This report was prepared by the Virginia Department of Environmental Quality (DEQ) pursuant to HB 1608 and SB 340. These identical bills were approved by the 2018 session of the General Assembly and signed by the Governor on March 30, 2018. The bills provide that:

"Subsequent to the implementation of any applicable regulations, permits, or the Chesapeake Bay [Total Maximum Daily Load] Watershed Implementation Plan, the [DEQ] Director may authorize disbursements from the [Water Quality Improvement Fund (WQIF)] for any water quality restoration, protection, and improvements related to point source pollution that are clearly demonstrated as likely to achieve measurable and specific water quality improvements, including cost effective technologies to reduce loads of total phosphorus, total nitrogen, or nitrogen-containing ammonia in order to meet the ammonia requirements that have not yet been adopted and that are more stringent than regulations adopted by the State Water Control Board as of January 1, 2018."

The United States Environmental Protection Agency (EPA) updated its 1999 national ambient water quality criteria recommendations for ammonia in 2013. These criteria are approximately twice as stringent as the current criteria in Virginia’s Water Quality Standards Regulation (9VAC25-260-155), which are based on EPA’s 1999 criteria, since they reflect added toxicity data for very sensitive freshwater mussels and snails. DEQ anticipates that the State Water Control Board will consider adopting these new nationally-recommended ammonia criteria in late 2018. Individual Virginia Pollutant Discharge Elimination System (VPDES) permits for both municipal and industrial facilities include permit requirements, special conditions, effluent limitations, and monitoring requirements determined for each facility on a site-specific basis in order to meet applicable water quality standards. Adoption of the nationally-recommended freshwater ammonia criteria may require stricter permit limits, requiring permittees to upgrade existing treatment equipment or to install new treatment equipment.

HB 1608 and SB 340 also require DEQ to prepare a preliminary estimate of the amount and timing of WQIF grants required to fund projects to reduce loads of nitrogen-containing ammonia at certain levels based on an estimate of the anticipated range of costs for all publicly owned treatment works if the State Water Control Board were to adopt the 2013 Aquatic Life Ambient Water Quality Criteria for Ammonia published by EPA. The legislation further specified that for purposes of preparing this preliminary estimate, DEQ “may rely upon readily existing information and any reasonable assumption."

A July 2015 estimate prepared for the Virginia Association of Municipal Wastewater Agencies (VAMWA) estimated capital costs of $512 million (in 2014 dollars) to implement the 2013 nationally-recommended ammonia criteria.[*1] While DEQ considers this estimate to be representative, the estimate was derived using a combination of underlying assumptions that are likely to be very conservative and thus may actually over-estimate the potential cost of implementing the new nationally-recommended ammonia criteria.[*2] DEQ expects that a site-specific evaluation of many facilities will demonstrate that the facility is currently meeting the proposed nationally-recommended ammonia criteria without significant capital costs.

However, it is not possible to translate a cost estimate into an estimate of the amount and timing of WQIF Grants. The provision added by HB 1608 and SB 340 only applies once Chesapeake Bay TMDL Watershed Implementation Plan needs have been satisfied, and it is uncertain when this will occur. Additionally, until the new nationally-recommended ammonia criteria are applied to permitted dischargers on a case-by-case basis, the amount of grants a facility might be eligible for is uncertain. Finally, grants that might be issued pursuant to this section are subject to the availability of funds appropriated by the General Assembly, which are unknown at this time.
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[*1] Memorandum from Clyde Wilber, P.E. to the Virginia Association of Municipal Wastewater Agencies (July 15, 2015) (on file with DEQ).

[*2] Adoption of the nationally-recommended ammonia criteria may also result in VPDES permit limits that require upgrades at industrial facilities, but that analysis is beyond the scope of this report.