NACWA Regulatory Update June 2007

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The National Association of Clean Water Agencies (NACWA) is pleased to provide you with the June 2007 Regulatory Update. This Update provides a narrative summary of relevant regulatory issues and actions current to June 11, 2007. Please contact NACWA’s Chris Hornback at 202/833-9106 or chornback@nacwa.org or Cynthia Finley at 202/296-9836 or cfinley@nacwa.org with any questions or information on the Update topics.

Top Story

NACWA Meets with EPA on Climate Change, Green Energy Credits
NACWA met with officials from the Municipal Support Division in the EPA Office of Wastewater Management on May 22 to discuss a possible green energy credit program for clean water agencies and how such a program may fit into EPA’s broader water program strategy on climate change. The Municipal Support Division has been working with EPA’s Office of Air and Radiation (OAR) on potentially expanding an OAR program on methane gas reuse for landfills to include wastewater treatment facilities. EPA also may create a green credit market for clean water agencies that reuse methane and decrease their demand for power, making clean water agency credits available to power utilities and others looking to purchase ‘green power.’ Under the plan, clean water agencies already reusing methane would be able to get credit for the work they have done, and EPA would provide additional technical information and assistance to encourage other utilities to begin reusing their methane. While many details of a methane gas reuse program have yet to be addressed, including whether funding will be available for clean water agencies to purchase equipment necessary to use their methane gas for power, it will likely be mentioned in a forthcoming strategy on climate change for the national water program being developed by EPA. NACWA expects a draft of the strategy to be available later this summer for public comment and will alert the membership when it becomes available.

Conferences and Awards

Sustainability, Green Infrastructure to be Focus of NACWA’s 2007 Summer Conference
As utilities look to develop sustainable clean water infrastructure, new ‘green’ options may be a viable choice to complement traditional ‘gray’ infrastructure. NACWA’s 2007 Summer Conference, Sustainable Infrastructure Choices…Gray, Green, & Everything In Between, July 17-20, in Cleveland, Ohio, will focus on the potential improvements green infrastructure can provide. Panel presentation topics include quantifying the costs and benefits of green infrastructure, increasing energy efficiency in wastewater treatment, and collaborating with new partners for green infrastructure success. On Thursday afternoon, conference attendees can choose to golf in the 2007 NACWA Open or attend the Green & Gray Infrastructure Tour. This complimentary Tour will begin at the Ohio & Erie Canal Reservation, a 320-acrea recreation area reclaimed from industrial sites, then continue to the Northeast Ohio Regional Sewer District’s Southerly Wastewater Treatment Plant. The hotel registration deadline of June 26 is approaching, and rooms are filling up quickly. Hotel information and more details about the conference, including the agenda, are available on NACWA’s Meetings and Conferences webpage (http://www.nacwa.org/meetings/07summer/).

Enforcement

NACWA Tracks Fallout from EPA IG Report on Enforcement of Permit Program
NACWA is closely tracking the potential fallout from a new Office of Inspector General (OIG) report released May 15 (http://www.epa.gov/oig/reports/2007/20070514-2007-P-00023.pdf) on EPA’s oversight of the National Pollutant Discharge Elimination System (NPDES) permit program. The report details what OIG describes as ineffective enforcement oversight of major facilities that are in long-term significant noncompliance (SNC) (also see related story on EPA’s new SNC policy for wet weather) with NPDES permit requirements. The OIG reviewed enforcement actions at 56 major facilities, including some wastewater treatment plants, and found that EPA and the states did not take suitable action in many cases, and where action was taken, was often not timely based on EPA’s own guidance. The OIG also cited problems with incomplete or inaccurate records of the enforcement actions that were taken.

EPA’s Office of Enforcement and Compliance Assurance (OECA) reviewed a draft of the report. OECA’s extensive comments, citing significant factual inaccuracies and misinterpretations, are included in the final OIG document. OECA is now required to develop a response to the final report, including a corrective action plan with milestones, and deliver that report to OIG within 90 days. While any action by OECA to more aggressively address SNC may impact clean water agencies, the OIG report also includes a separate recommendation concerning bacteria that may have greater implications for public wastewater utilities. In its review, the OIG noted numerous exceedances of bacteria permit limits. OIG said that if the SNC criteria for conventional pollutants were applied to those exceedances, almost 75 percent of them would have been considered SNC. Since bacteria limits are not currently subject to SNC criteria, these exceedances were not evaluated for the report. The OIG, however, is now recommending that OECA “establish controls allowing EPA leadership to identify significant noncompliance by bacteria-only violators for enforcement action.” NACWA will alert the membership when it learns how OECA plans to respond to the report.

