WIFIA program — no longer a “pilot” — is set to grow.
By Joel C. Beauvais and David J. Penna
On October 23, 2018, President Trump signed into law the America’s Water Infrastructure Act of 2018 (AWIA 2018). This bipartisan legislation, among other elements, reauthorized the Water Infrastructure Finance and Innovation Act (WIFIA). WIFIA, which established a federal water infrastructure bank administered by the US Environmental Protection Agency (EPA), is intended to ramp up federal funding for large-scale projects. Under the program, EPA can make low-interest, long-term loans and loan guarantees for a broad range of water projects. Eligible users include private, public, or mixed public-private entities, projects generally must be US$20 million or larger, and loans or guarantees can cover up to 49% of eligible costs. For a broader overview, please see Latham & Watkins’ WIFIA White Paper.
Although WIFIA was enacted in 2014, Congress did not fund the program until Fiscal Year (FY) 2017. In FY 2017, Congress appropriated funding sufficient to provide more than US$3 billion in loans or guarantees, and in FY 2018 expanded this to support more than US$5 billion in loans or guarantees. WIFIA uses a two-step selection process, beginning with the project proponents submitting letters of interest to EPA; from these, EPA selects a subset of projects to make a full application, with the expectation that projects making a full application ultimately will be approved. EPA closed its first loan in April 2018 and recently selected 39 projects to apply for FY 2018 funding. The program enjoys robust bipartisan support, and appears poised to continue to grow in coming years. While the reauthorizing legislation made only modest changes to WIFIA, water project developers considering using the program should note three key takeaways.
Over the past month, two US Courts of Appeals have rejected Clean Water Act (CWA) citizen suits seeking to hold power companies liable for discharges of pollutants from coal ash disposal facilities “through” groundwater to waters of the US. Although the Fourth Circuit accepted that discharges through groundwater could be the basis for liability, it held that the relevant ash piles and impoundments were not “point sources” for purposes of the CWA. The Sixth Circuit likewise held that the ash disposal facilities at issue were not point sources, but — contrary to the Fourth Circuit — also held that discharges through groundwater were not actionable under the Act. Collectively, these recent decisions stand as a significant new obstacle to citizen suits against owner/operators of coal ash impoundments. At the same time, the decisions deepen a circuit split on the so-called “groundwater conduit” theory of CWA liability, helping to tee the issue up for possible Supreme Court resolution. If the Court does take this question up, the outcome will be critically important for many industry sectors, including electric power, oil and gas, manufacturing, and mining companies, among others. The CWA imposes strict liability, and citizen suits based on groundwater conduit claims can result in extremely costly remedies — including large civil penalties and injunctive relief.
New regulations governing the implementation of the Safe Drinking Water and Toxic Enforcement Act of 1986 (Prop 65) will go into effect on August 30, 2018 that apply to products manufactured after the operative date of August 30, 2018. The new regulations update the content of the Prop 65 warning label that appears on products, in addition to other substantive changes.
On August 27, 2018, the US Department of the Interior (DOI) issued an Advance Notice of Proposed Rulemaking (ANPR) requesting 
Water management is becoming increasingly critical amid increasing oil and gas production in the Permian Basin and other regions of the United States. In particular, many companies are now seeking to manage larger quantities of produced water, and/or to secure water supplies for drilling activities — leading
Chinese authorities have been increasing their efforts to prosecute environmental offenders along the Yangtze River, the third-longest river in the world and the longest in Asia. The crackdown reflects China’s goal to make 70% of its surface water safe to consume by 2020.
Enforcement of the Safe Drinking Water and Toxic Enforcement Act of 1986, commonly known as Proposition 65 (Prop 65), will change significantly on August 30, 2018. Two years earlier, on August 30, 2016, California’s Office of Environmental Health Hazard Assessment (OEHHA), the agency responsible for implementing Prop 65, issued regulations that increased businesses’ responsibility to provide a “clear and reasonable” warning to consumers for products that contain carcinogens and/or reproductive toxicants. Among other requirements, under these new regulations (2016 Regulations) businesses must provide consumers in California with more specific information about potentially harmful chemicals in their consumer products. The 2016 Regulations also specify which entities in the stream of commerce are responsible for providing the Prop 65 warnings and the information that goes into the warnings.
China’s water supply problems are well-known globally. However, the main problem facing China is how to distribute its water, rather than lack of water per se. 80% of China’s water supply lies in southern China. But this water cannot be used by the population of 12 Chinese provinces representing 41% of its total population, 38% of Chinese agriculture, 46% of its industry, and 50% of its power generation. Eight of these provinces are currently experiencing acute water scarcity, while in four provinces water is merely “scarce,” and two provinces are largely desert. Moreover, the problem is getting worse, with 28,000 rivers in China having dried up over the past 25 years. And China’s appetite for water continues to grow, with consumption forecast to rise to 670 billion cubic meters a year by the early 2020s.