Tough PFAS Drinking Water Standards Add Major Compliance Burden

Businesses should start preparing for more regulatory notification and reporting, recordkeeping obligations, and potential liability now that the Environmental Protection Agency has issued its first-ever national, legally enforceable drinking-water standards for “forever chemicals.”

The EPA has set near-zero maximum contaminant levels, or MCLs, for six per- and polyfluoroalkyl substances, and we expect this development to broadly impact PFAS regulation. Water systems operating under state drinking water standards for PFAS will have to comply with the more stringent MCLs. The costs to treat PFAS in drinking water to meet the MCLs will cost billions of dollars.

To avoid passing these costs along to customers, water systems will pursue litigation against companies potentially responsible for PFAS in the water supply. Because insurance coverage is generally unavailable for these environmental risks, businesses will likely have to pay for their own defense, and any judgment.

Given these risks, companies should begin evaluating how these recent rulemakings could impact their operations.

Final Regulations

The EPA has set legally enforceable MCLs for PFOA, PFOS, PFNA, PFHxS, and HFPO-DA, known collectively as GenX chemicals. An MCL is the highest level of a contaminant that is allowed in drinking water based on cost benefit analysis and is legally enforceable for public water supply systems. The rule also applies to PFAS mixtures containing at least two or more of PFHxS, PFNA, HFPO-DA, and PFBS.

The EPA issued health-based, nonenforceable maximum contaminant level goals, or MCLGs, for these PFAS. An MCLG is the level of a contaminant in drinking water below which there is no known or expected risk to health. MCLGs allow for a margin of safety and are non-enforceable public health goals.

The MCLs and MCLGs are expressed in parts per trillion. One part per trillion is equivalent to one drop of ink in the water contained in 20 Olympic-size swimming pools. The MCL of four parts per trillion for PFOA and PFOS is the lowest concentration of these chemicals that most laboratories can reliably detect.

Water systems must reduce these PFAS levels in drinking water if it exceeds regulatory standards.

Impact of Regulations

Over the last several years, Massachusetts, Michigan, New Jersey, Pennsylvania, New York, and other states have been setting standards such as MCLs for PFAS in drinking water. Regulated entities in those states have had to meet those standards.

However, the EPA’s regulation will preempt any state-issued regulations that allow greater MCLs than those provided in the national regulations. For example, MCLs for PFOA in Michigan, New York, Pennsylvania, and New Jersey are all higher than the EPA’s new MCL of four parts per trillion.

Communities and water systems will have to continue following those applicable state requirements until the PFAS national regulations’ requirements are enforceable. States that implement the federal drinking water program must adopt regulations at least as strict as the federal MCL for these PFAS. This means public water systems in those states will have to comply with new, more stringent standards.

The costs for public water systems to comply with the MCLs will be substantial. The EPA estimates 3,400 to 6,300 water systems serving a total population of 70 million to 94 million people will be affected.

There are limited options available to water systems to remove PFAS contamination from drinking water. According to the EPA, granular activated carbon, AIX resins, and reverse osmosis are capable of removing PFAS from water suppliers. All of these technologies are expensive, and public water systems will likely incur billions of dollars to implement them.

As a result, public water systems will incur significant compliance costs. The EPA has estimated the annual compliance cost at $1.5 billion, but the industry expects the actual costs to be much higher. Water systems likely will pursue litigation against potentially responsible parties to recoup these costs.

Water systems across the country already have pursued litigation against manufacturers of PFAS. But we expect an imminent wave of litigation against industrial facilities that use and process PFAS in their products, such as electroplating, petroleum, bulk fuel, textile, and paper facilities, among others. Water systems may allege that those facilities contributed to PFAS contamination in their water supplies.

There are significant insurance coverage implications for companies affected by these lawsuits. Insurers oftentimes deny coverage for PFAS-related claims based on pollution and contamination exclusions. Most commercial general liability policies include an exclusion for pollution claims.

In response to PFAS-related risks, some insurance companies have begun using broad PFAS-specific exclusions. This means there is the potential for potentially responsible parties to be responsible for all costs of their defense and any judgment.

Impact on CERCLA

Finally, the MCLs will affect ongoing site cleanups and environmental due diligence. Although the MCLs aren’t enforceable for regulated public water systems until 2029, regulators will expect businesses to use these near-zero MCLs when evaluating the extent of PFAS contamination in groundwater. Many state site cleanup programs use MCLs as cleanup levels for groundwater.

The federal MCLs and MCLGs will affect the remediation of contaminated sites under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, or CERCLA.

Under CERCLA, Superfund remedies must achieve MCLGs when remediating groundwater and other drinking-water sources. CERCLA also requires that on-site remedial actions attain or waive federal environmental applicable or relevant and appropriate requirements—or more stringent state ARARs—upon completion of the remedial action.

No separate rulemaking or other process is required.

Once the regulation takes effect, the new MCLs will become ARARs at the more than 1,300 Superfund sites across the US. This could result in increased cleanup costs, cleanup delays, and the expansion of existing Superfund sites to include PFAS and new responsible parties.

Given the sweeping implications of the new MCLs, the time to start preparing is now.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Jeffrey Dintzer is partner in Alston & Bird’s environmental, land use, and natural resources practice group.

Gregory Berlin is a senior associate in Alston & Bird’s environmental, land use, and natural resources practice group.

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