Water infrastructure spending shows progress as budget threats rise

Proposed cuts to state revolving funds could be devastating for water utilities, lawmakers heard Thursday.

The Senate Committee on Environment & Public Works heard testimony from local water officials highlighting triumphs and ongoing challenges in the drinking and wastewater arena.

A spotlight was also focused on the evolving tug of war over Clean Water and Drinking Water State Revolving Funds. SRF's provide a reliable vehicle for municipal bond issuance and are being targeted for cuts by some lawmakers as a way to negate the power of the Environmental Protection Agency, which administers them.

"We are concerned about these developments of using congressionally directed spending out of the corpus of the state revolving funds," said Elizabeth Bizer, secretary, North Carolina Department of Environmental Quality. "The proposed cuts would be devastating to the state's capacity to meet current and growing environmental needs and harm the state federal partnership. This is not the time to take our foot off the accelerator."

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In suburban Maryland SRF funding is going towards a combination of infrastructure and ratepayer relief efforts.  "We have received a total of $60.3 million because of the increased appropriations in clean water and drinking water SRF funding, with over 30% being given in loan forgiveness," said Kishia L. Powell, general manager, CEO, Washington Suburban Sanitary Commission. "WSSC will receive just over $105 million from the state revolving funds in the coming year for water main replacement projects, lead service line inventory and replacement." 

North Carolina received $1.9 billion via the American Rescue Plan which they put to work towards connecting new ratepayers. "In 2022 we awarded a $13.2 million grant to run forty miles of water lines to connect 350 homes in Ivanhoe, to the county water system for the first time," said Biser. "The residents of Ivanhoe have been fighting for decades for the chance to connect." 

NCDEQ is also taking the lead on mitigating the harmful effects of polyfluoroalkyl substances in drinking water. The Cape Fear public utility authority spent $43 million to install a granular activated carbon filtration system to treat PFAS flowing in from the Cape Fear River. 

"We know that the testing, planning, and design work has to take place before you're ready to construct a treatment system and this can take up to a year," said Biser. The state is set to receive another $23 million for the project but is estimating costs for removing the chemicals could soar to $1.3 billion.  

The EPA released a revised advisories on PFAS in June 2022 with some lawmakers believing the agency is overstepping its bounds. "I have significant concerns regarding the EPA's approach to implementing the directives from Congress as it begins to allocate substantial financial investments to our nation's water infrastructure," said Sen. Shelley Moore Capito, R-W.Va. "The EPA has repeatedly tried to impose its pockets policies, priorities on states and communities, often in violation of authorities reserved to them under the Safe Drinking Water and Clean Water Act." 

The new regulations have in turn led to proposed legislation in the Senate designed  to hold polluters accountable for PFAS contamination along with calls for protecting water authorities.  

Water officials expressed gratitude for the influx of infrastructure spending while also fretting about ongoing challenges faced by local water authorities include a tight labor market, inflationary pressures and the uncertainty caused by the changing regulatory puzzle.