Federal Water Requirements: Challenges to Estimating the Cost
Impact on Local Communities (30-NOV-05, GAO-06-151R).
Under the Safe Drinking Water Act and the Federal Water Pollution
Control Act, commonly referred to as the Clean Water Act, the
Environmental Protection Agency (EPA) has responsibility for
protecting public health and welfare, as well as the integrity of
our nation's waters. Federal water requirements under these acts
affect facilities providing the most basic services at the local
level, including drinking water treatment plants and distribution
systems; wastewater treatment plants and collection systems; and
storm sewer systems, which collect storm water, or the runoff
created by rainfall and other types of wet weather. For example,
depending on the circumstances, local communities may have to pay
for installing new treatment technologies or taking other
measures so that community-based or regional facilities can meet
applicable water quality standards. Nationwide, there are roughly
53,000 community drinking water systems, 17,000 municipal
wastewater treatment plants, and 7,000 communities served by
municipal storm sewer collection systems that may be affected by
federal water requirements. While recognizing the public health
and environmental benefits of federal water requirements,
communities are increasingly voicing concerns about the financial
burden imposed by these requirements--in particular, the
projected costs of more recent regulations and their cumulative
costs over time. Over the years, EPA, water and community
associations, and other parties have developed various estimates
of some of the different costs related to ensuring clean water
and safe drinking water. Additionally, the Unfunded Mandates
Reform Act of 1995 requires EPA to prepare a written statement
identifying the costs and benefits of federal mandates contained
in certain regulations. However, the act does not require EPA to
identify the cumulative costs and benefits of multiple
regulations. As the Congress considers legislation to provide
more resources to communities to address regulatory costs and
aging water infrastructure, it is seeking a more complete
understanding of the federal water requirements affecting local
communities and the cumulative costs associated with implementing
them. In this context, Congress asked us to determine the
cumulative cost of federal water requirements. In conducting this
work, we identified some major methodological challenges to
developing complete and reliable cost information. This report
summarizes the information provided Congress during our November
17, 2005, briefing and formally transmits the charts presented
during that briefing. As requested, this report provides
information on (1) key federal water requirements that local
communities are subject to under the Safe Drinking Water Act and
the Clean Water Act, (2) the extent to which existing studies
provide information on the cumulative cost of such requirements
to communities, and (3) the methodological challenges to
developing reliable cumulative cost estimates attributable to
federal water requirements.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-06-151R
ACCNO: A42357
TITLE: Federal Water Requirements: Challenges to Estimating the
Cost Impact on Local Communities
DATE: 11/30/2005
SUBJECT: Cost analysis
Environmental law
Environmental monitoring
Federal regulations
Health hazards
Local governments
Potable water
Water pollution control
Water quality
Water treatment
Cost estimates
Standards (water quality)
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GAO-06-151R
United States Government Accountability Office Washington, DC 20548
November 30, 2005
The Honorable James M. Inhofe Chairman, Committee on Environment and
Public Works United States Senate
The Honorable Mike Crapo United States Senate
Subject: Federal Water Requirements: Challenges to Estimating the Cost
Impact on Local Communities
Under the Safe Drinking Water Act and the Federal Water Pollution Control
Act, commonly referred to as the Clean Water Act, the Environmental
Protection Agency (EPA) has responsibility for protecting public health
and welfare, as well as the integrity of our nation's waters. Federal
water requirements under these acts affect facilities providing the most
basic services at the local level, including drinking water treatment
plants and distribution systems; wastewater treatment plants and
collection systems; and storm sewer systems, which collect storm water, or
the runoff created by rainfall and other types of wet weather. For
example, depending on the circumstances, local communities may have to pay
for installing new treatment technologies or taking other measures so that
community-based or regional facilities can meet applicable water quality
standards. Nationwide, there are roughly 53,000 community drinking water
systems,1 17,000 municipal wastewater treatment plants, and 7,000
communities served by municipal storm sewer collection systems2 that may
be affected by federal water requirements.
While recognizing the public health and environmental benefits of federal
water requirements, communities are increasingly voicing concerns about
the financial burden imposed by these requirements-in particular, the
projected costs of more recent regulations and their cumulative costs over
time. Over the years, EPA, water and community associations, and other
parties have developed various estimates of some of the different costs
related to ensuring clean water and safe drinking water. Additionally, the
Unfunded Mandates Reform Act of 1995 requires EPA to prepare a written
statement identifying the costs and benefits of federal mandates contained
in
1There are also roughly 107,000 noncommunity water systems that may be
affected by federal drinking water requirements. About 19,000 of these
systems are located at facilities such as schools, factories, and
hospitals, which regularly serve at least 25 of the same people at least 6
months per year. The remaining noncommunity water systems are located at
facilities, such as gas stations and campgrounds, which serve transient
populations. 2Some municipalities have separate collection systems for
wastewater and storm water, and some have combined collection systems.
Both types may be affected by federal requirements and are included in
this figure.
Page 1
GAO-06-151R Federal Water Requirements
certain regulations. However, the act does not require EPA to identify the
cumulative costs and benefits of multiple regulations. As the Congress
considers legislation to provide more resources to communities to address
regulatory costs and aging water infrastructure, it is seeking a more
complete understanding of the federal water requirements affecting local
communities and the cumulative costs associated with implementing them.
In this context, you asked us to determine the cumulative cost of federal
water requirements. In conducting this work, we identified some major
methodological challenges to developing complete and reliable cost
information. We subsequently briefed your staffs on these challenges. This
report summarizes the information provided to your staffs during our
November 17, 2005, briefing and formally transmits the charts presented
during that briefing (see enc. I). As requested, this report provides
information on (1) key federal water requirements that local communities
are subject to under the Safe Drinking Water Act and the Clean Water Act,
(2) the extent to which existing studies provide information on the
cumulative cost of such requirements to communities, and (3) the
methodological challenges to developing reliable cumulative cost estimates
attributable to federal water requirements.
