    [Senate Hearing 118-101]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 118-101

                              WATER AFFORDABILITY
                          AND SMALL SYSTEM ASSISTANCE

    =======================================================================

                                    HEARING

                                   BEFORE THE

                          SUBCOMMITTEE ON FISHERIES,
                              WATER, AND WILDLIFE

                                     OF THE

                                  COMMITTEE ON
                          ENVIRONMENT AND PUBLIC WORKS

                              UNITED STATES SENATE

                        ONE HUNDRED EIGHTEENTH CONGRESS

                                 FIRST SESSION
                                   __________

                                  MAY 31, 2023
                                   __________

      Printed for the use of the Committee on Environment and Public Works

                        [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

            Available via the World Wide Web: http://www.govinfo.gov

                                  __________

                        U.S. GOVERNMENT PUBLISHING OFFICE

    53-348PDF                 WASHINGTON : 2023

                   COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                        ONE HUNDRED EIGHTEENTH CONGRESS

                                 FIRST SESSION

                      THOMAS R. CARPER, Delaware, Chairman
              SHELLEY MOORE CAPITO, West Virginia, Ranking Member

    BENJAMIN L. CARDIN, Maryland         KEVIN CRAMER, North Dakota
    BERNARD SANDERS, Vermont             CYNTHIA M. LUMMIS, Wyoming
    SHELDON WHITEHOUSE, Rhode Island     MARKWAYNE MULLIN, Oklahoma
    JEFF MERKLEY, Oregon                 PETE RICKETTS, Nebraska
    EDWARD J. MARKEY, Massachusetts      JOHN BOOZMAN, Arkansas
    DEBBIE STABENOW, Michigan            ROGER WICKER, Mississippi
    MARK KELLY, Arizona                  DAN SULLIVAN, Alaska
    ALEX PADILLA, California             LINDSEY O. GRAHAM, South Carolina
    JOHN FETTERMAN, Pennsylvania

                   Courtney Taylor, Democratic Staff Director
                   Adam Tomlinson, Republican Staff Director
                                  ----------

                 Subcommittee on Fisheries, Water, and Wildlife

                       ALEX PADILLA, California, Chairman
                   CYNTHIA M. LUMMIS, Wyoming, Ranking Member

    BENJAMIN L. CARDIN, Maryland         KEVIN CRAMER, North Dakota
    SHELDON WHITEHOUSE, Rhode Island     PETE RICKETTS, Nebraska
    EDWARD J. MARKEY, Massachusetts      JOHN BOOZMAN, Arkansas
    DEBBIE STABENOW, Michigan            DAN SULLIVAN, Alaska
    MARK KELLY, Arizona                  SHELLEY MOORE CAPITO, West
    THOMAS R. CARPER, Delaware (ex           Virginia (ex officio)
        officio)
                                C O N T E N T S

                                  ----------
                                                                       Page

                                  MAY 31, 2023
                               OPENING STATEMENTS

    Padilla, Hon. Alex, U.S. Senator from the State of California....     1
    Lummis, Hon. Cynthia M., U.S. Senator from the State of Wyoming..     3

                                   WITNESSES

    Jones, Kyle, Policy and Legal Director, Community Water Center;
      Sacramento, California.........................................     6
        Prepared statement...........................................     8
        Response to an additional question from Senator Cardin.......    16
    Menard, Rosemary, Water Director, City of Santa Cruz Water
      Department; Santa Cruz, California.............................    18
        Prepared statement...........................................    20
        Responses to additional questions from Senator Cardin........    25
    Pepper, Mark, Executive Director, Wyoming Association of Rural
      Water Systems..................................................    28
        Prepared statement...........................................    30

                              ADDITIONAL MATERIAL

    Letter to Senators Padilla and Lummis from the Association of
      Metropolitan Water Agencies, May 31, 2023......................    52
    Letter to the U.S. Senate Committee on Environment and Public
      Works, Subcommittee on Fisheries, Water, and Wildlife, from
      Community Water Center et al., May 31, 2023....................    55
    Memorandum from U.S. Environmental Protection Agency, Analytical
      Chemistry Branch, to Anne Overstreet, Director, Biological and
      Economic Analysis Division, Office of Pesticide Programs, May
      18, 2023.......................................................    57

                              WATER AFFORDABILITY
                          AND SMALL SYSTEM ASSISTANCE

                                  ----------

                            WEDNESDAY, MAY 31, 2023

                                   U.S. Senate,
             Committee on Environment and Public Works,
                Subcommittee on Fisheries, Water, and Wildlife,
                                                        Washington, DC.
        The Committee met, pursuant to notice, at 2:43 p.m. in room
    406, Dirksen Senate Office Building, Hon. Alex Padilla
    (Chairman of the Subcommittee) presiding.
        Present: Senators Padilla, Lummis, Cardin, Whitehouse,
    Kelly, and Ricketts.

                OPENING STATEMENT OF HON. ALEX PADILLA,
               U.S. SENATOR FROM THE STATE OF CALIFORNIA

        Senator Padilla. Good afternoon, everybody. This hearing
    will come to order.
        It is my honor to welcome everyone to the first hearing of
    this Congress for the Senate Environment and Public Works
    Subcommittee on Fisheries, Water, and Wildlife.
        I apologize for the slightly delayed start of the hearing.
    They opened the Senate floor just a few minutes ago. I can
    attest that Senator Lummis and I were among the first to cast
    our votes so we could race over here and try to begin as on
    time as possible. We do expect additional colleagues to join us
    over the next several minutes.
        Today, we will be examining the issue of water
    affordability and small water system assistance in communities
    across the United States. There is a reason why there is a
    saying in the West that, ``whiskey is for drinking, and water
    is for fighting over.'' Access to water is the foundation for
    strong and healthy communities, economies, and families.
        As a Californian, this topic is near and dear to me and to
    the 40 million Californians that I represent, as well as to all
    Americans who have ever had to worry about whether or not they
    could afford their next water bill or if their water would be
    shut off because they can't keep up with the bills.
        In a country as wealthy as the United States, nobody should
    have to worry about whether aging, deteriorating pipes in rural
    communities will hold up, whether wells could run dry due to an
    extended drought, or whether the climate crisis and extreme
    weather will bring catastrophe to our water supply. It is only
    right that we take a close look at the state of our country's
    water systems and the Federal investments needed to make sure
    that all Americans have access to safe, affordable, and
    reliable water supply. After all, it is not just about our
    economy and environmental protection. It is about fundamental
    health and human safety.
        I want to thank our witnesses who are here today to discuss
    their experiences with America's aging water infrastructure, as
    well as with the families who are experiencing rising costs.
        I also want to thank Chairman Carper, Ranking Member
    Capito, and my Subcommittee Ranking Member, Senator Lummis, as
    well as all of our hardworking Committee staff for making
    today's hearing a priority.
        When it comes to clean water, Americans too often face a
    heartbreaking choice. Just last fall, the Los Angeles Times
    told the story of Rosario Rodriguez, a woman living in a rural
    community in western Fresno County in California. With bills to
    pay, a family to feed, and a skyrocketing water bill after a
    summer of drought, Rosario was forced to choose between paying
    the electric bill or the water bill, not to mention food,
    school supplies, clothing, and more.
        Because there were few assistance programs available for
    water bills beyond one time payments, she was forced to pay the
    water bill in full and look elsewhere for electric rate
    assistance.
        In 2012, California became the first State in the Nation to
    recognize in statute a human right to water, but California
    can't do it alone.
        For the Rodriguez family and many families like them,
    extreme drought and the increasingly devastating impacts of our
    changing climate, combined with aging water infrastructure,
    have made access to clean, affordable water a privilege instead
    of a basic human right. This is the result, in large part, of
    decades of underinvestment in water infrastructure.
        Water systems, especially those in small, rural, or
    disadvantaged communities, also frequently lack adequate
    staffing and the financial capacity to make necessary upgrades.
    As a result, the cost of maintaining and repairing water
    infrastructure has fallen on States, localities, and of course,
    ratepayers.
        In fact, over the past 20 years, water rates have increased
    at three times the rate of inflation, significantly higher than
    the rate of energy bill increases, for example.
        The American Water Works Association has found that one in
    three Americans struggles to pay their water bills on time, and
    the EPA projects that 36 percent of U.S. households will not be
    able to afford drinking water by next year. That is more than
    one in three.
        This all points to an alarming water affordability crisis
    and an environmental justice crisis as well, with underserved
    communities who already struggle to afford utilities in rural,
    low income, and Tribal communities being hit hardest by rising
    water rates.
        In this moment, we need a unified approach from the Federal
    Government to ensure that all Americans have access to
    affordable, clean drinking water.
        Over the past few years, I have been proud to see Congress
    come together to provide over $1 billion to help low income
    households pay their water bills after the outbreak of COVID-
    19. I was proud to help pass the Bipartisan Infrastructure Law,
    the single largest investment in water infrastructure in our
    Nation's history, bringing an unprecedented $55 billion to
    communities across the country to bolster drinking water and
    wastewater infrastructure, replace lead pipes, and address
    forever chemicals known as PFAS.
        I was also proud to support this Committee's work to
    authorize a new EPA pilot program to help rural and low income
    households pay for water bills. Together, these are great first
    steps to lifting up families in need and investing in our
    Nation's clean water future, but these are temporary rate
    assistance programs, and investments that only begin to address
    the backlog of our deferred maintenance needs. We cannot stop
    there.
        The $1 billion for utility assistance, for example, is set
    to expire this year, and despite the robust investments we made
    in LIHEAP, a permanent energy assistance program, we still do
    not have a permanent equivalent program for water assistance.
        That is what today is all about: Working together to see
    how we can provide permanent water utility assistance to
    communities in need and how we can make sure that no American
    has to choose between putting food on the table or pouring
    water into their glass.
        I am excited to hear from all of our witnesses about what
    families are still facing, what communities and utilities see
    as the most pressing challenges to delivering affordable water,
    and how we can best strengthen our Nation's water supply
    systems.
        With that, I would like to turn to Ranking Member Lummis
    for her opening statement.

