As new EPA rules on PFAS regulation emerge, North Carolina debates who should bear cleanup costs. NCLM urges Congress for liability protection and funding, as state legislation targets PFAS manufacturers for remediation costs.
Who will ultimately pay to clean up PFAS contamination has become an increasing focus of policymakers at the state and federal level after the U.S. Environmental Protection Agency recently released new rules regarding regulation of the chemicals.
North Carolina has become a ground-zero when it comes to public debate regarding how to address per- and polyfluoroalkyl substances (PFAS), including GenX, after the discovery of extensive contamination of the Cape Fear River in the southeastern part of the state. Chemours, along with its former parent company DuPont, has produced the chemicals at its plant near Fayetteville and has been blamed for much of the pollution. The chemicals are used in the production of medical devices, weatherproof products, firefighting foam and cooking pans.
Last year, Chemours, DuPont and another firm, Corteva, announced that they would pay over $1 billion to settle claims regarding these so-called forever chemicals, but many more lawsuits remain pending. Meanwhile, the EPA this spring issued new rules regulating PFAS as hazardous substances under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), with pollution limits for drinking water that could create huge costs for public water drinking utilities.
Against that backdrop, N.C. League of Municipalities Executive Director Rose Williams wrote to members of North Carolina’s congressional delegation in May to urge that they consider the effects of the ruling on the municipal and regional water utilities that will have to meet treatment requirements.
“Without action from Congress, these final rules have huge cost and liability implications for local governments, their utilities and local taxpayers and ratepayers,” Williams wrote. “While Congress has made funding available through the Bipartisan Infrastructure Law and other programs to address PFAS and other emerging contaminants, this funding will likely cover only a fraction of the costs and potential liability for municipalities under the strict liability requirements of CERCLA.”
Williams went on to note that “many North Carolina water utilities are run by smaller towns with limited ratepayer bases.” She urged North Carolina’s members of Congress to pass additional funding now under consideration but to also provide liability protection to utilities.
“These entities have been passive receivers of these pollutants, and without liability protection, costs will be shifted from manufacturers to local taxpayers,” she wrote.
At the state level, North Carolina legislators are again considering legislation that would force manufacturers to repay any remediation costs of water utilities required to treat PFAS, whether one-time equipment or ongoing treatment.
While similar legislation failed to pass in 2022, the latest bill, HB 864 PFAS Pollution and Polluter Liability, clearly focuses on PFAS manufacturers and not companies that have used the chemicals in their processes and goods. At a House committee hearing in June, Rep. Ted Davis of New Hanover County, a bill co-sponsor, said that he considers the legislation “good for business.”
“This legislation is not anti-business. It is about protecting us and our drinking water and the (utility) ratepayer,” Davis said.
Businesses, especially in communities with large manufacturers, can make up a significant percentage of the ratepayer base for local public water utilities. As such, they could be forced to pick up a significant portion of treatment costs if state or federal policy does not dictate a “polluter pays” principle.
“The people right now who are on the hook … their rates have to go up to pay for the equipment,” Davis said. “It’s not fair for the ratepayer to have to pay the bill.”
The League’s Government Affairs team is closely following the legislation and was prepared to speak in support at the June hearing but was unable to do so due to the time limitations of the meeting.
But in comments that did show the potential for the huge costs for utilities and their ratepayers, John Nichols, director of Brunswick Public Utilities, said that utility had already paid $170 million for equipment to treat PFAS and spends nearly $3 million a year in ongoing costs.
Even for utilities that have already spent money on PFAS treatment, the new EPA rules have the potential to raise those costs.
While it is unclear whether the latest state legislation will pass into law this year, the issue of who pays and who owns liability for PFAS contamination is not going away, either at either the state or federal legislative level, or in the courts.
The League will continue to closely follow these issues regarding PFAS contamination and advocate on behalf of member cities and towns for policies that don’t leave local utilities and their ratepayers footing the bill.