To respond to the first objective, we identified key federal water
requirements and verified the accuracy and completeness of the list with
EPA. Under the Safe Drinking Water Act, we included key regulations
directed at local drinking water systems and excluded regulations that
focused on analytical methods or provided clarification to existing
requirements. For the Clean Water Act, we included key regulations that
typically affect local wastewater treatment plants and municipalities with
combined or separate storm sewer systems and excluded regulations that are
specific to particular locations or involve technical clarifications. In
addition, we met with representatives from more than 10 associations
representing water and community interests to obtain their views on which
requirements have had, or will have, the most significant cost impacts on
local communities. In responding to the second objective, we conducted
Internet searches and held discussions with EPA, the Congressional Budget
Office, the Congressional Research Service, associations, and others to
identify studies that estimated some aspect of costs associated with
federal water requirements. Overall, we reviewed over 25 studies published
between 1988 and 2005 and summarized their scope, methodology, and
findings. For the third objective, we conducted site visits to four
communities, which we selected on the basis of three criteria: diversity
in community size and level of complexity, community willingness to
participate, and diversity of geographic location. During these site
visits, we met with community and system managers to determine what
information was available to support cumulative cost estimates, identify
challenges to developing such estimates, and obtain perspectives on the
federal water requirements that have had the most significant impact on
their communities. We supplemented this information with examples of
methodological challenges identified in existing cost studies and
perspectives gathered in interviews with EPA, associations, and others. We
conducted our review from February 2005 to October 2005 in accordance with
generally accepted government auditing standards.
Page 2
GAO-06-151R Federal Water Requirements
Summary
The key requirements of the Safe Drinking Water Act and the Clean Water
Act that communities must meet focus on limiting the exposure of customers
to contaminants in water supplied by community drinking water systems and
ensuring that communities prevent pollutants from sewage and diffuse
sources, such as streets and construction sites, from reaching surrounding
water bodies. (See enc. II for a list and brief description of these
federal water requirements.) Under the Safe Drinking Water Act, EPA
currently regulates over 90 contaminants, such as arsenic and lead, and is
developing regulations on several more. Generally, as required by the Safe
Drinking Water Act, EPA's regulations establish a limit, or "maximum
contaminant level," for specific contaminants and require water systems to
test the water periodically to determine if the quality is acceptable. If
contaminant levels are too high, water systems must install new treatment
technologies or take other measures to address the problem, such as
finding a new water source. However, if it is not economically or
technically feasible to ascertain the level of a contaminant, EPA may
instead establish a treatment technique to prevent known or anticipated
health effects. Other regulations require water systems to notify the
public when contaminant levels exceed established limits and provide
annual reports summarizing the results of all water quality testing. The
Clean Water Act requires wastewater treatment plants to meet minimum
technology-based effluent limitations. Plants also may need to implement
additional, more stringent limitations, including those necessary to meet
water quality standards. In addition, EPA requires municipalities to
develop and implement management programs that help prevent pollutants in
runoff from reaching surrounding bodies of water. In developing these
plans, communities must adopt certain minimum practices, such as controls
to reduce or eliminate pollution that collects on streets.
While many parties, including EPA, various water and community
associations, and private consulting firms, have developed cost estimates
for different aspects of maintaining safe, clean water, these estimates
have not provided information on the cumulative costs of complying with
federal water requirements, primarily because they were not intended to do
so. Some studies focus on developing a broad estimate of the costs of
providing safe drinking water or clean water, but do not attempt to
separate the costs associated with meeting regulatory requirements from
other costs. For example, EPA's 2000 Clean Watersheds Needs Survey
presents the cost of projects needed, nationwide, to address water quality
and public health problems, which EPA estimated to be $181.2 billion.3 The
study includes the costs of adding capacity to accommodate population
growth, replacing aging infrastructure, and complying with requirements in
its estimates, among other costs, but it does not distinguish the portion
of the total costs that are associated with meeting federal water
requirements. In addition, many studies have a narrower scope, focusing on
estimating costs for a subset of regulatory requirements and particular
time periods, or estimate costs to different entities (e.g., states,
private sector). For example,
3The estimate includes current and projected abatement costs, in 2000 year
dollars, for projects needed to address water quality or public health
problems eligible for funding under the Clean Water State Revolving Fund.
According to EPA, the quality of data informing the estimate was affected
by the variation in the level of effort states put forth in reporting the
cost data. We did not independently evaluate the estimation methodology
for any of the EPA estimates discussed in this report, nor did we evaluate
the validity or the reliability of the survey and other data used to
develop these estimates.
Page 3
GAO-06-151R Federal Water Requirements
EPA's 2003 Drinking Water Infrastructure Needs Survey and Assessment
presents an estimate of current and projected costs, for the time period
of 2003 to 2022, for drinking water infrastructure investment needs, which
totals $276.8 billion.4 While EPA did distinguish the portion of the total
cost attributable to compliance with regulatory requirements ($45.1
billion),5 the estimates do not include expenditures prior to 2003, and
only cover regulations under the Safe Drinking Water Act. (See enc. III
for an abbreviated description of the studies we reviewed.) Similarly,
although EPA is required to develop cost estimates for some individual
regulations, by definition, these estimates are narrow in scope. While the
estimates provide a measure of potential costs to comply with individual
regulations, which EPA has estimated may reach into the hundreds of
millions of dollars for some regulations,6 the estimates have been subject
to criticism for both overestimating and underestimating actual
implementation costs. Moreover, adding the projected costs of individual
regulations together to obtain an estimate of actual cumulative cost
impacts to communities would not provide a meaningful result because,
among other reasons, the regulatory estimates are prospective, the range
of uncertainty surrounding them is compounded as they are added together,
and, in any event, estimates do not exist for all relevant federal water
requirements.
Several methodological challenges hinder new efforts to develop reliable
cumulative cost estimates, including obtaining accurate and complete cost
data, particularly for older requirements; accurately allocating costs
(e.g., among jurisdictions that share costs); and establishing a causal
link between community investments and federal water requirements.