             OPENING STATEMENT OF HON. CYNTHIA M. LUMMIS,
                 U.S. SENATOR FROM THE STATE OF WYOMING

        Senator Lummis. Thank you, Chairman Padilla. I look forward
    to working with you on the issues that we are discussing today,
    as well as other items, such as reforms to the Endangered
    Species Act and to our work to ensure the continued supply from
    the Colorado River.
        I want to thank our witnesses for being here today. I
    especially want to thank Mark Pepper, who runs the Wyoming
    Association of Rural Water Systems. You are always such a help
    in informing me about what our small, rural water systems are
    facing, so I am deeply grateful for your being here today. You
    wear many hats in Wyoming. And I am deeply grateful that you
    took time out to be here today because I know you are super
    busy.
        Water is the key to life. While this sounds like an overly
    simple statement, for many Americans, it is a harsh reality.
    From droughts that can strain the supply to ever increasing
    water bills, access to water is not universal across the
    country. In my home State of Wyoming, it is a constant struggle
    to keep water system operators to meet the needs of their
    communities, keep rates low, while simultaneously complying
    with complex and evolving regulatory requirements from the EPA,
    and that is a challenge to our systems as well.
        Unfortunately, rural water systems have their own
    additional challenges. Small populations means less ratepayers,
    which means less revenue needed to make capital investments. I
    worked with my colleagues on this Committee to make significant
    investments in water infrastructure in the previous Congress,
    and I was pleased to see that effort included the
    Infrastructure Investment and Jobs Act.
        However, Congress failed to make the investments in that
    bill in a fiscally responsible manner. If we are to continue
    investing in the needed infrastructure, Congress must find ways
    to ensure that we are not simply transferring our obligations
    to future generations.
        Outside of the capital investment needed, small systems
    also face difficulty finding, training, and retaining a work
    force. Some estimates suggest that one-third of the water
    sector work force will be eligible to retire in the next
    decade. That loss, not only of personnel, but institutional
    knowledge, will put tremendous strains on water systems across
    the country. Once again, rural America will be the first and
    hardest hit by these retirements.
        In addition to these items, I would be remiss if I did not
    express my concern with EPA's actions as it relates to PFAS.
    PFAS compounds are designed to be durable and not break down
    naturally. As a result, these compounds can be found in water
    and soils across the country.
        While we are working to better understand the science
    behind this class of chemicals, it is clear they do pose a
    threat to human health. So I support EPA's actions to establish
    a national primary drinking water standard for the most common
    PFAS compounds. Every single American deserves the peace of
    mind that their water is safe to drink.
        But I am concerned that levels selected by EPA at four
    parts per trillion will represent an unfunded mandate on water
    systems while not being supported by the science. That level
    represents not a health based standard, but instead the level
    at which these compounds can reasonably be detected. For
    reference, four parts per trillion is roughly the same as four
    droplets in an Olympic sized swimming pool.
        As one might guess, the detection and treatment technology
    needed to handle something at that scale will be costly, and
    those costs will be borne by the communities these systems
    serve. EPA must evaluate the academic literature from across
    the world when selecting the levels for these standards and not
    just rush to the costliest option.
        EPA is also proposing to designate those same PFAS
    compounds under CERCLA, the Superfund law. If finalized, water
    systems that are treating for PFAS may be held liable under
    CERCLA, again, at the expense of the ratepayer.
        When CERCLA was first written, it was done using the
    ``polluter pays'' model. Water systems, however, are not
    polluters of PFAS, as they have never used those compounds. As
    such, it is imperative that we work here in Congress to pass
    legislation that clarifies that entities such as water systems
    are not held liable for pollution to which they did not
    contribute.
        Thanks again for calling this hearing, Mr. Chairman. I look
    forward to hearing from our witnesses.
        Senator Padilla. Great, thank you.
        Now, I would like to turn to our witnesses. First, I would
    like to introduce Kyle Jones, who serves as Policy and Legal
    Director for the Community Water Center, an environmental
    justice nonprofit organization that works in rural and low
    income communities in places like the San Joaquin Valley, which
    many refer to as the salad bowl of America. Mr. Jones has a
    background in environmental law, land use law, and local
    government advocacy.
        Mr. Jones, you are a long way from Visalia, but we know
    that you truly understand the impact that the policies that we
    enact here in Washington have on the folks back home. And your
    voice, and the voices of the communities you work with, must be
    a part of this conversation.
        Let me also introduce Rosemary Menard, the Water Director
    for the city of Santa Cruz. Ms. Menard has served for over 40
    years in public service, holding several water utility
    leadership positions in Seattle, Washington; Portland, Oregon;
    and Washoe County, Nevada.
        As Water Director in Santa Cruz, Ms. Menard has helped
    guide the Santa Cruz Water Department through multiple
    droughts, wildfires, repair and replacement of aging
    infrastructure, a pending water treatment plant upgrade, meter
    replacements, and a plan to supplement the city's water supply
    and prepare for the ongoing effects of our changing climate.
        Thank you for testifying today. I look forward to hearing
    about the particular challenges and solutions water utilities
    are thinking about in the short, medium, and longer term.
        I now, once again, turn to Senator Lummis to introduce Mr.
    Pepper.
        Senator Lummis. Mr. Pepper has over 43 years of finance and
    administration experience, 34+ years in senior management
    positions, and 8+ years in public accounting. He has been
    involved in surface and groundwater issues in Colorado, Nevada,
    Texas, and Wyoming during his career.
        Mr. Pepper chairs the Casper Area Economic Development
    Joint Powers Board. He also serves on the Wyoming Water
    Association Board of Directors, and was appointed by the
    Governor to the following current commissions or task forces:
    The State Emergency Response Commission, the State
    Qualification Review Committee, Governor's Non-Point Source
    Task Force, Governor's Small System Task Force, Governor's
    Special District Task Force, and he is a member of the
    Governor's Solid Waste Citizens Advisory Committee.
        I don't know how you have time to do anything but go to
    meetings.
        He heads the State of Wyoming's largest utility membership
    organization that administers training and technical assistance
    programs, enabling Wyoming's community water industry systems
    to meet the requirements of the Safe Drinking Water Act, Clean
    Water Act, and the Resource Conservation and Recovery Act.
        Mark Pepper is a very knowledgeable and busy man.
        Thank you again for coming to Washington.
        I yield back.
        Senator Padilla. Thank you, Senator Lummis.
        In this Subcommittee, there is no requirement that we swear
    in witnesses, but we trust that the testimony shared today will
    be the truth, the whole truth, and nothing but the truth.
        With that, Mr. Jones, your testimony, please.

