» Clean Water Current Archive

August 2, 2013 

EPA Plans New Financial Capability Framework to Outline Available Flexibility

NACWA met with EPA water and enforcement office staff on Tuesday to discuss the Association’s most recent financial capability paper, The Evolving Landscape for Financial Capability Assessment – Clean Water Act Negotiations and the Opportunities of Integrated Planning , and an upcoming EPA policy statement on financial capability. While EPA stood firm that it will not revise its 1997 financial capability guidance – or move away from its matrix calculations as a baseline for negotiations – the Agency acknowledged that there is a need for clearer direction on the extent to which utilities can supplement, or potentially deviate from, the guidance. The Agency is working on a Financial Capability Framework to further outline the flexibility it believes is available to utilities. The Framework is anticipated to provide additional information on, and justification for, what is affordable. It will also serve as a complement to the Agency’s Integrated Planning Framework. EPA expects to have a draft of the Framework in early September and plans to share it with NACWA at that time. EPA will also be discussing the draft Financial Capability Framework with the U.S. Conference of Mayors at an October meeting and hopes to issue it in final form by the end of the year.

During the meeting EPA indicated that the cash flow forecasting approach laid out in NACWA’s most recent paper will be included in the new Framework as one of the options available to utilities. The Framework is anticipated to rely on the 1997 guidance as the foundation for federal government negotiations; however, EPA acknowledged that many existing consent decrees are based on assessments like cash-flow forecasting, not the 1997 matrix. Examples of where this has been done successfully may be included in the Framework to highlight the flexibility EPA intends to provide. It is hoped that this new Framework will demonstrate that when communities have the knowledge and willingness to offer an alternative approach – they have been, and can continue to be, successful.

NACWA made the point that the flexibility EPA believes is already in its guidance is not really acknowledged ‘out in the trenches’ during real negotiations. The Agency is optimistic that this new Framework – which will be sent to Regional Administrators as a memo from the Office of Water and Office of Enforcement & Compliance Assurance – will help to improve negotiations. NACWA will alert the membership when it receives a copy of the new Financial Capability Framework.

Biogenic Emissions Coalition Discusses Path Forward after Court Vacates Deferral

NACWA met this week with other members of the Biogenic CO2 Coalition to strategize how to move forward in the wake of the July 12 U.S. Court of Appeals for the District of Columbia decision to vacate EPA’s three-year deferral of biogenic greenhouse gas (GHG) emissions from Clean Air Act regulation (see July 19 Clean Water Current article for more information). The court ruled that EPA failed to provide legal justification to support its deferral of GHG permitting requirements for biogenic emissions, but did not close the door on EPA’s authority to finalize its rulemaking.

The Coalition is continuing to draft a petition for rulemaking to ensure the exemption is made permanent – along with an accompanying technical report – to submit to EPA providing data to support such an exemption. Legal and legislative opportunities that could ultimately lead to a permanent exemption for biogenic emissions are also being explored. To help build the case for an exemption, NACWA is obtaining information from its Air Quality Workgroup on the potential impacts of Title V and Prevention of Significant Deterioration (PSD) permitting on wastewater utilities, when biogenic emissions are included. Association members with any information on the magnitude of their GHG emissions or permitting impacts should contact Cynthia Finley at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

Funds for Integrated Planning Pilots Secured in House Appropriations Bill

The FY2014 House EPA appropriations bill contains $2 million to establish an integrated planning pilot program. Under the program funding would be provided to selected communities in each EPA region to pursue integrated plans. NACWA was instrumental in securing strong bi-partisan support for the program, as reflected in an April letter written by Representatives Bob Gibbs (R-OH) and Tim Bishop (D-NY), Chair and Ranking Member of the House Water Resources & Environment Subcommittee, urging House appropriators to include funding for the program. While the release of the House EPA appropriations bill is only the first step in a lengthy process to finalize a FY2014 budget, it’s clear that Congress understands the need for, and value of, the integrated planning approach.