Therefore, any estimate of the cumulative costs of federal water
regulations should be viewed in light of the following challenges and
consequent data limitations.7
o Local communities often lack the institutional knowledge or historical
records on the costs of treatment technologies or other operational
changes. As a result, local officials may not be able to provide
information on the costs associated with installing new treatment
technologies or making other operational changes, when such changes
occurred, or why they were made.
o Even when data on the costs of treatment technologies or other
operational changes are available, local officials often have trouble
allocating costs attributable to federal water requirements partly because
accounting systems generally track costs by project rather than by federal
requirement. Cost
4The estimate includes costs, in 2003 year dollars, for projects to
protect public health, preserve the physical
integrity of water systems, convey treated water to homes and commercial
and industrial establishments, and
ensure continued compliance with specific Safe Drinking Water Act
regulations. According to EPA, there is some
uncertainty in the estimates due to sampling error and the use of
statistical cost models and regulatory economic
analyses.
5The estimate includes costs, in 2003 year dollars, for projects directly
attributable to specific Safe Drinking Water
Act regulations. According to EPA, there is some uncertainty in the
estimates due to sampling error and the use of
statistical cost models and regulatory economic analyses.
6Estimated costs for individual rules can vary widely, and in some
instances, reach into the hundreds of millions of
dollars. For example, EPA estimated that the Arsenic Rule would cost
public water systems between $190 million
and $227 million annually (in 1999 year dollars, annualized over 20 years
using a commercial discount rate, which
approximates 5 percent).
7Two previous GAO reports, Regulatory Burden: Measurement Challenges and
Concerns Raised by Selected
Companies, GAO/GGD-97-2 (Washington, D.C.: November 18, 1996), and
Unfunded Mandates: Views Vary About
Reform Act's Strengths, Weaknesses, and Options for Improvement,
GAO-05-454 (Washington, D.C.: March 31,
2005) presented similar limitations and concerns regarding the accuracy
and completeness of regulatory cost
estimates.
Page 4
GAO-06-151R Federal Water Requirements
allocation is especially difficult when costs are shared by multiple,
overlapping
jurisdictions or when communities make system or program changes for
multiple reasons, such as installing a new treatment technology that both
meets federal requirements for safe drinking water and improves the
water's
aesthetic quality. o Establishing a causal link between community
investments and federal water requirements is also problematic in
developing cost estimates. First, in some instances, there is no good
measure of what communities would have done in the absence of federal
water requirements that can be used as a baseline in developing cost
estimates. Second, some investments are made in anticipation of potential
federal requirements rather than in response to finalized ones.
Consequently, because of the subjective judgments that would have to be
made, it is difficult to reliably determine how far in advance of a
requirement an investment can be made and still be attributed to that
requirement. Third, because some states or regional entities may exercise
their authority to establish requirements that are more stringent than the
federal standards, some community investments may include costs beyond
those fairly attributable to federal requirements. Identifying the federal
portion of the costs is often not feasible because the authority and
requirements of the multiple levels of government overlap.
Information on the cumulative cost of federal water requirements is
critical in determining the nature and extent of the financial burden on
local communities. However, given the methodological challenges of
obtaining accurate and complete cost data, accurately allocating costs,
and establishing a causal link between community investments and federal
water requirements, researchers face formidable obstacles in developing a
reliable cumulative cost estimate.
Agency Comments and Our Evaluation
We requested comments on a draft of this report from the Administrator of
the EPA or his designee. On November 9, 2005, we obtained oral comments
from officials with EPA's Office of Water, including the Director of the
Office of Ground Water and Drinking Water, the Deputy Director of the
Municipal Support Division of the Office of Wastewater Management, and the
Associate Director of the Water Permits Division of the Office of
Wastewater Management. They generally agreed with our findings and
provided some technical comments, which we have incorporated into this
report where appropriate.
-----
We are sending a copy of this report to EPA. Copies will be made available
to others upon request. This report will also be available at no charge on
GAO's Web site at http://www.gao.gov.
Page 5
GAO-06-151R Federal Water Requirements
If you have any questions about this report or need additional
information, please contact me at (202) 512-3841 or by e-mail at
[email protected]. Contact points for our Offices of Congressional
Relations and Public Affairs may be found on the last page of this report.
Key contributors to this report include Ellen Crocker, Mark Braza, Nancy
Crothers, Laura Gatz, Alyssa Hundrup, Richard Johnson, and Mehrzad Nadji.
John B. Stephenson
Director, Natural Resources and Environment
Enclosures - 3
Page 6
GAO-06-151R Federal Water Requirements
Federal Water Requirements: Challenges to Estimating the Cost Impact on Local
Communities
A Briefing for Congressional Requesters
Objectives
o Local concerns about the cumulative impact of federal water
requirements prompted the original request.
o Revised objectives:
o What key federal water requirements are local communities subject to
under the Safe Drinking Water Act (SDWA) and the Clean Water Act (CWA)?
o To what extent do existing studies provide information on the
cumulative cost of such requirements to communities?
o What are the methodological challenges to developing reliable
cumulative estimates of costs attributable to federal water requirements?
To meet our review objectives, we
o identified key federal water requirements,
o interviewed major stakeholders,
o reviewed cost studies, and
o conducted site visits to selected communities.
Figure 1: Local-Level Facilities Subject to Federal Water Requirements
under SDWA
Figure 2: Local-Level Facilities Subject to Federal Water Requirements
under CWA
Background
o Local-level facilities subject to federal water requirements:
o 53,000 community drinking water systems
o 17,000 municipal wastewater treatment plants
o 7,000 communities served by combined sewer systems and separate storm
sewer systems
Background
o Typical types of operational changes that may be required to comply
with federal water requirements:
o Installing new treatment technologies
o Adding new chemicals during treatment
o Identifying a new source of drinking water (e.g., drilling a new well)
o Adopting best management practices, such as sweeping parking lots and
streets
Key Requirements Local Communities Are Subject to under SDWA and CWA
o SDWA - Most drinking water requirements set limits on
contaminants; EPA currently regulates over 90. Figure 3: Drinking Water
Standards, as Applied to Drinking Water Systems
o If it is not economically or technically feasible to ascertain the
level of a contaminant, EPA may instead establish a treatment technique.
