On September 15, the Water Environment Federation (WEF), The American Water Works Association (AWWA), and the National Association of Clean Water Agencies (NACWA) joined together to applaud the U.S. Environmental Protection Agency (EPA) for today’s pre-publication release of its proposed 2020 Financial Capability Assessment (FCA). This revised affordability guidance should ease the financial burden on low-income communities.
The new document will aid water sector utilities and their communities in developing plans to comply with federally mandated drinking water and clean water mandates by providing approaches that can more accurately and comprehensively account for the disproportionate impacts of water and wastewater service costs on low-income populations.
This pre-publication marks the first major update to the original FCA that was finalized in 1997. The water sector has been advocating to update it for the past two decades, and this update is a product of many years of bipartisan work. The new 2020 proposed FCA incorporates additional metrics for evaluating financial capability that reflect the disproportionate impacts on low-income populations. The water sector associations are still reviewing the specifics of EPA’s proposal, but are optimistic that it will provide significant improvement over the 1997 methodology that relied solely on median household income. As proposed, the new FCA also would provide both utilities and regulators with a more comprehensive picture of the affordability challenges facing a given community.
Importantly, EPA’s new document incorporates key elements from a report developed jointly by WEF, AWWA, and NACWA in 2019 that was shared with EPA. The inclusion of new metrics suggested by the report marks an important milestone as EPA pivots away from the narrow elements of the 1997 FCA and looks to incorporate a much broader suite of considerations in the 2020 FCA that better account for the financial burdens a community can bear as it meets expansive and costly federal drinking water and clean water requirements.
“This newly proposed Financial Capability Assessment (FCA) will allow communities to better evaluate what they can afford to pay for water infrastructure and compliance with the Clean Water Act,” said Jacqueline A Jarrell, President of the Water Environment Federation (WEF) and Interim Deputy Director at Charlotte Water. “WEF looks forward to working with EPA and other stakeholders to ensure the final FCA can be implemented consistently and in a way that allows communities to utilize its intended flexibility, especially as they are still battling the coronavirus pandemic.”
When finalized, the 2020 FCA will support negotiations of schedules for implementing CWA requirements for municipalities and local authorities. Upon publication in the Federal Register, EPA will accept comment for 30 days via the Federal eRulemaking portal at www.regulations.gov, referencing Docket ID No. EPA–HQ–OW–2020–0426.
EPA's Water Finance Center will host an informational webinar on the 2020 FCA on Tuesday, September 22. Additional webinar information, including how to register, will be available at Water Finance Center and announced via newsletter later this week.
Download the pre-publication version of Proposed 2020 Financial Capability Assessment for Clean Water Act Obligations.
