June 2013, Vol. 25, No.6

Effects to be determined

News Impact of sequester on U.S. wastewater treatment plants still being assessed.

Sequester? What sequester? That’s what at least some U.S. municipal wastewater utilities may be wondering 3 months after across-the-board automatic spending cuts took effect in federal agencies on March 1.   

At that time, a flurry of news reports announced a sampling of sequestration’s likely impacts. Illegal aliens would be released, underutilized airport control towers would be closed — even the annual White House Easter egg roll was at risk, the reports predicted, as federal agencies scrambled to absorb $85 billion in mandatory cuts in their fiscal year 2013 budgets. And that is just the beginning. Unless the U.S. Congress enacts legislation to replace it, the sequester will remain in effect for the next 10 years, mandating federal spending cuts of $1.2 trillion. 

According to preliminary reports from the U.S. Environmental Protection Agency (EPA), the impact of these cuts on U.S. water resource recovery facilities likely will range from fewer inspections for Clean Water Act compliance to fewer grants and low-cost loans for projects aimed at cleaning up polluted water supplies.  

Few of these actions have yet been felt at the local level, said a handful of municipal wastewater officials who agreed to speak with WE&T on the subject. Many more declined, noting that, at this point, they had nothing to add to the conversation. 


The impact on EPA    

It is clear that EPA’s budget for fiscal year 2013, which will end Sept. 30, was cut by $472 million, or about 5%, according to the White House Office of Management and Budget’s sequester order.  

Nearly three-fourths of these cuts come from EPA’s two largest accounts. The agency’s state and tribal assistance grant budget was cut by $210 million, which will have an impact on states that depend on EPA funding to implement environmental programs. EPA’s environmental and program management budget, which funds many of the agency’s regulatory programs, faces cuts of $135 million.  

At press time, Alisha Johnson, a press secretary for EPA said that precisely where and how these cuts would be manifested still was being assessed at agency headquarters. The agency has been gathering information from its regional offices that will guide its decision-making. 

“[The regional offices are] the ones that will see most of the day-to-day impact,” Johnson said. “As we compile this information, we’ll be making final determinations on how to proceed.”  

Staff furloughs are part of the mix, as EPA sent notices in March to 17,000 employees alerting them of the possibility of up to 13 days of unpaid leave each before the end of the fiscal year. Since federal employees are entitled to receive a month’s notice before being furloughed, the first wave of furloughs began to take effect April 21.  

As for other impacts, in late April, EPA was referring reporters to a communication sent in early February from then-EPA Administrator Lisa Jackson to the U.S. Senate. Jackson’s report provided a preliminary assessment of the sequester’s impact on EPA programs, people, and services and included some clues to what lies ahead. It cited several potential impacts: 

Weaker enforcement of environmental     lawswith fewer staff available to monitor compliance, EPA could cancel as many as 1000 inspections for Clean Water Act and Clean Air Act compliance in fiscal year 2013.  

Cancellation of clean water projects — as many as 100 projects aimed at cleaning water supplies or protecting water sources could be shelved. EPA also could find that it lacks the resources to develop the permits needed to bring new facilities into operation. 

Less money for state revolving funds — cuts to the agency’s Clean Water and Drinking Water State Revolving funds could hurt smaller communities and others seeking access to low-interest funding to build or repair their infrastructures. 

Less green infrastructure researchresearch into best management practices for green infrastructure, as well as a host of other research programs, could slow, to the detriment of municipalities facing stormwater enforcement actions. 


Trickle-down may take time  

How these impacts and others will play out on the local level will become clearer in the weeks and months ahead as EPA begins to implement its cuts. But Allen Mounts may have begun to see hints of what is to come already. Mounts is director of utilities for the Evansville (Ind.) Water and Sewer Authority, which is putting the finishing touches on the long-range control plan it is required to implement as part of the consent decree agreement it signed with EPA Region 5 in January 2011.  

“We’ve been in discussions with EPA on the deliverables under our consent decree for many months,” Mounts said. “But we’ve recently noticed a change in how we communicate, with telephone conference calls now often taking the place of in-person meetings.”  

EPA hasn’t officially used the “S” word in its communications with Evansville. “Their comment has been that they don’t have the funds to travel,” said Mounts. “We’re assuming it’s related to sequestration.” 

“It’s been relatively minor,” Mounts added, “and to the extent that it is minor, you can manage to it.” 