     STATEMENT OF KYLE JONES, POLICY AND LEGAL DIRECTOR, COMMUNITY
                  WATER CENTER; SACRAMENTO, CALIFORNIA

        Mr. Jones. Good afternoon, Chair Padilla, Ranking Member
    Lummis, and members of the Subcommittee.
        My name is Kyle Jones. I am the Policy and Legal Director
    with Community Water Center.
        For background, Community Water Center started in Visalia,
    California, organizing nitrate impacted residents to help them
    understand what is in their water and what they can do about
    it, and has since expanded to focus on advocacy and direct
    technical assistance to support long term, community driven
    solutions for the drinking water crisis in California.
        We also serve as a core member of the Water Equity and
    Climate Resilience Caucus, a caucus focused on water equity
    nationally. As noted, in California, we recognize the human
    right to clean, safe, and affordable drinking water for all.
    This is a necessary condition in order to ensure that there is
    economic development and self-determined futures for the
    communities that we work in.
        Many of the communities that we work in, unfortunately, are
    disproportionately challenged. Many are small communities that
    are often failing to meet basic drinking water needs.
    California alone has 395 failing water systems serving over
    800,000 people. Almost 3 million others are in systems that are
    either at risk of failing or potentially at risk of failing.
    These systems disproportionately serve small, rural communities
    and low income communities of color.
        The residents we work with are also faced with increased
    levels of contamination. Residents that we work with cannot use
    their taps for drinking water, and some can't even take hot
    showers without fear of getting sick or having increased risk
    of cancer.
        A particular challenge in the West is the increasing
    aridification and droughts fueled by climate change that is
    pushing us to have to rely more and more on less and less
    groundwater that is already being over pumped by agriculture.
        As noted, many of these systems lack the technical,
    managerial, and financial capability to access resources that
    are out there. These systems don't have the staff or expertise
    necessarily to navigate funding streams like the State
    Revolving Funds. And even if they could, State Revolving Funds
    and bonds often can't provide a full solution, as oftentimes
    operation and maintenance requirements can't be funded unless
    they make solutions too costly for communities.
        All of this leads to more unaffordable water. The small
    communities with small ratepayer bases face the highest rates.
    One community, El Porvenir in Western Fresno County that our
    partner organization, Leadership Council for Justice and
    Accountability works at, has a fixed rate every month of $280.
    And that is before any volumetric charge for the use of water.
        Further, because of contamination, our communities are
    paying twice for water: Once for the tap they can't use and
    again for the bottled water they need to survive. It is
    unconscionable.
        Treatment costs are also going up, and we are facing a
    situation where communities are either forced to choose between
    water that is safe or water that is affordable, but we believe
    in the United States that we can provide both. Affordability
    programs are not universal like they are for other utilities
    like energy, gas, food. Safe drinking water is a necessity, and
    whether or not a family can afford their water should not be
    based on their ZIP code.
        The affordability crisis really came to a head during the
    pandemic. California had over $1 billion in water debt as a
    result of the pandemic, and wasn't alone. And while we have
    been successful in crafting some solutions focusing on debt, we
    are not addressing the root of the problem, which is
    unaffordable water rates.
        What are the solutions? We believe there needs to be
    continued and expanding investments in water infrastructure,
    with a focus on removing barriers that limit access for small
    water systems. And this includes things like expanded outreach
    and engagement to ensure that small, rural communities have
    projects that are ready to be funded when infrastructure
    programs are available, and also funding to solve operations
    and maintenance.
        We also encourage Congress to look at other ways to fund
    drinking water, such as rural development at USDA, the Bureau
    of Reclamations programs. We also need a low income water
    assistance program. We need sustained funding to make sure that
    water is affordable so that folks don't fall behind and get
    into debt.
        We can't create a program alone as a State. We need support
    from the Federal Government. So we urge the creation of a LIRA
    program this year, and in addition, extension of LIHWAP to
    ensure that in the meantime, there is still some assistance for
    families in need. We also ask for reforms to the LIHWAP program
    to ensure it can be more successful for States like California.
        We recognize that there is a human right to clean, safe,
    and affordable drinking water for all. And we urge Congress to
    join us and work toward fulfilling this human right. Thank you.
        [The prepared statement of Mr. Jones follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Senator Padilla. Thank you, Mr. Jones.
        Ms. Menard.