NACWA Active on Key Funding and Financing Proposals

NACWA continued to weigh in on key clean water funding and financing proposals currently being considered in Congress. They include:

• The Tax-Exempt Status of Municipal Bonds: Congress will be considering whether to accept the President’s Fiscal Year (FY) 2014 budget proposal to implement a 28% benefit cap on tax-exempt municipal bond interest for high income taxpayers. On Tuesday, NACWA attended a meeting hosted by the U.S. Conference of Mayors, which leads the ‘Don’t Mess With Our Bonds’ coalition, to discuss recess strategy and a media campaign for September. Representatives Randy Hultgren (R-IL) and Dutch Ruppersberger (D-MD), who are leading a sign-on letter  urging House leadership to reject proposals to alter the tax-exempt status of municipal bonds, also participated in the meeting. The NACWA-AMWA report, The Impacts of Altering Tax-Exempt Municipal Bond Financing on Public Drinking Water & Wastewater Systems, has been sent to all Members of Congress and NACWA has asked its Member Agencies to meet with their Congressional delegations during the August recess to discuss this key issue.
• Funding for the Clean Water State Revolving Fund (CWSRF): Last week, the House Appropriations Subcommittee on Interior & EPA passed its FY 2014 appropriations package which slashed funding for the CWSRF from $1.2 billion to just $250 million. While this is only the first step in Congress’ attempt to establish a FY 2014 budget, the House Subcommittee’s proposed cut to the CWSRF indicates that many in Congress are willing to step away from this critical program. NACWA led a coalition of key Washington-based organizations representing local elected officials, state water quality regulators and water and wastewater authorities in sending a letter  to Members of the House of Representatives protesting these cuts and urging lawmakers to restore them. This week, however, the Senate Appropriations Committee released a draft appropriations bill for Interior & EPA, proposing an increase in overall funding for EPA by 1.25 percent, to $30.2 billion. The bill would also maintain FY 2013 funding for the Clean Water and Drinking Water SRFs (not including sequestration cuts) at $1,448,887,000 and $906,896,000 respectively. A markup for the bill in the Senate Appropriations Committee has not yet been scheduled, and NACWA will continue to keep members informed as budget negotiations proceed.
• Creation of a Voluntary Clean Water Trust Fund: NACWA, along with the Water Infrastructure Network (WIN), met with Congressman Earl Blumenauer (D-OR) on Wednesday to discuss progress with a bill he is crafting to establish a voluntary clean water trust fund. Under his proposal, the makers of water-based beverages and flushable products could opt to put a clean water logo on their products in exchange for a 3-cent fee on their products. The revenue from this fee would go towards the trust fund to replenish the CWSRF and fund a Water Infrastructure Finance & Innovation Authority loan guaranty program. Rep. Blumenauer is looking for Republican co-sponsors, and hopes to introduce his legislation in the fall.

Congress adjourns today for the August recess and will consider these issues in September. In the meantime, NACWA will be meeting with House and Senate staff to discuss these proposals and the importance of continued federal support in helping communities fund and finance their clean water needs – and comply with Clean Water Act requirements. We will provide updates on these meetings and the evolving FY 2014 budget as they occur.

NACWA, WEF, WERF Discuss Energy-Water Nexus with EPA

NACWA, along with representatives from the Water Environment Federation (WEF) and the Water Environment Research Foundation (WERF), met with EPA water office staff on July 29 to discuss ongoing efforts to engage the Department of Energy (DOE) on energy-water nexus issues. NACWA, WEF and WERF, building on their joint Water Resources Utility of the Future Blueprint, have had several discussions with DOE staff on how best to tap into the resources currently available to clean water agencies – and how to increase DOE investment in energy efficiency and energy generation, from both a research and technology deployment standpoint, within the clean water community. EPA and DOE began quarterly meetings on the subject earlier this year. DOE is expected to lay out its plan for working on energy-water nexus issues later this year. During the July 29 meeting, EPA provided a brief summary of its discussions with DOE to date and how the water sector and EPA will want to coordinate as discussions continue with DOE. One of the top challenges identified is developing a more robust and detailed estimate of the energy potential from the water sector. NACWA, WEF, and WERF are engaged in a project that will build on existing WERF research to develop such an estimate by early fall. NACWA’s Targeted Action Fund is supporting this project. The water sector groups and EPA committed to meeting regularly going forward.

NACWA’s Blog of the Week:
New Rule Delays Show Continued Challenges of Federal Stormwater Regulation

Have you read this week’s blog post on The Water Voice? It discusses the long wait for EPA’s much-anticipated national post-construction stormwater rule. As each deadline comes and goes – without the release of a draft rule – there is confusion as to whether any new deadline actually exists. This pattern continued most recently last month, when EPA missed the June 10 date for the rule’s proposal, but provided no additional timetable for action going forward. With all of this waiting – what is the path forward? The Water Voice has a new posting each Wednesday, subscribe today and don’t miss a post.