Ted Henifin, general manager of Hampton Roads Sanitation District in Virginia Beach, Va., said his utility had not seen any changes in its interactions with EPA as a result of sequestration — and he wasn’t expecting much moving forward.  

“In Virginia, there is little regular interaction [between] EPA and our treatment facilities,” Henifin said. “The majority of the regulatory action is delegated to Virginia DEQ [Department of Environmental Quality].”  

Henifin also questions the impact that further cuts in federal funding might have on Hampton Roads and other utilities.  

“There had been little to no federal grant money available before sequestration,” Henifin said. “The only significant federal grant dollars in recent years were associated with stimulus funding that also dried up prior to sequestration.”  

The State Revolving Fund (SRF) loan program, he said, could be another story. “There is a potential for less funding to the SRF, which could impact the low-interest loans available through that program,” he said. “If SRF funding is reduced, smaller utilities may feel it most, as will [utilities] with credit challenges that make it difficult to access capital from other sources.” 


Other impacts still to come?  

Might water resource recovery facilities find their production slowed due to government cutbacks elsewhere, such as the military? Henifin doesn’t believe so — at least for now — despite the strong U.S. Navy presence in his region.  

“Unless the federal government actually cuts personnel and they move out of our service area, we will see their flow whether [they are] at work or at home,” he explained. “In fact, [a] reduction in ship deployments may actually result in increased revenues, as the personnel will be using water within our service area as opposed to being at sea.” 

While today’s impacts may be negligible, Michael Sweeney, deputy executive director of the Toho Water Authority (Kissimmee, Fla.), is concerned that the sequester could have unintended consequences should it continue beyond the current fiscal year.  

“The CBO [Congressional Budget Office] projects sequestration may reduce growth by 0.75 to 1.5 percentage points,” Sweeney said. “That could mean a slowdown in new home starts, tourism, [and other activities] that are important to our area. The sequestration doesn’t translate well to fueling immediate job growth.” 

But such impacts can be difficult to tie to any one program. And people must begin to feel them directly before they capture much attention. Or, as Sweeney puts it, “Implementing the Affordable Medical Care Act seems to predominate the conversation more than sequestration.” He can only hope it stays that way.  

Mary Bufe, WE&T  




Federal appeals court: U.S. EPA regulation by letter is invalid 

On March 25, the 8th U.S. Circuit Court of Appeals issued a significant legal decision (Iowa League of Cities v. EPA, 8th Cir., No. 11-3412) invalidating U.S. Environmental Protection Agency (EPA) efforts to limit mixing zones and regulate peak wet weather flow management techniques at publicly owned treatment works (POTWs) via letters instead of formal rulemaking. 


At issue were two letters sent by EPA in June and September 2011 to U.S. Sen. Charles Grassley (R–Iowa). The relevant portions of the letters provided that bacteria mixing zones in waters designated for primary contact recreation carry potential health risks and should not be permitted by state agencies authorized to implement and enforce Clean Water Act regulations; and use of a secondary treatment alternative (ACTIFLO®) fails to “provide treatment necessary to meet the minimum requirements provided in the secondary treatment regulations at 40 CFR 133.” (ACTIFLO is a patented, proprietary physical/chemical process of Veolia Water Solutions & Technologies [Paris] that uses ballasted flocculation in which chemicals are used to aggregate solids and sands, causing them to settle faster. EPA views this process as an impermissible diversion or bypass from traditional biological secondary treatment that would only be allowed upon a showing of no feasible alternatives.)  

The court determined that these two letters were thinly disguised regulations. Based on the fact that EPA failed to promulgate these regulations using the proper procedures — formal rulemaking with notice and comment — the court vacated both the mixing zone rule and the blending rule and remanded the case to EPA for further consideration. In addition, the court ruled that EPA’s conclusion that blending (in this case, use of ACTIFLO) had to be justified with a “no feasible alternatives” analysis exceeded EPA’s statutory authority to the extent that it would impose the effluent limitations of the secondary treatment regulations internally, rather than at the point of discharge into navigable waters. 


Mixing zones  

In its 1994 Water Quality Handbook, EPA defines a mixing zone as “a limited area or volume of water where initial dilution of a discharge takes place and where numeric water quality criteria can be exceeded.” EPA regulations give states the discretion to develop mixing zone policies in their water quality standards, subject to EPA review. 