             STATEMENT OF ROSEMARY MENARD, WATER DIRECTOR,
      CITY OF SANTA CRUZ WATER DEPARTMENT; SANTA CRUZ, CALIFORNIA

        Ms. Menard. Chairman Padilla, Ranking Member Lummis, and
    members of the Subcommittee, my name is Rosemary Menard, and I
    am the Director of the Santa Cruz Water Department. Thank you
    for the opportunity to share with you my perspective on the
    important issue of the affordability of water and wastewater
    rates.
        The Santa Cruz water system serves just under 100,000
    people through 27,000 connections. We own, operate, and
    maintain a complex water system to produce and deliver treated
    drinking water that is both groundwater and surface water from
    those sources.
        Most of the system's major facilities were constructed
    before 1960 and have reached the end of their useful life. In
    addition to our aging infrastructure, we are challenged with
    the impacts of our water supply and infrastructure from climate
    change fueled extreme drought conditions and severe storms
    while maintaining compliance with the State and Federal
    drinking water standards. Meeting these various
    responsibilities comes with a cost that is ultimately borne by
    our water customers who pay their bills.
        To ensure uninterrupted, quality service for our customers,
    Santa Cruz has developed a multiyear capital investment
    program, or CIP, that currently has a $650 million price tag.
    To pay for the CIP in 2016, a long range financial plan was
    developed that had a project funding strategy that was heavily
    focused on debt financing.
        To cover the costs of the CIP, the Santa Cruz City Council
    unanimously approved significant rate increases in 2016 and
    again in 2021. The 2021 rate increase schedule is now being
    implemented and includes a 16 percent rate increase in both
    July 2023 and July 2024. Looking ahead, we expect to have
    continued rate increases through at least the next decade to
    address the issues in our water system as they continue to age
    and we deal with the climate challenges.
        While our investment and rate increases to pay for them are
    necessary to maintain and upgrade Santa Cruz's water system, we
    recognize their effects on our customers, particularly those at
    the lower end of the income scale. Today, our data show that
    about 20 percent of the households we serve are already heavily
    financially burdened by their water and wastewater rates due to
    about a 250 percent increase in the cost of water since 2014
    and also an anticipated additional 50 percent increase by 2026.
        This is where the Federal Low Income Water Customer
    Assistance Program could play a vital role. Santa Cruz is
    unable to provide rate assistance through a statutory
    requirement in the State of California that prohibits us from
    using rate revenues from one set of customers to provide
    resources to subsidize the cost of service to another set of
    customers. We are one of many States that have that
    prohibition, and there are a number of other States in the
    country where there is a gray area, legally, about whether
    utilities can actually use that form of rate revenue to provide
    rate assistance. So it discourages water utilities from
    attempting to stand up such programs.
        This is why the Low Income Household Water Assistance
    Program, LIHWAP, that you just heard about, was so critical
    when Congress established it during the pandemic. For the first
    time, the Federal Government offered direct support to help low
    income households maintain essential water service, just as for
    years, the LIHEAP Program has provided for heating and cooling
    assistance.
        In Santa Cruz, as of January 2023, the LIHWAP program
    provided nearly $580,000 in funds to offset utility arrearages
    to about 800 customers. In the recent lifting of the California
    COVID area prohibitions against disconnections for nonpayment,
    an additional 44 customers have received some one time
    assistance. These are really important benefits, but one time
    assistance only solves part of the problem, and we need ongoing
    assistance.
        Looking forward, I would really ask Congress to consider
    multiple options, starting with extending LIHWAP through the
    next fiscal year 2024, so that critical assistance can occur,
    and also additionally to consider how the bipartisan
    legislation that allowed for the EPA pilot program to develop
    might be funded and provide an opportunity for there to be some
    exploration of that program.
        I appreciate the opportunity to share Santa Cruz's
    affordability challenges with you today, but please remember
    that virtually every community in the country also has
    customers with similar water related assistance needs. Now is
    the time to act to ensure their ability to access essential
    water services and wastewater services, and are not threatened
    due to the cost.
        I thank you for the opportunity to share my testimony
    today. I will be happy to answer any questions.
        [The prepared statement of Ms. Menard follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Senator Padilla. Thank you.
        Mr. Pepper, your testimony, please.

