[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]

EPA OVERREACH AND THE IMPACT ON NEW HAMPSHIRE COMMUNITIES

=======================================================================

HEARING

before the

COMMITTEE ON OVERSIGHT
AND GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED TWELFTH CONGRESS

SECOND SESSION

__________

JUNE 4, 2012

__________

Serial No. 112-157

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Printed for the use of the Committee on Oversight and Government Reform

Available via the World Wide Web: http://www.fdsys.gov
http://www.house.gov/reform

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COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

DARRELL E. ISSA, California, Chairman
DAN BURTON, Indiana ELIJAH E. CUMMINGS, Maryland,
JOHN L. MICA, Florida Ranking Minority Member
TODD RUSSELL PLATTS, Pennsylvania EDOLPHUS TOWNS, New York
MICHAEL R. TURNER, Ohio CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina ELEANOR HOLMES NORTON, District of
JIM JORDAN, Ohio Columbia
JASON CHAFFETZ, Utah DENNIS J. KUCINICH, Ohio
CONNIE MACK, Florida JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan JIM COOPER, Tennessee
ANN MARIE BUERKLE, New York GERALD E. CONNOLLY, Virginia
PAUL A. GOSAR, Arizona MIKE QUIGLEY, Illinois
RAUL R. LABRADOR, Idaho DANNY K. DAVIS, Illinois
PATRICK MEEHAN, Pennsylvania BRUCE L. BRALEY, Iowa
SCOTT DesJARLAIS, Tennessee PETER WELCH, Vermont
JOE WALSH, Illinois JOHN A. YARMUTH, Kentucky
TREY GOWDY, South Carolina CHRISTOPHER S. MURPHY, Connecticut
DENNIS A. ROSS, Florida JACKIE SPEIER, California
FRANK C. GUINTA, New Hampshire
BLAKE FARENTHOLD, Texas
MIKE KELLY, Pennsylvania

Lawrence J. Brady, Staff Director
John D. Cuaderes, Deputy Staff Director
Robert Borden, General Counsel
Linda A. Good, Chief Clerk
David Rapallo, Minority Staff Director

C O N T E N T S

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Page
Hearing held on June 4, 2012..................................... 1

WITNESSES

The Honorable T.J. Jean, Mayor, City of Rochester, New Hampshire
Written Statement............................................ 5
Oral Statement............................................... 8
Mr. Dean Peschel,Peschel Consulting LLC, on Behalf of The Great
Bay Municipal Coalition
Written Statement............................................ 11
Oral Statement............................................... 13
Mr. John Hall, Hall & Associates, on Behalf of the Great Bay
Municipal Coalition
Written Statement............................................ 18
Oral Statement............................................... 20
Mr. Peter Rice, Public Works Director, City of Portsmouth, New
Hampshire
Written Statement............................................ 24
Oral Statement............................................... 27
Mr. H. Curtis ``Curt'' Spalding, Region 1 Director, U.S.
Environmental Protection Agency
Written Statement............................................ 46
Oral Statement............................................... 49

APPENDIX

Letters, statements, etc., submitted for the record by:
Carl Spang....................................................... 65
Stephen Silva.................................................... 66
Judith Spang, Phil Ginsburg, 2 other State Representatives, and
27 attendees................................................... 67

EPA OVERREACH AND THE IMPACT ON NEW HAMPSHIRE COMMUNITIES

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Monday, June 4, 2012

House of Representatives
Committee on Oversight and Government Reform
Washington, D.C.
The committee met, pursuant to call, at 9:01 a.m., at
Exeter Town Office Building, Nowak Room, 10 Front Street,
Exeter, New Hampshire, Hon. Darrell E. Issa [chairman of the
committee] presiding.
Present: Representatives Issa and Guinta.
Staff Present: Molly Boyl, Majority Parliamentarian;
Lawrence Brady, Majority Staff Director; Linda Good, Majority
Chief Clerk; Kristina Moore, Majority Senior Counsel; Christine
Martin, Majority Counsel; Brian Quinn, Minority Counsel;
Rebecca Watkins, Majority Press Secretary.
Chairman Issa. This committee will come to order.
Before I begin, this is a Congressional hearing no
different than any hearing in Washington. We abide by the same
rules. Obviously, it is a little more folksy by design, and we
will try to be accommodating in any way we can. If there are
questions or other items that people would like to have placed
in the record, if you will hand them over to committee staff,
we will try to accommodate written information and let it into
the record.
Additionally, I am going to notify that the record will
remain open for five days, which means that if you get any
additional information to Mr. Guinta's office within five days,
he will have it included in the record. Now, that doesn't make
it testimony, but it does make it material that will be a part
of the entire record of consideration for this and future
hearings.
The Oversight Committee's mission statement is that we
exist for two fundamental principles. First, Americans have a
right to know that the money Washington takes from them is well
spent; and, second, Americans deserve an efficient, effective
government that works for them.
Our duty on the Oversight and Government Reform Committee
is to protect these rights. Our solemn responsibility is to
hold government accountable to taxpayers, because taxpayers
have a right to know what they get from their government. It is
our job to work tirelessly in partnership with citizen
watchdogs to deliver the facts to the American people and bring
genuine reform to the Federal bureaucracy.
As we begin the discussion today, I think it is safe to say
everyone here on the dais, and I am sure everyone in the
audience, appreciates the goal for the Great Bay Estuary is, in
fact, to make it cleaner than it is today and to make it clean
enough for habitat, including plant life, to flourish.
Having said that, there will be multiple views--having
reviewed the written statements, multiple views on how to
achieve and to what level. And ultimately, this area, like so
many areas of America, is dealing with a cost-benefit
consideration: how much improvement for how many dollars and
where those dollars could otherwise be spent, whether remaining
in the pockets of the ratepayers or in fact providing as much
as $100 million for other clean air and clean water projects in
the region.
Under the Clean Water Act and the National Pollutant
Discharge Elimination System, permits for pollutants ultimately
have to be granted. This gives the EPA a considerable amount of
authority. Early in my career and even a few years beforehand,
the Federal Government provided substantial dollars for non-
source pollution. Those dollars have not just evaporated, but
ultimately the demands are virtually everywhere in America.
What you see in the Great Bay communities, ultimately we see in
California; we see in Ohio; we see throughout America.
This form of pollution, primarily driven from runoff and
other waste considerations, nonindustrial, is in fact an area
of pollution once not measured. Today, it in fact is not only
measured, but household pollutants are in fact the largest
single source of water concerns in America. Whether it is on
the Chesapeake or here in New Hampshire, we have a problem.
In your case, the need to reduce nitrogen levels by at
least 73 percent, back to 1980 levels, are a clear goal. The
question is not do you go back to that level. The question is,
do you go beyond it, how much can the ratepayer pay, and are
those dollars better used elsewhere?
The EPA has a mission. That mission is clearly defined. But
the levels that EPA seeks is in fact within a judgment
decision. It is one of the reasons that Federal regulators,
particularly your Congressman, asked us to come here and hear
from local authorities of whether in fact this balance, this
cost-benefit, is in fact being properly measured. More
importantly, has the EPA bypassed or circumvented the state
legislature and imposed its own requirement?
As I prepared for this hearing, I found a mixed result. I
have to side with EPA in one sense: There was in fact no clear
vote of the legislature, and at some point there is a
responsibility for the EPA to act. Do I believe, and do our
witnesses believe that they acted appropriately, that they
acted properly, or that they should have insisted that the
legislature at least codify what some would say is a
significantly flawed study?
As we listen to our witnesses here today, it is not for us
to be the final judges. It is for us to collect a record, make
it available to the entire committee, and then urge the EPA,
and, if appropriate, the State of New Hampshire to act in a way
that is in the best interest of this community, and, more
importantly, to set a standard for other projects around the
country.
As Congressman Guinta and myself recognize, our committee,
no matter how many hearings we have, no matter how many
investigators do work like this, we, in fact, are not doing
work for one community. This community today is a community
that we hope will set the stage for better decisions by the EPA
and other agencies around the country. Ultimately, Congressman
Guinta's leadership on this has been appreciated because, in
fact, as a former mayor, he brought to the Congress an
understanding of many of these issues and has been a leader in
helping us understand some of the unique challenges faced in
New England.
And with that, I recognize my colleague for his opening
statement.
Mr. Guinta. Thank you very much, Mr. Chairman, for holding
this hearing here in New Hampshire today.
This is the first field hearing that I have had here in New
Hampshire. I very much appreciate this issue being a central
issue to the committee, and to you and to our staff.
I also want to thank the distinguished witnesses for being
here today, as well as the concerned Granite Staters who have
great interest in the Great Bay issue.
Personally, I want to first mention this is an incredibly
important issue to me. This is the first piece of legislation
that I ended up introducing in the House, called the Great Bay
Community Protection Act. The reason that I proposed this
legislation as one of the--as the first piece of legislation is
that I was contacted by several of the contiguous communities
in this region who expressed some concern about this issue.
I think there is one common goal that we all share, and
that we want to ensure that the estuary remains a wonderful
asset to this region and to our state. There are, however, as
the chairman pointed out, some differences of opinion as to how
to meet the goal and objective of reducing nitrogen levels. And
while I share the goal of reducing nitrogen levels in Great
Bay, I think there are various ways that we can address and
achieve that objective.
So I think that there is a lot of common support. I think
there are also different perspectives and different unique
approaches into how to meet that objective.
But what is the best way to achieve that objective? And
that is why we are here: to hear different opinions and
different viewpoints today. Some of the proposed solutions
would carry very steep price tags for local municipalities,
small businesses, and families, particularly here in Exeter, as
well as the communities of Dover, Newmarket, Rochester, and
Portsmouth, and I have heard from those communities over the
course of the last year about that legitimate concern.
So, today, I am here to listen to these communities and
their representatives. I want to hear more about the individual
plans that will be presented, and I would like to hear more
about how residents will shoulder the financial impact of the
decisions being made in their name. It is my hope that when
this field hearing is concluded, we will have, and leave with a
deeper, more complete understanding of exactly what is at stake
for the Great Bay Estuary and how it impacts everyone.
In addition, I feel that we also have the responsibility as
American citizens to make sure that the Federal Government
operates within its proper boundaries. Our government was
specifically created to serve we the people. It exists to meet
our needs, not to needlessly intrude into our lives. For as we
are reminded in the Declaration of Independence, the government
derives its powers from the consent of the governed. That is
why this hearing I think is so important. Today, Granite
Staters will make their voices heard on the permitting process.
I am proud to say to the chairman and to the group here
that this is not a partisan issue. Democrats, Republicans, and
independents alike agree that EPA needs to take into
consideration the views of the many people who live in the
Great Bay Estuary and who would be directly impacted by the
Agency's regulatory actions. Governor Lynch, Senator Shaheen,
and Senator Ayotte have all raised the similar and same
concerns and have shown their willingness and support to work
collectively to try to address this issue. And I want to
particularly commend Senator Shaheen, Senator Ayotte, and
Governor Lynch for supporting a reasonable, long-term approach
and compromise on how to best ensure that this estuary reduces
nitrogen, but also does it in a meaningful way and in a way
that does not significantly and financially place an undue
burden on the communities that are here today.
I also specifically want to commend EPA Region 1 Director
Curt Spalding, who is here and will testify in the second
panel, for his personal involvement in this issue. He has met
with me personally and my staff to discuss options and
alternatives for moving forward to a reasonable resolution, and
I commend him and the EPA for trying to find a way to meet the
concerns of the communities.
Finally, I want to say my thanks to all of you for
attending this hearing. New Hampshire is a place where we are
very civically engaged and take great interest in our
environment. I am here eager to listen to the witnesses who
have agreed to testify today and I look forward to the
question-and-answer period as well, and I yield back the
balance of my time.
Chairman Issa. I thank the gentleman.
I would now like to ask unanimous consent that three
letters presented to us be placed in the record: one from the
Lamprey River's Advisory Committee, one from the Lamprey River
Watershed Association, and the last a letter from Phil
Gingbird--Ginsberg, I'm sorry--who is a member of the New
Hampshire House.
Without objections, so ordered.
Chairman Issa. Thank you.
Frank, would you like to introduce our witnesses?
Mr. Guinta. Yes. Thank you.
Chairman Issa. They are your community leaders.
Mr. Guinta. Thank you very much, Mr. Chairman.
We have in the first panel four distinguished individuals.
First, the Honorable T.J. Jean, who is the mayor of the City of
Rochester, New Hampshire, as well as a lifelong resident of
Rochester, testifying on behalf of the Great Bay Municipal
Coalition.
Second, we have Mr. Dean Peschel of Peschel Consulting, who
has extensive experience in environmental project management
and is testifying on behalf of Dover, New Hampshire, and the
Great Bay Municipal Coalition.
Third, we have Mr. John Hall of Hall & Associates, who is
one of the nation's leading environmental attorneys and is
testifying on behalf of the Great Bay Municipal Coalition.
And, finally, to conclude the first panel, we have Mr. Mr.
Peter Rice, who is a water and sewer engineer for the City of
Portsmouth, New Hampshire, and is testifying on behalf of the
City of Portsmouth.
Chairman Issa. Thank you.
Pursuant to the committee rules, would you all rise to take
the oath. Raise your right hand.
[Witnesses sworn.]
Chairman Issa. Let the record reflect that all witnesses
answered in the affirmative. Please take seats.
In Washington, we have the same red, yellow, and green
lights. My predecessor on the committee, Chairman Towns, was
always quick to remind people that this is not a new
phenomenon, that green means go, yellow means prepare to stop,
and red means stop. So I would ask you to try to time your
opening statements to be as close to that five minutes as
possible.
I might remind you that your entire opening statement is in
the record, and since none of you are presidential
administration witnesses, you undoubtedly have a little ability
to summarize if necessary.
And with that, Mayor, you are recognized.