NACWA Comments on EPA Significant Noncompliance Policy for Wet Weather
In related news, NACWA submitted comments (http://www.nacwa.org/getfile.cfm?fn=2007-06-01sncltr.pdf) on June 1 regarding a new version of EPA’s draft Significant Noncompliance (SNC) Policy (http://www.nacwa.org/getfile.cfm?fn=2007-05-17snc.pdf). NACWA previously submitted comments based on member input to the Agency regarding the policy (http://www.nacwa.org/getfile.cfm?fn=2006-11-13epaltr.pdf). Many of the problems identified in these previous comments still exist in the new version of the draft policy. Specifically, NACWA is concerned that permitting authorities need more discretion to consider mitigating circumstances when determining designation of an overflow as SNC. The policy may also duplicate existing National Pollutant Discharge Elimination System (NPDES) permit requirements for wastewater treatment facilities, since many NPDES permits contain overflow reporting requirements. NACWA will be working with EPA in the coming weeks regarding these problems and other issues with the draft policy and will keep the membership informed of any developments.

Facility and Collection Systems

NACWA to Meet With EPA on Financial Capability Issues
Work on NACWA’s guiding principles for financial capability assessments is nearly complete and a meeting with the head of EPA’s Office of Wastewater Management has been set up to discuss the clean water community’s concerns with the Agency’s current approach. NACWA’s guiding principles outline what additional considerations should be made in the course of evaluating a particular community’s ability to pay for an environmental program, and concentrate on the importance of unique local conditions that are sometimes overlooked in EPA’s current, more formulaic approach. The meeting will also provide an opportunity to discuss the recent report from EPA’s Environmental Finance Advisory Board (EFAB), which closely mirrored many of the arguments in NACWA’s guiding principles. EPA will likely decide in the next few months whether to make revisions to its 1997 guidance on assessing financial capability for combined sewer overflow projects, and NACWA believes that together with the EFAB report its guiding principles will demonstrate the need for changes.

Security

Water Sector-Specific Plan Released by EPA and DHS
The Department of Homeland Security (DHS) and EPA recently released the final Critical Infrastructure and Key Resources Sector-Specific Plan (SSP) for Water as input to the National Infrastructure Protection Plan. Billy Turner, NACWA board member and chair of the Water Sector Coordinating Council, issued a Dear Colleague letter describing the relevance and usefulness of the SSP to water and wastewater utilities. The SSP and letter are available on NACWA’s Security Documents webpage (http://www.nacwa.org/advocacy/security/docs.cfm).

The SSP outlines security and emergency response objectives for water and wastewater utilities and identifies four water sector security goals: 1) sustain protection of the public health and environment; 2) recognize and reduce risks in the water sector; 3) maintain a resilient infrastructure; and 4) increase communication, outreach, and public confidence. As established by the SSP, the water sector’s security vision “is a secure and resilient drinking water and wastewater infrastructure that provides clean and safe water as an integral part of daily life.” As the letter from Billy Turner points out, “many initiatives supporting the Water SSP are underway. All of these initiatives are designed to promote the voluntary integration of security and emergency response issues into the day to day business operations of water sector utilities.” NACWA will keep members informed about the progress of these initiatives and other developments regarding water sector security and emergency preparedness.

Water Quality

EPA Issues Policy Memo on Development of Numeric Nutrient Criteria
A May 25 memo (http://www.nacwa.org/getfile.cfm?fn=2007-05-25epa.pdf) from Assistant Administrator for Water Ben Grumbles is attempting to accelerate the development of numeric nutrient criteria by the states. This is the first major policy statement on nutrients since 2001, when EPA gave states additional time to make plans for developing their own numeric criteria (http://www.nacwa.org/getfile.cfm?fn=11-14-01nutrientswqsmemo.pdf). Since EPA published its national nutrient criteria strategy in June 1998 and began developing national criteria, NACWA has expressed serious concerns with the approach EPA chose to derive the criteria values. NACWA encouraged EPA to give states additional time to develop more scientifically-based criteria instead of simply adopting the federal numbers. EPA originally expected states to develop their numeric criteria by the end of 2004, with the expectation that EPA would consider federal promulgation of the criteria if that deadline was not met. But the 2001 policy statement revised the target dates and only asked states to be able to show progress, using a schedule or set of milestones, toward development of nutrient criteria by the end of 2004.

