On January 12, 2021, the U.S. Environmental Protection Agency (EPA) signed a Federal Register notice finalizing the 2021 Financial Capability Assessment (FCA) for Clean Water Act (CWA) Obligations. It marks the first major update to the original FCA, which was finalized in 1997.
The goal of the 2021 FCA is to advance the ability of communities to more accurately demonstrate the financial burdens they face. The 2021 FCA also looks to increase the transparency of EPA’s considerations as it endeavors to consistently apply FCA methodologies across the country.
EPA’s 2021 FCA guidance includes new metrics that more accurately reflect how much low-income communities can afford to pay for service, which affects the affordability of capital expenditures and operation and maintenance needed to ensure CWA compliance. Additionally, EPA will apply the options and flexibilities built in the 2021 FCA when considering economic impacts for public entities seeking revisions to designated uses, water quality standard (WQS) variances, and antidegradation reviews for WQS.
The finalized 2021 FCA can be found on EPA’s Water Affordability website.
Back on October 19, 2020, WEF filed comments on the EPA's proposed 2020 Financial Capability Assessment Guidance for Clean Water Act Obligations. WEF’s comments included some suggestions for refinement and clarification. WEF worked with experts and partners as well as a number of technical committees and the Government Affairs Committee to prepare these comments.
The new document looks to aid water sector utilities and their communities in developing plans to comply with clean water mandates by providing approaches that can more accurately and comprehensively account for the disproportionate effects of water and wastewater service costs on low-income populations.