STATEMENT OF T.J. JEAN

Mr. Jean. Good morning. My name is T.J. Jean and I am the
mayor of the City of Rochester.
On behalf of the city, I want to extend our sincere thanks
for your willingness to hold this oversight hearing which is
addressing issues of critical importance to the City of
Rochester and its citizens.
The purpose of my testimony today is to discuss with you
the severe financial impacts which the regulatory actions
proposed by the United States Environmental Protection Agency
will have on our city and its citizens.
Rochester is committed to protecting the natural
environment for the benefit of its citizens and all citizens of
our state. However, Rochester and other major cities in the
Great Bay area are concerned that the proposed regulatory
actions designed to protect the Great Bay are not based upon
sound science, and, if implemented, would do more than
constitute a waste of scarce local resources. It would
financially cripple our city, prevent us from attracting and
maintaining our business base, and impose an unreasonable
financial burden on our citizens and ratepayers. We are
disappointed that the EPA would gamble away our future based on
little more than guesswork. This committee needs to stop the
EPA now and insist on an independent review of their actions.
Like other New Hampshire municipalities, Rochester has been
adversely impacted by the recent national economic downtown.
However, those impacts have been felt even more significantly
in our city.
By way of brief background, the poverty rate in Rochester
is at 13.1 percent, the highest of any city in the Strafford
County region. The Rochester School District has 32.6 percent
of its student population eligible for free or reduced lunch.
Rochester accounted for 31.6 percent of foreclosures in the
Strafford County region, with 118 foreclosures in 2011 alone.
The city's tax base or net assessed value has decreased each of
the last three years, from approximately $2.36 billion in 2009
to approximately $2 billion in 2011.
It is no surprise that this recent economic downturn has
resulted in significant job losses in our city. In the last
three years, Rochester has experienced 504 lost jobs or 58
percent of the regional employment loss. The largest of those
jobs involved 374 jobs lost at Thompson Center Arms, formerly
the city's largest employer.
With respect to the employers which remain in the city,
shifting and unstable international economics have put
additional pressure on manufacturers with global products, such
as medical devices, composite materials, machine parts, and
aerospace components, all major employment sectors in
Rochester. The result of the foregoing is a ripple effect
throughout our local economy and that consumer spending has
dropped significantly, having major impacts on the downtown
business district and the retail and hospitality sectors in our
city.
While the financial resources of the city and its citizens
have plummeted, the financial obligation imposed upon and
accepted by the city to meet the basic needs of its residents
has increased. The city continues to finance a number of
important major capital expenditure projects to meet the needs
of our citizens. These include major bridge and road
rehabilitation and reconstruction projects to better serve our
community. As a result, wholly apart from those projects which
the regulations which are subject of this hearing could impose
on the city, the city's annual debt expense is projected to
increase from approximately 4 million per year to approximately
6.3 million per year over the next five years. This brings me
to the financial impacts proposed by the EPA mandate.
Rochester has been informed that EPA intends to issue a new
permit requirement for both total nitrogen and phosphorus,
which would require the city to construct an additional
wastewater treatment facility. The city is still retiring a $20
million debt-related bond relative to our wastewater treatment
plan improved in 1997. The city recognized at the time that the
construction of these upgraded facilities was appropriate to
protect the health of the Cocheco River, its aquatic
environment, and its users.
The EPA's latest mandate will likely require that facility
with outstanding bonds to be abandoned, as EPA has now changed
its regulatory focus to total nitrogen. However, the city has
been informed by its consultants that EPA's new proposed
nitrogen and phosphorus limitations are not based on sound
science and will not result in demonstrable benefits to the
aquatic environment of the Cocheco River or Great Bay. While I
am not qualified to discuss that science, I am certainly able
to discuss the financial impact which implementation of those
requirements would have on the city.
EPA's indifference to mandating major local expenditures
every time a new permit is issued based on the flimsiest of
information simply must cease. We cannot offered such multi-
million-dollar guesswork. Our consultants have advised us that
the capital costs related to the upgrade to the city's
wastewater treatment facility necessary to comply with the
proposed nitrogen and phosphorus limits would be approximately
$20.5 million. Assuming a 20-year amortization period at 5.5
percent interest, this would result in additional debt service
costs of approximately $2 million per year beyond those I
previously mentioned. After capital construction is complete,
additional operating costs required to meet these permit limits
would be approximately 2 million per year, beginning in fiscal
year 2016.
The impact of these costs on our sewer rates is staggering.
The city's current sewer rate is $6.11 per 100 cubic feet,
already among the highest in the region. Compliance with the
latest EPA mandates would immediately result in a 23 percent
increase in rates. By fiscal year 2016, the projected sewer
rate would more than double to $12.50 per 100 cubic feet, which
would, in turn, mean an estimated yearly user bill of $1,200
per year in fiscal year 2016.
I see my time has elapsed. I just would like to conclude by
saying and reaffirming that the city is committed to take
whatever steps are necessary to protect the health of its
citizens and the natural environment of Rochester and its
surroundings. However, the city should not be forced into the
kind of economic crisis outlined above for little or no
demonstratable environmental benefit.
I appreciate your attention to my remarks and hope you will
give them due considerable in your role of overseeing these
proposed regulatory actions.
Thank you.
[Prepared statement of Mr. Jean follows:]

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Chairman Issa. Thank you.
Mr. Peschel?

STATEMENT OF DEAN PESCHEL

Mr. Peschel. My name is Dean Peschel of Peschel Consulting,
and I'm speaking on behalf of the City of Dover and the Great
Bay Municipal Coalition.
Congressman Issa, Congressman Guinta, thank you for
convening this hearing of the Oversight and Government Reform
Committee here in Exeter.
The USEPA has proposed limit of technology nitrogen permit
limits of 3 milligrams per liter for the coalition communities'
wastewater treatment facilities. Nitrogen removal will require
all wastewater treatment plants to either modify their existing
facility or completely build new facilities.
New Hampshire DES Environmental Services issued a draft
nutrient criteria in 2008 which establishes a very low water
quality standard. EPA relies heavily on this analysis in
justifying strict nitrogen limits in the draft permits. The
coalition communities reviewed the nutrient criteria and
questioned the underlying assumptions and analysis used. Expert
consultants were engaged by the coalition to review both the
science and to analyze the potential economic impacts to meet
the likely permit limits. Holland Associates of Washington,
D.C., and HydroQual of Mahwah, New Jersey, were the nationally
recognized technical experts selected. Applied Economic
Research of Laconia, New Hampshire, was the firm chosen to
assess the economic impacts associated with these upgrades.
Our technical experts reviewed the nutrient criteria and
told us the document has fatal flaws in the methodology and
incorrectly concludes that nitrogen is causing excessive algae
growth which is reducing water clarity in the estuary.
Chairman Issa. Mr. Peschel, could you speak just a little
louder? I apologize, but----
Mr. Peschel. Sure.
Chairman Issa. That mic, the one you have closer, that is
the one that counts the most from the standpoint of the record.
Mr. Peschel. Thank you.
The consultants further informed us the nitrogen water
quality standard established by DES is unattainable and will
likely require communities to expend even more resources on
stormwater reductions indefinitely into the future, at a cost
two to five times more than that of the wastewater treatment
upgrades. Based on stormwater costs incurred in other states,
the basin-wide costs to meet EPA mandates could easily exceed
$1 billion. That's a staggering number.
EPA has issued three draft permits which use the draft
criteria as justification for imposing limit of technology
nitrogen limits. John Hall will address how this action
violated Clean Water requirements in more detail with you.
Our economist, Russ Thibeault, principal of Economic
Research, is a well-respected national expert. AER was provided
the capital costs, operation and maintenance costs expected,
and over a range of nitrogen removals. The cost for the five
communities to meet a 3-milligram-per-liter limit is $588
million. This represents a huge environmental cost. The costs
represent capital costs, the building improvements, O&M, and
the cost to finance it over a 20-year period. If we look closer
at the economic impacts for the City of Dover, we see that the
cost to meet an 8-milligram-per-liter limit is 36.4 million,
and a 3-milligram-per-liter, 94 million. That's a difference of
$58.5 million.
The City of Dover and other coalition communities do not
want Great Bay to continue to degrade. The communities also
want to ensure that the investments to improve the conditions
in the estuary are effective and achieve intended results. It
is clear to us that requiring the communities to upgrade
wastewater plants to limits of technology is unwarranted and
will not achieve the desired results, at an extraordinary cost
to the ratepayers.
Times have changed dramatically with respect to funding
wastewater. 20 years ago, when the Dover treatment plant was
constructed, federal grants paid for 95 percent of those
capital costs. Today, the local ratepayer will be paying 100
percent of all the costs.
In order to move the process forward, the coalition
developed an alternative approach to the 3-milligram-per-liter
permit. Nitrogen levels have increased. We do not want them to
continue to increase unabated. Nitrogen sources in the
watershed are estimated to be 25 percent to 30 percent from
point sources and 65 to 75 percent from non-point sources.
Chairman Issa. If you could wrap up.
Mr. Peschel. Yes.
The coalition has proposed an Adaptive Management Plan. It
will provide significant nitrogen reduction quickly, addresses
both point and non-point sources, funds needed for monitoring
the restoration, and avoids legal appeals and a waste of
financial resources and delays of implementing nitrogen
reduction. A copy of that plan is attached to this written
testimony. And I will wrap up----
Chairman Issa. Without objection, it will be placed in the
record in its entirety.
Mr. Peschel. Thank you.
The coalition believes that the Adaptive Management Plan is
an effective and rational approach that will engage the entire
watershed community, not just the sewer ratepayers. It will
build upon success that will lead to future success and garner
the public support needed to fund future improvements over the
long term. It will provide significant nitrogen reduction at an
affordable cost, and, most importantly, provide a process to
determine if additional reduction is needed. It will also save
over $200 million in expenditures that have no proven need for
benefit.
With that, I will conclude, and thank you very much.
[Prepared statement of Mr. Peschel follows:]

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Chairman Issa. Thank you.
Mr. Hall?
I will take a moment for the mics to catch up.

