Uncertainty Abounds in Regulatory Processes

The US Environmental Protection Agency (USEPA) continues to look at many of the same issues, but with new context. The past year’s deregulatory shift has brought considerable uncertainty to environmental rule making.

The past year has been a time of change and uncertainty for water regulations. First, a whirlwind of regulatory actions blew through in the last months of the Obama administration, including USEPA’s final fourth Unregulated Contaminant Monitoring Rule, the fourth Contaminant Candidate List, the final Risk Management Plan Rule, and rules implementing the Water Infrastructure Finance and Innovation Act. As predicted in the January 2017 Reg Talk column (www.awwa.org/RegTalk/Opflow/January2017), the Trump administration has taken a very different—and perhaps even more sweeping—approach.

PLANS TO REPEAL AND MODIFY RULES

One of the first priorities under the new administration is the implemented, planned, and possible repeal or major modification of several regulations. These efforts are intended to reduce the cost, complexity, and number of regulations in effect.

Executive Orders. The administration has implemented two major cross-agency initiatives. First, Executive Order (EO) 13771, Reducing Regulation and Controlling Regulatory Costs, sets two major rule making and agency requirements. Each new significant regulation must identify two regulations for possible repeal, and the total cost of any new significant regulation combined with repeal or revision of existing regulations must be zero or negative. In this structure, the total number of regulations must decrease, and the total cumulative cost of regulations must either decrease or stay level.

Second, based on another action, EO 13777, Enforcing the Regulatory Reform Agenda, the administration is actively seeking input on regulations to repeal or otherwise modify for possible action regardless of new regulatory proposals. For example, the administration has already issued draft repeals of the Clean Power Plan and the Clean Water Rule (Definition of Waters of the United States), which were the Obama administration’s signature environmental regulations. USEPA leaders have suggested that regulatory cost savings from these actions can

be used to offset other regulations, such as the anticipated long-term revisions to the Lead and Copper Rule.

Public Health, Public Comments. AWWA comments during USEPA’s open call for opportunities to reduce the burden of regulations focused on reducing the water sector’s burden from the Risk Management Plan Rule, streamlining the use of State Revolving Loan Funds, addressing concerns about recent health advisories, and several other issues. Like many other organizations, AWWA sought to identify ways to streamline rules that are potentially

ineffective or otherwise inefficient without compromising public health.

USEPA received 198,047 public comments. Although some essentially said “don’t change anything,” many others suggested a wide variety of changes across nearly every environmental rule administered by the agency. How USEPA (and other federal agencies that collected suggestions) plans to use this information remains to be seen.

Safe Drinking Water Act Protections. The Safe Drinking Water Act (SDWA) contains an “anti-backsliding” provision. This means that for maximum contaminant levels and some other rules that directly address public health protection, once a rule has gone into effect, USEPA can only revise the rule if the new rule is equally or more protective. For example, the revised Total Coliform Rule eliminated the maximum contaminant level (MCL) for total coliforms but substituted new requirements designed to make the rule better protect public health. Therefore, MCLs and key facets to many SDWA rules aren’t likely to be changed under the current deregulatory initiatives.

Congressional Review Act. In addition to the regulations being reviewed or repealed by the Trump administration, Congress has used a mechanism known as the Congressional Review Act (CRA) to eliminate 14 Obama administration rules (most of which are outside of the environmental space). This mechanism had been used successfully only once before this administration, so this may be the beginning of a new precedent. Moreover, attempts are under way to apply the CRA to guidance and advisory documents and for Congress to override agency guidance documents.

DRINKING WATER REGS DELAYED

Some drinking water regulations are still likely, although their timing and content are in flux. Until recently, it seemed likely USEPA would issue a proposal for the revised Lead and Copper Rule in early 2018, with a final rule coming by 2020. However, agency statements now suggest a delay past 2018. Substantial budget cuts also have been proposed for USEPA that could slow down this rule and others. New requirements to conduct economic analysis on existing rules to offset the costs of the new ones add to this budget challenge.

