GAO Offers EPA Advice on Water Asset Management

June 1, 2004
The General Accounting Office last month recommended that when it comes to water infrastructure asset management, the US Environmental Protection Agency ...

By Maureen Lorenzetti

The General Accounting Office last month recommended that when it comes to water infrastructure asset management, the US Environmental Protection Agency needs to better coordinate its own activities so timely and relevant information is available to utilities. GAO, an independent watchdog arm of Congress, called on EPA to establish a web site that focused on asset management issues. EPA generally agreed with GAO's recommendations.

EPA currently encourages water utilities to use established management techniques to manage plant equipment and related property through the use of educational materials, technical assistance, and research. GAO called EPA's efforts a good first step but more coordination is needed, they said. EPA now has no central repository to encourage information sharing within and across its drinking water and wastewater program, for example. Water industry officials meanwhile see a role for EPA in promoting asset management as a tool to help utilities meet infrastructure-related regulatory requirements; they also noted that establishing an EPA web site would be useful for disseminating asset management information to utilities.

The US Congress is also considering legislation that would require water utilities to develop detailed asset management plans.

House Subcommittee Considers Aging Infrastructure

The House Water Resources Subcommittee held a hearing April 28 on aging water infrastructure. Groups such as the Association of Metropolitan Sewerage Agencies (AMSA) called on lawmakers to provide increased wastewater funding to avoid a future crisis. Lawmakers are now considering the possibility of more funding through a 2005 budget resolution, but the measure has been slow moving; House and Senate negotiators are now participating in a conference committee to resolve differences between the two chambers. Utilities want Congress to support a Senate resolution that would provide increased funding for the Clean Water State Revolving Fund (SRF) and the Drinking Water SRF.

AMSA said that a broad-based coalition, that includes municipal, state, environmental, labor and industry groups, wants conferees to authorize increased funding for the Clean Water SRF to $3.2 billion and the Drinking Water SRF to $2 billion – a total increase of $3 billion over FY '04 levels.

"The $5.2 billion allocation for the SRFs is essential as it would help local communities meet water quality standards, repair and replace aging plants and decaying pipelines, protect public health, and ensure continued progress in restoring the health of America's waterbodies," AMSA said.

The coalition maintains that the Senate's proposal will help close looming infrastructure spending gaps, protect the environment and public health, and create nearly 250,000 jobs – "more than triple" the House version, AMSA said.

At the same hearing, American Water Works Association officials told lawmakers that increased federal investment and higher consumer rates will be required to meet $250-300 billion in drinking water infrastructure needs during the next three decades. AWWA Water Utility Council Chairman Howard Neukrug said America needs "a new partnership for reinvesting in drinking water infrastructures."

He added: "AWWA remains committed to the principle of full cost recovery through rates. However, AWWA does believe that due to concurrent needs for investment in water and wastewater infrastructure, security projects, replacement of treatment plants, new drinking water standards, and demographic changes, many utilities will be very hard pressed to meet their capital needs without some form of federal assistance."

Water Professionals Ask Congress to Reject MTBE Liability Protections

The US Senate in late April effectively rejected energy legislation. Nevertheless water utilities and other industry stakeholders are continuing to urge the US Congress to reject any attempt to provide defective product liability immunity – or "safe harbor" – to manufacturers of the controversial gasoline additive methyl tertiary butyl ether (MTBE).

MTBE-blended fuel that leaked out of underground storage tanks has been blamed for contaminated water sources in 36 states; several jurisdictions have banned or plan to ban the chemical's use. Water utilities are worried that if lawmakers give safe harbor to MTBE producers it will mean utilities, and ultimately consumers, are saddled with a $29 billion cleanup bill.

A recent US Senate proposal to include first an ethanol mandate provision, then energy-related legislation to a pending Internet tax bill failed; neither provision included MTBE protections. Last fall, a narrowly divided Senate rejected similar legislation but at that time it included the hotly contested MTBE provisions.

The key Senate sponsor of energy legislation this session, Sen. Pete Domenici (R-NM), chairman of the Senate Energy and Natural Resources Committee, said that the most recent votes do not mean the Senate's most recent version of energy legislation, S. 2095, is dead for the year.

"We don't consider the vote a litmus test on the merits of S. 2095. There were too many other variables. The vote today [April 29] does not affect the strategy we have been pursuing for the last several weeks on the authorizing package. That strategy is unchanged and still in play," a Domenici spokesperson said.

But water utilities are worried that the House may be successful in its effort to enact legislation that includes some kind of MTBE protection.

Unlike the Senate, the US House supports an energy bill with MTBE liability. Leaders from that chamber said that if energy legislation is to be considered this session a MTBE safe harbor must be included. Some lobbyists, however, think some kind of compromise, perhaps language that offers a cap on how much liability protection can be given, is still politically feasible, especially if gasoline prices continue climbing this summer.

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