Blending is a process of diverting flow around biological secondary treatment units during wet weather events when a treatment facility has reached or is near capacity to avoid overwhelming the biological system. Flow receives primary treatment and disinfection, is diverted and then blended with fully treated effluent before discharge into the receiving waterbody. The goal is a blended wastewater stream that meets secondary treatment standards and all relevant water standards. 

In 2005, EPA proclaimed that diverting peak wet weather flow now shall be considered a bypass and allowed only when there is a demonstration that no feasible alternatives are available. EPA never officially adopted this policy, and as late as June 2010, the agency continued to solicit public input through notices in the Federal Register. This unofficial policy contradicts EPA’s secondary treatment rule, which applies effluent limitations at the point of discharge into navigable waters unless impractical to do so; the rule also precludes the imposition of any particular technology to achieve effluent limitations. Thus, the secondary treatment rule allows blending if effluent limitations are met at end-of-pipe.  



After years of conflicting messages from EPA on the permissibility of mixing zones and blending, the Iowa League of Cities (Des Moines), which represents more than 870 cities, asked Grassley to seek clarification from EPA. After receiving EPA’s two letters in response to Grassley’s inquiry, the league sought appellate review in the 8th Circuit, arguing that the letters set forth regulatory requirements and that EPA had violated the Administrative Procedures Act (APA) by attempting to implement them without following the notice and comment procedures for agency rulemaking. Even if EPA had followed proper procedure, the league argued, it lacked the statutory authority to impose the regulations. 


Court’s analysis and decision  

After determining that it had jurisdiction to review the case, that the matter was ripe for review, and that the league had standing to bring suit, the court turned to the merits of the case. 

For the procedural challenge, the court said that three factors should be examined to determine if an agency action constitutes a regulation: the agency’s own characterization of the action, whether the action was published in the Federal Register, and whether the action has binding effects on private parties or on the agency. Focusing on the third factor, the 8th Circuit cited the District of Columbia Circuit Court of Appeals in Appalachian Power Co. v. EPA:  

If an agency acts as if a document issued at headquarters is controlling in the field, if it treats the document in the same manner as it treats a legislative rule, if it bases enforcement actions on the policies or interpretations formulated in the document, if it leads private parties or State permitting authorities to believe that it will declare permits invalid unless they comply with the terms of the document, then the agency’s document is for all practical purposes ‘binding.’ 

The court held that both the mixing zone rule in the June 2011 letter and the blending rule in the September 2011 letter had binding effect on regulated entities and were, therefore, regulations requiring APA notice and comment. Having bypassed this process, the court said, the rules were procedurally invalid: “As agencies expand on the often broad language of their enabling statutes by issuing layer upon layer of guidance documents and interpretative memoranda, formerly flexible strata can ossify into rule-like rigidity. In such circumstances, notice and comment procedures are required in order to ‘secure the values of government transparency and public participation.’” 

The court went on to vacate the blending rule on substantive grounds “as in excess of statutory authority insofar as it would impose the effluent limitations of the secondary treatment regulations internally, rather than at the point of discharge into navigable waters.” 

Turning to the substantive challenge to the mixing zone rule, the court found that the Clean Water Act obviously does not preclude EPA’s mixing zone rule. Thus, that rule survived a substantive challenge but may be challenged again after EPA cures the procedural defects (i.e., promulgates the rule in accordance with APA procedures for notice and comment).  



According to EPA estimates, compliance with the blending rule alone would cost local governments $150 billion in new equipment and wastewater storage systems. In Iowa, the estimated cost of compliance for Des Moines (population: 206,599) is between $80 million and $200 million; for Davenport (population: 100,802), approximately $250 million; and for Ottumwa (population: 24,881), approximately $60 million. Thus, it is no surprise that the regulated community is declaring this a major victory. According to Nathan Gardner–Andrews, general counsel for the National Association of Clean Water Agencies (Washington, D.C.), the ruling “provides utilities with important flexibility going forward in selecting peak flow management options that play an integral role in helping utilities provide maximum treatment to wet weather flows and protect water quality.” 

Nancy Wheatley, vice president of CDM Smith (Cambridge, Mass.) and a member of the Water Environment Federation (Alexandria, Va.) Government Affairs Committee, said, “Ironically, by taking a hard line on blending during wet weather events, when treatment processes are strained, those in EPA who have advocated that position have not only denied POTWs a real opportunity to manage wet weather flows efficiently and effectively, they inadvertently may have damaged EPA’s ability to enforce the technology requirement. The technology requirement is intended to provide minimum treatment for all discharges. If EPA can only evaluate compliance with secondary [treatment regulations] at the end of the pipe, that may open up opportunities to provide less treatment during dry weather conditions by diverting around secondary processes.”  