             STATEMENT OF MARK PEPPER, EXECUTIVE DIRECTOR,
               WYOMING ASSOCIATION OF RURAL WATER SYSTEMS

        Mr. Pepper. Good afternoon, Chairman Padilla, Senator
    Lummis, and members of the Subcommittee. It is an honor to
    appear before you today on behalf of small and rural
    communities.
        I am Mark Pepper, the Executive Director of the Wyoming
    Association of Rural Water Systems, a nonprofit association
    representing all small water and wastewater systems in Wyoming.
        I am also here to testify on behalf of the National Rural
    Water Association, which represents over 31,000 small and rural
    water systems across the country. Our member utilities have the
    very important responsibility of complying with all applicable
    Environmental Protection Agency regulations and ensuring the
    provision of safe drinking water and sanitation services to the
    public all day, every day.
        The State Revolving Funds, which provide Federal dollars to
    small towns for building, expanding, and maintaining their
    drinking water and wastewater infrastructure were authorized by
    this Committee, and thank you. One of the key aspects of our
    work at Rural Water is to provide direct assistance to small
    and rural communities in operating, governing, financing,
    upgrading, and maintaining their water and wastewater
    infrastructure.
        Local governments and nonprofit water utilities exist
    solely to serve the public's interest. They are directly
    accountable to their local citizens through local elections and
    are often governed by duly elected volunteer citizens.
        For the next few minutes, I would like to discuss some of
    the most important issues facing small water systems right now,
    including affordability, the implementation of the
    Infrastructure Investment and Jobs Act, personnel challenges,
    and PFAS regulatory burdens.
        First, the two largest costs of most utilities are
    personnel costs and energy costs. Compounding these expenses
    are supply chain issues impacting access to chemicals for water
    treatment, the replacement expansion parts, and scarcity of
    qualified professionals like engineers and contractors.
        Inflationary pressures are also hampering affordability.
    This has had a stagnating pressure on personnel costs as
    operating costs have taken precedence.
        The SRF set asides help to fill the technical gap by
    allowing qualified professionals to provide onsite assistance,
    comply with the myriad of Federal Safe Drinking Water and Clean
    Water Act regulations, as well as access to supply chains and
    troubleshooting advice, which is helping to keeps rates
    affordable. Should SRFs set asides be reduced or eliminated, I
    would suspect many systems will turn to unaffordable quickly.
        As for the Bipartisan Infrastructure Law, rural water
    systems are grateful to this Committee and Congress for the
    enactment of this landmark legislation. However, we are hearing
    from a lot of systems and States that the funds provided in the
    bill have been slow to be implemented due to lack of supplies
    and engineers to do the work.
        Another quandary in Wyoming is that operators and agencies
    have questions with the definition of disadvantaged community.
    With the bulk of Wyoming systems serving under 1,000 people,
    they are at a socioeconomic disadvantage due to size,
    expertise, work force, and a limited budget. We believe these
    communities should qualify as disadvantaged under the bill.
        We also believe an extension of time to get the money out
    based on the lack of supplies and engineers is warranted. We
    would also like the State match to remain at 10 percent for at
    least 5 years instead of just years 1 and 2. The 20 percent
    match for years 3 and on may make spending difficult in meeting
    the match requirement.
        Regarding personnel, the water sector is facing critical
    staffing shortages with up to 50 percent of the work force
    expected to retire in the next decade. The NRWA Apprenticeship
    Program is an essential tool being used right now in 35 States
    to address this critical issue. This novel initiative was
    specifically designed by industry leaders to attract, train,
    and retain the next generation of the water work force. These
    strategic partnerships have already created over 600 jobs for
    the water industry.
        Regarding PFAS, NRWA and WARWS share the Committee's goal
    of eliminating PFAS from the public's drinking water and
    environment. However, the looming threat of EPA's proposed PFAS
    MCLs and the liability costs associated with having certain
    PFAS compounds designated under CERCLA could price small water
    utilities out of existence, which is why we are extremely
    grateful and express our strong support for S. 1430, introduced
    by Senator Lummis. The bill will preserve a fundamental element
    of environmental law, which is the important ``polluter pays''
    principle for cleanups of PFAS designated under CERCLA.
        Finally, access to certified labs and Subtitle C disposal
    facilities and the associated costs will further put strain on
    very thin operating margins.
        In closing, Mr. Chairman, small and rural communities thank
    you for the opportunity to testify before the Subcommittee
    today to express our thoughts, reservations, and acknowledge
    the numerous opportunities this Committee has provided rural
    America in the crafting of Federal water and environmental
    legislation. Thank you.
        [The prepared statement of Mr. Pepper follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Senator Padilla. Thank you, Mr. Pepper, and all three of
    you for your testimony.
        We now turn to questions from the Committee. I get to
    begin.
        Aging infrastructure and deferred maintenance have left our
    water systems vulnerable, as I think we have all laid out here.
    And we unfortunately saw the worst of that play out last year
    in Jackson, Mississippi, a disaster which was decades in the
    making. Unlike other forms of infrastructure like bridges and
    roads, clean drinking water is not primarily funded by taxes.
    Instead, more than 90 percent of the average utility's revenues
    comes directly from constituents' water bills.
        Ms. Menard, I commend you for your efforts to secure
    various forms of Federal and State funding, including through a
    WIFIA loan, LIHWAP, SRFs, rate increases, and other sources.
    But not every water agency is as adept as you have been in
    Santa Cruz, often due to staff and other capacity challenges.
        Can you speak to the challenges of accessing funding from
    so many different sources? Is it time for maybe a new paradigm
    for how we finance and fund water infrastructure?
        Ms. Menard. Thank you for the question, Senator Padilla. I
    would be happy to speak to that question.
        One of the things I think is really important for us to
    think about as we think about affordability today and going
    forward is, how are we going to cover these very big costs and
    for spreading out over a relatively small rate base, whether
    you are one of the rural systems that was spoken of by one of
    my colleagues, whether you are a small system, spoken of by Mr.
    Jones, these are big questions.
        Even in Santa Cruz, the number I gave you of $650 million
    for a capital program to rehabilitate, replace, and climate
    proof our water utility is a pretty darn big number when you
    spread it across 27,000 accounts. And it results in the kind of
    rate increases that we have been seeing that are really
    creating these problems for our low income customers.
        I do think that, unlike so much of our other
    infrastructure, we do need to think about whether or not the
    business model we are using to fund water utilities, local
    water utilities, is really broken and can get us where we need
    to go through this next cycle of reinvestment. If it is not,
    then what is the right solution?
        I think that there needs to be more State and Federal
    funding that comes in to help us with these things. Some of
    that is loan funding, and it is great, and we have obviously
    accessed that. We have gone from about, say, $14 million in
    debt in 2014 to now, Santa Cruz has about $370 million in debt,
    and more coming because of the funding strategy.
        That is a very significant debt burden for a community to
    take on, and a lot of communities simply won't do it because of
    fear of how that will require rates to increase. I think it is
    time for us to be looking at new paradigms.
        Senator Padilla. Thank you.
        My next question is in the area of rising costs of water.
    The graph behind me illustrates how household water and
    wastewater bills have increased by 160 percent since 1998. That
    is a greater rate of growth than electricity bills, rent, or
    medical bills.
        The burden of unsafe and unaffordable water
    disproportionately impacts lower income communities and
    communities of color. As Mr. Jones shared in his testimony,
    many rural communities, including Tribal communities, farmer
    group communities, and communities near sites of legacy
    industrial contamination in reality pay twice for safe drinking
    water: Once for the contaminated water flowing from their taps,
    and once again for the cost of bottled water that they must
    rely on.
        As the disparity between water rate increases and income
    growth has increased, so too have household water affordability
    issues.
        Mr. Jones, ratepayers, especially low income households,
    cannot continue to bear the burden of deteriorating
    infrastructure. Federal investment in water infrastructure has
    declined by 77 percent since its peak in the 1970s.
        How critical, in your opinion, is Federal investment in
    water infrastructure for supporting water affordability?
        Mr. Jones. Thank you for that.
        It is absolutely critical that we continue and expand the
    overall investment, and also prioritize making sure that those
    investments can reach the communities that need it most, that
    have had the biggest challenges in accessing funding,
    historically.
        Part of the work we do through some of the expanded
    community outreach and engagement projects is do the work of
    organizing community residents to really understand what water
    solutions are and get them in support of that.
        A lot of the work we do focuses on consolidations, which
    honestly, is some of the most cost effective ways to ensure we
    can build a stronger ratepayer base to be able to cover these
    costs. And in order to get a consolidation going, you really
    have to get two communities who have historically not been
    working together to work together. And that takes a lot of work
    on the ground.
        Making sure that the funding sources are being paired with
    the right types of outreach and engagement can be, is
    absolutely critical to make sure that these solutions that we
