Executive Summary
Per- and polyfluoroalkyl substances (PFAS) represent the most significant unfunded regulatory mandate facing water and wastewater utilities in a generation. This report synthesizes research across the federal regulatory timeline, state-level regulations in five key markets, treatment and compliance costs, and rate design implications.
The regulatory floor is set. EPA finalized enforceable MCLs for PFOA and PFOS at 4.0 parts per trillion in April 2024. While the Trump administration extended the compliance deadline from 2029 to 2031 and moved to rescind MCLs for four additional PFAS compounds (PFHxS, PFNA, GenX, and the Hazard Index), the D.C. Circuit denied EPA's motion to vacate those standards in January 2026. As of March 2026, all six MCLs remain legally in effect.
Compliance costs are massive and disproportionate. EPA estimated national compliance costs at $1.55 billion annually, but AWWA/Black & Veatch estimates are roughly double ($2.7–3.5 billion/year), with capital costs of $37–48 billion. The cost disparity between large and small systems exceeds 100:1 on a per-household basis.
The funding gap is real. Approximately $10 billion in Bipartisan Infrastructure Law funding plus $15 billion in manufacturer settlements provide meaningful but insufficient funding relative to $37–48 billion in capital needs. Utilities will ultimately need to recover the majority of PFAS compliance costs through customer rates.
Rate design is evolving in real time. Three primary mechanisms are emerging: PFAS-specific surcharges, base rate integration, and settlement credit riders. Under AWWA M1 methodology, PFAS treatment costs are predominantly fixed and support recovery through base/fixed charges rather than volumetric rates.
Wastewater utilities face a parallel crisis. PFAS in biosolids has driven management cost increases of 37–72%, with Maine's first-in-nation ban on biosolids land application serving as a harbinger. Minnesota estimates statewide wastewater PFAS cleanup costs of $14–28 billion over 20 years.
Every cost-of-service study and rate design engagement for a water or wastewater utility must now account for PFAS — whether through capital improvement plan integration, revenue requirement modeling, affordability analysis, or funding strategy. The regulatory, cost, and legal landscape is volatile, and utilities need adaptive rate strategies that can accommodate evolving requirements.
Regulatory Landscape
Federal TimelineEarly Science and Framework Building (2002–2016)
EPA's engagement with PFAS began with a TSCA Significant New Use Rule (SNUR) for PFOS-related chemicals in 2002 (67 FR 11008, March 11, 2002), following 3M's voluntary phase-out announced in 2000. In 2006, EPA launched the PFOA Stewardship Program, a voluntary agreement with eight major manufacturers to eliminate PFOA emissions by 2015.
In January 2009, EPA issued provisional health advisories for PFOA (400 ppt) and PFOS (200 ppt) — non-enforceable guidance values. That same year, PFOA and PFOS were included on the third Contaminant Candidate List (CCL 3) under the Safe Drinking Water Act (74 FR 51850, October 8, 2009).
The Unregulated Contaminant Monitoring Rule 3 (UCMR 3), published May 2, 2012 (77 FR 26072), required approximately 5,000 public water systems to monitor for six PFAS compounds between 2013 and 2015, generating the first comprehensive national occurrence dataset. Results showed detections nationwide, particularly near military installations, airports, and industrial facilities.
In May 2016, EPA replaced the provisional advisories with lifetime health advisory levels of 70 ppt for PFOA and PFOS, individually or combined (81 FR 33250). These remained non-enforceable. CCL 4 was published later that year (81 FR 81099, November 17, 2016).
Regulatory Determination and Legislative Action (2019–2021)
In February 2019, EPA released its PFAS Action Plan (EPA 823-R-18-004), the agency's first comprehensive cross-office strategy, committing to pursue MCLs for PFOA and PFOS. The preliminary regulatory determination (85 FR 14098, March 10, 2020) found these chemicals met all three SDWA criteria for regulation. The final regulatory determination followed on March 3, 2021 (86 FR 12272), formally triggering the MCL development process.
Congress acted in parallel. The FY2020 NDAA (P.L. 116-92, December 20, 2019) added 172 PFAS chemicals to EPA's Toxics Release Inventory. The Infrastructure Investment and Jobs Act (P.L. 117-58, November 15, 2021) provided approximately $10 billion in PFAS-related water infrastructure funding: $4 billion to the Drinking Water SRF, $5 billion for Emerging Contaminants in Small or Disadvantaged Communities grants, and $1 billion to the Clean Water SRF.
EPA released the PFAS Strategic Roadmap on October 18, 2021, establishing a whole-of-agency approach with concrete timelines for proposing a drinking water MCL, designating PFOA and PFOS as CERCLA hazardous substances, and developing Clean Water Act effluent limitations guidelines.
Health Advisory Update (June 2022)
On June 15, 2022, EPA issued dramatically lowered interim health advisories (87 FR 36848): PFOA at 0.004 ppt and PFOS at 0.02 ppt — reductions of roughly four orders of magnitude from the 2016 levels. GenX was set at 10 ppt and PFBS at 2,000 ppt. While non-enforceable, these signaled the direction of formal rulemaking.
Final PFAS Drinking Water Rule (April 2024)
Following the proposed rule published March 29, 2023 (88 FR 18638), EPA published the final PFAS National Primary Drinking Water Regulation on April 26, 2024 (89 FR 32532), effective June 25, 2024.
| PFAS Compound | MCLG | MCL |
|---|---|---|
| PFOA | Zero | 4.0 ppt |
| PFOS | Zero | 4.0 ppt |
| PFHxS | 10 ppt | 10 ppt |
| PFNA | 10 ppt | 10 ppt |
| HFPO-DA (GenX) | 10 ppt | 10 ppt |
| Hazard Index (PFHxS + PFNA + HFPO-DA + PFBS) | 1 | 1 |
Original compliance deadlines: initial monitoring by 2027, full compliance by 2029. EPA estimated costs at $1.5 billion annually and identified 4,100–6,700 affected systems serving 83–105 million Americans.
CERCLA Hazardous Substance Designation (April–July 2024)
EPA designated PFOA and PFOS as hazardous substances under CERCLA § 102(a) on April 19, 2024 (89 FR 39504, May 8, 2024; effective July 8, 2024), with a default reportable quantity of one pound per 24-hour period. EPA simultaneously issued an Enforcement Discretion and Settlement Policy focusing enforcement on manufacturers — but this is a policy, not a binding legal safe harbor. Water utilities remain technically liable as potentially responsible parties under CERCLA's strict, joint, and several liability framework.
Legal Challenges (June 2024–Present)
On June 7, 2024, the American Water Works Association and others filed petitions for review in the D.C. Circuit (No. 24-1188), challenging the NPDWR on grounds of inadequate science, unlawful Hazard Index methodology, and underestimated costs. Eighteen states and multiple environmental organizations intervened in support of the rule.
Trump Administration Modifications (2025)
Following the January 20, 2025 inauguration, EPA Administrator Lee Zeldin announced in April 2025 that the administration would retain PFOA/PFOS MCLs at 4.0 ppt but rescind the four additional MCLs. On May 14, 2025, EPA formally extended the PFOA/PFOS compliance deadline to 2031, established a federal exemption framework for systems facing extraordinary compliance challenges, and launched the PFAS OUTreach Initiative for rural and small water systems.
On September 17, 2025, EPA announced retention of the CERCLA designations while acknowledging the "passive receiver" liability problem and calling for a Congressional statutory fix as the most enduring solution.
On November 13, 2025, EPA proposed narrowing the TSCA § 8(a)(7) reporting rule with de minimis (0.1%), imported articles, byproducts, R&D, and non-isolated intermediates exemptions. Reporting deadlines: October 13, 2026 for most manufacturers; April 13, 2027 for small business importers.
D.C. Circuit Denies Vacatur (January 2026)
On January 21, 2026, the D.C. Circuit denied EPA's motion to vacate the PFHxS, PFNA, GenX, and Hazard Index portions of the rule, stating the merits were not sufficiently clear. As of March 2026, the full Biden-era NPDWR — all six MCLs plus the Hazard Index — remains legally in effect. Any modifications must proceed through notice-and-comment rulemaking.
PFOA and PFOS MCLs at 4.0 ppt are staying. The compliance deadline is moving to 2031. Treatment investment for these two compounds is unavoidable. The fate of the other four MCLs remains uncertain, but all six remain legally in effect as of March 2026. Utilities should plan for full compliance with all six MCLs as the conservative baseline.
State-by-State Analysis
At least 15 states have adopted enforceable PFAS drinking water standards or are in active rulemaking. The following analysis covers five key markets that illustrate the range of regulatory approaches, contamination profiles, and financial challenges facing utilities.
Texas
Compliance OnlyRegulatory Status
Texas has not adopted state-level PFAS MCLs or action levels beyond federal requirements. TCEQ enforces federal MCLs but has not established stricter limits. TCEQ's posture is compliance-focused rather than proactive. The agency published Protective Concentration Levels (PCLs) for 16 PFAS compounds under the Texas Risk Reduction Program in 2014 (updated February 2025) and provides free Financial, Managerial, and Technical assistance to public water systems.
HB 1674 (89th Legislature, 2025–2026) would have regulated PFAS in biosolids-derived fertilizers with testing, disclosure, and criminal penalties. Despite 75 co-authors, the bill missed a key deadline in May 2025. No Texas agency currently has both the authority and responsibility to monitor PFAS in biosolids applied to land — the most significant regulatory gap in Texas PFAS management.
Contamination and Enforcement
Nearly 50 Texas public water systems exceed one or more EPA PFAS MCLs based on UCMR 5 data, including systems in Fort Worth, Dallas, Arlington, Abilene, Baytown, Deer Park, and Grapevine.
| Military Installation | PFAS Level (ppt) | Multiple of EPA 4 ppt MCL |
|---|---|---|
| Lackland AFB (JBSA) | 680,000 | 170,000x |
| Dyess AFB (Abilene) | 448,200 | 112,050x |
| Randolph AFB (JBSA) | 182,000 | 45,500x |
| Reese AFB (Lubbock) | 7,280 | 1,820x |
PFAS-contaminated biosolids from Synagro Technologies were applied to agricultural land in Johnson County, leading to soil, surface water, and groundwater contamination, livestock deaths, and farmer lawsuits. Fort Worth terminated its 10-year Synagro contract in March 2025, paying $2.4 million in settlement.
| Litigation | Amount/Relief | Status |
|---|---|---|
| City of Fort Worth v. DoD, 3M, DuPont et al. | $420 million | Filed March 2025; active |
| City of Dallas v. 3M, DuPont et al. | Undisclosed | Active |
| Johnson County farmers v. Synagro | Damages | Active |
| Texas AG v. 3M, DuPont | TPDC enforcement | Filed December 2024; active |
Costs and Funding
TWDB administers DWSRF and CWSRF Emerging Contaminants programs with 100% principal forgiveness. PFAS projects earn highest priority (200 points in CWSRF). EC-SDC allocation to Texas: $114.7 million. Total BIL SRF allocations: approximately $2.9 billion; $358.98 million announced for infrastructure upgrades. Fort Worth's 2025 utility budget includes a $42 million increase (7%), with $1.1 million PFAS-specific (legal counsel + lab analysis), and a total Water Fund of $617 million. The approved January 2025 rate increase has an average residential impact of $1.71/month.
California
Most AggressiveRegulatory Status
California has the most developed advisory framework among the five states, though enforceable MCLs have not yet been established. Notification and Response Levels were updated October 29, 2025:
| Compound | Notification Level (ppt) | Response Level (ppt) | Federal MCL (ppt) |
|---|---|---|---|
| PFOA | 4.0 | 10 | 4.0 |
| PFOS | 4.0 | 40 | 4.0 |
| PFHxS | 3.0 | 10 | 10 |
| PFHxA | 1,000 | 10,000 | N/A |
The State Water Resources Control Board identified PFAS MCL development as its highest priority for 2026. OEHHA proposed Public Health Goals in July 2021 (PFOA: 0.007 ppt; PFOS: 1 ppt, cancer-based). General Order DW-2025-0002-DDW (December 12, 2025) requires monitoring by March 31, 2027. AB 794 would authorize emergency regulations at least as protective as federal standards.
Contamination
PFAS has been detected in systems serving up to 25 million Californians, with 62 military facilities having known or suspected releases. Orange County Water District (serving 2.3 million) shut down over 60 wells and invested in the largest ion exchange PFAS treatment facility in the U.S. Estimated compliance cost: $1.8 billion over 30 years, with $267 million in near-term capital. In Southeast Los Angeles, Cal Water found PFAS in 30% of tap water samples, with 89% of detections in industrial, predominantly Latino and low-income areas.
Costs and Financial Planning
State appropriations total $100 million (FY 2021–2024). Over $700 million in BIL funding has been allocated to California for emerging contaminants, including a $131 million WIFIA loan for OCWD. Twelve providers have spent $571 million and planned $1.13 billion since December 2019.
California Water Service's pending CPUC rate case (A.24-07-003) illustrates the emerging practice of separating PFAS costs from base rates: a 30%+ base increase plus a 25% PFAS surcharge equals a potential 55%+ cumulative rate increase. The $215 million PFAS investment spans $1.6 billion across California districts for 2025–2027. The CPUC proposed decision authorized $92.3 million (11.1%), $50.8 million (5.5%), and $52.4 million (5.4%) over three years — but rejected Cal Water's request for a PFAS memorandum account.
Maryland
Moderate-AggressiveRegulatory Status
Maryland enforces federal MCLs starting April 2029, with an interim advisory of 70 ppt for the sum of PFOA and PFOS. The landmark Protecting State Waters From PFAS Pollution Act (HB 1153/SB 956, signed May 9, 2024) established a 4 ppt industrial discharge limit and a phased implementation schedule: identify industrial users (October 2024), develop monitoring criteria (January 2025), develop action levels (June 2025), and develop mitigation plans (September 2025).
Maryland has also banned PFAS in firefighting foams, food containers, rugs/carpets, personal care products, and cosmetics (HB 643, effective January 2025). A biosolids-specific bill (HB 909/SB 732) failed in 2025 but is expected to return in 2026.
Contamination
Approximately 75% of Maryland community water systems tested positive for PFAS (134 detections out of 450+ systems). Sixty-three systems serving approximately 165,000 individuals exceeded proposed MCLs. Military contamination is severe: Joint Base Andrews at 435,000 ppt, Fort Meade at 87,000–89,000 ppt (with an $83 million Army cleanup), NAS Patuxent River at 87,000 ppt (Webster Field). The W.L. Gore industrial contamination in Cecil County recorded levels 200–250 times the EPA limit, triggering a class action (February 2023) and state lawsuit (December 2024). PFAS was found in drinking water at 10 Maryland schools in August 2024.
Costs and Biosolids
Baltimore City estimates unfunded mandates approaching $1 billion. EPA awarded $76 million in SRF funding to Maryland. Maryland's biosolids program is the most advanced of the five states: a moratorium on new land application permits since February 2023, mandatory sampling using EPA Method 1633, and biosolids limits effective October 1, 2027 (PFOA+PFOS ≥50 ppb cannot be land applied; 25–50 ppb with alternate management measures).
Illinois
Moderate-ProactiveRegulatory Status
Illinois adopted Part 620 groundwater standards matching federal MCLs (January 22, 2026 final drinking water; April 11, 2025 groundwater). Standards match federal values: PFOA and PFOS at 4 ppt, PFHxS/PFNA/HFPO-DA at 10 ppt, PFBS at 2,000 ppt. Seven PFAS Health Advisories with guidance levels were issued 2021–2024. The SB0561 PFAS Reduction Act (2021) banned Class B AFFF, while HB2516 (August 2025) expands product bans to cosmetics, dental floss, juvenile products, and more by January 2032.
