of Environmental Services (Ore.), and Clean Water Services (Hillsboro, Ore.). Participants discussed ways for EPA to promote a holistic, watershed approach to utility management and to assist utilities in making the case for the cost-effectiveness of local and regional watershed approaches. The case studies highlighted the tremendous efforts some communities have made to integrate their efforts to improve water quality. From integrated municipal permits (including all treatment plants and stormwater discharges under a single permit) to planning efforts on a community scale (integrating low impact development and other smart development practices into the daily operations of all municipal departments), it was clear that many NACWA members are already establishing themselves as leaders in this area. A major item of discussion during the forum was the existing barriers and regulatory hurdles that were preventing other communities from taking a similar approach. A final report outlining the forum’s work will be published in the coming weeks and NACWA will make the report available to its members.

GASB Finalizes Statement on Pollution Obligations
The Governmental Accounting Standards Board (GASB) has finalized its Statement No. 49, governing the financial reporting of pollution remediation obligations. NACWA alerted its members to the draft Statement in March 2006 ( and provided comments on the draft on May 19, 2006 ( The standards do not apply to pollution prevention or control obligations with respect to current operations, such as installing additional treatment equipment at a wastewater plant to meet a total maximum daily load for nutrients. Instead, the reporting standards apply to any obligations to address the current or potential detrimental effects of existing pollution by participating in remediation activities, like cleaning up an old hazardous waste spill or removing asbestos. Paragraph 11 of the final Statement outlines the ‘obligating events’ that would trigger reporting.

The final document also contains some example scenarios where the standards would apply, including brownfields remediation, leaking underground storage tank cleanup, water pollution from an abandoned waste dump, and asbestos removal. However, despite NACWA’s request to include additional clarification in the final standard, the applicability of the standards is still somewhat ambiguous for certain scenarios (e.g., clean-up obligations following a sanitary sewer overflow or contaminated property discovered during collection system replacement activities). GASB Statement No. 49 takes effect for all financial statements covering periods beginning after December 15, 2007 and can be ordered online at A question and answer document about the statement is also available online at

Water Quality

NACWA Files Intervention in BEACH Act Case
NACWA filed a motion ( on December 14 to intervene in Natural Resources Defense Council (NRDC) v. Environmental Protection Agency, an important case involving recreational water quality criteria currently pending in the U.S. District Court for the Central District of California. The case concerns EPA’s failure to meet certain milestones established by the Beaches Environmental Assessment and Coastal Health (BEACH) Act requiring the Agency to establish new recreational water criteria. Citing the fact that “EPA’s failure to comply with the BEACH Act has an immediate and substantial impact on NACWA’s member agencies,” the motion said the Association’s interest in the case is “to protect and preserve the interests of its members nationwide.” Furthermore, the motion states that “NACWA’s members have a vital interest in being involved at all stages of regulatory development in order to protect the current and future interests of their constituents,” including the ability to plan appropriately for future financial constraints. Early signs suggest that NRDC may oppose NACWA’s entry into the case. However, NACWA has overcome such opposition in past cases and hopes the court will recognize NACWA’s interest and allow the intervention.

NACWA Files Reply Brief, EPA Releases New Documents Relating to TMDL Case
NACWA submitted a reply brief December 8 to the U.S. Supreme Court in Friends of the Earth v. EPA, responding to a brief filed in November 2006 by EPA opposing review of the case. NACWA’s reply brief reiterates our support for High Court review of the D.C. Circuit ruling that all total maximum daily loads (TMDLs) must be expressed in daily terms only, and challenges EPA’s assertions that the recently issued Agency guidance on TMDLs ( is sufficient to resolve the legal uncertainty created by the D.C. Circuit decision. The NACWA brief states that review is necessary because of the current split between the D.C. Circuit and Second Circuit over the meaning of the word “daily” in TMDLs and because the recent EPA guidance memorandum “fails to resolve the significant legal uncertainty created by the circuit conflict, is contrary to EPA’s existing regulations, and will trigger additional litigation.” The brief further states that EPA’s guidance “exacerbates rather than solves the controversy over the conflict between the circuits,” thus creating a need for Supreme Court review.

NACWA also sent a letter ( to Benjamin Grumbles, Assistant Administrator for EPA's Office of Water, stating that “EPA’s guidance only compounds the ambiguity and does not provide clarity or certainty for the regulated community.” Although EPA is not accepting formal comments on its new guidance, the letter encouraged EPA to review the arguments in NACWA’s reply brief and “give serious consideration to revising the document to make it more comprehensive and helpful to both regulated and regulatory agencies.”

