As evidenced by two recent announcements, US EPA seems to have concluded that broad regulatory programs may not be the best tool for regulating stormwater impacts.  These decisions rely on a more tailored regulatory and technical approach to controlling pollution impacts from stormwater. In general, this is welcome news for commercial, industrial and institutional property owners – but there may be a cloud to this silver lining for those in US EPA Region I.

Since 2010, US EPA has been engaged in an intensive regulatory effort to develop national regulations for stormwater discharges from developed and re-developed sites following construction. US EPA’s current NPDES construction stormwater regulations (applicable to construction sites larger than one acre) regulate only stormwater discharges associated with construction activity. Unless the developed/re-developed site generates stormwater associated with certain industrial activities, it is not covered by the existing federal NPDES stormwater program.

In 2009, several public interest groups sued US EPA to compel regulation of stormwater impacts to the Chesapeake Bay. US EPA subsequently entered into a settlement agreement that obligated it to promulgate nationally applicable regulations imposing stormwater management standards at non-industrial sites following construction – so-called post-construction stormwater regulations.

US EPA subsequently undertook a broad stakeholder process, which included questionnaires issued to hundreds of property owners pursuant to Section 309 of the Clean Water Act (meaning that failing to respond could result in penalties).  As reported here, US EPA repeatedly missed various deadlines and extended deadlines imposed by the settlement agreement to promulgate regulations.  Last fall, US EPA and the public interest groups reached an impasse over further extensions of the deadline.  However, US EPA continued to state publicly its intent to issue regulations as mandated in the settlement agreement, and released information about proposed elements of the regulatory program.

After months of silence on the status of the regulations, US EPA announced in mid-March that it would not promulgate national regulations mandating stormwater management practices at newly developed and re-developed sites.  US EPA indicated that it intended to pursue other approaches in lieu of regulations, including incentives and technical assistance to municipalities operating municipal separate storm sewer systems (MS4), adding provisions to municipal MS4 permits targeting properties discharging into MS4s, and promoting the use of so-called green infrastructure (aimed at enhancing infiltration).

This is welcome news for real estate owners who were facing potentially significant compliance costs under the proposed regulatory program – US EPA acknowledged that it had encountered problems assessing the costs and benefits of the program.  This decision represents a rare but welcome instance when an agency concludes that a “command and control” regulatory program is not the best solution for mitigating environmental impacts, and alternatively embraces a more flexible and creative approach.  Of course, the public interest groups involved in the Chesapeake Bay litigation could still seek judicial enforcement of their settlement agreement – so there may yet be another chapter in this regulatory tale.

In a separate but related announcement, US EPA also responded to petitions filed by other public interest groups requesting US EPA to exercise its residual designation authority (“RDA”) to regulate stormwater discharges from commercial, industrial and institutional properties in Regions 1, 3 and 9.  These petitions, filed in July 2013, were based on an arcane provision in the Clean Water Act (40 C.F.R. § 122.26(a)(9)(i)(D)) that permits US EPA, on a case by case basis, to regulate currently unpermitted discharges that are contributing to violations of water quality standards.  The petitions alleged that currently unpermitted stormwater discharges from commercial, industrial and institutional properties were causing impacts that had led to the listing of numerous water bodies as “impaired” under Section 303(d) of the Clean Water Act.  (This listing triggers the obligation to develop a Total Daily Maximum Load or TMDL for the pollutant(s) causing the impairment).

US EPA announced in mid-March (long after the 90-day deadline for responding to the petitions had passed) that it would deny the petitions filed in Regions 3 and 9 – meaning that it would not exercise its RDA to promulgate regulations for stormwater discharges from commercial, industrial and institutional properties.  However, Region I took a different tack and left the door open to future regulatory action.  Rather than denying the petition, Region I announced that it would consider using its RDA “where there is adequate evidence and documentation of storm water discharges from one or more [commercial, industrial or institutional] sites causing or contributing to water quality impairment.”  The decision specifically stated that Region 1 will revisit an earlier RDA initiated in November 2008 for stormwater impacts to the Upper Charles River.  At that time, US EPA had proposed a general permit pilot project in three municipalities, and commissioned a study to evaluate compliance costs.  When that study revealed that the compliance costs could exceed $300 million in just those three communities, Region 1 essentially abandoned the project.  How Region 1 intends to proceed with regulating stormwater discharges in the face of that compliance cost study is an interesting question, indeed.

So, while the anticipated downpour of stormwater regulations has apparently dissipated, owners of commercial, industrial and institutional properties in Region 1, and particularly in the Charles River watershed, should anticipate future regulatory initiatives to control stormwarter discharges from their sites.  The forecast for when and how those initiatives will develop remains unclear.