May 2019 Vol. 74 No. 5
Washington Watch
Sewer Construction Grants Targeted for Big but Speculative Increase
Stephen Barlas | Washington Editor
There seems to be a good chance that Congress will pass a reauthorization of the Clean Water State Revolving Fund (CWSRF), given strong bi-partisan support for the Water Quality Protection and Job Creation Act of 2019 (H.R. 1497). The bill would authorize $4 billion for the EPA sewer loan program in each of fiscal years 2020 through 2024. That is nearly four times the $1.694 billion Congress appropriated in FY19. But one does not have to go too far out on a limb to predict Congress will not appropriate a 300-percent increase annually in fiscal 2020–‘24.
The bill has several other provisions aimed at helping local communities repair aging sewer systems, for example, extending the authorization of Sewer Overflow and Stormwater Reuse Municipal Grants at $225 million per year through 2024. But the $4 billion annual funding level for the CWSRF, which, again, must be appropriated separately by Congress, is the marquee provision in the bill, and supported by top Democrats and Republicans on the House Transportation and Infrastructure Committee. The CWSRF is popular with cities and counties around the country because it provides loans at interest rates below 1 percent over 20 to 30 years, which looks good compared to the 4½ to 5 percent municipalities would otherwise have to pay.
But given the huge sewer construction needs in the U.S., witnesses at the hearings of the Transportation and Infrastructure (T&I) Committee in March argued that even $4 billion a year for the CWSRF won’t make much of a dent in the financial needs of wastewater systems nationwide.
“And while we are grateful for the sums of money in this consideration, I think all will agree, these amounts are not enough to address every wastewater infrastructure investment need, so reliance on a more flexible model to improve water quality can be achieved through integrated planning and other potential tools,” David Condon, mayor of Spokane, Wash., told the T&I water resources and environment subcommittee.
The EPA has had an “integrated planning” program in place for a decade, where the agency tries to ease permitting requirements for cities and counties with effluent contamination by allowing them to use alternative methods such as green infrastructure and projects to reclaim, recycle or reuse water. This helps governments avoid hiking up sewer rates on residents by pocketing savings from rainfall recycling, for example.
Last year, Congress passed legislation to put a statutory, integrated planning process in EPA. The idea was to give local governments even more leeway to spend on hard, sewer infrastructure by helping them avoid consent decrees with the Justice Department, resulting in fines and the need to immediately address contaminants the conventional, expensive way.
Congress Begins to Consider Changes to Pipeline Safety Law
Congress had its first hearings in early April, in both the House and Senate, on reauthorization of the Pipeline Safety Act, which loses its current authority on Sept. 30, 2019. There will perhaps be some new safety requirements passed, given that both Democrats and Republicans are unhappy with the continuing rash of accidents. But the industry may get some new leeway to use some new engineering technologies, which the Interstate Natural Gas Association of America (INGAA) has been pushing for.
The good news is that Rep. Daniel Lipinski (D-Ill.), chairman of the House Transportation and Infrastructure Committee’s railroads, pipelines and hazardous materials subcommittee seems open to industry-requested changes.
“It is important to listen to the reasonable requests of industry stakeholders,” he said. But he also noted that according to PHMSA (Pipeline and Hazardous Materials Safety Administration), there have been 11,992 incidents, 317 deaths, 1,302 injuries and $8.1 billion in damage from pipeline accidents between 1999 and 2018.
The new pipeline bill almost surely to emerge from Congress by September will probably be a mild one, light on new safety or environmental requirements and light on new transmission company mandates. That is because PHMSA has failed to complete several significant rulemakings mandated by the last two pipeline reauthorizations in 2011 and 2016.
That failure has drawn the most fire from both Democrats and Republicans at hearings so far. One of the biggest pending rulemakings, this one mandated by the 2011 law, is a gas transmission rule that would lay down procedures for how pipelines expand their integrity management programs beyond high-consequence areas and how they retest maximum allowable operating pressure (MAOP) for pre-1970 pipelines.
Robin Rorick, vice president, midstream and industry operations, American Petroleum Institute, who testified at the House subcommittee hearings on April 2, pressed the subcommittee to allow pipeline companies to simplify the “burdensome approval process” companies must go through to be able to use alternative safety technology.
“Establishing clear parameters and deadlines associated with PHMSA’s review, notification and approvals of alternative technology will help provide more certainty in the process, and allow operators to utilize the latest cutting-edge technologies to further pipeline safety,” he stated.
Rorick also pushed for changes to current regulations that say pipeline operators must report pipeline incidents meeting certain conditions, including a clean-up cost of $50,000 or higher.
INGAA, too, supports those kinds of changes. But pipeline companies may be in somewhat of a defensive crouch, given likely efforts by environmentalists and public interest groups to advocate for restrictions on methane releases and changes to the agency’s risk-benefit analysis requirements, which some view as an impediment to faster PHMSA action of the 2011 and 2016 mandates.
Carl Weimer, executive director of the Pipeline Safety Trust, pointed to “the unique and onerous cost-benefit requirements PHMSA finds itself saddled with.” PHMSA is the only federal agency that must assess the risk of a new regulation based on a cost-benefit standard.
Osman says INGAA would oppose the kind of cost-benefit rule changes Weimer suggests. Osman agrees that PHMSA’s statutes are more specific than cost-benefit regulations at other federal safety agencies. But he argues that more specific rules reduce the time for rulemaking, because there is more certainty about what must be done, and the chances of litigation based on any final rule are reduced. •
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