Figure 4: Key CWA Requirements Included in National Pollutant Discharge
Elimination System Permits for Municipal Facilities
Key Requirements Local Communities Are Subject to under SDWA and CWA
Table 1: Key CWA Requirements Included in NPDES Permits for Municipal
Separate Storm Sewer Systems and Municipalities with Combined Sewer
Overflows
Municipal Separate Storm Sewer System Combined Sewer System
(MS4)
Storm water regulations require The Combined Sewer Overflow Policy
municipalities to o obtain a NPDES requires municipalities to o adopt
permit for all discharges from MS4s nine minimum control measures and
and o develop a storm water o develop a long-term control plan.
management program.
Key Requirements Local Communities Are Subject to under SDWA and CWA
o Community and water associations' views on the requirements that are
having the most significant cost impact on communities:
o Safe Drinking Water Act
o Arsenic Rule
o Disinfectants and Disinfection Byproducts Rule
o Radionuclides Rule
o Clean Water Act
o Total Maximum Daily Load Program
o Storm water regulations
o Combined Sewer Overflow Policy
Figure 5: Some Studies Focus More Broadly on the Costs of Providing Safe
Water or Clean Water, Rather than on Regulatory Costs Alone
Extent to Which Existing Studies Provide Cumulative Cost Information
o Other studies estimate costs for
o a subset of regulatory requirements, particular time periods, or
o entities other than local communities (e.g., states, private sector).
Extent to Which Existing Studies Provide Cumulative Cost Information
o EPA is required to develop cost estimates for some regulations, but
these estimates
o focus only on single regulations,
o are prospective,
o have been subject to criticism for both overestimating and
underestimating actual implementation costs, and
o do not provide a meaningful measure of actual cumulative compliance
costs when added together.
Methodological challenges hindering new efforts to develop reliable
cumulative cost estimates:
o obtaining accurate and complete cost data, particularly for older
requirements
o accurately allocating costs (e.g., among jurisdictions that share
costs)
o establishing a causal link between community investments and federal
water requirements
Challenge 1: Obtaining Accurate and Complete Cost Data
o There is a lack of institutional knowledge or historical records on the
costs of compliance efforts.
o Example: One community could not provide cost data on past operational
changes because some records were not readily available.
A key official with over 20 years of experience said that even with
project cost information, it would be difficult to determine how much of
the cost was incurred as a result of federal requirements.
Challenge 2: Accurately Allocating Costs
o Costs are sometimes shared by multiple, overlapping jurisdictions.
Figure 6: Example of Cost-Sharing among Multiple, Overlapping
Jurisdictions in One Community We Visited
(Challenge 2 continued)
o Communities generally track costs by project rather than by federal
requirement; projects may involve system or program changes that serve
multiple purposes or impose indirect but related costs.
o Example: One city decided to upgrade its treatment to reduce nitrogen
levels to meet upcoming NPDES requirements when it expanded its wastewater
treatment capacity to serve a growing population.
o Example: A county upgraded the biological, or secondary, treatment in
its wastewater facility in response to a federal requirement. Indirect but
related costs: (1) building more storage space to handle the additional
sludge and (2) installing odor controls on the sludge storage tanks to
comply with the Clean Air Act.
Methodological Challenges to Developing Reliable Estimates
Challenge 3: Establishing a Causal Link between Community Investments and
Federal Water Requirements
o For some requirements, there is no good baseline measure of what
communities would have done in the absence of such requirements.
o Example: To meet federal storm water requirements, the cities in one
county are required to sweep streets once a month. The problem in
allocating costs is determining what the cities would have done in the
absence of the federal requirement. Some cities would have swept their
streets anyway.
Methodological Challenges to Developing Reliable Estimates
(Challenge 3 continued)
o Some investments are made in anticipation of federal requirements.
Figure 7: General Process for Development of a Regulation and Points Where
Communities May Decide to Take an Action That Incurs Costs
(Challenge 3 continued)
o Example: One community decided to upgrade the biosolids program at its
wastewater facility before there was a specific federal requirement
covering the use or disposal of biosolids. A community official told us
that the change was made in anticipation of the federal requirement.
o Example: When another community constructed a new wastewater facility
to accommodate population growth, it opted to install a filter, not
because it was needed to meet any existing NPDES permit limits, but
because it anticipated that future federal requirements could necessitate
more advanced treatment.
(Challenge 3 continued)
o Some states or regional entities may exercise their authority
toestablish requirements that are more stringent than the federal criteria
(e.g., water quality standards, storm water requirements).
Figure 8: Authority for Establishing Water Quality Standards and Effluent
Limits
(Challenge 3 continued)
Figure 9: Multiple Regulatory Layers Affect the Impact of Federal Water
Requirements on Communities
Enclosure II
Key Federal Requirements Local Communities Are Subject to under the Safe
Drinking Water Act
Title Date Local-level systems covered Principal requirements promulgated
or proposeda Disinfection Byproduct Regulations
Trihalomethanes November 29, Community water Establishes a maximum
systems that contaminant
Rule 1979 serve 10,000 or more level (MCL) and
people and associated monitoring
add a disinfectant to and reporting
their treatment requirements for total
process trihalomethanes
Stage 1 Disinfectants December 16, Community water systems and Builds upon
and expands the
and Disinfection 1998 nontransient, noncommunity water Trihalomethanes
Rule; establishes
Byproducts Rule systems that treat their water with a standards for three
disinfectants, two chemical disinfectant; certain groups of organic
disinfection requirements for one disinfectant byproducts, and two
inorganic apply to transient noncommunity disinfection byproducts water
systems.