STATEMENT OF JOHN HALL

Mr. Hall. To rearrange. Thank you.
Good morning, Chairman Issa, Congressman Guinta, and
members of the committee. My name is John Hall. I am a
principal of Hall & Associates, an environmental firm that
represents the Great Bay Municipal Coalition.
As mentioned in earlier testimony, the Region's actions
will needlessly impose restrictive nutrient reduction
requirements that will adversely impact these local economies
for decades to come, and unfortunately not produce the intended
environmental improvements.
In seeking to impose some of the most stringent nutrient
limits in the nation, the Region has also violated several
mandatory duties under the Clean Water Act, as well as several
other EPA rules and policies that are designed to protect due-
process rights and ensure that only reliable scientific methods
are employed in regulatory decision-making.
As noted earlier, the Region has issued three draft NPDES
permits that impose very stringent total nitrogen requirements.
These nitrogen limits are based on draft water quality criteria
that have never been formally adopted by the State or formally
approved by EPA, a practice that is strictly prohibited by the
Clean Water Act and EPA's regulation known as the Alaska Rule.
To quote EPA in its ``Questions and Answers on the Alaska
Rule,'' I quote: ``The CWA Section 303(c)(3) is explicit that
all standards must be submitted to EPA for review and must be
approved by EPA in order to be the applicable standard. Under
actions Section 303(d), the State must base listings on the
applicable water quality standard. The State cannot use the new
standard for CWA purposes, e.g., in a final permit, until EPA
has approved that standard.''
However, the Region simply ignored these requirements. It
knew it had these mandatory duties, and early on recommended
that the State quickly move to adopt the criteria into its
standards, which would have then given the public an
opportunity for active input. When the State failed to do so,
the Region came up with the idea to call the draft numeric
criteria something else--a narrative criteria interpretation--
as if that changed any procedural requirements or the mandatory
duties under the Clean Water Act.
In addition, if not more importantly, the Region knew that
there was no cause-and-effect relationship between total
nitrogen and the eelgrass loss for the estuary, and this was
based on prior federally-funded research specifically directed
at this issue. Nonetheless, the Region adopted the position
that stringent nitrogen limits were essential to restore
eelgrass populations, and limits of technology were mandated
which would then also trigger very stringent land use controls
in these same areas.
The Region's insistence on using unadopted numeric criteria
and permits and impairment listings plainly violates the public
notice and town requirements included in the Act in part 131.
After circumventing the required approval process in March
2011, the Region then undertook additional efforts to exclude
the public from a peer-review process that was intended to
bless the criteria. When the coalition found out about the
impending peer review, they specifically requested an
opportunity to participate in that action. The coalition
submitted comments to the State and Region based on major
technical deficiencies in the draft criteria. However, the
Region refused to allow the peer reviewers to address any of
these points and concerns. This is directly at odds with
Section 101(e) of the Clean Water Act, which mandates that the
Agency must promote public participation in any review and
modification of standard, not prevent it.
Since the peer review, the affected communities have
repeatedly submitted detailed, site-specific information
clearly showing the proposed permit requirements were
fundamentally flawed. To date, all of those submissions have
been ignored without comment. It is now apparent that serious
regulatory violations, bias, and, in fact, scientific
misconduct underlie the Region's actions.
The communities believe that the record is clear that the
Region is determined to implement a predefined regulatory
agenda of stringent nitrogen limits:
One: Even after a federally-funded Technical Advisory
Committee for the Great Bay confirmed there was no cause-and-
effect relationship between nitrogen, transparency, and
eelgrass loss;
Two: Even after EPA's own Science Advisory Board stated
that the type of simplified analysis the Region now wants us to
use to support to a more restrictive approach is not
scientifically defensible;
Three: Even after the Region itself internally identified
major scientific deficiencies and significant conflicts with
the Science Advisory Board recommendations.
These are serious issues. What is the point of having a
local or federal Science Advisory Board if the agency is simply
going to ignore the findings and continually employ methods
that are criticized as fundamentally flawed, and, for that
reason, will likely misdirect resources?
In closing, it's apparent to the coalition communities that
the Region appears to have no intention of conducting a
comprehensive, impartial scientific review. For that reason,
the coalition submitted a letter to EPA headquarters on May
4th, documenting science misconduct and requesting that the
matter be withdrawn from the Region and transferred to an
independent panel of scientific experts. The coalition
continues to support this request as the only viable means for
an objective review that will help ensure the local resources
are not squandered on misdirected policy mandates.
We appreciate the committee's investigation into this
matter and hope that this can be resolved in the near future.
The details supporting this testimony, including the
misconduct letter with numerous attachments are included in the
record, Mr. Chairman. I request that they be included.
[Prepared statement of Mr. Hall follows:]

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Chairman Issa. No objection. They will all be included in
the record.
Mr. Rice?

STATEMENT OF PETER RICE

Mr. Rice. Thank you, Mr. Chairman, Congressman Guinta.
On behalf of the City of Portsmouth and the Great Bay
Municipal Coalition communities, I'd like to thank you for this
opportunity to testify today.
My name is Peter Rice. I'm the city engineer for the City
of Portsmouth, and I've worked in this position for the last 10
years. Prior to working for the city, I worked as a consulting
engineer. I'm a registered professional engineer and I have
served in a variety of state wastewater commissions and
organizations, and have been involved in the Great Bay nutrient
issues since 2002.
A copy of my resume has been included in my testimony.
The City of Portsmouth is a small city, about 21,000
people, but despite our small size, we have big-city
infrastructure problems. The city owns and operates two
wastewater treatment facilities, has over 120 miles of sewer
pipe, and manages 20 pumping stations. Communities such as
Portsmouth want predictable, scientifically supported
environmental regulations that deliver demonstratable
environmental benefits. Within such a regulatory framework,
limited municipal resources can be secured, budgeted, and
invested wisely to deliver necessary services for the maximum
environmental benefit.
In 2002 I assumed my predecessor's position on the State
Water Quality Standards Advisory Committee. On this committee I
became involved with the Nutrient Technical Advisory Committee
for the New Hampshire Estuarine Project, which is currently
known as Piscataqua Region Estuarine Partnership, or PREP. The
purpose of this technical advisory committee was to provide
technical peer view on the science used to develop water
quality standards for the estuaries of New Hampshire. A
specific focus of this committee was whether and how nitrogen
could be affecting the bay ecology, in particular, eelgrass
populations.
In 2005 EPA directed the State to develop nutrient
standards for the estuary. This was part of a national effort
on EPA's part. Up until late 2008, nitrogen, although a
concern, was not identified as a source of impacts on the bay.
In particular, it was concluded, based on federally-funded
studies, that increased nitrogen levels had not caused
increased algae growth and had not adversely impacted water
transparency in the bay.
I have attached with my comments presentations given by the
New Hampshire Department of Environmental Services staff
relative to these conclusions.
In 2008 there was an abrupt turnaround. At a State Water
Quality Standards Advisory Committee meeting, a simplified data
analysis was presented which ignored previous detailed studies
and reached an opposite conclusion. This incorrect analysis was
supported by EPA and subsequently became the basis for setting
standards and declaring virtually all waters in the estuary
nutrient-impaired. All of this occurred without any formal
adoption in accordance with law or formal approval of the
criteria by EPA as a new water quality standard. Thus, the
impacted communities had no opportunity to challenge these
changes.
As a result of this about-face, Portsmouth reached out to
other communities with wastewater treatment facilities to
discuss the State's water quality criteria. The change in the
State's conclusions with regard to the role of nutrients
spelled trouble for the municipalities discharging into the
Great Bay Estuary. The proposed criteria for nitrogen is not
achievable and has been used by EPA to claim that nitrogen must
be treated to limit of technology at wastewater treatment
facilities and that stringent stormwater treatment must also be
implemented to improve water transparency.
On March 15, 2010, I attended a Water Environment
Federation EPA briefing in Washington, D.C. Mike Hanlon, the
EPA director of wastewater management, advised attendees that
the EPA didn't have the time or money to do the science and
that the EPA was going to apply the Chesapeake Nutrient
Criteria Program nationally.
The following day, at a congressional briefing breakfast, I
was told by the Regional Administrator Spalding that until
Portsmouth and other communities developed their own science,
EPA would not consider our communities' concerns.
Complicating EPA's apparent limited time and money were the
interest of nongovernmental organizations which appeared to be
having a disproportionate impact on the water quality process
and setting of permit limits. I was told that the regulators
were more worried about possible lawsuits by NGOs than they
were afraid of municipalities. This deference to the NGOs is an
indication that EPA is more concerned about policy issues than
getting science right and implementing cost-effective solutions
to protect and improve the environment. This involvement by
NGOs may explain why our repeated requests for involvement of
our technical experts were either rejected or trivialized.
For example, Portsmouth was given assurances by
representatives of the New Hampshire Department of
Environmental Services that we could participate in a formal
EPA peer review of the draft nutrient criteria. Instead,
Portsmouth and other communities were excluded from the peer-
review process at an EPA level. This EPA peer review was
carefully orchestrated, exercised, designed to provide an
appearance of scientific credibility through fundamentally-
flawed nutrient criteria that met EPA's policy objectives. I
have attached the correspondence relative to that process in my
statement.
Rejecting the public's ----
Chairman Issa. Without objection, that will be placed in
the record.
Mr. Rice. Thank you.
Rejecting the public's request for an inclusive, objective,
and open process, the regulators have delayed action which
would have yielded environmental benefits in the near term. By
ignoring good science, the EPA's regulatory process has set up
unachievable goals which will misapply scarce public funds
while not achieving the intended goals, and force communities
to spend their money on lawyers instead of science and
solutions.
In summary, the Great Bay Municipal Coalition is committed
to protecting and restoring the Great Bay, but we believe the
existing science does not support the regulatory decisions
being made and should not be the basis for NPDES permits.
I would like to thank you for this opportunity to let me
speak today.
[Prepared statement of Mr. Rice follows:]

