KBRA Releases Research – Proposed EPA Regulations on “Forever Chemicals” Will Challenge Public Water System Budgets

NEW YORK--(BUSINESS WIRE)--KBRA releases research providing an overview of PFAS issues, examining the responses at the federal and state/local levels, and assessing how these issues affect the public water utility landscape. PFAS (per- and polyfluoroalkyl substances) are a class of synthetic chemicals widely used in industrial and consumer products, and they are detectable virtually everywhere. These substances are known as “forever chemicals” because they are slow to biodegrade. Exposure at certain levels has been shown to cause serious health problems in humans.

Throughout the U.S. and globally, significant PFAS concentrations are present in rainwater, surface water, groundwater, and ocean water, which presents a major public health challenge. Notably, these chemicals may be disproportionately present in the drinking water of disadvantaged communities located near industrial, manufacturing, and waste disposal facilities. In response to these issues, the U.S. Environmental Protection Agency (EPA) in September 2022 mandated the removal of two widely studied PFAS compounds, PFOS and PFOA, in drinking water by designating them as hazardous substances under the federal Superfund law.

Key Takeaways

• PFAS have been detected in groundwater and surface water in thousands of U.S. locations.
• To ensure drinking water quality, the EPA is establishing a National Primary Drinking Water Regulation (NPDWR) for six PFAS chemicals. The EPA expects to publish the NPDWR by year-end.

• Grant funding of $10 billion will be available from the November 2021 Bipartisan Infrastructure Law (BIL) to help communities most severely impacted by PFAS cover the costs of water quality testing, centralized treatment systems, and technical assistance. Disadvantaged communities near areas of PFAS contamination will be prioritized.
• While the BIL will greatly increase access to funding for PFAS remediation, KBRA expects that for many public water systems—including those that have already brought PFOA and PFAS levels into compliance with their own state’s regulations—capital budget adjustments will be necessary to meet the stricter limits expected under the NPDWR.

Click here to view the report.

About KBRA

KBRA is a full-service credit rating agency registered in the U.S., the EU and the UK, and is designated to provide structured finance ratings in Canada. KBRA’s ratings can be used by investors for regulatory capital purposes in multiple jurisdictions.