NACWA opposes EPA's financial capability guidance

April 26, 2022
NACWA argues that the proposed Financial Capability Assessment Guidance fails to consider low-income households and introduces inappropriate, arbitrary requirements.

In response to the U.S. Environmental Protection Agency (EPA)’s proposed 2022 Financial Capability Assessment Guidance, the National Association of Clean Water Agencies (NACWA) has filed comments opposing the guidance, asking that the proposal not be finalized.

NACWA has stated that it opposes the guidance "for multiple reasons, including because it is inconsistent with the Biden Administration's professed focus on environmental justice concerns.”

“The 2022 Proposed Financial Capability Assessment (FCA) Guidance turns this focus on EJ communities on its head,” an open letter from NACWA’s executive team says, “ensuring there will be no meaningful opportunity to examine and discuss the disproportionate financial burden EJ communities will continue to bear as we work to address the nation’s clean water needs, and therefore no meaningful opportunity to evaluate the best way to mitigate that burden.”

NACWA  says that the current plan opens low-income households to the burden of extreme affordability challenges in order to correct past inequities. The association argues that the guidance is flawed in its reliance on median household income for calculations, is too strict in its scheduling benchmarks, and fails to evaluate the impacts of water affordability on low-income households.

In these points, NACWA is challenging many ways that EPA has historically estimated a community’s financial capability and water affordability.

The letter argues that EPA’s Office of Enforcement and Compliance Assurance (OECA) “has numerous consent decrees negotiated under the 1997 approach that it does not want to revisit under new affordability criteria because it knows a true financial analysis looking at actual low-income burden will show many of those agreements are unaffordable for poor households.”

The guidance also introduces new requirements for utilities to retain a Medium or High Burden designation, including a Financial Alternatives Analysis, which NACWA argues is “inappropriate and legally questionable in the context of a guidance document.”

Lastly, the guidance returns to using “arbitrary scheduling boundaries,” which NACWA claims are problematic and irrelevant.

“NACWA appreciates the opportunity to comment on the 2022 Proposed FCA Guidance,” the letter concludes. “We hope EPA will seriously consider the input from NACWA, its water sector partners, and the clean water utilities providing comments on the proposal, and work to establish a meaningful dialogue on how best to move forward on this critically important issue.”

About the Author

Jeremy Wolfe

Jeremy Wolfe is an Editor for WaterWorld magazine. Email him at [email protected].