At press time, EPA had not announced whether it will appeal the decision.  

 — Amanda Waters, WE&T 



Testing what’s possible 


U.S. Department of Energy funds two major university projects that highlight the value of algae and wastewater as a biofuel source 

Wastewater can serve as a source of renewable energy by supplying nutrients that can be used in fertilizers, biogas that can be generated in anaerobic digesters, and thermal heat that can be used to supply an alternative energy source for buildings. For years, wastewater also has served as good feedstock for algae, a biofuel that can be grown quickly and abundantly in the right environment. 



“The wastewater [treatment] industry is [the] inspiration of the biofuel industry,” said Tryg J. Lundquist,associate professor of civil and environmental engineering at California Polytechnic State University (San Luis Obispo). He said the wastewater treatment industryovercame climatic limitations to grow microorganisms, and it always has embraced progressive research and development.  

“Algae biofuels even grew out of the wastewater treatment industry,” Lundquist said.“Bill Oswald of [the University of California–Berkeley] came up with the concept back in the 1950s of raceway ponds. His original purpose was to accelerate wastewater treatment in ponds, and he stumbled upon the algae growth and the accompanying biomass. He would feed the algae to animals and use it in anaerobic digesters for biogas production. The [U.S. Department of Energy (DOE)] later approached researchers to produce biofuel rather than just biogas.” 

The federal government saw the big opportunity in algae biofuel because it can be used by the military and commercial airlines as fuel. 

Over the past 8 years, there has been a lot of funding for algae biofuel and algae production projects,” Lundquist said.  Two of these projects are being conducted by California Polytechnic State University and Arizona State University (ASU; Phoenix) at the City of San Luis Obispo (Calif.) Water Reclamation Facility.   Lundquist said the university has been doing pilot work at this water resource recovery facility (WRRF) since 2007. It started with small tank ponds, and then, with funding from the California Energy Commission fund, it was able to expand to nine 30-m2 raceway-style ponds.   

The first project, to which DOE supplied $1.4 million, uses one of the facility’s nine ponds. It also involves installing additional tank ponds. The project will show how much researchers can recycle water and nutrients within an algae production facility, Lundquist said. “So far, there haven’t been any big pilot projects on how often you can recycle water without inhibitors impeding algae growth,” he explained.  

The other question that the project hopes to address is how efficiently researchers can recycle those nutrients to grow another crop of algae. 

“Wastewater provides [a] source of water and nutrients for algae production, but the amount of fuel we need is enormous,” Lundquist said. “There aren’t enough [WRRFs] to provide enough biofuel that we need.” So, the best way to do so is to only use the additional wastewater to make up for evaporation and nutrient losses of recycled water, he said. 

“The near-term value proposition is that we can treat wastewater at much lower cost or energy input than, say, activated sludge,” Lundquist said. “The longer-term value proposition is producing a biofuel.” 

But projects like these face limitations, such as, “We need sites that are sunny, warm, and flat,” Lundquist said. “Reasonable-price land also must be available,” he added. “There are a lot of people in northern states and in Canada that may be interested in similar projects, but they lack the all-year-round warm temperatures. It could be a challenge.”  

Lundquist said the ideal climates are “where they’re doing three crops of alfalfa a year, as opposed to one crop a year. States like California, Arizona, and Texas are [a] more ideal commercial situation [for algae growth].”  

The second project is being conducted by ASU and funded by a $14 million to $15 million DOE grant. ASU will work with partners in Hawaii, California, Arizona, Ohio, and possibly Georgia, Lundquist said. All of the sites will have identical tank ponds. ASU will produce a specific algal strain that will have biofuel use and will test how the strain performs and survives at each site, he said.  

The algae in this experiment face many obstacles, Lundquist said. They include encountering an invasive strain of algae that could take over the pond, and microorganisms, such as rotifers, and diseases that can attack the algae. Also, this algae strain may not perform well in some weather conditions.  

Lundquist said both research teams are hoping to learn a lot from their experiments, and the WRRF also is anticipating the results. 

“[Algae] is a crop that has a quick turnaround and can therefore accelerate research,” Lundquist said. “Hopefully, both fields can benefit from this collaboration.” 

— LaShell Stratton-Childers, WE&T