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WateReuse Celebrates One Year of the Bipartisan Infrastructure Package and Water Reuse Funding

Date: November 18, 2022

Last week marked the one year anniversary of the enactment of the Infrastructure Investment and Jobs Act (IIJA), which WateReuse helped shape and pass. The IIJA invests $1 billion over five years in water recycling programs for the Western United States and roughly $48 billion for nationwide water programs that can support water recycling projects. It also established an Interagency Working Group on Water Reuse, which WateReuse proposed and built support for.

Over the past year, the Bureau of Reclamation (BOR) awarded funds through the Title XVI Water Reclamation and Reuse Grants Program and began standing up the newly created Competitive Grant Program for Large-Scale Water Recycling and Reuse Projects. The BOR awarded $310 million to 23 water reuse projects across California, Idaho, Texas, Utah, and Washington. The funding will assist drought-impacted communities as they work to establish water supply resiliency. This initial round of funding included $245 million out of a total of $550 million from the IIJA, combined with $65 million in discretionary funding provided by the FY 2022 appropriations package.

Earlier this month, the BOR took its first steps in implementing the Large-Scale Water Recycling and Reuse Projects Program, releasing temporary guidance on the Feasibility Study Review Process. The guidance creates additional feasibility study requirements building on the Title XVI process. Notably, project sponsors will have to conduct an economic analysis and an assessment of alternatives to the project. WateReuse expects additional program information, including a notice of funding availability, to be released by the end of the year. The IIJA provides a total of $450 million over five years for the program.

Throughout the year, the U.S. EPA awarded $4 billion in water infrastructure funding through capitalization grants to state authorities under the State Revolving Fund (SRF) programs, as detailed in the Agency’s Year One Anniversary Report. The state authorities will work to allocate the funding based on their updated intended use plans. As with base SRF funding that is provided through the annual appropriations process, water recycling projects are eligible for SRF funding provided by the IIJA. The U.S. EPA also provided $1 billion in PFAS grant funding to help communities facing disproportionate impacts of emerging contaminants. This funding including water reuse projects addressing PFAS contamination.

In addition to standing up programs and getting IIJA funding out the door, the U.S. EPA led the formation of the Interagency Working Group on Water Reuse over the past year. EPA held an initial meeting of the Working Group in May. The Working Group engages 15 federal agencies, with the goal of breaking down silos, leveraging resources throughout the federal family, and facilitating stakeholder engagement on water recycling. The Working Group is sketching out its first- and second-year priorities, which it will discuss during the Tuesday morning plenary session of the Annual WateReuse Symposium in March.

Challenges remain as the Administration works to implement the Build America, Buy America provisions of the IIJA. Ahead of the Buy America requirements taking effect in May of 2022, the Office of Management and Budget’s (OMB) Made In America Office (MIAO) released initial implementation guidance for federal agencies to follow. Since then, the U.S. EPA and U.S. Department of Interior have issued a number of public interest waivers for funding programs. Waiver eligibility and timing vary per program, leaving project recipients with many applicability questions. WateReuse continues to work with U.S. EPA and the BOR to ensure that the waiver process is workable for water recycling projects. We expect the Administration to release additional information and guidance on implementation in 2023.

Looking toward 2023, WateReuse remains committed to working with Congress to fund the Pilot Program for Alternative Water Source Grants, which Congress authorized at $125 million over five years in the IIJA. We anticipate that final FY 2023 appropriations legislation will include first-time funding for the program. Once funded, we will work with EPA to stand up the program and ensure its success. We also look forward to our continued partnership with the Bureau of Reclamation as it implements the Title XVI Program and works toward releasing the first request for proposals for the Large-Scale Water Recycling Projects Grant Program.

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