    are funding are making the most impact.
        Finally, I think, as we have all said, that there needs to
    be a focus on affordability when it comes to funding these
    projects. Because even with some of these solutions, there are
    going to be increases in rates. And that is hard for customers,
    especially if you are a low income farm worker or undocumented
    community, like we work with, to understand that this solution
    comes at a cost.
        Making sure we have a program to ensure water is affordable
    is absolutely critical to make sure that we can get to these
    solutions for contamination and other issues.
        Senator Padilla. Thank you.
        Senator Lummis.
        Senator Lummis. Mr. Pepper, again, thanks for being here.
    As you know, I have been focused on concerns about PFAS. I want
    to ask you about that, as well.
        How are the regulatory requirements from EPA driving up
    operating costs for water systems? So this is PFAS and other
    ways in which EPA regulations drive up costs.
        Mr. Pepper. The regulatory environment right now is
    expanding. The Lead and Copper Rule has been revised, requiring
    that we get lead service lines out. We all appreciate that that
    has to happen, but it is very expensive, and the amount of
    money that has been designated for lead line replacements is
    woefully inadequate.
        I think that you throw in PFAS on top of that, both at the
    MCL level, as well as at the CERCLA level, and that becomes an
    unsustainable perfect storm. It just can't. And we all want
    clean water, and we want safe, affordable drinking water, but
    there has to be an approach that allows that.
        I make this statement a lot, and I will go on the record.
    No system in the United States is sustainable on rates alone.
    It has to include funding from other sources, whether that is
    other taxes, the loan grant programs, all of that. The
    regulatory environment just adds that additional cost layer.
        A lot of the systems, especially that we work with in
    Wyoming, with the pertinent number being under 500 in
    population, just do not have the expertise to address a lot of
    that. So that is where our technical assistance comes in and
    helps, because we are able to provide that gap, if you will, of
    people who can fill in and do the work, help and assist in
    doing that, as well as keeping it affordable, because all of
    our services are provided free of charge to the systems.
        I do think that the regulatory environment, if you look at
    the old public health advisory for PFAS being at 70 parts or 90
    parts per trillion, dropping it to 4 parts, we have had a
    couple rounds of testing in Wyoming that were done when the
    protocols were not that great, and so there were a lot of lab
    errors and what not. But we did have some detects under the
    public health advisory level.
        Senator Lummis. So were the detects at 40 to 70 parts per
    trillion, or were they at the 4 parts per trillion?
        Mr. Pepper. Both. We had some that were detect, and so you
    have to assume they were low enough to have a detect.
        Senator Lummis. And if something is detected, does it have
    to be addressed?
        Mr. Pepper. Well, that is the million-dollar question. We
    don't know. Not all the PFAS, PFOA, PFOS compounds cause health
    issues. I think they have identified six that have that they
    are going to try and create the MCL for. Our focus on the MCL
    is that it will then cause the ratepayers to pick up the tab to
    cure that violation.
        Senator Lummis. So, you mentioned the MCLs, but you also
    mentioned CERCLA. The role of CERCLA in this is that water
    systems could bear the liability costs, correct, if EPA moves
    forward with designating certain PFAS compounds as hazardous
    substances?
        Mr. Pepper. Correct, and that is if we look at it as a
    hazardous waste product, the cost to do that is severe.
        In Wyoming, the closest lab that would be able to do any of
    that testing is Cincinnati. So you have the shipping costs, you
    have the hold times, you have all the issues of lab testing.
        The closest Subtitle C hazardous waste disposal site is in
    Utah. There isn't anything close enough, so I can use this,
    when Sundance, from Sundance to Salt Lake is a heck of a trek,
    so all that hazardous material would be expensive as all get
    out to transport, and the liability to clean it up then, marked
    as a hazardous waste site, would be astronomical. And like I
    said, it would probably price those communities out of
    existence.
        Senator Lummis. And normally, under CERCLA, the polluter
    pays, but if the substance is there, and the polluter can't be
    identified, the ratepayer could pay. Correct?
        Mr. Pepper. Correct. That is where we run into nonpoint
    source pollution, when you can't find that person. There are
    some programs out there.
        As indicated, I sit on the Governor's Nonpoint Source Task
    Force. We do 303(d) funding and 219 funding to help clean up
    some of those issues. But the State of Wyoming gets about
    $700,000 a year from those two programs. It wouldn't touch
    having to try and do PFAS if that gets thrown into the mix.
        Senator Lummis. Thank you for your testimony.
        Mr. Chairman, I yield back.
        Senator Padilla. Thank you.
        As everyone can see, members are coming in and out of the
    Committee, eagerly trying to time their opportunity to pose
    questions to our witnesses.
        I recognize Senator Kelly, if he is ready, or if he needs a
    minute?
        Senator Kelly. Ready to go.
        Senator Padilla. Senator Kelly.
        Senator Kelly. Thank you, Mr. Chairman, and thank you to
    our witnesses for being here today.
        Mr. Chairman, thank you for holding this hearing on this
    important topic, certainly for Arizona and California and the
    West, we are facing serious challenges with drought and climate
    change. And our access to reliable supplies of water and water
    affordability is directly related to these challenges.
        As sources of water become more scarce, the price is
    clearly going to go up. For example, I live in Tucson, Arizona,
    where the average water bill increased by 118 percent between
    2010 and 2018. In some cases, these increasing water rates can
    drive more conservation. I have been told it is the one thing
    that actually works well.
        But increasing water bills also has a significant impact on
    households who are living paycheck to paycheck. Folks are
    really struggling with this.
        Ms. Menard, I understand that your community has faced
    water supply challenges due to drought. How has the city of
    Santa Cruz balanced the challenges of needing to increase rates
    as water supply costs increase with the need to ensure that
    water remains affordable to your residents?
        Ms. Menard. Thank you for that question, Senator Kelly. I
    think that really important thing that we have done in Santa
    Cruz is acknowledge, once we initiated our major capital
    reinvestment cycle, including the infrastructure side as well
    as the supply side, that we were potentially going to be
    negatively impacting some of our folks in our community who are
    least able to pay.
        One of the things that we have done is we have really
    studied that problem and gone into detail to try to understand
    not just what is occurring, but what will occur as we continue
    to make these really necessary reinvestments in systems and
    facilities and supply.
        I think another thing we have done is we have recently
    completed an advanced metering infrastructure implementation in
    our community that has allowed us to help people, particularly
    focused on low income customers, look at and be notified
    immediately when they start having a leak so that we can assist
    them with getting that leak repaired.
        We have redirected our conservation programs. Santa Cruz
    has a very strong ethic for water conservation, and our
    customers, indoor and outdoor use averages about 44 gallons per
    person per day, which is probably the lowest or near the lowest
    in the State and maybe lots of other places. But one of the
    results of that is that we have been able to redirect some of
    our resources internally to supporting this advanced metering
    infrastructure initiative to communicate to customers
    immediately when a leak is occurring so that they can get that
    fixed.
        We are looking at opportunities to support helping people
    get those leaks fixed and dealing with the fact that, in
    rentals for example, the tenant is responsible for the bill,
    and then it is not incentivized for the owner to actually pay
    to fix the leaks. We have been working on some ways to deal
    with that as well.
        Senator Kelly. I recently added one of those to the water
    meter in my house that will detect and give you a lot of data
    on water usage, so thank you.
        Mr. Jones, one way that we can address rising rates for
    those with difficulty making ends meet is through some Federal
    water assistance programs. And that is why I supported the
    creation of a water assistance pilot program for rural and low
    income communities in the Bipartisan Infrastructure Law. In my
    remaining time here, Mr. Jones, can you speak to how water
    affordability assistance programs can help to ensure increasing
    water rates do not push families into poverty or cause them to
    lose access to drinking water?
        Mr. Jones. Yes. I think the situation we have right now,
    and thank you for that, in California and across the country,
    is that with water rates ever increasing, that folks are
    continuing to face shut offs and losing access to water
    entirely without assistance. All we have so far established on
    the Federal level is the Low Income Household Water Assistance
    Program, LIHWAP, which is addressing debt and only addressing
    debt, at least in California, one time. And that can be a big
    challenge. Going through the journey and what it takes for a
    customer, a family, to go through the process of having to
    choose between paying their water bill to avoid shut off or
    maybe not paying rent or not paying for as much food, that is a
    challenge that none of us should have to face.
        While it is great that we have debt assistance so far,
    without a long term program that actually makes water
    affordable in the first place, folks aren't ever going to be
    made whole, and we are going to continue to face challenges. I
    think the support for that pilot and really getting that
    program going is going to be absolutely critical to ensure that
    folks aren't getting shut off as we continue to invest in water
    and make it safe for all.
        Senator Kelly. Thank you.
        Senator Padilla. Thank you, Senator Kelly.
        Senator Ricketts.
        Senator Ricketts. Thank you, Chairman Padilla and Ranking
    Member Lummis, for holding this hearing today on water
    affordability.
