On September 15, 2020, the U.S. Environmental Protection Agency (EPA) announced its proposed 2020 Financial Capability Assessment (FCA) for the Clean Water Act, which will help communities plan for water infrastructure improvements. This action is designed to support water utilities serving economically disadvantaged communities and aid them in providing vital clean water services that support public health, the environment, and local economies. It’s been more than 20 years since this document was updated. The 2020 FCA Proposal explores customers’ ability to pay for water utility service and the resulting impacts on capital and operation and maintenance expenditures needed to comply with the CWA and other service improvements. It also provides tools to more easily articulate local financial circumstances. This is expected to be even more important in light of the economic stress many utilities now face as a result of the Coronavirus pandemic.

In 2016, Congress directed EPA to contract with the National Academy of Public Administration (NAPA) to create a framework for “community affordability.” The resulting NAPA Report included recommendations for improving EPA’s 1997 FCA Guidance, as well as a 2014 FCA Framework document. The 2020 FCA Proposal reflects NAPA recommendations and updates EPA’s methodology for evaluating a community’s capability to fund CWA projects and programs.

When finalized, the 2020 FCA Proposal will support scheduled negotiations for municipalities and local authorities charged with implementing CWA requirements. One of the main changes to the guidance is that EPA will not exclusively focus on median household income when evaluating utility payment schedules. EPA will accept comment for 30 days via the Federal eRulemaking portal; commenters should reference Docket ID No. EPA–HQ– OW–2020–0426. The September 18, 2020 Federal Register notice containing the Proposal is available HERE. To access the eRulemaking portal, go HERE.