Stage 2 Disinfectants Proposed Community water systems and and
Disinfection August 18, nontransient, noncommunity water Byproducts 2003
systems that add a disinfectant
other than ultraviolet light or deliver water treated with a disinfectant
other than ultraviolet light Would augment the Stage 1 Disinfectants and
Disinfection Byproducts Rule in part in response to new information
concerning the health effects of disinfection byproducts; requires systems
to evaluate their distribution systems to identify locations with high
disinfection byproduct concentrations (locations will then be used by the
systems as the sampling sites for disinfection byproduct compliance
monitoring); alters method of calculating compliance with disinfection
byproduct MCLs to reduce exposure to peak disinfection byproduct
concentrations
Microbial Contaminant Regulations
Surface Water June 29, Public water systems Establishes maximum level
that use contaminant
Treatment Rule 1989 surface water or goals for Giardia lamblia,
ground water viruses, and
under the direct Legionella, and establishes
influence of treatment
surface water technique requirements to
protect
against the health effects of
exposure to
these contaminants (by
establishing
criteria under which
filtration is required,
as well as disinfection
requirements)
Total Coliform June 29, Public water Sets an MCL, monitoring requirements
Rule systems
1989 (which are based on the population
served), and analytical requirements
for
total coliform bacteria; requires
routine
monitoring by all public water
systems,
periodic sanitary surveys for small
systems, and additional monitoring
for
systems that detect coliform
contamination
Page 31 GAO-06-151R Cost of Federal Water Requirements
Enclosure II
Interim December 16, Public water systems Requires large systems
Enhanced that serve to control
Surface Water 1998 more than 10,000 microbial contaminants,
people and use particularly
Treatment Rule surface water or Cryptosporidium; sets a
ground water maximum
under the direct contaminant level goal
influence of for
surface water Cryptosporidium; and
builds on the
treatment technique
requirements of the
Surface Water Treatment
Rule
Filter Backwash June 8, 2001 Public water systems Adds further protections
that use to ensure
Recycling Rule surface water or treatment processes
ground water effectively remove
under the direct Cryptosporidium by
influence of requiring systems
surface water, use to review their recycle
direct or practices and,
conventional where appropriate, make
filtration any necessary
processes,
and recycle certain changes to recycle
process waters practices that may
compromise microbial
control
Long Term 1 January 14, Public water Requires small systems to
systems that serve improve
Enhanced 2002 fewer than 10,000 control of microbial
Surface and use surface contaminants,
Water Treatment water or ground particularly
water under the Cryptosporidium, by
Rule direct influence of strengthening filtration
surface water requirements and
addressing risk trade-offs
with
disinfection byproducts;
builds on the
treatment technique
requirements
established for large
systems in the
Interim Enhanced Surface
Water
Treatment Rule
Ground Water Proposed Public water Establishes treatment
Rule systems that use techniques for
May 10, 2000 ground water systems using groundwater;
specifies
the appropriate use of
disinfection in
ground water, requires surveys
and
assessments, and requires any
system
with significant deficiencies
to take
corrective actions
Long Term 2 Proposed Public water systems that use Enhanced Surface August
11, surface water or ground water Water Treatment 2003 under the direct
influence of Rule surface water Builds upon the treatment techniques for
Cryptosporidium that were established for large systems by the Interim
Enhanced Surface Water Treatment Rule and for small systems by the Long
Term 1 Enhanced Surface Water Treatment Rule; requires source water
monitoring for Cryptosporidium, additional Cryptosporidium treatment for
filtered systems, and inactivation of Cryptosporidium by unfiltered
systems
Other Contaminant Regulations
Fluoride Rule April 2, 1986 Community water Sets an MCL for
systems fluoride
Phase I - Community water Establishes MCLs for
Synthetic July 8, 1987 systems and eight volatile
Organic nontransient, synthetic organic
Chemicals noncommunity water chemicals
Rule systems
Phase II - January 30, Primarily community Establish MCLs for 26
Synthetic water systems synthetic organic
Organic 1991 and nontransient, chemicals and 7
Chemicals noncommunity inorganic chemicals
and Inorganic water systems
Chemicals Rules
Lead and June 7, Community water Establishes maximum contaminant level
Copper 1991 systems and
Rule nontransient, goals for lead and copper and
noncommunity water
systems establishes "action levels" that,
when
exceeded, trigger treatment technique
requirements (including corrosion
control treatment, public education,
and,
under some circumstances, source
water treatment and lead service line
Page 32 GAO-06-151R Cost of Federal Water Requirements
Enclosure II
replacement)
Phase V - July 17, Community water systems Establishes MCLs for 18
Synthetic 1992 and synthetic
Organic Chemicals nontransient, organic chemicals and 5
noncommunity water inorganic
and Inorganic systems chemicals
Chemicals Rule
Information May 14, Large public water Required systems to collect and
1996 systems report
Collection Rule (surface water information on the occurrence
systems serving at of
least 100,000 and disinfectant residuals,
ground water disinfection
systems serving at byproducts, and disease-causing
least 50,000)
microorganisms in drinking
water and on
the effectiveness of various
treatment
technologies to reduce levels
of these
contaminants; this data
collection effort
is complete and no longer
imposes
requirements on systems.
Radionuclides Rule December 7, Community water systems Sets an MCL for
uranium and revises 2000 monitoring requirements for other radionuclides
Arsenic Rule January 22, Community water systems and Establishes a new MCL
for arsenic 2001 nontransient, noncommunity water systems
Radon Rule Proposed Community water systems Proposes two options: (1)
that use developing a
November 2, ground water or mixed multimedia mitigation
ground program at the
1999 water and surface water state level to reduce radon
in indoor air
or (2) developing a local
program to
reduce radon in water to a
greater
extent
Customer Awareness Regulations
Consumer August 19, Community water Requires systems to prepare
systems and
Confidence Reports 1998 provide to their customers
annual
Rule confidence reports on the
quality of the
water delivered by the
systems
Public Notification May 4, 2000 Public water Requires systems to notify
systems the people it
Rule serves of (1) violations of
drinking water
regulations, (2) applicable
variances and
exemptions from the
regulations, and (3)
other situations posing a
risk to public
health from the drinking
water;
establishes minimum
requirements
regarding the form, manner,
frequency,
and content of the public
notification
Notes:
Public water system is a water system that regularly supplies drinking
water to at least 15 service connections or 25 people daily for at least
60 days a year. A public water system is either a "community water system"
or a "noncommunity water system."
Community water system is a public water system that serves at least 15
service connections used by year-round residents or regularly serves at
least 25 year-round residents.
