The United States Environmental Protection Agency (EPA) has issued a rule that potentially will have a significant impact on construction and development sites nationwide. The rule will impose new pollutant control, monitoring and reporting requirements on a multitude of sites. The requirements will be applied via the stormwater permitting process and are expected to cost the industry nearly $1 billion annually once fully implemented. Noncompliance with the rule can be costly, as large penalties for permit violations may be imposed. The regulations will take effect on February 1, 2010. The rule’s details are summarized below.
Issuance and Effective Date
The rule was issued on November 24, 2009 and establishes Clean Water Act technology-based Effluent Limitations Guidelines1 and New Source Performance Standards2 (NSPS) for the construction and development (C&D) point source category under the National Pollutant Discharge Elimination System (NPDES). Essentially, the rule requires construction site owners and operators to implement erosion and sediment control measures and pollution prevention practices in discharges from their sites. In addition, beginning in August 2011, a numeric standard for turbidity (which measures the sediment and other pollutants in a discharge) will be imposed on certain NPDES-permitted discharges. The rule was published in the Federal Register on December 1, 2009 and will take effect on February 1, 2010. All general and individual NPDES permits issued by the EPA, state or local regulators thereafter will need to incorporate the rule’s requirements. The rule is available at http://edocket.access.gpo.gov/2009/pdf/E9-28446.pdf.
The C&D point source category covers firms classified under North American Industry Classification System (NAICS) codes for the Construction of Buildings (NAICS 236) and Heavy and Civil Engineering Construction (NAICS 237). Activities addressed under NAICS 236 include residential, nonresidential, industrial, commercial and institutional building construction. Heavy and civil engineering construction, NAICS 237, includes utility systems construction (water and sewer lines, oil and gas pipelines, power and communication lines), land subdivision, highway, street, and bridge construction and other heavy and civil engineering construction. The rule specifically provides that other types of entities not included under NAICS 236 or 237 could also be impacted.
The rule imposes three key requirements on covered entities:
Criticisms of the Rule
EPA estimates that the rule will reduce the yearly sediment discharges by about four billion pounds, producing monetized benefits of $369 million per year. However, by EPA’s own estimates, these benefits will come at a cost of $953 million per year once the rule is fully implemented. Thus, EPA estimates reflect annual costs of the rule exceeding anticipated monetized benefits by $584 million. EPA suggests that these numbers do not paint the full picture since there will be additional benefits that it was not able to monetize such as increases in property value near water bodies, reduced flood damage and reduced cost of ditch maintenance.
Noncompliance with the rule also may be costly as penalties could extend to $37,500 per violation per day. The rule notes that exceptions for noncompliance may be permitted in limited circumstances where technical implementation of the rule’s requirements is not feasible.
2. NSPS are intended to reflect effluent reductions that are achievable at new sources based on the best available demonstrated control technology. In developing NSPS, EPA is required to consider the cost of achieving the effluent reduction and any non-water quality environmental impacts and energy requirements.
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