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Chairman Issa. Thank you.
I will recognize myself for the first round of questions.
As you may have seen on C-Span from time to time, our
questions are not designed to be softballs, and they won't be
here today.
Mayor, you spent a lot of time telling us about the money
cost and the problems in the community, the unemployment, and
the like.
Do any of those provide any legitimate reason to not go
forward with whatever is the requirement under the Clean Water
Act and whatever would provide a return of health to the
estuary?
Mr. Jean. Well, I can only speak to the point that, right
now, if we were to encumber that amount of debt service to meet
the nutrient limits, the ratepayers of Rochester would have
their sewer bills double, and that would remove basically all
disposable income that they might have to help in the business
sector.
Chairman Issa. No, I appreciate that. The question was one
that I think in Washington we have to be sensitive to, but
hopefully here in New Hampshire, you are sensitive to it, too.
Ultimately, if it is necessary to double the rates in order
to clean up the estuary to an acceptable level--in other words,
to mitigate the damage being done by human activity--isn't the
requirement absolute if it's necessary?
Mr. Jean. If it's necessary, absolutely, yes.
Chairman Issa. Okay. And I just want to make that clear,
because often we sort of talk about what we can't afford. And
in this case, we are the polluters: every home, every runoff
and stormwater and so on. And I did not think you were saying
that one offset the other, other than we need to be very
careful to make sure that in fact it is necessary.
Mr. Peschel, you went a lot into procedure as did Mr. Hall,
but particularly, you mentioned the State--I'm sorry, Mr. Hall
mentioned that.
Let me ask you a question. You feel that the science of
essentially half as expensive a solution is the appropriate
science, don't you?
Mr. Peschel. I do. And I think, you know, based on the
information that our consultants, the technical consultants
provided, there is great doubt that what is being proposed by
the EPA is necessary.
Chairman Issa. Well, now, I am a businessman, and for the
20-plus years I was in business, I know that you generally get
from your consultants what you seek to get. In other words,
they work hard to reach a goal that you ask them to get.
I am presuming that you asked them to get the least
expensive way to reach a goal that you thought was reasonable.
Is that correct?
Mr. Peschel. No, it wasn't correct.
Chairman Issa. You just gave them a blank slate of what
would it take?
Mr. Peschel. What we told them when we hired our
consultants was that we wanted an honest review of the
information that was being presented as being justified by the
state nutrient criteria.
Chairman Issa. What if they are wrong? What if they are
wrong? What if the EPA allows you to go forward with your
level, the 8 milligrams rather than the 3? What if, in fact,
three years, four years, five years--roughly 2020 you would be
at that point--you'd see that it's not working?
Mr. Peschel. Then we would have the information that we
need to make the additional improvements. That has always been
our understanding and our plan.
Chairman Issa. So you're----
Mr. Peschel. What we don't want to do is spend money that
is not necessary.
Chairman Issa. Is that true of--I mean, each of you
represents, I guess four of the five cities involved, or at
least is affiliated.
If in fact your plan were to be adopted with a measure and
renewal period, is it your understanding that, you know, you
don't get to do this for 20 years for the life of those bonds;
that you might, in fact, by choosing a less expensive solution,
if you don't achieve the goals that in fact--in other words,
the return of health of the estuary--that in fact you could
find yourself back again with a new financial impact? Is that
an understanding that you have here today?
Mr. Peschel. Absolutely. And any design that we would
undertake to meet, you know, say, the 8 milligrams per liter,
if we were to be found that it's not sufficient, we haven't
lost anything. The actions are supplemental. We would just add
on to what we've already done. So----
Chairman Issa. Sort of when you cut curtains, you want to
make sure you cut them but not too short, because you can take
more away; you can't add on?
Mr. Peschel. Right. That's not the case in this particular
situation. We can add on, and it won't have been money lost on
the initial.
Chairman Issa. Mr. Hall, you went into great detail on the
violations of procedure. Ultimately, you also, I gather,
believe that they reached the wrong conclusion. But even if
they reached the right conclusion, do you feel that, in fact,
the lack of due process on both sides is part of the fatal flaw
of EPA reaching this conclusion?
Mr. Hall. Well, there is a serious error and lack of due
process in the manner in which the procedure went forward, and
that does need to be corrected. Quite frankly, we wouldn't be
sitting here raising just a due-process issue if any of us
thought that----
Chairman Issa. But I'm asking for a reason. We have before
us a document that indicates EPA is scared stiff of the sue-
and-settle crowd, the NGOs that will sue if they fail to abide
by every nuance of the rule.
Ultimately, if they had erred on the side of you, with the
same, in other words, if they picked you arbitrarily and
quickly, wouldn't they have been in the same boat, except in
this case it would have been NGOs suing them?
Mr. Hall. Well, actually, it was the NGOs that originally
sued EPA to establish the Alaska Rule. They said, ``You are
changing water quality criteria without going through the
process. You are cutting off our ability to provide the
science, the input, the process. You are cutting off our
ability.''
So they're the ones that originally sued to make this
rule----
Chairman Issa. So all you're really asking for is what the
environmentalists demand and have sued to get: an open and fair
process with certain comment requirements that you've been
denied?
Mr. Hall. That would be a very fair way of stating the
position.
Chairman Issa. Let me just ask--and if I could ask for a
couple more minutes. But--and I said this in my opening
statement--isn't the EPA also in a box because of inaction by
the state legislature? In other words, at some point we in
Washington, if a state simply chose not to act, and so far the
state legislature has not acted--isn't there a time limit at
which at some point we have to allow the EPA to take some
action? Regardless of their violating procedure, ultimately
they did have a need to act if in fact a state legislature
never acted?
Mr. Hall. Oh, most certainly. There is a provision under
the procedures of 303(c)(3). If a state refuses to take action
or delays in taking action on updating the water quality
criteria, the EPA sends them--it's basically a 60-day notice
letter.
Chairman Issa. Has the EPA sent that?
Mr. Hall. No, that letter has not gone out. That was the
letter that they sent to the state of Florida that triggered
the Florida water quality standards adoption.
Chairman Issa. So, essentially, they haven't given the
state legislature notice to sort of pay rent or quit, to in
fact do its job or be bypassed?
Mr. Hall. Correct. That has not happened.
Chairman Issa. Lastly, Mr. Rice--and I'll be brief--but it
sounds like you're describing in this process, and from the
conference you attended, a ready-shoot-aim procedure going on
by EPA. They tell you they have no time, they tell you they
have no money, but they're saying, ``Do it anyway.''
Is that pretty fair?
Mr. Rice. That is a pretty accurate approach, or statement,
yes.
Chairman Issa. And where is, in any of your understanding,
where is in fact the assumption that the science has to be
disproved--or has to be established as disproving from the EPA,
rather than EPA coming down with science that supports their
assertions on water or air? Because it sounds like they're
asking you to prove by your science what you want to do, while
in fact they say there's no time and no money for them to
establish scientific standards in this case.
Mr. Rice. We asked to participate in the scientific process
four or five years ago. We said that we would participate
financially, contributing to the sampling process as well as
with our technical experts. We were told at that time that they
had their science and, you know, ``You don't need to
participate.'' We felt that our participation would have
benefited the process and would have gotten us farther along.
In order to know if a decision--a solution works, you need
to have a foundation that's solid, so that a financial decision
that's made, you can build and measure if that decision was
good. If you don't have a ability to measure if something is
good or not, or that does what you think it's going to do,
you'll continue to spend money on a solution that may not be a
solution.
So what we argued was that we needed to be able to really
build and measure, and that's part of this adaptive management
approach was that we would be able to say, ``We're not going to
preclude better decisions in the future by jumping all the way
to some foregone conclusion.'' We would be able to build, see
the improvements. If their science is correct, we should see a
40 percent reduction on our incremental step in terms of the
nutrients going into the bay. That change should have a marked
improvement if their theories are correct.
We do not believe they're correct. We do not believe the
science supports the conclusions that they have made.
Chairman Issa. Let me just close with, in all of your
statements, you talked in terms of eelgrass not being affected
by this. So your theory is, you will do the reduction for other
reasons and that ultimately eelgrass will continue to have a
problem that you don't know the source of. Is that roughly
correct?
Mr. Hall. Mr. Chairman----
Chairman Issa. Yes. There's water clarity you mentioned.
Mr. Hall. Actually, more importantly, they actually do know
the source of the problem. The research was completed. It
concluded--which was kind of obvious when you looked at the
data--that nitrogen had not caused the effect that they thought
it did.
There's an interesting thing that happens in the watersheds
in this area. There's a lot of swamps. When it rains a lot,
colored water comes out of the swamps. When colored water comes
out of the swamps, it goes into all the tributaries and turns
them dim. The light can't penetrate. The federal studies found,
yes, in fact, that's the primary cause with why there's poor
transparency in various areas. Having found that conclusion, it
was then tossed out, because there was this drive for nutrient
criteria. I mean, it was as if it was a solution in search of a
problem.
So that's the unfortunate part, and that's what Mr. Rice is
talking about, about having a----
Chairman Issa. That you reduce the nutrient, and water
clarity will not change therefor?
Mr. Hall. Yeah. It doesn't change it. Yeah. It has no
effect on it.
Chairman Issa. I've exceeded my time.
Mr. Guinta.
Mr. Guinta. Thank you very much, Mr. Chairman. I want to
start with Mayor Jean.
I just want to ask you a simple question. Do you support
ensuring that Great Bay remains clean?
Mr. Jean. Absolutely.
Mr. Guinta. Okay. During the course of your testimony, you
commented that protecting the natural environment for the
benefit of its citizens and all the citizens of the New
Hampshire is important, but that you were also concerned that
the nitrogen and phosphorus discharge limits proposed by the
EPA were unnecessarily strict.
As an alternative, in other testimony, the AMP, or the
Adaptive Management Plan, has been proposed. Rochester has
joined in supporting the Adaptive Management Plan. Can you talk
to me a little bit about why that Adaptive Management Plan is
more reasonable from a financial perspective for the City of
Rochester?
Mr. Jean. Certainly.
Right now the City of Rochester is at approximately 30
milligrams per liter of nitrogen, and the Adaptive Management
Plan brings us closer to 8. The most important part of the plan
is, it will give us some time to collect some hard data that
would show whether or not what we're doing for total nitrogen
will actually improve the status of Great Bay or not, and we
felt that that was probably the most cost-effective and
reasonable number to achieve, and that's why the city supports
that, from a financial standpoint.
Mr. Guinta. Now, you talked a lot about the potential cost
to taxpayers. Taxpayers in the City of Rochester have a tax
bill, but they also have a sewer bill?
Mr. Jean. Correct. Correct.
Mr. Guinta. You mentioned a $2 million annual increase in
the bond for, I would assume the wastewater treatment?
Mr. Jean. Correct.
Mr. Guinta. You said that would double the rate, and you
testified to the rates.
Can you give me an idea what the average amount that a
family or household is paying currently for----
Mr. Jean. Sure.
Mr. Guinta. Is it billed quarterly?
Mr. Jean. It's billed quarterly, and right now, at the
current rates, you're looking at a sewer bill that's probably
about, I'd say close to $600 annually.
So if you were to impose the debt service that a wastewater
treatment plant upgrade would entail, you're looking at about
$1,200. And that's just the sewer side. That doesn't count
water. Of course, there's both sides to the water and sewer
bill.
Mr. Guinta. Right.
And that would be just if this mandate----
Mr. Jean. Correct.
Mr. Guinta.--was implemented?
Mr. Jean. That's correct.
And what's important to note is, of course, if this were an
upgrade that would be spread between the entire commercial and
residential tax base, that would be one thing. But this is
focused directly to the ratepayers who subscribe to the
wastewater treatment service that we provide. So it's a smaller
number, as opposed to the broad width of a residential tax
base.
Mr. Guinta. And you mentioned that the valuation of the
city since, I think you said '09, has been declining?
Mr. Jean. Correct. Has diminished from $2.6 billion to
approximately $2 billion.
Mr. Guinta. Which is not uncommon for economic conditions
that the entire country is in.
Mr. Jean. That's correct.
Mr. Guinta. There are many other communities that are
also--their value is declining.
Mr. Jean. That's correct.
Mr. Guinta. Which means that either, just from a
mathematical perspective, either you have less tax base to tax.
So if you're going to have the same amount of money, the same
amount of services, you've got to increase taxes or you've got
to somehow cut back on the expenses of the city to equalize
that reduction in value.
Mr. Jean. That's correct. But there was a reduction in
revenue.
Mr. Guinta. Now, has the tax rate increased over the last
several years in the City of Rochester?
Mr. Jean. It has.
Mr. Guinta. What's the rough average increase?
Mr. Jean. You're looking at approximately 3 percent, 2.5 to
3 percent over the last three years.
Mr. Guinta. Okay. And this issue, this mandate would be in
addition to 2.5 to 3 percent annual increase?
Mr. Jean. Yes.
Mr. Guinta. So this issue, this mandate would be in
addition to the 2.5 to 3 percent annual increase?
Mr. Jean. That's correct.
Mr. Guinta. The second point I wanted to make with the
mayor is that the Great Bay Municipal Coalition, which includes
Rochester, has initiated litigation against the State and the
State DES, alleging that it violated the state rule-making
process by neglecting to conduct a formal rule-making process.
I don't know if I should ask you this or maybe Mr. Hall or
Mr. Rice.
My particular question is, if the State of New Hampshire or
the EPA were to follow the procedures that the EPA put in
place, and ensured that the state legislature had a proper
review, that obviously would take some time. It would happen
over either one cycle or maybe two bienniums. That would
provide at least some additional time to create different or
better science, or maybe more agreed-upon science. But,
secondly, it would put you in a position as a city, one of the
contiguous communities, to try to identify a means in which you
could pay for this, long-term.
Is that a fair statement?
Mr. Jean. That would be fair, and I could defer to Mr. Hall
if there's any--anything that he would like to add about the
DES process. But I think that's an accurate assessment.
Mr. Guinta. Well, in the next round of questioning, maybe
I'll get into the specifics on procedure, because I think that
is extremely important.
Mr. Hall. The only point being, the chairman raised whether
EPA had taken the step of sending the letter to the State,
saying, ``Why have you not adopted the standard?'' Because the
regulatory agencies did not do what they were supposed to do,
we're now going to court to make them do precisely that.
So, you know, we're the ones that are moving the regulatory
process along its proper path. We wish we didn't have to do
that, but that's the situation we're stuck in right now.
Mr. Guinta. And the final question, I guess I want to ask
Mayor Jean.
I know that your method of governance is one of inclusion,
and I know that one of your focuses has been trying to improve
the economic condition of Rochester as an extremely important
city to the county and to this region.
If you were to have five businesses that you were courting,
and you were to include, as a matter of proper disclosure, that
there's a potential that there would be significant increases
on this side of the ledger, how would that affect your ability
to attract new, smaller businesses, job creators, and how would
that put you in a competitive disadvantage--advantage or
disadvantage to other communities?
Mr. Jean. From an economic development standpoint, the
increased rates would certainly put us at a disadvantage, not
only to the surrounding communities within Strafford County,
but really would put the entire Strafford County at a
disadvantage and encourage business to settle maybe in
Hillsborough County or Merrimack County where there are less
stringent regulations that would cause a wastewater----
Mr. Guinta. Because this is not just affecting Rochester?
It's affecting----
Mr. Jean. No. This is a regional impact. And that's why
we're here today.
Mr. Guinta. Okay. Thank you very much.
I yield back the balance.
Chairman Issa. Thank you.
We'll do one quick second round, because we do have another
panel to get to. And I had a couple questions.
Mr. Rice, you testified that for your first years, 2002 to
2008, essentially the State Water Quality Standards Advisory
Committee took one approach as to nutrient from a technical
advisory standpoint, and then in 2008 there was an abrupt
change.
Can you account for what caused, if you will, what science
supports an abrupt change in how nitrogen is looked at?
Mr. Rice. I can't justify the abrupt turnaround based on
science.
Chairman Issa. But you saw----
Mr. Rice. Based on policy, I was told by DES personnel that
they were being directed to come up with a strict nutrient
limit and that they had to make the numbers work.
Chairman Issa. So what you saw was a policy change without
science that led to essentially science being found to support
a policy decision already made?
Mr. Rice. Correct.
Chairman Issa. That's not uncommon. We see that in
Washington.
I guess, Mr. Hall, that sort of brings us to that question
of, these procedures that you're alleging, and I think are