Transient noncommunity water system is a public water system that does not
regularly serve at least 25 of the same people at least 6 months per year
(e.g., gas stations, campgrounds).
Page 33 GAO-06-151R Cost of Federal Water Requirements
Enclosure II
Nontransient noncommunity water system is a public water system that
regularly supplies water to at least 25 of the same people at least 6
months per year (e.g., schools, factories, office buildings, and hospitals
that have their own water systems).
a
Date of proposal is given for rules not yet finalized.
Page 34 GAO-06-151R Cost of Federal Water Requirements
Enclosure II
Key Federal Requirements Local Communities Are Subject to under the Clean Water
Act
NPDES program areas Date Municipal systems/facilities Key requirements and
requirements promulgated covered
Secondary treatment standards
Secondary August 17, Publicly owned Establish required levels of
Treatment treatment works effluent
Standards 1973 (as (POTW)a quality based on the quality
amended) achievable by secondary, or
biological, treatment
Water quality and technology-based permitting
Surface Water July 24, States are directly Specifies that states
Toxics 1992 covered; must submit
Control Program POTWs discharging to their lists of impaired
and impaired waters,
Water Quality b waters are including waters targeted
Planning indirectly affected. for total
and Management maximum daily load (TMDL)
Program (governing development to EPA every
2 years
regulation for the and provide documentation
Total to
Maximum Daily Load support the states'
determinations;
Program) eventually, POTWs could
be
required to meet more
stringent
limits on the discharge
of some
pollutants.
Monitoring August 4, POTWs and other Require monitoring for
1999 treatment works certain toxic
Requirements for treating domestic and other pollutants; the
sewage extent of
Publicly Owned pollutant monitoring
required varies
Treatment Works and by POTW size.
Other Treatment
Works
Treating Domestic
Sewage
Effluent Municipalities that Establish
Limitations January 19, (1) own or operate technology-based
effluent
Guidelines, 2000 new or existing limitations for
hazardous or wastewater
Pretreatment nonhazardous landfill discharges associated
Standards, facilities with the
regulated, operation and
and New Source respectively, under maintenance of
Subtitle
Performance C and Subtitle D of these landfill
Standards the Resource facilities
for the Landfills Conservation and
Point Recovery Act and
Source Category (2) collect and
discharge landfill
generated wastewater
to surface
waters of the United
States (unless
the landfills are
directly associated
with other industrial
or commercial
facilities)
NPDES - Final Regulations to Establish Requirements for Cooling Water
Intake Structures at Phase II Existing Facilities
July 9, 2004 Facilities (including municipally owned facilities) existing
prior to January 17, 2002, that (1) are point sources; (2) as their
primary activity both generate and transmit electric power or generate
electric power for sale to another entity for transmission; (3) use or
propose to use one or more cooling water intake structures with a total
design intake flow of 50 million gallons per day or more to withdraw water
from waters of the United States; and (4) use 25 Establish national
performance standards based on the best available technology to protect
aquatic organisms from being killed or injured by cooling water intake
structures
Page 35 GAO-06-151R Cost of Federal Water Requirements
Enclosure II
percent of water withdrawn exclusively for cooling water
Combined sewer overflows
Combined Sewer
April 19, 1994 Combined sewer systems that
Overflow Control Policy, Codified by the Consolidated Appropriations Act
for Fiscal Year 2001 overflow as a result of wet weather events
Establishes a consistent national approach for controlling discharges from
combined sewer overflows to the nation's waters; among other things,
municipalities must implement minimum technologybased controls and develop
longterm combined sewer overflow plans to meet water quality standards.
Municipal separate storm sewer systems National pretreatment program
Biosolids (sewage sludge)
Permit Application November 16, Discharges from Require large and
large and medium medium
Regulations for 1990 municipal separate municipal separate
Storm storm sewer sewer systems
Water Discharges systems (those to obtain NPDES
serving more than permits for storm
(Phase I Storm Water 100,000 people) water discharges and
set forth the
Regulations) required components
of municipal
storm water quality
management
plans
Regulations for December 8, Discharges from small Extend storm water
Revision municipal requirements to
of the Water 1999 separate storm sewer smaller municipal
Pollution systems (those separate storm
Control Program serving less than 100,000 sewer systems
people)
Addressing Storm
Water
Discharges (Phase
II
Storm Water
Regulations)
General Pretreatment June 26, 1978, POTWs Require most major POTWs to
Regulations for Existing as amended develop a locally run
pretreatment
and New Sources January 28, program to ensure that
1981 nondomestic users of the
municipal
system have controls in
place to
prevent the introduction
into
POTWs of pollutants that
will
interfere with operations or
pass
through the POTW untreated
Standards for February 19, POTWs and other Establish requirements for
Use or treatment works the final
Disposal 1993 treating domestic use and disposal of sewage
sewage sludge sludge;
numerical limits on the
pollutant
concentrations in sewage
sludge;
management practices; and, in
some cases, operational
requirements
a
A POTW is a state or municipally owned system or device used to store,
treat, recycle, or reclaim municipal sewage or liquid industrial wastes.
The term includes treatment plants. b If a state lists a water body as
impaired, it must eventually develop, for each pollutant causing an
impairment, a TMDL-the amount of the pollutant that the water body can
receive, taking into account seasonal variations and a margin of safety,
and still meet water quality standards. To implement a TMDL, states
allocate pollutant loadings among specific sources, such as local
wastewater treatment plants, and incorporate the loads into the state's
water quality management plans and NPDES permits.
Page 36 GAO-06-151R Cost of Federal Water Requirements
Enclosure III
Summary of Selected Cost Studies
Title Description
EPA studies
Drinking Water Infrastructure The purpose of this study was to estimate
the national infrastructure needs for public Needs Survey and Assessment:
drinking water systems. EPA conducted a survey to project the estimated
costs, for the Third Report to Congress, EPA, time period of 2003 to 2022,
for the approximately 75,000 public water systems eligible 2005. to
receive assistance from the Drinking Water State Revolving Fund. The
assessment
includes costs needed to protect public health, preserve the physical
integrity of water systems, convey treated water to homes and commercial
and industrial establishments, and ensure continued compliance with
specific Safe Drinking Water Act regulations. EPA also conducted similar
surveys in 1995 and 1999.