        I want to thank all of our witnesses for coming here today
    to talk to us about it, and for all of your support for water
    infrastructure projects across the country.
        I have heard from Nebraskans who have concerns about the
    costs that local water utilities and ratepayers will bear with
    regard to PFAS monitoring and remediation. I understand the
    importance of making sure we have clean water for everybody,
    but the concerns, especially for the cost burden in our rural
    and more remote water utilities.
        I am going to ask the entire panel to weigh in on this. I
    am going to start with you, Mr. Pepper. What tools would be
    helpful for testing and compliance, especially to water
    infrastructure in rural and remote communities? What are some
    of the things that these communities can look for?
        Mr. Pepper. As far as testing goes, thank you, Senator, for
    that, the access to additional labs would be one thing that we
    can use that would allow for more appropriate or quick testing,
    so we know where we are.
        PFAS is a new animal. It has been around for a long time,
    but the testing is not where we would like it to be yet. I
    think the labs that are starting to do that have indicated that
    they have gotten much better at the detections and being able
    to isolate which compound they are dealing with. But those are
    few and far between, and the costs are exorbitant.
        We understand some of the PFAS tests can be anywhere from
    $1,500 to $10,000. If they are required to be done on a
    periodic basis or a monthly basis, that could just ruin a small
    community.
        I understand that the treatment, of course, treatment is
    everything. We don't know what is the best treatment. There are
    a lot of scientists that are working on methodologies to try
    and deal with the treatment to remove PFAS or PFOS, PFOA, from
    the drinking water.
        We don't have it yet, as far as I know, in a usable form. I
    have heard that there is some costs in, I want to say
    Pennsylvania, maybe the State, that has a community that did
    put in a UV type reactor that is able to incinerate the PFAS,
    but it was a cost of, I want to say, it was a town of 10,000
    and the cost was $25 million or $30 million. We just can't
    afford it. We need a lot of R&D and testing and treatment.
        Senator Ricketts. Thank you, Mr. Pepper.
        Ms. Menard.
        Ms. Menard. Thank you for that question, sir.
        One of the things that is going on in Santa Cruz is we are
    making this massive generational reinvestment in our water
    system as we are working on a major water treatment plant
    upgrade. Our treatment plant is from 1960. It hasn't really had
    major money put in it since before the 1986 Amendments to the
    Safe Drinking Water Act. So it does its job now, but it is not
    going to be the water system, water treatment process for the
    future.
        We are looking at a number of opportunities to use that
    treatment plant upgrade to prepare us, future proof our water
    system against the incremental changes that occur in water
    quality regulations over time.
        PFAS is one of the issues we are looking at. Obviously,
    disinfection biproducts is another one that we are working on.
        We are looking at granular activated carbon, which is one
    of the best available technologies that EPA has identified. The
    issue with that one is not so much a huge capital cost, at
    least not in the system we are looking at, of about $158
    million construction costs for this treatment plant that we are
    looking at. And the capital for the GAC contractors is maybe
    around $5 million, so it is not a huge, big, it is not nothing,
    but it is not the hugest part of the deal.
        But the operating costs of that part of the system is
    anticipated to increase our ongoing operating costs by
    potentially as much as 500 percent, so that is a big issue for
    us. And I think that one of the things that we are all looking
    at as we look at these really tiny numbers is, how do we best
    balance that question of what to do with the treatment process
    versus how to make sure that we don't put so much treatment in
    place and then drive our operating costs, which go on forever,
    up to a place where we maybe balance one thing, but we cost
    something else.
        Senator Ricketts. Great, thank you.
        Mr. Jones, I am out of time, so please, can you weigh in,
    but just briefly?
        Mr. Jones. Thank you, Senator. I will be quick.
        I think a lot of what everyone mentioned, and in addition,
    making sure there is technical assistance for testing out
    there. We have over 2,700 water systems in California. A lot of
    them are small and rural; they will need assistance, and also
    assistance for domestic wells.
        A recent study showed that 40 percent of pesticides used in
    California actually end up having PFAS in them, and as that
    percolates in the groundwater, we need to make sure that
    everybody is protected, including domestic well owners.
        Senator Ricketts. Great. Thank you very much.
        Mr. Chairman, thank you.
        Senator Padilla. Thank you, Senator Ricketts. You may be
    out of time in this first round of questions, but we have a
    second round for additional responses or additional questions.
        Once again, I get to begin.
        During the COVID pandemic, and you addressed this in your
    earlier comments, Ms. Menard, Congress recognized the risk of
    impending water shut offs and growing debt nationwide and
    provided more than $1 billion to cover water debt and restore
    connections for low income households. To do this, Congress
    created the Low Income Household Water Assistance Program. For
    folks watching at home, when you hear LIHWAP, that is what we
    are talking about, the first Federal program to assist low
    income families with their water bills.
        That program expires this year, as does the one time
    funding provided by Congress to cover water debt. It covers
    reconnection services; it covers late fees and reduces water
    rates.
        I have advocated for additional funding and an extension of
    the program as a bridge to a permanent water assistance program
    that several of you have suggested.
        Ms. Menard, I was glad to hear that Santa Cruz participated
    in LIHWAP to help your customers access one time payments and
    temporary support. What will happen if LIHWAP expires, and we
    don't replace it with a permanent water assistance program?
        Ms. Menard. That is a great question. Thank you for that.
        One of the things that we are concerned about is that we
    won't have the one time funding to help particular people who
    get in arrears, which if you are low income and you are making
    this trade off every month, it is pretty easy even once you get
    the help of having your slate cleaned to find yourself back
    there again. But I think that we would find ourselves in a
    situation where setting people up for down payment or giving
    people payment arrangements is something that would become much
    more frequent.
        One of the things we have done about, just in the last
    couple of weeks since the COVID era prohibition against
    disconnections has occurred, actually expired in California, is
    we have had just 50 payment arrangements that were set up just
    in the last couple of weeks. The average amount of those
    payment arrangements is $198 a month for 12 months.
        So that is going to be a really big burden for someone who
    is already struggling to be able to pay in order to clear that
    arrearage. I think the bottom line for us is that we would have
    a lot more people facing shutoffs for non-payment.
        Senator Padilla. Mr. Jones, a brief response, if you would.
    Do you think it makes sense that we have a permanent energy
    assistance program, LIHEAP, I referenced that earlier, but not
    a permanent program for water?
        Mr. Jones. Absolutely not. We need support for water
    assistance.
        Senator Padilla. Anybody disagree with that?
        All right, thank you. Let the record reflect all witnesses'
    heads nodded no.
        One additional question, and then I will recognize Senator
    Lummis again.
        Mr. Jones and Mr. Pepper, both of you, in your written
    testimonies, discussed the challenges that small, rural, or
    disadvantaged water systems face to develop solutions and
    create needed projects to deliver and to treat water. And that
    is just to develop the pipeline of projects that could
    potentially receive Federal or State funding. You discussed
    issues related to economies of scale and the lack of a large
    ratepayer base to spread costs.
        Could you each expand on the challenges communities face in
    accessing infrastructure dollars, and what are some of the
    solutions that you have seen, particularly if it sheds light on
    what Congress can do to help in this regard?
        Mr. Jones. Thank you.
        Some of the challenges we are facing, like I said, a lot of
    times, projects need a lot more technical assistance, not only
    to understand what a long term solution is that works for the
    community, but also gets community support and buy in, which is
    absolutely critical.
        I think the famous story in California is about Lennar,
    California. That is a community that faced arsenic in their
    drinking water. They funded a treatment project for that
    community, but unfortunately, because it wasn't right sized for
    the community, that project was shuttered when the community
    couldn't afford operations and maintenance costs.
        One thing we are doing in California is looking at starting
    to fund operations and maintenance for certain projects to
    actually make it so that solutions are affordable for
    communities. And so I think, going forward, that has to be part
    of the conversation to figure out how making sure that
    communities are able to run systems is part of the solution.
        Mr. Pepper. Thank you, Mr. Chairman.
        In Wyoming, I know we have a myriad of funding programs in
    addition to the Federal programs, the State Revolving Funds. I
    think the State Revolving Funds were a great addition to the
    funding mechanisms. Giving the States the opportunity to design
    their own rules and regulations around the SRFs is critical.
        Every State is a little different, which does make it a
    little tough to go from State to State to State, which makes in
    State technical assistance so critical. But I do think that
    some of the timelines that come with that funding need to be
    addressed and need to be looked at a little bit differently.
        Like I said, the SRF, the infrastructure bill, some of
    those funding sources and timelines are just unrealistic, given
    the supply chain issues, given the technical abilities of
    having enough engineers and contractors who can do the work,
    and then also having the work force that can then maintain it
    after everything is all done.