pretty well documented, these shortcuts that are being taken,
aren't they in fact the exact fatal flaws that both sides need
to guard against? In other words, even though it's a long and
laborious process of comment and inclusion, that, ultimately,
that's a requirement--whether it's objections from the left or
objections from the right on any particular issue, in order to
get to a decision that we all have to live with--if you will,
that's the due-process guarantee, even if the outcome is not
always what we wanted?
Mr. Hall. Well, that's certainly correct, Mr. Chairman. I
mean, we're not trying to dictate an outcome, but we should
have our process which then allows us to put in the requisite
scientific information to show what should or shouldn't be
occurring, and that--again, it applies to both sides.
So I agree.
Chairman Issa. And I guess one follow-up question that I'm
particularly interested in.
Isn't it possible that with all the due process, with the
legislature acting, with science being re-looked at in an open
and transparent way, isn't it possible you'd lose; that in fact
we'd end up with less than 8, perhaps as little as 3; that the
ultimate standard may not be where your particular experts
found it?
Mr. Hall. Well, I would offer the following observation.
Chairman Issa. I was hoping for a yes or no.
[Laughter.]
Mr. Hall. Actually, the answer is no. The scientific
information is so perfectly clear.
Chairman Issa. In other words, you're comfortable with your
science. But let me ask it another way.
The process would at least create the possibility that
people of good faith would look at the science and reach a
different decision that might not be exactly the same as yours?
Mr. Hall. Yes, Mr. Chairman. And, in fact, when we asked
for the independent peer review, our statement going in--and I
mean, the coalition's statement--was, ``Get three truly
independent experts''--and there are top experts in the country
that know these issues back and forth--``Get three experts. If
they say we're wrong and we need to do it, we will go figure
out a way to find the money and get it all done.''
But if they say it's, like they did the last time, ``It's
not correct,'' we don't expect another policy decision to foist
a billion-dollar nutrient-reduction program.
Chairman Issa. Mr. Rice, you seem to be eager to give an
answer.
Mr. Rice. Yeah. Well, it's just for perspective.
Chairman Issa. And we do this in Washington. We give
answers where there are no questions.
[Laughter.]
Mr. Rice. Well, there's points to be made, right?
Chairman Issa. Yes.
Mr. Rice. As the city engineer, I'm responsible to look at
the data that's available and to make recommendations to the
decision-makers, our city council, our city manager, based on
that information. That information needs to be able to support
the decisions and the investments that the city makes.
Reviewing this information does not support these significant
capital outlays.
Chairman Issa. I guess as the city engineer, if you needed
to build a one-mile-long road that would accommodate a certain
amount of traffic per day, and you calculated two lanes, and
somebody else said, ``But I want four lanes because it looks
prettier,'' that, ultimately, you'd be looking at, ``Yes, but
why should we pay twice as much for twice as many lanes unless
we need them?''
Mr. Rice. Correct.
Chairman Issa. And so, in a sense, this is what this really
is: a decision about what it takes in the way of capacity and
mitigation in order to achieve a goal that is already specified
and agreed to by all of you?
Mr. Rice. Absolutely.
Chairman Issa. Do all--I know there's four--I keep saying
four, but I know there's one city that we were not able to get
a witness on either side available for.
Would you all agree here--and particularly, Mayor, since
you bind the city to a great extent--that if the process is
adhered to, that if EPA does what it's supposed to do, if your
legislature, if appropriate, does what they are supposed to do
with the 60-day notice, if that comes through, that,
ultimately, you would recognize and abide by whatever the
decision is and whatever the cost is, if the due process is
properly run through?
Mr. Jean. That's correct. We'd have no choice.
Chairman Issa. You'd have no choice, but----
Mr. Jean. Yes. Yes. Yes, we would, Mr. Chairman.
Chairman Issa. I guess I'm asking only--you know, for us,
we'd like--we'd all like to have the best outcome. I would like
healthcare to cost as much as it does, because I've got to tell
you, the healthcare debate in Washington would be a lot easier
if it was half the cost. Ultimately, we wouldn't have a crisis
in Medicare. If I can't make it half the cost, I at least have
to arrive at the least waste and fraud that I can, and then pay
the bill.
Mr. Jean. Yeah.
Chairman Issa. That's sort of the situation you're in, is
that you'd like to protect the citizens of your city by getting
them the most accurate and least expensive but effective
decision with a legitimate due process?
Mr. Jean. That's correct.
Chairman Issa. Well, that's, to a great extent, what
Congress has an obligation to do with all the federal agencies.
And I will tell you that's my goal when I leave here today is
to ensure not that your particular solution win, but that the
process be adhered to so that ultimately the best solution, at
the lowest cost possible, be achieved.
Thank you.
Mr. Guinta.
Mr. Guinta. Thank you, Mr. Chairman.
Mr. Rice, you're here on behalf of the City of Portsmouth.
Can you tell me what if any votes the City of Portsmouth took
relative to this particular issue or the Adaptive Management
Plan?
Mr. Rice. I will, and I can. But if I misspeak, my
assistant city attorney is here to let me know I'm----
Mr. Guinta. Sure. To set you straight.
Mr. Rice. Yeah, to set me straight.
Chairman Issa. So we've got an engineer and an attorney.
What a combination.
[Laughter.]
Mr. Rice. Yeah. It's a bad combo.
It's my belief that the city council did vote for the
adaptive management approach, and we did budget monies that
were passed to move forward with that approach in this year's
budget.
Mr. Guinta. Can you----
Mr. Rice. And then the other question you had was--for
the--well, the other votes that they've been taking is, the
city is voting and committed to moving forward to build a
treatment plant we're upgrading a treatment plant, to build
that treatment plant to 8 milligrams per liter, with the
ability to treat to 8. So that's another vote that was taken.
Mr. Guinta. So, just to sort of put this in perspective,
right now we're talking about anywhere--of a discharge from 20
to 30 milliliters; correct? I mean, currently, the current
discharge?
Mr. Rice. Right. Currently we're around 20.
Mr. Guinta. And different communities are at different
levels, but it's roughly 20 to 30 based on the communities.
So you're at 20; Rochester could go as high as 30 in
certain years. But that's where we are today?
Mr. Rice. Yeah.
Mr. Guinta. The EPA requirement is to get to 3, and the
coalition communities would like to get--the goal is to get to
8?
Mr. Rice. As the first step, correct. And, obviously, what
we would do is, we would build and measure. You know, the idea
is, if it didn't have the results we were hoping for, you know,
is it the right step and do we need to do anything beyond that?
Mr. Guinta. So you don't object to having a plan; you don't
object to ensuring that Great Bay is clean; you don't object to
reducing nitrogen. What you're objecting to, it sounds like, is
the mandate to immediately get to 3?
Mr. Rice. We don't feel the science supports going to 3.
Mr. Guinta. Okay. And you have offered to the EPA--have you
offered to the EPA----
Mr. Rice. Yes.
Mr. Guinta.--your alternative?
Mr. Rice. Yes.
Mr. Guinta. And what response have you gotten from the EPA?
Mr. Rice. The request, I think, went through the DES
originally, in a letter to the EPA; and the EPA responded that
it was not adequate, that you had to go to limits of
technology.
Mr. Guinta. Okay. Can you talk to me a little bit about
what you identified in your testimony in regards to your
attendance to a Washington event, a Water Environment
Federation EPA staff briefing on March 15, 2010? You talked
about it a little bit. Can you talk a little more in depth
about what you were told?
Mr. Rice. Yeah. I mean, there was a briefing through our
New Hampshire Water Pollution Control Association, the New
England water environment group. We went down--we go down
annually to get updates and have a chance to chat with our
representation down there, to bring up concerns and get
information.
At a staff EPA briefing to our organization, they were
talking about the Chesapeake Bay, and they talked about other
estuaries and that they were taking this approach and expanding
it nationally. And I pointed out that there were site-specific
differences with each estuary and it appears to be a one-size-
fits-all, and, you know, why would you do that? You know, our
Bay is different than elsewhere.
And they said--and the response was, ``You know, we don't
have the time or money. We're moving forward. And, you know,
that's just the way it is, and you just have to accept it.''
Mr. Guinta. So they don't have the time or money to do the
proper----
Mr. Rice. But we do.
Mr. Guinta. Exactly.
And, Mr. Hall, you did actually mention in some of your
comments that there are geographic differences nationally on
what would produce the transparency issues or the discoloration
of different water bodies?
Mr. Hall. That's correct. Actually, if Chesapeake Bay had
the algal level that you have in Great Bay, they would be doing
handstands. It is that low. The nutrients----
Mr. Guinta. Compared to Chesapeake?
Mr. Hall. Compared to the Chesapeake. And it's because----
Chairman Issa. It's nice to be colder.
Mr. Hall. Colder, and more importantly, I don't know--if
you get a chance to go eat some seafood down at Portsmouth
Harbor----
Chairman Issa. My staff has contributed considerably to the
economy in the last two days.
[Laughter.]
Mr. Rice. We appreciate that.
Mr. Hall. Ask them to watch the tidal exchange. It is
impressive, the amount of water that comes rushing through
every day. The detention time, which is a critical controlling
factor in any nutrient growth in a bay, is, I think about 13 to
18 days in Great Bay. In Chesapeake Bay it's like nine, ten,
twelve months.
So the amount of difference that you can have in algal
growth is huge in Chesapeake. In Great Bay, you can put
nitrogen in and it actually doesn't affect the algal growth,
which is exactly what the data showed.
What we were astounded with--about--was, after the EPA
looked at the data, EPA looked at the data and they were shown
that the nitrogen went up--the algae did not change--they still
kept claiming that nitrogen caused more algae and caused worse
transparency. The data confirmed it never happened.
So, yes, there are major differences in this system
compared to others. And I might note that your Technical
Advisory Committee from 2007 concluded you shouldn't use the
data from other estuaries, because this one is so different.
And I don't know where that recommendation went, but it
certainly got ignored in the end process.
Mr. Guinta. Mr. Chairman, may I have one additional minute?
Chairman Issa. Of course.
Mr. Guinta. Okay. Thank you.
Mr. Hall, we are going to hear in the second panel from the
EPA, specifically Mr. Spalding, and I suspect what he, to make
the points for the EPA, will talk a little bit about the PREP,
the Piscataqua Region Estuaries Partnership, and that report
from 2009 and how it justifies the proposed standards by EPA.
Can you talk a little bit about, from your perspective,
what PREP states, what that document states?
Mr. Hall. Sure.
Mr. Guinta. And maybe if you have any concerns or if there
are also any legitimate points you want to make about that
document.
Mr. Hall. I think the simplest analogy would be the
following.
Suppose you went into a doctor and said, ``I'm having
shortness of breath.'' And the doctor said, ``Well, you know,
this could be anything from indigestion to you may need bypass
surgery. You know what we need to do? We need to run some very
specific tests to figure out what the right diagnosis should
be.''
The doctor runs those tests; concludes, in fact, it was
indigestion.
You go back to meet the doctor again, and then the doctor
tells you----
Chairman Issa. ``Time for a heart transplant.''
Mr. Hall. ``It's time for a heart transplant, because I
have an opening on my schedule next week, and I needed to fit
somebody in.''
That is what happened with the 2009 criteria document. They
did the specific studies. When it confirmed that the specific
results or conclusions were, transparency was not affected in
the way they thought, they then switched to a simplified
diagnosis, plotted data in a way--and, by the way, my
background is in mathematics and I also have degrees of
environmental engineering. If I had handed this assessment in a
master's program as a basis for calculating a nutrient limit, I
would have gotten an F. The EPA Science Advisory Board
specifically said you can't use these kind of simplified
methods to predict complex nutrient criteria.
Okay. We brought that to EPA's attention. Now, that SAB
report happened, oh, about six months after the State finished
their report. So we thought, well, we'll bring this forward.
Obviously, they've make a mistake and they'll just fix it.
But, no. Since that date, the Science Advisory Board
position that you can't do these kind of analyses was ignored,
as was the specific diagnosis that this wasn't a transparency
issue.
So, yeah, we've got a few problems with the 2009 documents,
and that's why we've been asking for an independent scientific
review from day one, because I cannot imagine any credible set
of knowledgeable scientists looking at the evaluation and
saying anything else other than ``You need to change that.''
Mr. Guinta. Thank you, Mr. Chairman.
Chairman Issa. Thank you.
I'm going to just follow up, because there was one thing
that I didn't get in the last round.
One of you talked about the 1997 water treatment plant,
which gets you only to 30 milligrams per liter; right?
Currently.
Mr. Jean. Yes. Yes.
Chairman Issa. So in 1997, in the Year of Our Lord 1997,
way back then, 30 was good enough.
As an engineer, how long has 3 been technically possible?
How long has 8 milligrams per liter cost what it costs now in
your study? Is this a science where every year, if you--you
know, a little bit like trying to have the greatest computer.
The greatest computer 25 years ago, for millions of dollars, I
have in my pocket behind me--it's an iPad--you know, in my
briefcase. But a $20 million computer in the '70s was not as
powerful as an iPad, nor did it have as much memory.
How is the science going relative to being able to make
those kinds of removals, if 3 is technically possible but
expensive today, 8 is cheaper, and in 1997 you were at 30? Has
it progressed that quickly?
Mr. Rice. There have been improvements in the science and
the understanding of these systems. The big difference between
a computer and a biological system--a wastewater system is a
natural biological system. We take what naturally occurs in the
river and we condense it down into a treatment plant, so we get
more bang for the space available.
Chairman Issa. Right. But, for example, reverse osmosis is
in the order of 10 times less costly to do water purification
in that system than it was a few decades ago.
Mr. Rice. Sure.
Chairman Issa. My reason for asking is, if in fact the EPA
were to arrive at a decision that 8 looked good enough today,
10 years from now, 15 years from now, just as 15 years ago, if
they come back and there's a reason to go to 4, is it likely to
cost less or more because of technology breakthroughs?
Mr. Rice. It really depends on a number of different
things. The operation costs of these technologies are not
insignificant. Reverse osmosis is energy-intensive. A lot of
these low-limit biological systems require additional
chemicals, methanol, which is dependent upon energy prices. So
it may be cheaper on a----
Chairman Issa. The last time I checked, you don't have a
lot of natural gas coming into New England yet.
Mr. Rice. No. Right.
But if you look at in a capital cost, it may be cheaper in
terms of the capital, but the operation and maintenance costs
will offset the cost.
So, you know, it's crystal ball to a certain extent. Our
understanding of the biology and how the bacteria work has
significantly improved, and we're doing the best--you know,
we're really milking a lot out of what they do naturally. But
when you start adding chemicals----
Chairman Issa. I guess let's leave the dollars out for a
moment.
Could you have gotten to 3 milligrams per liter with the
existing science in 1997?
Mr. Hall. Not easily.
Mr. Rice. Probably not easily. I mean, even today, 3 is a
seasonal type thing. During colder temperatures, it's going to
challenging to meet the 3, if not--if not----
Chairman Issa. So it's a developing standard. It's also a
developing technology. And finding the right mix today doesn't
preclude the fact that you could do potentially better, even
for a small difference, and do it a few years from now?
Mr. Rice. Absolutely. And that is really why we say this
build-and-measure approach doesn't preclude doing better things
in the future. However, going to 3 today does preclude, because
it takes away resources.
And you had asked the mayor, you know, what type of impacts
this could be having, negative other than just financial. The
unintended consequence of raising sewer rates in all the
sewered communities will drive development into the non-sewered
areas. And as we've seen, non-sewered areas are really the
source--the runoff is really the source of the problems. And,
granted, some of the cities have runoff problems, but you'd be
expanding sprawl and moving more runoff issues out of the
sewered areas.
Chairman Issa. And that is one of the interesting
challenges, is that when your project is complete at 3 or 8 or
whatever level, I'm sure the vast majority of the State will
still be and its residents will be at a level higher; thus,
you'll be the good actor, but some of that waste will still be
going into the same estuary.
Mr. Rice. Correct.
Chairman Issa. Okay. Well, I want to thank you all for your
multi-panel answers. If you possibly can remain for the next
panel, we'd appreciate it. If you have comments or additional
items that occur as a result of Mr. Spalding's testimony,
please understand we're going to leave the record open for five
days for your additional comments, in addition to outside
organizations.
So thank you. And if we could reset for the next panel.
[Recess.]
Chairman Issa. This hearing will come back to order.
We are now joined by Mr. Curtis, or Curt, Spalding. He is
the administrator of the Environmental Protection Agency's New
York--I'm sorry--New England Region.
And pursuant to the committee rules, if you also would rise
to take the oath.
[Witness sworn.]
Chairman Issa. Let the record indicate the witness answered
in the affirmative.
Just as at the last panel, although you do probably have a
prepared statement that's been approved, try to limit it as
close as you can to five minutes, summarize, or skip over a
little bit. Your entire statement is going to be placed as a
matter of record.
Mr. Spalding. I will.
Chairman Issa. With that, you're recognized.