Perchlorate Deadline. Perchlorate is exempt from the regulatory budget because USEPA is under a December 2019 court-ordered deadline to either finalize a rule or make a final decision not to regulate perchlorate. This situation came about when the Natural Resources Defense Council sued USEPA in 2016 over failing to meet a statutory deadline to issue a proposed rule triggered by a positive regulatory determination in 2011. USEPA Administrator Scott Pruitt has since issued new internal guidelines that limit circumstances under which the agency can settle lawsuits, meaning that future litigation may be more drawn out.

The biggest uncertainties surrounding perchlorate are technical, with the appropriateness of a national rule still questioned by many. The model for perchlorate’s metabolism (a critical component of making the rule) is undergoing a second round of peer review, meaning that much work remains before USEPA can set a goal on which to base a proposed MCL.

Other Activities. Among other activities under way is the fourth round of the Unregulated Contaminant Monitoring Rule. After issuing health advisories for cyanotoxins (microcystins and cylindrospermopsin) and certain perfluorinated compounds (perfluorooctanoic acid and polyfluoroalkyl substances) in 2015 and 2016, respectively, USEPA and state agencies continue to seek additional ways to understand the risk posed by these substances and how to best manage environmental exposure. This means a future drinking water rule for one or both could be a possibility, but not for at least several years. USEPA has included cyanotoxins in the rule to get occurrence information to support decision making.

Also, the agency is reconsidering the Steam Electric Power Plant Effluent Guidelines Rule. AWWA, in collaboration with the National Association of Water Companies, is advocating for stricter controls on bromide to reduce disinfection byproduct formation at downstream water treatment plants. AWWA utility members should stay tuned for regulatory alerts on these and other issues.

STATES ACTING ON THEIR OWN

Given the combination of delays, which aren’t a new phenomenon, and ongoing deregulation at the federal level, some states are deciding to set their own standards in lieu of waiting for federal guidelines. SDWA and most other environmental laws allow states to pass regulations more stringent than federal standards if they choose. Although such regulations are common in a few states, their total number and distribution could increase in the next few years, especially if federal delays on anticipated rules continue. However, most state regulatory offices operate on limited budgets and don’t have the scientific, economic, and technical capacity that USEPA has when it develops a rule.

In 2018, the agency will push state SDWA primacy agencies to transition to a replacement data system for compliance monitoring reporting. What this means in each state will be different, but water systems should anticipate requirements for electronic compliance data reporting and be prepared for compliance data being rapidly available to the public through state and federal data systems. USEPA’s Safe Drinking Water Information System (SDWIS) Prime data system is scheduled to be operational in March 2018, and states are expected to transition to SDWIS by the end of the year.

MINIMIZE REGRETS

Although future regulatory requirements may be uncertain, now is the time for water utilities to take actions that promise significant benefits regardless of regulatory changes:

Invest in Infrastructure Maintenance and Renewal. Managing distributed water quality goes hand in hand with maintaining the infrastructure used to deliver it. In addition to improving water quality in the distribution system, infrastructure improvements often help ensure adequate supply, reduce water loss, increase energy efficiency, increase reliability, and improve consumer confidence. Given the long lifespan of most types of infrastructure, renewal and replacement is an opportunity to assess and improve on all of these concerns and others, saving money, energy, and resources through sound investments. Taking advantage of opportunities through the Water Infrastructure Financing and Innovation Act, State Revolving Loan Funds, the bond market, and other resources help to make these investments affordable.

Ensure Technical, Managerial, and Financial (TMF) Readiness. Lead and Copper Rule revisions, along with newly recognized contaminants such as perfluorinated compounds, represent significant financial and technical challenges on the horizon. TMF fundamentals are essential for water utilities to effectively handle such challenges.

Review Corrosion Control Practice. Water utilities need to ensure their staffs understand corrosion control in terms of current water supplies and treatment schemes as well as anticipated water supplies and wholesale accounts.

Talk to Customers. Service expectations are set and met locally, so open and transparent communication on hard topics like lead service line replacement, Legionella, cyanotoxins, and perfluorinated compounds requires building positive two-way communication with local decision makers and customers.

Although the regulatory landscape looks a lot different and more uncertain than it did a year ago, the level of activity nevertheless remains high. AWWA’s Water Utility Council and Government Affairs Office will continue to push for cost-effective regulations that protect public health.

Adam T. Carpenter is manager of energy and environmental policy at AWWA (www.awwa.org), Washington, D.C. Reprinted from AWWA’s Opflow magazine.