Report to Congress: Impacts and This report documents the extent of human
health and environmental impacts caused by
Control of CSOs and SSOs, EPA, municipal combined sewer overflows (CSO)
and sanitary sewer overflows (SSO),
2004. including the location of discharges causing such impacts, the
volume of pollutants discharged, the resources spent by municipalities to
address these impacts and the projected costs to reduce CSOs and SSOs, and
the technologies used by municipalities to address these impacts. EPA
reported expenditures, primarily for infrastructure investments such as
sewer system replacement and rehabilitation, going back to 1970 and
projected future needs over a 20-year period.
Clean Watersheds Needs Survey The purpose of this study was to estimate
the total national need for water quality
2000: Report to Congress, EPA, programs and projects under the Clean Water
Act. EPA conducted a survey to estimate
2003. the costs for needs that existed as of January 1, 2000; had an
indeterminate future time frame; and were eligible for Clean Water State
Revolving Fund assistance. EPA collected documentation from facilities
involved with water quality management, such as wastewater treatment
plants and municipal separate storm sewer systems. The assessment includes
projected costs for wastewater treatment, collection, and conveyance; CSO
correction; storm water management programs; and nonpoint source pollution
control. EPA conducted a similar assessment in 1996 and has collected
information about Clean Water Act needs since 1972.
Community Water System Survey This report summarized information from a
survey of a nationally representative sample
2000, EPA, 2002. of community drinking water systems on their financial
and operating characteristics. The survey collected information from water
systems on such characteristics as the source of their water; the size of
their system; and the capital expenditures they made over a 5year period.
EPA conducted similar surveys in 1976, 1982, 1986, and 1995.
The Clean Water and Drinking The purpose of this study was to estimate the
gap between projected clean water and Water Infrastructure Gap Analysis,
drinking water investment needs, over the 20-year period from 2000 to
2019, including EPA, 2002. needs related to regulatory compliance, and
levels of spending at the time the analysis
was conducted. The scope of the report includes both capital and
operations and maintenance costs for all clean water and drinking water
services. The analysis used the clean water and drinking water needs
surveys (see above) as a starting point and then made adjustments, based
on several alternative assumptions.
The National Costs of the Total This report estimates the national costs
of developing and implementing the Total Maximum Daily Load Program
Maximum Daily Load (TMDL) Program, under the Clean Water Act. EPA
calculated the (Draft Report), EPA, 2001. annual costs to states and EPA
for listing impaired waters and developing TMDLs. EPA
also estimated the annual costs to pollutant sources-such as industrial
dischargers and wastewater treatment plants-to implement the TMDLs for the
approximately 20,000 impaired waters that were identified at the time of
the study.
A Retrospective Assessment of This study estimates the nationwide costs of
water pollution abatement expenditures by
the Costs of the Clean Water Act: both public and private entities under
the Clean Water Act. The analysis focuses on the
1972 to 1997, prepared for EPA by incremental annual costs of requirements
under the Clean Water Act between 1972 and
George Van Houtven, Smita 1997.
Brunnermeier, and Mark Buckley,
Center for Economics Research,
2000.
Estimates of the Total Benefits The purpose of this study was to estimate
the total benefits and costs for all of the and Total Costs Associated
with drinking water regulations specified in the 1986 Amendments to the
Safe Drinking Water Implementation of the 1986 Act. The regulations
included in the analysis cover: volatile organic chemicals, fluoride,
Amendments to the Safe Drinking the surface water treatment rule, the
total coliform rule, the lead and copper rule, phase
Page 37 GAO-06-151R Federal Water Requirements
Enclosure III
Water Act, prepared for EPA by II inorganic and synthetic organic
chemicals, radionuclides, disinfection requirements, Wade Miller
Associates, Inc., phase V inorganic and synthetic organic chemicals, and
arsenic. The study presented 1990. aggregate national-scale costs for
implementing these rules on an annual basis in
addition to providing cost-benefit comparisons for the regulations at the
individual water system level and at the household level. Similar studies
were conducted in 1987 and 1989.
Environmental Investments: The This summary report presents data on
environmental pollution control costs from 1972 Cost of a Clean
Environment: A through 1987 and then projects the costs for each
subsequent year to the year 2000 Summary, EPA, 1990. under a number of
different scenarios. Cost estimates are included for actions taken
pursuant to each of the major federal environmental pollution control
statutes (including the Clean Water Act and Safe Drinking Water Act).
Separate costs were developed for each of the various environmental media,
including air, water, land, and useful chemicals (such as pesticides).
Cost estimates were also broken down by the economic sector that would
directly incur the cost, including EPA, other federal agencies, state and
local government, and the private sector. This report summarizes data
presented in a much more detailed report also issued in 1990 entitled
Environmental Investments: The Cost of a Clean Environment, Report of the
Administrator of the Environmental Protection Agency to the Congress of
the United States.
The Municipal Sector Study: This study examined the impacts of 22
environmental regulations that municipalities Impacts of Environmental
have to comply with, including 11 drinking water regulations, 3 wastewater
treatment Regulations on Municipalities, regulations, and 1 storm water
management regulation. EPA calculated the impacts by EPA, 1988. looking at
the projected increases in user charges (e.g., charges for water and sewer
services) per household, and the ability of municipalities to raise needed
capital to
comply with the additional requirements.
Studies by other federal agencies
Draft 2005 Report to Congress on
This report provides an estimate of the total costs and benefits of
regulations reviewed
the Costs and Benefits of Federal Regulations, Office of Management and
Budget, 2005.
by the Office of Management and Budget (OMB), including a 10-year
retrospective of major federal regulations reviewed by OMB, a historical
examination of the trends in federal regulatory activity, and discussion
of the implementation of the Information Quality Act. OMB's estimates are
based on cost estimates found in the agencies' regulatory impact analyses.
Federal regulations, including those under the Clean Water Act and Safe
Drinking Water Act, were included if, in general, they were projected to
have the potential for a significant impact.a OMB issues similar reports
on a yearly basis.