STATEMENT OF H. CURTIS ``CURT'' SPALDING

Mr. Spalding. Thank you.
Well, thank you, Mr. Chairman. My name is Curt Spalding.
I'm the administrator of EPA's New England Region. I appreciate
the opportunity to describe the agency's approaches to the
challenges facing Great Bay.
I think we all start from a common understanding. The Great
Bay estuaries are a real treasure. I've been on the water there
with scientists and state officials, and it's easy to see what
all who live in the Seacoast Region already know: Great Bay is
a real jewel. It is one of only 28 estuaries in the nation to
be included in the Clean Water Act's National Estuaries
Program. And thanks to the Piscataqua Region Estuaries
Partnership--or PREP, as was referred to earlier--and many
other scientific experts, the estuary has been studied
extensively for many years. And also, thanks to the stewardship
of Senator Gregg, the Federal Government has made significant
investments in research and land conservation in this
watershed.
Another point of agreement is that Great Bay is in serious
decline. In the 19--in the 2009 PREP study that was referred
to, the State of the Estuaries Report showing environmental
quality of the estuary was indeed declining. Of the 12
indicators measured, 11 showed negative or cautionary trends.
The most pressing problems include discharges from sewage
treatment plants, increased stormwater runoff, and non-point
source pollution. With mounting evidence of serious decline
across the watershed in 2009, the New Hampshire Department of
Environmental Services designated Great Bay waters as impaired
for failure to meet applicable water quality standards.
The panel before me discussed in detail the scientific
uncertainty. What you haven't heard about is the actual weight
of evidence. When EPA weighs all the lines of evidence,
particularly in the tributary waters where most of the
treatment plants discharge, we conclude that there is an
abundant evidence of impairment. In New Hampshire, unlike most
states, EPA is the Clean Water Act permitting authority. That
makes it our responsibility to ensure discharges of pollutants
to Great Bay do not cause or contribute to violations of water
quality standards. The discharge of nitrogen to Great Bay and
its tributaries comes from a variety of sources, including 18
sewage treatment plants in New Hampshire and Maine that
discharge close to 20 million gallons a day of wastewater, with
little or no removal of nitrogen. Beginning to control this
resource of nitrogen represents the single-most cost-effective
and predictable step that could be taken towards meeting water
quality standards. Sources other than the sewage treatment
plants are also important to Great Bay's nutrient problem, and
we will continue to take steps to address these sectors,
including the development of a general permit to address
stormwater discharges.
EPA's initial focus has been on the small number of
facilities that discharge the bulk of the nitrogen load coming
from sewage treatment plants. The plants in Exeter, Newmarket,
Dover, and Rochester account for over 80 percent of the
nitrogen released to the Great Bay from treatment plants.
And as true in every permit we issue, EPA has provided an
analysis for the public to examine and critique. In Exeter,
Newmarket, and Dover, we've have lengthy public comment periods
and heard from proponents and opponents of the proposed
nutrient limits. We will document our responses to all comments
received and provide a detailed record of our decisions. I
anticipate we will make decisions on the permits later this
summer.
We are very sensitive to the fact that it will take
significant public investments to clean up Great Bay. We
recognize significant economic impacts facing municipalities
for treatment plant upgrades, stormwater requirements, and
other municipal needs. We are more than willing to work with
communities on implementation schedules designed to minimize
the impact to ratepayers. You've heard the coalition propose
that EPA take an adaptive management approach to control
nitrogen in the estuary that would allow treatment plans to be
upgraded on phased schedules. These are the discussions we're
having with Newmarket and Exeter now.
For 18 years prior to my current position, I was executive
director of Save the Bay in Rhode Island. I witnessed the
nearly complete crash of Narragansett Bay to nitrogen pollution
problems, and we struggled to find solutions, just as the
struggle is starting here.
I know how hard it is to build a consensus to make the
investments in public infrastructure necessary to begin the
very long path towards restoring Great Bay. There is still
time, but probably not much time, to arrest the decline in
Great Bay before it bottoms out. The longer we wait, the harder
and more expensive the path back. EPA stands willing to work
with each community to find an affordable path to restoring the
treasure that is Great Bay.
I thank you for the opportunity to testify today. I'm happy
to take your questions.
[Prepared statement of Mr. Spalding follows:]