NACWA is supporting its member agency the District of Columbia Water and Sewer Authority (D.C. WASA) in requesting Supreme Court review. The Supreme Court will make a decision whether to review the case on January 12, 2007. A copy of NACWA’s filings in this case may be found on the Litigation Tracker webpage (, including the reply brief (

In addition to its November 2006 guidance on the daily load issue, EPA has also recently released for comment two other documents that provide additional technical justification for EPA’s proposed approach to address the D.C. Circuit’s decision, requiring the development of a ‘daily load expression’ in the TMDL, but not requiring direct implementation of the daily number in NPDES permits:

NACWA Works with EPA on Experts Panel to Guide Recreational Use Criteria Research
NACWA and several member agency representatives met with EPA in December to help define the scope of a March 2007 Experts Workshop and identify key issue areas for the development of new recreational water quality criteria. Many of the stakeholders, including NACWA and several state representatives, discussed with EPA their frustration regarding the Agency’s 1986 criteria for bacteria and the lack of implementation guidance. The timing of EPA’s effort appears to be related to a lawsuit filed in August by the Natural Resources Defense Council (NRDC) over the Agency’s missed deadlines under the Beaches Environmental Assessment and Coastal Health (BEACH) Act for setting recreational water quality standards and for failing to update its 1986 bacteria criteria.

The December meeting did demonstrate, however, that EPA is interested in moving forward with the critical research and policy work needed to develop scientifically sound recreational water quality criteria that can be applied to a wide range of Clean Water Act (CWA) programs and lead to improved protection of human health. Participants generally agreed that the expert panel should consider a range of options, including the possibility of a “toolbox” of multiple criteria and fecal indicators. This toolbox would apply to other CWA applications, including National Pollutant Discharge Elimination System (NPDES) permitting, and allow for different criteria for different water types.

EPA said it does not expect this process to result in a set of consensus recommendations for moving forward, but believes it will help the Agency set its research and criteria development agenda for the next three to five years. Follow-up after the 2007 Experts Workshop will be needed to ensure EPA moves forward with the development of a plan. NACWA views the makeup of the panel of experts at the 2007 Workshop to be critical and has learned that at least one member representative from the NACWA Pathogen Workgroup has been selected to participate. NACWA is now working with EPA to ensure additional municipal representatives are included. EPA expects to formally announce the list of experts soon. Presentations from the December meeting are available on NACWA’s website ( and the Association will alert the membership to any developments on this issue.

New Information Available on Status of State Nutrient Criteria Development
NACWA recently received new information regarding the status of state nutrient criteria development. Four states/jurisdictions – Hawaii, Tennessee, Oklahoma, and the District of Columbia – have completed their criteria and have had them approved by EPA. EPA’s new N-STEPS website ( will soon have additional information on the criteria development progress of other states and information about the various approaches states are using. Some additional information regarding the development of nutrient criteria is available on the Association of State and Interstate Water Pollution Control Administrators’ (ASIWPCA) website (

EPA also recently released its Draft Nutrient Criteria Technical Guidance Manual: Wetlands, giving state and tribal water quality managers guidance for the first time on how to set nutrient criteria for wetlands. The document does not contain specific nutrient criteria for any wetlands in the U.S., but it does present EPA's scientific recommendations on defensible approaches for developing regional nutrient criteria. The draft document and information on providing comments is available on EPA’s website (

EPA Releases Unregulated Contaminant Monitoring Rule for Drinking Water
EPA published its plans for the second Unregulated Contaminant Monitoring Regulation cycle (UCMR 2) in the January 4, 2007 Federal Register (, as required by the 1996 amendment to the Safe Drinking Water Act. EPA will use data collected in the UCMR 2 to determine if additional contaminants require regulation by the Agency. Increasingly, what happens in the drinking water sector impacts clean water agencies and vice versa, as discussed in detail at NACWA’s December 12, 2006 Strategic Watershed Agenda – Action Planning Session. If new contaminants are regulated for drinking water, clean water agencies may also face new requirements for contaminant removal in order to protect drinking water sources. The UCMR 2 cycle will occur from 2008 through 2010, with approximately 4,000 public water systems monitoring their drinking water for 25 unregulated chemicals using five different analytical methods. Analysis of the data will provide EPA with the occurrence of these chemicals and an estimate of the population exposed to the chemicals. More information about the UCMR 2 is available on EPA’s website (

EPA Releases Ecological Benefits Assessment Strategic Plan
EPA released its first Ecological Benefits Assessment Strategic Plan (EBASP), a peer-reviewed plan to evaluate the potential ecological benefits of national environmental policies. According to Benjamin Grumbles, Assistant Administrator for EPA's Office of Water, "this plan will boost environmental protection by advancing knowledge of ecosystem benefits. Understanding the value of a clean stream or a healthy coast informs decisions and improves environmental results." The EBASP was developed by management and staff of several EPA offices, including the Office of Water. The plan aims to “improve Agency decision-making by enhancing EPA’s ability to identify, quantify, and value the ecological benefits of existing and proposed policies.” Ecological benefits are defined as “the contributions to social welfare derived from ecosystems.” The EBASP includes a comprehensive list of actions recommended for improving ecological benefits assessments, as well as a strategy for implementing these actions. More information on EBASP is available on EPA’s website:

EPA Seeks Nominations for Water Quality Trading Awards
EPA is seeking nominations for its Blue Ribbon Water Quality Trading Awards Program. The awards will recognize outstanding leadership in designing or implementing water quality trading programs and policies that have achieved or will achieve environmental and economic benefits. NACWA’s members have made it increasingly clear that these trading programs are becoming more common and important as an innovative method for meeting Clean Water Act requirements. NACWA encourages clean water agencies who are already implementing water quality trading to achieve environmental improvement to seek recognition by applying for this award. The deadline for applications is January 16. More information is available on EPA’s website: