In yet another dramatic turn for federal policy governing the “waters of the U.S.” (WOTUS), the Biden administration has announced its intent to revise the definition of WOTUS, citing “destructive impacts” to critical water bodies under a Trump-era rule.

The Environmental Protection Agency (EPA) and the Department of the Army on June 9 issued a declaration requesting remand of the 2020 Navigable Waters Protection Rule, which the Trump administration made effective a year ago to replace a 2015 Obama-era rule. The Department of Justice, meanwhile, has reportedly acted to file a motion requesting remand of the rule.

The agencies said they intend to initiate a new rulemaking process that restores “the protections in place prior to the 2015 WOTUS implementation.” They also anticipate “developing a new rule that defines WOTUS and is informed by a robust engagement process as well as the experience of implementing the pre-2015 rule, the Obama-era Clean Water Rule, and the Trump-era Navigable Waters Protection Rule.”

‘Significant Environmental Degradation’

EPA Administrator Michael S. Regan noted that the Biden administration had flagged the rule for review, acting on his first day to revoke President Trump’s executive order related to the rule’s revision. “After reviewing the Navigable Waters Protection Rule as directed by President Biden, the EPA and Department of the Army have determined that this rule is leading to significant environmental degradation,” he said in a June 9 statement.

The EPA said the lack of protections is “particularly significant in arid states, like New Mexico and Arizona, where nearly every one of over 1,500 streams assessed has been found to be non-jurisdictional.” The agency also said it is aware of “333 projects that would have required Section 404 permitting prior to the Navigable Waters Protection Rule, but no longer do.”

The EPA intends to establish a “durable definition of ‘waters of the United States’ based on Supreme Court precedent and drawing from the lessons learned from the current and previous regulations, as well as input from a wide array of stakeholders, so we can better protect our nation’s waters, foster economic growth, and support thriving communities,” Regan added.

Why WOTUS Is Such a Highly Contentious Rule

The actions on Wednesday are a clear reversal toward a broader definition of what constitutes “WOTUS.”

According to the EPA, the Clean Water Act “prohibits the discharge of pollutants from a point source to navigable waters unless otherwise authorized under the Act.” In the Clean Air Act, “navigable waters” are defined as “the waters of the United States, including the territorial seas.” While WOTUS is not defined in the Clean Air Act, the EPA and the Army have widely used the term in regulations since the 1970s. The term also figures prominently in the agencies’ jointly implemented programmatic activities. Over the years, WOTUS has effectively emerged as a threshold term that establishes a geographic scope of federal jurisdiction under the Clean Water Act. 

The federal rule’s promulgation, however, has its roots in two major U.S. Supreme Court cases: Solid Waste Agency of Northern Cook County v. U.S. et al. (2001), and Rapanos et ux., et al. v. U.S. (2006).  While Rapanos was an especially fractured decision, concurring opinion, Justice Kennedy’s formulation of a “significant nexus” test for determining jurisdiction was integrated into legal guidance published by the EPA in 2007 and revised in 2008, during the Bush administration.

In 2015, the Obama administration issued a final rule, known as the “Clean Water Rule,” based largely on Justice Kennedy’s concurring opinion that granted the federal government broader powers to limit pollution. But when promulgating the final rule, the EPA suggested that the pair of Supreme Court decisions in 2001 and 2006 made it unclear whether the act also covered smaller bodies such as groundwater, headwaters, streams, and wetlands that feed those larger waterways. The EPA also said that for more than a decade, it had received requests—from members of Congress, state and local officials, industry, agriculture, environmental groups, scientists, and the public—for a rulemaking that would clearly define and protect tributaries that impact the health of downstream waters.

Once the Obama-era rule was finalized, it quickly drew ire, amassing legal challenges by at least 31 states and 52 non-state parties, which argued that it violates the 10th Amendment’s federalism principles and that it exceeds the Constitution’s commerce clause.

Among key challengers were a number of power companies and utilities, which expressed concerns that water near power plants, such as water drainage ditches and cooling ponds, may be considered U.S. waters. According to the Nuclear Energy Institute, the rule would create “significant practical problems” for companies operating nuclear power plants and planning new facilities. Similarly, the American Public Power Association suggested the final rule is problematic because it would drastically expand the WOTUS jurisdiction of EPA and the Corps, “which would subject more utility projects and activities to Clean Water Act jurisdiction.”

The Trump administration’s move to revise the definition in the 2015 WOTUS rule was widely applauded by the power industry, mainly because it narrowed WOTUS’s definition to exempt groundwater and ditches from regulation under the Clean Water Act. The rule derived key elements from Justice Scalia’s decision in Rapanos, particularly its emphasis on the need for a direct hydrologic connection (rather than a “significant nexus”). The final 2020 “Navigable Waters Protection Rule,” outlines six categories of what would be considered “waters of the U.S.”: traditional navigable waters; tributaries; certain ditches; certain lakes and ponds; impoundments; and adjacent wetlands. It also outlines what would not be considered WOTUS, a list that includes groundwater. 

On Wednesday, the EPA and Army said their new regulatory effort would be guided by “the latest science and the effects of climate change on our waters.” The forthcoming new rule may also emphasize a “practical implementation approach for state and Tribal partners.”

With Rule in Regulatory Limbo, What Power Sector Should Expect Now

According to Duke McCall, a partner at law firm Morgan Lewis, if the Biden administration repeals the Trump-era rule, the legal definition of WOTUS will revert to the pre-2015 guidance—for which there is consensus “it is a bit vague and difficult to apply.” The pre-2015 guidance “will be in effect until the Biden administration completes step two, which is to promulgate a new rule, presumably that, again, tries to provide greater clarity in terms of scope, but is likely to be broader as well than the Trump-era rule,” he said.

Dozens of challenges to the Trump-era WOTUS rule are already pending in federal district courts around the country, he noted. “What we saw happen [on June 9] is that the Department of Justice requesting a remand in a case [Conservative Law Foundation v. EPA] from the District of Massachusetts, arguing that [the EPA] intends to issue a new rule,” McCall said. “I think the expectation is that the DOJ and EPA will take the same approach in all other cases. Many of them are stayed at present. They will essentially try to take this issue out of the courts and put it back into the agency’s hands.”

For the power industry, the biggest impact from WOTUS rulemaking has so far been the Section 404 permit program, which regulates the discharge of dredged or fill material into waters of the U.S., including wetlands, McCall suggested. “If you’re looking to build transmission lines and you’re adjacent to a water body, the first question [that arises] is, ‘Is that water body considered WOTUS that will require you to comply with permitting requirements?’” Permitting can extend the duration of a project but also prompt changes in construction plans, he noted.

McCall said the power sector should carefully watch for changes to WOTUS. The biggest difference between the Trump-era rule and pre-2015 Bush-era policy is that the Bush rule includes the “significant nexus test,” he said. “It says WOTUS include not only navigable waters but also those with a significant nexus to navigable waters. The significant nexus analysis focuses on physiologic and ecologic factors—whether there’s some chemical connection or underground connection that ties the two closely together in a significant way,” he explained. “I think we have to prepare for it to return to that.”

In terms of concrete steps industry could take while the rule is in regulatory limbo is to “perhaps revisit some of the lessons learned from the litigation surrounding the definition promulgated by the Bush administration, and what transpired after that.”

However, no matter what the Biden administration comes up with, “What we’re likely to see is a return to litigation and increased uncertainty,” McCall said. Both the “environmental community, as well as the regulated community” could challenge the rule.  Ultimately, the courts may determine how the WOTUS rule is shaped, he said.

Sonal Patel is a POWER senior associate editor (@sonalcpatel@POWERmagazine).

Updated (June 11): Adds comments from Duke McCall, partner at law firm Morgan Lewis.