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Chairman Issa. Thank you.
Mr. Spalding, from your CV, your previous employment, what
was the discharge typical in Rhode Island in parts per
mililiter, or million?
Mr. Spalding. Million?
Chairman Issa. Million, yes.
Mr. Spalding. Well, the discharges are essentially
uncontrolled.
Chairman Issa. So they were hundreds or thousands per?
Mr. Spalding. The total----
Chairman Issa. In other words, where we're trying to
achieve 3 or 8----
Mr. Spalding. Right.
Chairman Issa.--and we're presently at 20 or 30----
Mr. Spalding. Yes.
Chairman Issa. A decade or two ago, uncontrolled could be
10 or 20 times that?
Mr. Spalding. Well, 40, 50 is not uncommon. I mean, that's
basically a fully functional secondary wastewater plant.
Chairman Issa. Plus whatever is running off people's lawns?
Mr. Spalding. Plus what's running off people's lawns, the
non-point runoff.
The Bay I was charged with trying to restore was----
Chairman Issa. And what did you achieve--what did the water
discharge turn into, at least from the sewage plants? What was
it when you left?
Mr. Spalding. Well, there's a set of controls now being
implemented on nitrogen.
Chairman Issa. No. What was it when you left? 18 years ago,
what had they, quote, gotten it to?
Mr. Spalding. On nitrogen?
Chairman Issa. Yes, sir.
Mr. Spalding. On nitrogen. They're still not controlled. So
at this point, the bay still deals with----
Chairman Issa. So in Rhode Island, they just put as much
crap down as they want?
Mr. Spalding. No, they do not. They now have controls
coming online in their wastewater plants----
Chairman Issa. Okay. But I asked you specifically,
because----
Mr. Spalding.--and permits in place.
Chairman Issa. I want to try to understand, because the
people who are here want to be as clean as necessary.
Mr. Spalding. Right.
Chairman Issa. And they also want to be comparatively
taxed, so to speak, along with the rest of the country.
Mr. Spalding. Right.
Chairman Issa. So, using Rhode Island, you're telling me it
wasn't 20 or 30 per, or certainly 8 or certainly 3 when you
left, and it isn't today?
Mr. Spalding. There are permit limits in most of the Upper
Bay Rhode Island plants today.
Chairman Issa. That are higher than being proposed here?
Mr. Spalding. There is a limit of 5 in Providence, a limit
of 3 in Woonsocket, a limit of 5 in East Providence.
Chairman Issa. Okay.
Mr. Spalding. So these limits are very much in the ballpark
of what's being proposed here.
Chairman Issa. Well, let's talk about the 5 versus 3. This
came out of the earlier panel. Environmental groups like the
Conservation Law Foundation, or CLF, have pressed the EPA for
stricter nitrogen limits in the estuary. Internal EPA Region 1
e-mail correspondence obtained through FOIA reveals the EPA
considered a 5-milligrams-per-liter nitrogen limit, with CLF,
basically an environmental group--not a neutral, just as your
previous group was not a neutral--apparently in this e-mail did
not agree.
Are you familiar with this e-mail that was delivered by----
Mr. Spalding. I'm not, but I'm familiar with the point that
proponents send e-mails and make input.
Chairman Issa. Well, do you know Stephen Sylva?
Mr. Spalding. I do know Steve Sylva, yes.
Chairman Issa. And do you know Carl Deloy?
Mr. Spalding. I do know Carl Deloy, yes. Both work for me.
Chairman Issa. Okay. So they're having a discussion about
what the standards should be to not get sued; right?
Mr. Spalding. Yeah.
Chairman Issa. So not getting sued is one of your
considerations for setting a standard?
Mr. Spalding. A standard is that the permit needs to be
legal. We get sued on both sides quite frequently. It's a
consideration, but not a determination.
Chairman Issa. But you wouldn't be having these kinds of e-
mail discussions if it wasn't trying to get groups to agree
that if you meet their standard--their standard you won't get
sued. That's what this e-mail shows. It isn't referring to
defendable science, a particular study, norms in other areas.
It's talking about getting sued.
Mr. Spalding. I think it's important to note that the
permit is still under consideration. There's been no final
determination. This is a back-and-forth communication. We again
have not made a final call whether it's 3 or 5 or any other
number. We propose 3 at this point.
Chairman Issa. Okay. But is this really boiling down to the
story of the pound of ground beef, and the way you determine a
pound is, the butcher has got his thumb on the top and he is
pushing down as hard as he can, and the purchaser has to put
his or her thumb on the bottom and push equally hard to get a
fair one pound of beef? Is it really about who can sue to get
the middle ground?
Mr. Spalding. No. No, it's not.
Chairman Issa. It certainly looks that way from this e-
mail.
Mr. Spalding. The determination by all involved, looking at
the weight of evidence, was that 3 was the standard we should
propose in the draft.
Chairman Issa. Well, isn't 3, though, the limit of
technology? Isn't that it, essentially, you couldn't propose 2,
because you couldn't mandate it based on achievable standards?
Mr. Spalding. 3, in combination with other factors of non-
point and stormwater control, as we all discussed, or as was
discussed earlier, the problem in the watershed and the equity,
we believe if these plants do achieve 3 in the future and other
actions are taken, you could meet the water quality standard.
Chairman Issa. So if they're at 30 and they're willing to
go to 8 in a matter of just a few years, why is that not a
dramatic improvement where you can make the change, and if I
understand correctly from the earlier testimony, in a matter of
days, a matter of days after you reach that level of output,
you reach that level in the estuary, and then, over a season,
you see the effected change? In other words, isn't it a few
days to lower the level, and then essentially a season or two
in order to see the effect?
Mr. Spalding. I wish it was that simple. No.
If they go to 8--and, in fact, we've had conversations with
Exeter and Newmarket about a phased approach that would bring
them to 8 and then, in years follow, go to the next level. So,
in fact, what I was interested in hearing was basic agreement
on the phased approach and adaptive management.
If you go to 8, you'll start to see improvement, yes.
There's a lot--in these systems, the nitrogen tends to be in
the system. It takes some time for it to work its way through.
Chairman Issa. You know I'm a native of Cleveland, even
though I represent California.
Mr. Spalding. Yes. Yes.
Chairman Issa. I remember when the Great Lakes were dead.
Mr. Spalding. Yes.
Chairman Issa. And they found out they weren't lakes; they
were rivers.
Mr. Spalding. Right.
Chairman Issa. Because it took a very short period of time,
after we quit putting chromate and all these other terrible
metals in, for it to flush out.
Mr. Spalding. Yes.
Chairman Issa. Now, in the soils deep beneath Lake Superior
and Lake Erie, I'm sure you can still measure some levels that
were left over from decades and decades ago.
Mr. Spalding. Right.
Chairman Issa. But it sounds like this is an area in which
you get a fairly quick change.
And I guess my question is, a phased approach, why wouldn't
you, if you will, look for something that is a threefold
reduction, or however, you want to talk about going from 20 to
30 down to 8? Let's just call it an average of 24 down to an
average of 8. Why wouldn't you take that and then measure it,
and recognize that there's no bargain?
And I'm not trying to----
Mr. Spalding. No, I understand.
Chairman Issa.--pledge a position. I'm trying to----
Mr. Spalding. I understand what you're saying.
Chairman Issa. Why wouldn't you say, ``Look. We don't have
a bargain. We have a point that we agree to go to and then
measure.'' Why wouldn't be that the first 5 to 10? Recognizing
that even though there would be a substantial investment,
everybody understands, as I asked the mayor on the first panel,
if it doesn't get the job done and science says you have to go
further, then, in fact, there's another round and another round
of expense, but you've essentially probably saved a couple
hundred million over that 6-, 7-, 8-year period that ultimately
you're going to use to make the next round of investment if you
need to.
Mr. Spalding. Yeah. Yeah. It's interesting you bring up the
phased approach, because, indeed, what you've just described is
a lot of what we've been talking about with Exeter. The only
difference is, to make a permit based on the science we see
today--and there's been a lot of conversation about science
from their consultant, but what we see in the science----
Chairman Issa. And if you noticed, when they were telling
me how confident they were, I said ``What if?''
Mr. Spalding. Yes.
Chairman Issa. Because we're always confident in our
science, and the other side is always confident.
Mr. Spalding. Absolutely.
Chairman Issa. I've been in trials and both sides have
experts that absolutely agree with them and disagree with each
other.
Mr. Spalding. Absolutely, sure. And we have a process for
arbitrating that through our Environmental Appeals Board.
But the fact is, writing a permit today, we think 3 is
what's required; but in discussions about a compliance
schedule, we've talked about several years doing exactly what
you talked about: Let's put 8 in, let's look at how it's
achieving, and then we would look at the science at that time,
with the idea that we all need to know how this resource is
responding, the issue you just raised.
Chairman Issa. So let me try to feed back your words,
because I think they're very important today. Because there may
be some misunderstanding of your goal, your likely rule, and,
in fact, what people understand.
Mr. Spalding. Right.
Chairman Issa. If in fact their study happens to be right,
and yet your belief is the one that ultimately is written on
the permit, do we have a situation in which you go to their 8;
you measure it. If they appear to be right in hindsight, you
don't go to 3 even though you still believe that you should go
to 3, but you see that they've achieved?
Mr. Spalding. Well, we have----
Chairman Issa. Or is this one of the things where they're
guaranteed to have to go to 3 and it's just a question of when?
Mr. Spalding. There are probably two permit cycles in play
before--again, talking about the compliance schedule that was
being discussed--where we could reconsider that 3 if their
science proves right, if other science proves right, or if
somebody--and you talked to Peter about the innovation that
might be out there, and believe it or not, there is a lot of
innovation around this water issue.
Chairman Issa. I suspected there was, although I didn't get
the answer I hoped for.
Mr. Spalding. No, there's a lot of innovation. The State of
Massachusetts just launched a very significant effort that way.
But the point is, yes, there is opportunity for
reevaluation in the compliance schedule we discussed--I've been
discussing with Exeter and Newmarket.
Chairman Issa. Well, I'm not envisioning a second round,
but as you saw in the last round, things come to me.
Mr. Spalding. Yes.
Chairman Issa. But Mr. Guinta has prepared very much for
this. I'll recognize the gentleman.
Mr. Guinta. Thank you, Mr. Chairman.
Thank you, Mr. Spalding, for working with me personally and
my office and the communities in trying to find what I hope is
a reasonable resolution. We've talked about this over the
course of the last year, and I want to try to get as much
information from this hearing to the public. I want to continue
to digest some additional information that I've heard, as you
know that I have filed legislation to try to find a middle
ground in getting to 8 as opposed to 3.
But some of the testimony I heard from the first panel did
concern me, because it does seem as though some of the
communities--I won't say all, but maybe some feel their voices
aren't being heard as much as maybe you would like or you feel
they're being heard. And you were in the audience; you heard
some of the testimony, particularly from Mr. Rice, on that
subject matter.
Can you maybe talk a little bit about that? Because I
suspect that there is maybe a difference of opinion that you
have, or a different approach that you have as the regional
director versus the EPA. I mean, I've gotten the sense over the
years that you want to try to find common ground, and I
appreciate that. But it does seem from some of the testimony
that that's not the opinion or it's not what the contiguous
communities have been feeling.
So can you just talk about that a little bit? And then I'll
get into more specific questions.
Mr. Spalding. Well, you make a good point. I took the
position or came in 2009, and this was well underway before I
got here. And we have been trying to open up paths of dialogue.
I've had regional staff in these communities, especially Exeter
and Newmarket, the first two permits, many hours of dialogue
with those communities on thinking about a compliance schedule
that would phase the approach and include this adaptive
management that they have proposed.
So we have been--and that was something I discussed in
depth with my staff: the need to get with the communities and
do that. And that's what I used to do running an NGO in Rhode
Island, have those kind of discussions. And, indeed, 3, 5,
other limits were put in without appeals in those--in that
place in Rhode Island.
So, yes, I think the need for dialogue is incredibly
important, because things will change, new technology will come
forth. Will the population in these towns continue to grow? The
real reason this is happening is population growth in this
region. So we need to continue to do that.
Mr. Guinta. On that, are you concerned at all about the
point that Mr. Rice brought up toward the end of his testimony,
about sprawl? I mean, fixing, from the EPA's perspective, one
problem and almost creating another?
Mr. Spalding. Yes. The idea that the costs in the cities
would go up and the people would go elsewhere.
Mr. Guinta. Is that a legitimate issue?
Mr. Spalding. It is a legitimate issue. I think the
chairman pointed out that a solution for this region needs to
include all the communities.
One thing that's very important----
Mr. Guinta. When you say ``all,'' what do you mean?
Mr. Spalding. All the communities that are in the Great Bay
Estuary watershed, that may be making an impact. So if you
have, for example----
Mr. Guinta. So does that go as far west as Candia, New
Hampshire?
Mr. Spalding. It can. I mean, there needs to be a
conversation about that. Those with septic systems and
individual systems need to be brought into this. And you might
find, as you go up these rivers, that some folks, their septic
system may not be working so well anymore. And those problems
need to be addressed. What's coming off of farms and lawns
needs to be addressed.
We are very eager to see a whole watershed solution found.
Unfortunately, we don't have that authority, that state and
local authority. So they need to put that program together. If
that program comes together and it shows real progress, there
could be a reconsideration of everything we've talked about
here.
Mr. Guinta. Well, staying on that point for a minute, it
seems like the first panel--and I think you would agree, but I
don't want to put words in your mouth, so tell me if I'm
wrong--but it seems like there's general understanding that
roughly 70 percent of the nitrogen in the estuary does not come
from wastewater treatment plant.
Mr. Spalding. That's right.
Mr. Guinta. So you've alluded to that.
