March 2014, Vol. 69 No. 3
Washington Watch
SRF Funding Dodges Funding Bullet – This Year
A flurry of new water infrastructure funding bills has made an appearance of Capitol Hill.
They arrive as cities and counties breathe a slight sigh of relief now that Congress has set what has to be considered a reasonable – under the circumstances – funding level for the state revolving funds in fiscal 2014. Actually, fiscal 2014 started last Oct. 1. But Democratic and Republican sparring over controversial issues prevented the House and Senate from adopting a final fiscal 2014 budget until Jan. 13, 2014.
That agreement included $1,448,887,000 for clean water state revolving funds and $906,896,000 for drinking water state revolving funds. Those are approximately the same amounts Congress appropriated for fiscal 2013. President Obama’s proposed budget for fiscal 2014, submitted in February 2013, included a total for both funds of about $1.9 billion.
Water infrastructure advocates are again holding their breath as the President gets ready to submit his proposed budget for fiscal 2015, which starts Oct. 1. 2014. It is entirely likely Obama will again attempt to convince Congress to reduce SRF funding.
Given the uncertainty of federal funding, not to mention its inadequacy when compared to needs, the introduction of a couple of bills give water advocates some reason for hope. The bills would establish supplemental alternative funding flows to the SRFs. Of course legislation creating “SRF supplements” has been introduced before, somewhat frequently actually, but has never passed Congress.
One of the new infrastructure funding bills targets water systems solely. It is called the Clean Water Affordability Act (H.R. 3862). A bill with the same name was introduced in prior Congresses, but the current version has been narrowed in its scope. Sponsored by Reps. Bob Latta (R-OH) and Tim Walz (D-MN), the bill gives cities and counties some flexibility in terms of the funding of sewer projects. The terms of any federal loan under the CWSRF would be eased based on a comprehensive and integrated planning approach first established by the EPA and then followed by a city applying for funds. The idea, apparently, is to give more breathing room to permit applicants to account for the ability of their ratepayers to fund a sewer project. But the Latta/Walz bill does not include any new sources of federal funding. That may actually enhance its chances of passage.
“Across the country, communities are struggling to pay for the critical wastewater infrastructure necessary to protect public health and the environment,” said Ken Kirk, NACWA executive director.
A second bi-partisan bill introduced in the Senate covers a broader range of products than just drinking water and sewer. The Partnership to Build America Act (S. 1957) was introduced by Sens. Michael Bennet (D-CO) and Roy Blunt (R-MO). It creates an American Infrastructure Fund which would sell bonds and use the proceeds to make loans, bond guarantees and equity investments. Corporations would be induced to buy these bonds because they would not have to include dividends from the bonds in their gross income in any taxable year.
FERC To Review Recent Rule Requiring Permitting Of Auxiliary Facilities
The Federal Energy Regulatory Commission (FERC) has agreed to take a second look at a new rule requiring certificates to be filed for right-of-way auxiliary construction and for landowners to be given a five-day heads up before construction and maintenance work commences.
That rule was published in November and went into effect on Feb. 3. The Interstate Natural Gas Association of America (INGAA) and National Fuel Gas Supply Corporation both asked for a rehearing and FERC granted that wish on Jan. 29. The rule was issued as the result of a petition submitted in 2012 by INGAA whose requests were essentially squashed by FERC when it issued a final rule in November.
Joan Dreskin, general counsel, INGAA, says, “FERC issued a standard ‘tolling order’ in this case which allows them to act when they wish on the rehearing/clarification.”
In part, the debate revolves around the difference between replacement and auxiliary facilities. The FERC wants them treated similarly as “jurisdictional” meaning they would have similar requirements with regard to pipeline companies filing certificates which the commission would have to approve before the companies could commence construction. The INGAA says auxiliary facilities shouldn’t be permitted.
INGAA had started the ball rolling back in 2012 because of commission staff discussions with pipeline representatives where FERC staffers stated that companies undertaking section 2.55(a) auxiliary installations to augment existing facilities must stay within the right-of-way or facility site for the existing facilities and restrict construction activities to previously used work spaces. Pipeline industry officials thought this was a change in policy, which would force them to obtain certificates when auxiliary facilities were installed outside rights-of-way. Auxiliary facilities at issue include: valves, drips, pig launchers/receivers, yard and station piping, cathodic protection equipment, gas cleaning, cooling and dehydration equipment; residual refining equipment and water pumping equipment.
Given that ostensible change in policy made outside any rulemaking, the INGAA filed its petition in 2012. The FERC issued a proposed rule in December 2012 which simply codified the position its staff had laid out. INGAA protested. FERC argued the proposed rule was only a “clarification” which “articulated existing, long-standing constraints and obligations with respect to auxiliary installations.” It then took more comments before ignoring INGAA’s protests again when issuing the final rule in November 2013.
The final rule also codified for the first time the common industry practice of notifying landowners prior to coming onto their property to install, replace or maintain auxiliary or replacement facilities.
David W. Reitz, deputy general counsel, National Fuel Gas Supply Corporation and attorney for Empire Pipeline, points out that PHMSA regulations require a company discovering a pipeline anomaly requiring immediate remediation to excavate and inspect the pipeline within five days of discovery. “Because of the time required to verify or determine the names and addresses of the property owners and to deliver the notices, five-day advance landowner notification would be impractical in these circumstances,” he explains. “In addition, a pipeline receiving a one-call notification often has a maximum of forty-eight hours to determine and mark the precise location of its facilities, which may require some excavation.”
OSHA Sandblasting Protection Proposal Could Require Respirator Replacement
The new OSHA proposed rule requiring greater protection for workers engaged in sandblasting may require interstate and intrastate companies and their contractors doing digging to probably replace the respirators they currently use. That is because the Occupational and Safety Administration wants to reduce its current permissible exposure limit (PEL) for crystalline silica from 100 to 50 micrograms per cubic meter of air and add a new action level of only 25 micrograms. Pipeline companies generally cannot control dust to the current level via engineering controls, so they give employees personal protective equipment (PPE), which is a legal option.
“With regard to PPE, it is unknown what the effect will be on the perceived adequacy of the current respirators given that the protection factor for each type of respirator is based on established exposure limits,” says Lisa Beal, vice-president, environment and construction policy, INGAA. “Therefore, lowering the PEL may require replacement of the respirators that are currently in use. The replacement costs will be substantial, but an even bigger concern is that this is a cost associated with replacing equipment that is adequately mitigating the hazard. In other words, this is a real cost without a tangible benefit.”
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