Puget Sound Point Source Regional Cost and Rate Study Summary

The Washington State Department of Ecology's (Ecology) Puget Sound Nutrient General Permit (PSNGP) regulates total inorganic nitrogen (TIN) loadings from municipal point source wastewater treatment plants (WWTPs) to Puget Sound. The permit requires all 58 PSNGP utilities to produce both optimization studies and to complete a nutrient reduction evaluation (NRE) where applicable, similar to a facilities plan. The PSNGP also requires review of treatment needs to all known and reasonable technology (AKART) annually, and to 3 mg/L in the summer (for dominant and moderate dischargers only). In 2022, the Association of Washington Cities (AWC) was awarded an Ecology grant to complete a prepare optimization studies and NREs for submission to the Ecology. Twenty nine of the 58 utilities participated in the study. The study was completed in December of 2023. In PSNGP, each facility is categorized based on TIN load: dominant (D), moderate(M), and small (S). Figure 1 shows PSNGP regulated utilities. As directed in the legislative proviso that appropriated the grant funding, only small and moderate WWTP dischargers were eligible for the technical assistance project. Table 1 shows total PSNGP and participating dischargers. The PSNGP requires dischargers to evaluate operational strategies for maximizing nitrogen removal and summarize results in an optimization study (NOP). Common optimization strategies included additional process monitoring and control adjustments, and replacement/upgrade of small-scale equipment. All moderate and dominant dischargers were required to submit NOPs to Ecology by March 31, 2023. Table 2 shows an estimated cost of the selected optimization strategies. Estimated optimization costs and performance from all moderate and dominant NOPs, including non-study participants averaged $300,000 for moderate dischargers and $25,000 for small dischargers. Optimization costs for moderate dischargers were estimated to be $0.10 to $15 per pound whereas costs to attain AKART upgrades were estimated to be $18 to $27 per pound. Dominant and moderate dischargers with existing average annual effluent TIN concentrations >10 milligrams per liter (mg/L) are required to prepare an NRE. For the AWC project participants, the PSNGP requires alternatives assessment to meet two levels of effluent TIN:

* AKART, 8 to 10 mg/L of TIN; and

* 3 mg/L of TIN (or equivalent load) as a seasonal (April through October) average The PSNGP calls for preparation of an NRE that considers costs for all known and reasonable technology upgrades (defined as 8-10 mg/L for most facilities) for dominant, moderate, and small dischargers and 3 mg/L TIN seasonally (April through October) for dominant, and moderate dischargers. Estimated capital, operation and maintenance, and net present values costs to for the AKART and 3 mg/L WWTP upgrades were determined if they were constructed today and operated for 20 years. Estimated capital and operating compliance costs for project participants are determined (NRE/AKART documents are not due until the end of 2025, so nonparticipant data is not available). The costs calculated are only associated with the nitrogen reduction upgrades to meet the requirements of the PSNGP and do not include any other utility expenses beyond what is reflected in the current rates (replacement costs due to aging infrastructure, inflation adjustments, etc.). Table 3 summarizes the estimated treatment costs for AKART and reaching 3 mg/L (or equivalent load) level of nitrogen reduction. Costs for moderate dischargers were higher than small dischargers ($10M to $35M compared to $6M to $17M), with higher costs for moderate dischargers to treat to 3 mg/L TIN ($16-$49M). Cost per pound of TIN removal for small dischargers were much higher than moderate dischargers ($18 to 27/lb for moderate dischargers as compared to $580 to $1100 per pound for small dischargers). Table 4 shows the total estimated net present value (NPV) cost per household for small and moderate participants (includes capital and operational costs) for the AKART and 3 mg/L treatment levels. Figures 2 and 3 summarize a customer's annual wastewater bill as a percentage of household income. By EPA metrics, rate impacts are considered low if annual sewer bills are less than 1 percent of household income, midrange if bills are 1 to 2 percent of household income, and high if annual sewer bills are greater than 2 percent of household income. The affordability analysis uses two metrics: the residential indicator (RI), which is based on median household income, and the lowest quintile residential indicator (LQRI). Over half of the utilities would see rates increase at least 50% with some rates more than doubling. Compliance with the new PSNGP would increase rates to a medium or high impact level on most households at median incomes and would have a medium or high impact on all households with the lowest quintile incomes. This study shows significant PSNGP compliance costs for moderate and small dischargers to the Sound with rate impacts hitting both median and lowest quintile income household in a meaningful way. In addition, there are environmental consequences for this action in the form of increased power consumption, production and trucking for chemicals and nitrous oxide emissions for nearly all of the Puget Sound plants that have not yet been weighed against the benefits of reduced TIN to the sound.