Mr. Spalding. There's no disagreement there.
Mr. Guinta. Okay. So should I be concerned with what the
communities are bringing to me in terms of their financial
concern? If wastewater treatment plant is 30 percent or 28
percent of the problem, why is the first phase of modifying or
improving this being such a significant financial impact, you
know, greater than the 30 percent that maybe they feel they're
responsible for?
Because I have to say, I'm hearing from the communities,
from day one, they want to fix this problem. They don't want to
be in a fight with the EPA. They've encouraged me and asked me
to be in this process to try to find that common ground
solution. And that's the role that I've tried to play from day
one, and that's the role I want to continue to play.
Mr. Spalding. Well, you should be concerned, like I'm
concerned. We both should be concerned about impact to
ratepayers and how this goes in place, and it needs to be
phased. We're working with communities with limits all over--
and I mean financial limits all over New England, places like
Holyoke and Fitchburg and other places with income levels far
below these communities. And we work very hard to phase the
work so it does not create undue burden.
But the other thing you point out is, that I think is very
important, is should the burden be borne by just these
communities? In other states in my region, states put forth
some bond-issue support and other things. There used to be a
grant program that was funded here. I think that's the case in
most states. They provide some help for a resource that's a
state asset like this.
I do regret, I think like we all do, that the Federal
Government can't do more in terms of granting and that sort of
thing. But, all said, I think we all need to be concerned.
Nobody wants to put a community at an unfair disadvantage.
Mr. Guinta. Two final points I'd like to make, if I could.
Chairman Issa. Of course.
Mr. Guinta. So, on that note, the Clean Water Act does
allow for state legislatures to engage in these particular
issues. The first panel, I think it's been identified that the
state legislature has not.
Mr. Spalding. Yes.
Mr. Guinta. So, to your point about a greater area,
shouldn't the legislature be more engaged, number one? And,
number two, if the upwards of--you know, it could be 75
million, could be 164 million, could be 250 million, depending
on the requirement of the 3 for the contiguous communities--I
mean, we probably differ in the cost, but they're telling me
anywhere from 160 to 250. You know, long term it could be a
billion when you include the other communities. Why wouldn't
the--why wouldn't the Adaptive Management Plan of 8 be
sufficient?
I keep hearing--I hear you say that you want to work with
them, but it sounds like you're saying at the end of the day,
you are saying they have to get to 3.
Mr. Spalding. What I'm saying is two things.
Mr. Guinta. So there's two points there.
Mr. Spalding. Two things. Looking at the science today, the
decline we see in the habitat health of the Great Bay Estuary
today, we have proposed 3 milligrams per liter as ultimately
necessary to see the Great Bay and its estuaries recover. That
said----
Mr. Guinta. However, you've also said that it could change
over time.
Mr. Spalding. That said, we have discussed with the
communities a compliance schedule that does a phasing approach
using the adaptive management approach; that if other means are
found to get that nitrogen reduction that all feel is necessary
done, that 3 could get reconsidered. We have two, at least two,
more permit cycles.
One thing that is unfortunate----
Chairman Issa. When you say ``permit cycles,'' how long are
they?
Mr. Spalding. They are five years, and these permits are
overdue. It's one of the issues that is not a good thing, that
your permits are overdue. I guess it makes us vulnerable to 60-
day notices anytime.
Mr. Guinta. No, I know. But--so the 3--and the chairman was
trying to make this point, and I think it's important for the
record.
Mr. Spalding. Right.
Mr. Guinta. Because a lot of people in New Hampshire feel
very, very strongly about Great Bay. Some want it cleaned up,
you know, quicker than others. Some people are more concerned
about the financial component.
Mr. Spalding. Right.
Mr. Guinta. But I think most people would agree we have to
get it cleaned up.
Getting to that requirement of 3, the e-mail exchange
between two EPA employer----
Mr. Spalding. Yes.
Mr. Guinta. Excuse me, employees, does concern me. I mean,
tell me if I should not be concerned.
When two EPA employees specifically state that either 5 mg
per liter, with CLF's agreement not to appeal, or 3--that's
what concerns me. What is driving, you know, this standard? Is
it an agreement with CLF not to sue? Or is it what people in my
state and these contiguous communities ultimately want to try
to come to an agreement with, that it's in the best interest of
their community?
Mr. Spalding. Well, I think what you're seeing here is, we
do look at legal risk related to permits from all sides.
Obviously, we're concerned about the communities and their
appeals, potentially. That's why we've been meeting with them
at length. And then we need to be concerned about appeals from
the other side.
Mr. Guinta. So you also meet with CLF?
Mr. Spalding. We from time to time meet with CLF. Not
specifically on a permit like we would with a community.
Mr. Guinta. Have you met with CLF on this?
Mr. Spalding. I have not.
Mr. Guinta. Have any EPA employees?
Mr. Spalding. I'd have to check with staff. I don't think
they have had a specific conversation about this. I think
they've expected CLF to participate like everyone else, through
the public comment period.
Mr. Guinta. Could you within the five-day period after
today's hearing include an answer to that question?
Mr. Spalding. I'll ascertain that. Absolutely. Absolutely.
Mr. Guinta. Well, my time has expired. I appreciate the
chairman's willingness to yield, and I yield back.
Chairman Issa. Well, you gave us this hearing, so if you
need more time, you certainly can have it.
As I promised, there will be something else.
Mr. Spalding. Good.
Chairman Issa. I've worked in engineering for most of my
career, but I'm a trained businessman. And so, thinking about
Sister Peggy's accounting class in college, if I did my math
right, if we went from 30 parts to 3 parts, but we're only
affecting 30 percent of the discharge and the other 70 percent
remains where it is, my arithmetic says that whatever level of
discharge you have today, even after they go down by tenfold in
some cases, you're still going to have 76 percent as much
flowing into the estuary as you have today. Isn't that roughly
right?
Mr. Spalding. I think you're definitely right, knowing your
skills.
Chairman Issa. So as we're trying to balance what share is
borne by five communities and what is necessary to clean this
up, if I read correctly, basically you're going to get 70
percent as much pollution if all five communities just ship
their water to Tacoma, Washington.
So one of our problems here is, at 70 percent the amount of
phosphates and nitrogen going into the water, you may still not
have a clean estuary. Isn't that true?
Mr. Spalding. Yeah. If no other action is taken, I think
your conclusion is correct.
Chairman Issa. Okay. So as we try to look at our guidance,
if you will, for future legislation, including Mr. Guinta's,
what I see here is, fingers in the dike are good if there's
only a few holes. In this case, it looks a little bit like the
thing I get my spaghetti dried with; that if these cities
comply fully at 8 percent, then 5, then 3, you may still have
an estuary that's not able to support what the people in this
community and the surrounding 40-some communities want.
Mr. Spalding. That's right. And I'd add to your concern. If
population keeps growing as it has been, this action would
perhaps have less effect.
Chairman Issa. So as we're looking at guidance to ourselves
and, quite frankly, Senator Shaheen, all of the elected
officials that go to Washington, possible guidance to the State
for their share, you said that, if you will, these are the
folks that are under--and I don't want to say your thumb in an
unfair way, but they're under your jurisdiction. The others are
effectively not. And would it be fair to say that we need to
look to New Hampshire's legislature and ask, and to other
communities, ``What are you going to do to help us with the
other 70 percent?''
Mr. Spalding. Absolutely. Absolutely.
Chairman Issa. Well, let me ask you a rhetorical question.
If all of 100 percent suddenly went to 8--in other words,
all the--you know, we all know that septics sometimes leak
conveniently, and no one addresses them because they're not
giving them a problem, but they're flowing right into the
water.
Mr. Spalding. Exactly.
Chairman Issa. If all of that was cleaned up, you might, in
fact, have a very healthy estuary at 8 or 10, because you're,
of course, now dealing with 100 percent of the problem, not
just 30. Is that true?
Mr. Spalding. You might well--I think there has been a
conversation about further study. I would presume that would be
a good thing to do to sort that out.
Chairman Issa. Okay. Because part of what we were hoping to
do, and Mr. Guinta as somebody who has served here as a city
mayor and obviously knows the state, you know, we're looking at
providing guidance both ways: guidance to ourselves in our
federal role, but also to the state.
And you mentioned the cycles. Let me ask just one last
question, or last type of question.
Mr. Hall, and to a certain extent Mr. Rice, but Mr. Hall
particularly, he basically said that your process bypassed an
awful lot of requirements of notice and hearings and so on. If
that's the case, are you concerned that no matter what number
you reach, if you reach a number that one side or the other
doesn't have, that it's not defensible under federal law? In
other words, you're going to end up in a suit either way?
Mr. Spalding. He was talking about two processes: the
process to establish a state water quality standard and our
process to establish a permit on the 3, on communities we've
issued draft permits for. These are distinct. Most of his
criticism was at the state water quality standard process.
We feel we followed the procedures to the letter for
putting forth these permits. We looked at the narrative water
quality standard. Not the numeric, the narrative. We looked at
the preponderance of evidence and came forth with a judgment.
Am I concerned? I'm always concerned when someone raises
those issues. I think there's ways to arbitrate those issues.
He's written a letter to my program, the water program, of
course, the Inspector General, who we pay very close attention
to EPA. I think----
Chairman Issa. Our committee does, too. There are fingers
and tentacles.
Mr. Spalding. We stay very--as I said, pay very close
attention.
So those will be, I think, fairly considered about this
issue of state water quality standard-setting. But on the
permit, which is what I'm responsible for, I think we're in a
process where public comment is being sought, and then we're
going to have to look at it all and issue a response to all
these comments, and we need to be accountable for the comments
we give forth and make a judgment. But, again, I have not
waited for that. We've been in conversation with community on
how to stretch this out to protect their financial health, and
we want to continue doing that.
At the end of the day, you made the great point. This has
to be a whole watershed approach. These permits are just one
piece. If that whole watershed approach comes into place,
clearly these permits can be looked at again, 5 years, 10 years
down the line.
Chairman Issa. Let me ask you one final question. Do you
have the authority to work with a schedule that is somewhat
closer to what each of these individuals, particularly the
mayor, talked about?
In other words, they put out bonds for 20 years. They want
to amortize all or part of a facility for at least 10 before
they tear it down and do it again, recognizing the 1997
facility could potentially become abandoned----
Mr. Spalding. Yeah. Absolutely.
Chairman Issa. Unless they're able to use it as a base for
upgrade.
Do you have the authority to work with schedules that would
be 10 years before the next step, 5 years before the next step,
and so on?
Mr. Spalding. We do. We have schedules like that underway.
The most difficult issue, as you can appreciate, coming from
the Midwest--combined sewer problems. Very challenging. We
spread those out. We need to make incremental progress.
I think what we're trying to say right now is we have to do
something in the short term, or move forward on Great Bay. And
that's what we're trying to do.
Chairman Issa. Well, thank you.
Mr. Guinta, do you have anything else?
Mr. Guinta. If I could have one final comment to that end.
Chairman Issa. Of course.
Mr. Guinta. I just want to reiterate for the record that
Senator Shaheen, Senator Ayotte, Governor Lynch, and myself
have all submitted letters essentially saying the same thing:
that we want to support the communities; we hear their
concerns; we hear the EPA's concerns. I hear, and we've all
heard the other groups', regional local groups' concerns. But
the four elected people that I mentioned have all asked for and
recommended additional time. And my hope would be that the AMP
is something that is looked at with great optimism and
opportunity to find that common ground.
There are other communities that are affected, who I think
support the AMP as well. And if there is some opportunity to
try to find a way to get to the AMP without the implicit
mandate, that at some point, without empirical data, getting to
that 3, I mean, give them some time to try to assess.
Mr. Spalding. Yeah.
Mr. Guinta. If they do the 8, you know, what that would
accomplish.
Mr. Spalding. Right. We will look at ways to do that. I
appreciate the input. Honestly, the input has led us to connect
with Portsmouth, and we've discussed actually a final permit
there at a--well, a draft, but a draft permit there at the 8-
milligram-per-liter level, because they are in a different
situation.
I want to make sure everyone understands. Every facility is
different----
Mr. Guinta. Oh, yeah, they are.
Mr. Spalding. In the context of this.
So we're trying hard to be as flexible as we can. So I
will--we will look at that very closely.
Mr. Guinta. And I think there's bipartisan support amongst
the delegation and the governor, you know, for that. And I
think everyone is trying to balance that----
Mr. Spalding. I hear that.
Mr. Guinta.--the mitigation needs, as the community does
support, but also the costs approach as well.
Mr. Spalding. Right. I hear that.
Mr. Guinta. So I appreciate that consideration.
Mr. Spalding. Thank you.
Chairman Issa. Thank you.
Thank you, Mr. Guinta. I appreciate your bringing this to
our attention and bringing us up here. I want to note that the
food, the accommodations were excellent. The weather, so-so.
Mr. Spalding. Not so good today.
Well, thank you for visiting the region. I appreciate it.
Chairman Issa. Well, that's what field hearings are for. If
we stay in Washington and ask you to come, we get one
selection. For all the men and women who came here, hopefully
this was an opportunity for you to see what you would otherwise
not necessarily have been able to see in Washington.
So I want to thank you for your patience and for your
participation. We stand adjourned.
[Whereupon, at 11:02 a.m., the committee was adjourned.]

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