Future Investment in Drinking This study provides background information
on the nation's water systems; presents Water and Wastewater estimates of
future costs for water infrastructure under two scenarios, a low-cost case
Infrastructure, Congressional and high-cost case; and discusses broad
policy options for the federal government to Budget Office, 2002. support
water infrastructure development. The cost estimates are for the annual
infrastructure funding needs of drinking water and wastewater systems for
the period 2000 to 2019. These needs include capital costs and operations
and maintenance costs, which include costs related to regulatory
compliance.
The Safe Drinking Water Act: A This study looked at the costs and benefits
of treating drinking water according to the Case Study of an Unfunded
standards set under the Safe Drinking Water Act as a case study of federal
mandates. Federal Mandate, Congressional Among other things, the study
examined whether the act, at the time the analysis was Budget Office,
1995. completed, had imposed large costs on households, had costs that
exceed benefits, and
had imposed a large fiscal burden on municipalities.
Studies by other entities
Impact of Unfunded Federal This report provides information on the survey
the U.S. Conference of Mayors conducted
Mandates and Cost Shifts on U.S. to collect cost information on several
federal mandates and requirements, including the
Cities: A Preliminary Report on Safe Drinking Water Act and the Clean
Water Act. A total of 59 cities provided
Costs in 59 Cities, The United information on their recurring annual costs
and any one-time costs associated with the
States Conference of Mayors, mandate for the most recent fiscal year for
which the information was available. The U.S.
2005. Conference of Mayors also conducted a similar survey in 1993.
a
All final rules promulgated by an Executive branch agency were included if
the rule met any one of the following measures: rules designated as
"economically significant" under section 3(f)(1) of Executive Order 12866;
rules designated as "major" under 5 U.S.C. 804(2); and rules designated as
meeting the threshold under 2 U.S.C. 1532.
Page 38 GAO-06-151R Federal Water Requirements
Enclosure III
Unfunded Mandates: A Snapshot The purpose of this report was to provide
information on the impact of unfunded Survey, National Association of
mandates on county governments. The Association collected cost information
for 10 Counties, 2005. federal mandates, including the Safe Drinking Water
Act and the Clean Water Act, by
surveying member counties from across the country on their estimated costs
to comply with each of the mandates for fiscal years 2003, 2004, and
projected 2005. The Association also conducted a similar survey in 1993.
Safe Drinking Water Act: Costs of This paper examines the national costs
associated with federal drinking water Compliance, Robert S. Raucher
regulations issued as a result of the 1996 Safe Drinking Water Act
amendments. and John Cromwell, Mercatus Building on EPA's cost estimates
published for each individual regulation and other Center, George Mason
University, available research, the study presents cost estimates for each
major national rule 2004. finalized under the act since the 1996
amendments. The cost estimates are then
aggregated, along with estimates for regulations issued before 1996, to
come up with a
total cost estimate for drinking water regulations issued since 1986.
The Cost of Regulations The purpose of this study was to estimate the cost
of implementing water pollution Implementing the Clean Water control
regulations under the Clean Water Act between 1972 and 2001. Cost
estimates Act, Joseph M. Johnson, Mercatus were developed for both the
government (including state and local) and the private Center, George
Mason University, sector. Estimates were largely based on government and
private expenditure data 2004. collected through the U.S. Census Bureau's
Pollution Abatement and Control
Expenditures survey.
Census Data Shed Light on U.S. This study analyzes U.S. Census Bureau data
from the Public Use Microdata Areas to
Water and Wastewater Costs, estimate the cost of water and wastewater
service for households with various
Scott J. Rubin, American Water characteristics, such as annual household
income, type of housing unit, and size of the
Works Association Journal, April, housing unit.
2005.
Dawn of the Replacement Era: This report estimates the funding that may be
needed over a 30-year period, nationwide,
Reinvesting in Drinking Water for the replacement of worn-out drinking
water pipes and associated drinking water
Infrastructure, American Water infrastructure. The estimate is based on an
analysis of 20 utilities geographically
Works Association, 2001. distributed throughout the nation.
The AMSA 2002 Financial Survey: The purpose of this study was to report on
current practices in financing and managing A National Survey of Municipal
public wastewater treatment agencies across the nation. The Association of
Wastewater Management Metropolitan Sewerage Agencies, an association that
represents public wastewater Financing and Trends, Association treatment
agencies, surveyed a sample of its membership on general utility
information, of Metropolitan Sewerage such as the size of service area and
the volume of treatment; financial information, such Agencies, 2002. as
capital improvement needs; rate information, including the rate structure
used; and
staffing and salary information, such as number of staff and licensing
requirements. The
2002 survey updates and expands on eight previous surveys conducted since
1981.
Clean and Safe Water for the 21st Century: A Renewed Commitment to Water
and Wastewater Infrastructure, Water Infrastructure Network, 2000.
Implementing a Regulatory Budget: Estimating the Mandated Private
Expenditure of the Clean Air Act and Safe Drinking Water Act Amendments,
Harvey S. James, Center for the Study of American Business, Washington
University, Working Paper 161, August 1996.
This report discusses the value of clean and safe drinking water and
wastewater; provides a historic and future perspective on investments to
water and wastewater infrastructure systems; estimates the cost of
building, operating, and maintaining needed drinking water and wastewater
facilities over a 20-year period; and discusses the federal role in
financing water and wastewater infrastructure projects. This study
examines the various problems that arise in measuring regulatory costs
and, in that light, proposes a feasible methodology for carrying out a
regulatory budget. The methodology was then applied to the recent
amendments of the Clean Air Act and the Safe Drinking Water Act to assess
the feasibility of administering a regulatory budget. In conducting the
study, the author estimated the compliance costs of the Clean Air and Safe
Drinking Water Acts, which for the Safe Drinking Water Act included
compiling data from EPA and American Water Works Association estimates for
the rules authorized by the 1986 amendments.
Note: We did not include studies specific to state and local entities in our
review.
(360591)
Page 39 GAO-06-151R Federal Water Requirements
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