The US Court of Appeals for the Second Circuit issued a decision January 18 upholding the Water Transfers Rule in Catskill Mountains Chapter of Trout Unlimited Inc. v. EPA, providing a key legal victory for the water sector.  The appeal arose from a district court decision vacating key portions of the rule, which exempts transfers of natural, untreated water for purposes of water supply, or flood control from regulation under the National Pollutant Discharge Elimination System (NPDES) program.

In reversing the district court’s decision, the Second Circuit evaluated EPA’s interpretation of the Clean Water Act (CWA) in enacting the rule, and concluded that the rule represents a reasonable interpretation of the Act.  As the court explained, the CWA does not clearly contemplate inclusion of transfers of untreated waters in the NPDES permit program, and reasonable alternatives exist at both the state and federal levels to address any pollution concerns associated with the transfers.

In September 2014, NACWA filed an amicus curiae brief as part of a coalition of entities representing the municipal water sector.  The brief highlighted the significant operational and regulatory challenges that permitting of water transfers would present to NACWA member utilities, and argued that the NPDES program is the wrong tool to regulate such transfers.  The joint brief suggested that other approaches such as federal drinking water requirements, the Total Maximum Daily Load (TMDL) program, and state regulations are better suited to address concerns over water transfers.  NACWA is pleased with the court’s ruling and believes it will provide important regulatory flexibilities to water and clean water utilities moving forward.