With its May 2007 memo, the Agency notes that state progress has been ‘uneven’ since 2001 and expresses its commitment to ‘accelerating the pace’ for making progress. While the memo makes no mention of federal promulgation and instead highlights the importance of working with the states to help them develop numeric criteria, EPA is still required by section 304(c)(B)(4) of the Clean Water Act to promulgate water quality standards when necessary. NACWA is most concerned that this latest push on the states will force some to abandon their more scientifically-based approaches to criteria development and simply adopt the federal default criteria. NACWA has been discussing this issue with the Association of State and Interstate Water Pollution Control Administrators and will alert the membership to any new developments.

NACWA Provides EPA With Additional Input on Possible Ammonia Criteria Revisions
NACWA members provided significant input in response to a request for additional scientific information on ammonia toxicity and implementation impacts associated with a potential revision to the existing ammonia water quality criteria now under consideration by EPA (see Regulatory Alert 07-03). Over the past few years, EPA has collected additional data and conducted new studies to better characterize the toxicity of ammonia to freshwater mussels. At least one study suggests that EPA’s current criteria may need to be lowered significantly to protect certain mussel species.

In an April 3 meeting with NACWA, EPA asked whether public utilities had any additional information that might help inform EPA’s decision-making process on whether and how to revise the ammonia criteria. NACWA sent a letter (http://www.nacwa.org/getfile.cfm?fn=2007-06-01acltr.pdf) summarizing the member input to the head of EPA’s Office of Science and technology on June 1. The letter highlights several remaining questions regarding the validity of the test protocols used for certain studies, the relevance for western or arid areas where there are fewer or no freshwater mussels, and the myriad implementation problems that would result from a more stringent set of criteria. Many communities are in the midst of planning and/or construction of massive capital projects designed to meet new requirements, including, in some cases, the existing ammonia criteria. The complications that will likely arise from more stringent criteria will be widespread. NACWA will keep the membership informed of any new developments. Should EPA proceed with a revision of the criteria, which seems likely at this point, the new criteria would not be published for approximately one to two years.

Court Decision Will Help Pre-TMDL Clean Water Act Permitting
On May 17, the Minnesota Supreme Court ruled in the case of Cities of Annandale and Maple Lake NPDES Permit Issuance that the Minnesota Pollution Control Agency (MPCA) may use an “offset” analysis when issuing a National Pollutant Discharge Elimination System (NPDES) permit for a new wastewater treatment plant discharging into an impaired water body. The ruling overturns a 2005 decision of the Minnesota Court of Appeals, which held that MPCA could not issue an NPDES permit for the cities to discharge to a water body that does not meet water quality standards. MPCA had issued the permit based on a finding that reductions resulting from upgrades at another nearby POTW would have more than offset the new discharge. The lower court held that consideration of such offsets was improper. The case was appealed to the Minnesota Supreme Court, and NACWA filed a brief in December 2005 at the request of its Minnesota members, supporting the state agency’s interpretation of the federal rule on permitting new discharges. The court’s ruling embraces NACWA’s reasoning and represents a significant victory for ensuring that states have the power to make NPDES permitting decisions that are both equitable and environmentally sound. A copy of the opinion is available on the NACWA website (http://www.nacwa.org/private/littrack/#cities). Additional information is available in Legal Alert 07-03 (http://www.nacwa.org/private/legalalerts/leg07-03.cfm).

Webcast on Nutrient Limited Waters Offered
The Nutrient Scientific Technical Exchange Partnership and Support (N-STEPS) center is hosting a webcast, It’s Not Just Phosphorus That Controls Trophic State in Fresh Waters, 3:00-4:30 pm EST on June 13, 2007. This webcast will discuss changes in the science of nutrient relationships over the last decades and the current concepts about nutrient limited waters. For more information about the webcast, visit http://n-steps.tetratech-ffx.com/NTSChome.cfm.

Miscellaneous

Effective Date for Oil Spill Rules Extended
EPA issued a final rule on May 16 amending the oil pollution prevention regulations under 40 CFR 112.3 to revise requirements for spill prevention, control, and countermeasure (SPCC) plans for non-transportation-related onshore facilities that store oil. For facilities that were in operation on or before August 16, 2002, the rule extends the date to amend their SPCC plan to July 1, 2009, and requires implementation of the amended plan by that date. These provisions will likely not affect POTWs, but there may be a handful of utilities that fall within the purview of the rule. Utilities with significant belowground storage for oil (more than 42,000 gallons) or aboveground storage (more than 1,320 gallons), may be subject to the provisions and required to develop SPCC plans. However, any facility containing oil that is used exclusively for wastewater treatment is specifically excluded from the requirements.