        Senator Padilla. I know my second round 5 minutes are up,
    but if you will indulge me, I have one specific follow up
    question for Mr. Jones. And I believe it is a timely one.
        As we speak, I believe the House of Representatives is
    taking up this debt limit deal. Now, the debt limit deal
    currently under consideration rescinds unobligated LIHWAP funds
    from the American Rescue Plan. Funds to States and Tribes have
    all been obligated; that is the good news, but this will impact
    the HHS budget for staff time and for expenses.
        So how will this impact, question for Mr. Jones, the
    ability of communities to implement their LIHWAP funds if HHS
    has decreased capacity for staffing?
        Mr. Jones. I think it is certainly going to pose a
    challenge. In California, there has been a lot of conversation
    between our State agencies that are implementing the program
    and HHS and a lot of assistance coming from HHS on how to
    better structure California's program. And unfortunately,
    California hasn't been as successful as other States in getting
    funding out the door. So certainly, making sure that HHS has
    the ability to support States in getting resources to families
    is going to be absolutely critical.
        Second, there is a lot of important work being done on
    reporting and getting data out there so that we can understand
    who is doing what work and why. And as I look to think about
    how California could do a better job, I see States like
    Pennsylvania, Michigan, doing fantastic, and that makes me want
    to learn about them.
        So I worry that if we are not going to have the ability to
    data share and staff to help, that we are not going to be able
    to improve upon the program and the model of delivery going
    forward.
        Senator Padilla. Thank you. I just wanted to underscore
    that, because I think part of the dynamic we are facing here
    for small, for rural, for resource limited water utilities and
    communities, sometimes reliance on the Federal Government for
    some of that technical assistance and support is part of
    getting to a solution. So if that is limited on the Federal
    side, separate and apart from a dollar, a grant, or a favorable
    loan, this is hurting more than it is helping.
        Senator Lummis, thank you for your patience.
        Senator Lummis. Thank you, Mr. Chairman.
        I have a question for Ms. Menard. My line of questioning
    for Mr. Pepper dealt mostly with maximum contaminant limits and
    CERCLA. Could you address those questions as well, please, from
    your community's perspective?
        Ms. Menard. Thank you, yes. I think the CERCLA question in
    our community is mostly on the wastewater side. And to some
    degree, we have it in our surface water, but at a really,
    really low level, so I am not too concerned about the CERCLA
    issues for solids coming from the water treatment plant, but
    obviously we are looking at that.
        Also, on the wastewater side is one of the places where the
    CERCLA liability is really getting looked at, because they
    obviously get water coming from households and businesses, and
    those sources can often have other additional adds of the PFAS.
        I think on the question of the impacts, I mentioned in my
    earlier comments about looking at granular activated carbon and
    its capital costs plus its operating costs, that does
    potentially represent a long term concern. But I also know that
    it is really important in my community for there to be a strong
    commitment and strong action on improving the quality and being
    good stewards of the quality of the treated water that is
    delivered.
        In my community, we have a strong preference for doing what
    we can to deal with these issues that come, including other
    constituents of emerging concern, pharmaceuticals, personal
    care products, those kinds of things, that fall in the source
    waters that we use, and those things are being planned for as
    part of our treatment plant upgrade.
        Senator Lummis. Thank you.
        There are other committee hearings going on this afternoon.
    We have some members of the Committee that are elsewhere, but
    wanted some questions asked for the record.
        This one is for Mr. Pepper. There are concerns within the
    water sector that funding decisions that are prioritizing
    environmental justice factors are unrelated to water quality
    and health. This could potentially impact the affordability of
    water services for rural communities, which already face unique
    challenges, such as limited funding, technical expertise, and
    resources.
        The question is this: Do you believe the emphasis on non-
    water infrastructure policies and potential biases that are
    related to environmental justice decisionmaking might affect
    affordability of water services in rural areas?
        Mr. Pepper. Thank you for that question.
        Yes. I guess, from the West, and from my perspective, a lot
    of the issue that we have is defining disadvantaged or
    environmental justice centers or constituents. I would contend
    that a lot of rural America, whether it is north, east, south,
    or west, works with those.
        We have a declining population base in a lot of those
    areas, which further puts strain on affordability in those
    small communities, aging communities, and disadvantaged, I
    believe, can be socioeconomic. That crosses all races and goes
    into, how do we look at that on a countrywide basis, as opposed
    to certain pockets.
        Yes, some of those biases, I think, can play into the
    affordability index and makes it far more difficult to define
    more than anything.
        Senator Lummis. The question comes from someone who is
    concerned that environmental justice is being used as a term to
    steer resources toward low income urban areas at the expense of
    rural areas. Mr. Jones, do you see that?
        Mr. Jones. I haven't seen that so much in California. I
    think the communities we work with are certainly both rural and
    environmental justice communities.
        Senator Lummis. So you distinguish it, you separate it?
    There is rural, and there is environmental justice communities?
        Mr. Jones. A community could be both, for sure. Maybe the
    disadvantaged community definition we use in California is 80
    percent State-wide income level. So certainly for the valley
    and areas that we primarily work in, most communities are able
    to qualify, unfortunately, just because of the level of income
    inequality in the State. But I haven't seen so much of a
    dynamic there in California, at least.
        Senator Lummis. Mr. Pepper, any closing remarks on that
    point?
        Mr. Pepper. I think he hit it very well. It just depends on
    the level of income in any area. In our State of Wyoming, there
    are several counties that are impacted and low income, but
    define lower income, a lot of those are ag related, so there is
    a different accounting in an ag business than there is in
    residential.
        I think there is, again, it comes back down to definitions.
    I would say that it does appear, in some respects, even in
    Wyoming. Some of the urban thrust versus the rural thrust is
    there, so that should be addressed.
        Senator Lummis. Thank you.
        Mr. Chairman, I yield back, and I want to thank the
    witnesses for attending today and providing their expertise to
    the Subcommittee.
        Senator Padilla. Thank you to you, Senator Lummis, and to
    our witnesses, once again, for being here today and for sharing
    your experiences to help us improve the lives of countless
    Americans who are still struggling to afford something as
    fundamental as their water.
        Again, I want to thank Chairman Carper and Ranking Member
    Capito, as well as our Subcommittee staff, for all the
    preparation that went into holding today's hearing which, I
    think, just for the record, that we have established a success.
        In the end, we can't be truly an equal society, we can't
    truly call ourselves a compassionate country, and no one can
    truly pursue life, liberty, and the pursuit of happiness unless
    every family has the dignity of safe drinking water and proper
    sanitation.
        The issue of water affordability in America could not be
    more important and more timely. That is why it has been a
    defining feature of many of the major funding bills that
    Congress has passed over the last few years. We have recognized
    the problem of deteriorating infrastructure, rising prices, and
    an economic crunch. And we have stepped in to help the American
    people.
        That is the good news. But the bad news is, as we have
    heard from our witnesses today, we still have much more work to
    do. What we heard from Mr. Jones, for example, should leave no
    doubt that families are still struggling to stay afloat.
        While recent laws have made a difference, one time
    assistance is not a solution for a family sitting at the
    kitchen table deciding between the next grocery store trip or
    next month's water bill. And unfortunately, as we learned from
    Ms. Menard and Mr. Pepper, the conditions of our aging
    infrastructure, combined with the increasingly devastating
    effects of climate change and the challenges posed by emerging
    contaminants, including PFAS, mean that none of this will be
    resolved on its own. Congress needs to step up.
        But I am hopeful that previously approved water assistance
    funding and the permanent energy utility assistance programs
    that were referenced earlier today have enjoyed bipartisan
    support. Congress has recognized the threat of rising costs of
    home energy bills. So in 1980, we established a permanent Low
    Income Home Energy Assistance Program for families in need.
    There is no reason that we can't do the same for water rate
    assistance. I believe we can and we must come together in a
    bipartisan fashion to make these meaningful investments.
        Countless families across the country are counting on us to
    do just that, because for them, this isn't just about policy.
    It is about the dignity of having clean water to wash your
    dishes and bathe your children. It is about the peace of mind
    knowing your kids have clean water to drink at school, and it
    is about making sure that every American, no matter the ZIP
    code or your paycheck, has access to safe, affordable water.
        Before we adjourn, just a bit of housekeeping. Senators
    will be allowed to submit written questions for the record by 4
    p.m. on Wednesday, June 14th, which is 2 weeks from today. We
    will compile those questions, send them to our witnesses, who
    we will ask to reply by Wednesday, June 28th.
        I want to thank you all again for being here this
    afternoon. With that, this hearing is adjourned.
        [Whereupon, at 3:57 p.m., the hearing was adjourned.]
        [Additional material submitted for the record follows:]

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