EPA is trying to allay states’ concerns over the initial startup costs
of its recently issued proposal to require electronic reporting of
most water discharge data, a measure that is expected to help
regulators and environmentalists beef up enforcement of sources that
they believe may not be adequately regulated.

During an Aug. 27 webinar with state officials on the proposed rule,
agency officials sought to calm states’ fears, highlighting the
measure’s long-term compliance benefits and workload reduction from
reduced paper reports. “This will save time, money and resources for
everyone, especially for our state partners,” John Dombrowski,
director of EPA’s data division in the agency’s enforcement office,
said on the webinar.

He also suggested that if states believe they need more than one year
to implement the first phase of the rule, they should inform EPA
during the comment period.

Agency officials also stressed the rule’s projected long-term savings
for states, as well as the fact that the rule would only require
electronic reporting of existing data requirements, not new types of
data. “Ultimately what it will do is it will lead to better
compliance, improved environmental performance, on the part of the
regulated community,” Steve Chester, EPA’s deputy enforcement chief,
said on the webinar.

“In this digital age that we live in where e-commerce and Internet
communication is so commonplace, it’s rather amazing that we still
have paper reports we receive from the regulated community,” he said.

The agency’s proposed rule, issued July 30, would require dischargers
to submit several categories of data currently required under the
National Pollutant Discharge Elimination System (NPDES) program to be
submitted electronically.

The comment period on the proposed rule ends Oct. 28. EPA has pledged
to submit a supplemental notice, with an additional comment period, if
it receives comments requiring significant changes — a possibility
Dombrowski said is likely. The agency hopes to complete the final rule
by late 2014 or early 2015.

That would start the clock on a yearlong deadline for electronically
submitting the first phase of data — discharge monitoring reports
(DMRs) and reports for facilities operating under a federal general
permit. Two years after the rule is complete, the rest of the data
would be required, including reports from facilities with a state
general permit and reports associated with a host of programs —
concentrated animal feeding operations (CAFOs), separate and combined
sewer systems, pretreatment programs, biosolids generators and
municipal separate storm sewer systems.

Dombrowski said the rule will help improve data on hundreds of
thousands of “non-major facilities,” many of which are likely
responsible for stormwater runoff that is a significant contributor to
water quality impairments.

“We have good data on the major facilities, the major dischargers. But
the vast majority of the NPDES universe, or regulated facilities, are
not major facilities,” he said “We don’t have a complete picture of
what we’re trying to regulate out there. There’s a data gap, a big
data gap.”

Electronic Data

According to an EPA presentation to the webinar, electronic data is
readily available for the roughly 6,900 major facilities, generally
those that discharge more than 1 million gallons per day, a tiny
fraction of the permit holders in the NPDES program.

The largest non-major categories include approximately 200,000
construction stormwater permits, 89,000 industrial stormwater permits
and 71,000 facilities operating under general permits.

Further, there are 39,000 non-major facilities with individual
permits, 20,000 separate sewer system permits, 19,000 CAFOs that
require water discharge permits and 16,500 biosolids generators.

The pending deluge of data is prompting some industry attorneys to
warn their clients about increased enforcement, both from state and
federal regulators and environmentalists through citizen suits.
“Having all the data electronically available in a common format will
simplify analysis and make it far easier for EPA or others to identify
non-compliance,” writes attorney Thomas Echikson of LeClairRyan in an
Aug. 12 blog post. “Prepare yourself for an uptick in Clean Water Act
enforcement.”

Environmentalists are also preparing for the rulemaking. Merritt Frey
of the River Network noted in a July 2012 blog post that “once
collected electronically you could be able to query the data to search
for specific permits in your watershed, map information about
discharges, investigate the cumulative impacts of multiple discharges,
and more.”

But cash-strapped state regulators are worried the rule will be a
budget burden, at least initially. During the webinar, a Louisiana
regulator noted that states would have to input basic data for all
permit holders before they can begin to collect periodic compliance
information. “Some states have thousands of permits that would need to
be coded but do not have the manpower [to] accomplish this.”

The rule’s economic analysis estimates that such initial data entry
would collectively cost states $13.2 million. In response to the
concern, Dombrowski said the yearlong deadline before the first
reports are due can be considered a “grace period.”

“If you don’t think this one-year period is enough time to make sure
we’re prepared for the DMRs… then we need to hear that,” he said.

An Iowa regulator also asked whether the agency had accounted for the
cost to train states and facilities about the new data systems.
Dombrowski said the agency would “do everything we can on our end to
develop training materials” that would be available online.

Other significant expected costs for states include a projected $6.4
million over two years to upgrade existing data collection systems and
$840,000 to modify discharge permits to include electronic reporting
requirements.

The concerns expressed by regulators on the webinar were echoed by
Shellie Chard-McClary, an Oklahoma water quality official and new
president of the Association of Clean Water Agencies, during an
interview withInside EPA. Highlighting the expected start-up costs,
she said many water agencies must compete with various other
departments under consolidated state computer systems.

But EPA notes that the rule would not force states to develop their
own data systems. States can save money and effort by using tools that
EPA is building. “We’re not requiring the states to develop electronic
reporting tools,” Dombrowski said.

Additionally, EPA enforcement office staffer Andrew Hudock said there
is “some possibility of financial assistance” through the exchange
network grant program to help implement electronic reporting tools.

Third-Party Programs

In addition to its work to develop systems to collect DMR and general
permit data, the agency is exploring using third-party programs —
comparable to tax return filing programs run by companies such as
TurboTax.

“EPA is exploring the concept, if you will, of the TurboTax model for
IRS reporting,” Dombrowski said. “Our plan is to go back and actively
engage states in that discussion to see if that model might work for
them.”

EPA says that after a two-year implementation, the rule would save
states $28.7 million annually and eliminate some reports that states
must currently complete. Also, the agency projects $1.2 million in
cumulative savings for permitees, mostly from reduced paper and
postage costs.

The preamble to the proposed rule also points to non-monetary
benefits, such as facilities’ spotting potential compliance problems
early so that “personnel can act promptly to minimize the impact.”
Electronic data could “help prevent minor self-reported violations
from escalating into more serious problems.” Also such public
information would provide “powerful incentives to avoid the negative
effects of government and public awareness of pollution.”

During a Sept. 4 webinar for water utility groups, Hudock said
regulated facilities are projected to spend $16 million over two
years. He said that figure represents a roughly $362-per-facility
charge multiplied by the vast number of permit holders. The cost
covers electronic signature agreements, training and registration.

The agency is considering temporary waivers, for up to a year at a
time, for facilities that can demonstrate they do not have access to
broadband Internet. Such facilities would continue to file paper
reports that would be entered into a data system by state officials.

That provision will be key for agriculture groups, who are concerned
that facilities in rural areas may not have adequate broadband access.
“There’s still a lot of places in this country, particularly rural
areas, where broadband and the lack thereof is a problem,” says an
agriculture industry source. Acknowledging that EPA is considering the
waivers, the source says, “we’re not comfortable with anything we’ve
heard of yet.”

The source also highlighted two cases from this spring in which the
agency mistakenly released personal information for farmers in 10
states in a controversial release of CAFO data to three environmental
groups. The source says the agency must ensure the new reporting
systems have safeguards to protect such information: “We don’t want
our members inadvertently putting private information on this system.”