Contamination
Illinois EPA tested all 1,749 community water supplies. At least 81 sites exceeded minimum reporting limits; 68 exceeded health-based guidance levels. In April 2025, 47 community water systems (serving 438,589 individuals) were notified of exceedances. Military contamination includes Chanute AFB (644,000 ppt, EPA recommended Superfund listing), Scott AFB (PFOS at 20,250x EPA limit), and Naval Station Great Lakes (27 hazardous sites). Chicago proper shows no detectable PFAS, but suburbs including Crest Hill (PFOA 13.7 ppt, PFHxS 12.2 ppt) are affected; Crest Hill is transitioning to Lake Michigan water by 2030.
Rate Cases and Funding
Illinois American Water's rate case (ICC Docket P2024-0097, filed January 27, 2026) requests $577 million for 2026–2027 ($421 million water, $156 million wastewater), with a residential impact of +$14/month water and +$28/month wastewater. Federal funding includes $288.29 million in BIL water infrastructure, $41.5 million DWSRF, and $300 million Public Water Supply Loan Program ($32 million for emerging contaminants). IAW settlement credits to customers began November 2025.
Colorado
ProactiveRegulatory Status
Colorado adopted state MCLs with a compliance deadline of April 2029 — two years ahead of the extended federal schedule. The state's PFAS Grant Program launched a January 2026 application cycle, and the PFAS Testing and Assistance Program (PFAS TAP) provides free testing and filters for income-eligible households.
Contamination and Cost Profile
Colorado faces military contamination among the worst nationally, with Schriever Space Force Base recording 870,000 ppt. The state also faces a unique wildfire–PFAS–affordability convergence: the 2020 wildfire season burned 625,000+ acres directly affecting drinking water sources. Thornton is spending $80 million on a GAC treatment facility. Metro Wastewater Reclamation District estimates over $700 million for PFAS cleanup. The Widefield/Fountain corridor near Peterson and Schriever SFB has experienced significant rate impacts from contamination-driven infrastructure needs.
Treatment Technology & Cost Analysis
National Compliance Cost Estimates
The gap between EPA's and the water industry's cost estimates is substantial and has direct rate planning implications.
| Source | Annual Cost Estimate | Capital Cost Estimate | Key Assumptions |
|---|---|---|---|
| EPA Economic Analysis (April 2024) | $1.55 billion/year | ~$14.4 billion total | 4,100–6,700 systems affected |
| AWWA/Black & Veatch (August 2024) | $2.7–3.5 billion/year | $37.1–48.3 billion (5 years) | 7,000+ entry points; UCMR 5 data |
| NACWA Coalition (July 2023) | Up to 3x EPA estimate | $50+ billion (20 years) | Includes wastewater impacts |
GAO Report GAO-25-107897 (July 2025) examined EPA's methodology and noted stakeholder assertions that the analysis does not adequately represent actual costs. For rate planning, the AWWA/Black & Veatch estimates serve as a more realistic baseline.
EPA Cost Categories
| Category | Annual Cost (EPA Estimate) |
|---|---|
| Water system treatment and disposal | $1,506 million |
| Water system monitoring | $36 million |
| Water system administration | $1 million |
| Primacy agency implementation | $5 million |
| Total annual cost | $1,548 million |
Best Available Technologies
EPA identified four treatment technologies as Best Available Technologies (BAT) for PFAS removal: Granular Activated Carbon (GAC), Anion Exchange (IX), Reverse Osmosis (RO), and Nanofiltration (NF). Technology selection has significant rate impact.
| Parameter | GAC | Ion Exchange | RO / Nanofiltration |
|---|---|---|---|
| Relative capital cost | Moderate | Lower | Highest (3x+ GAC) |
| Media cost per lb | ~$2 | $4–$12 | N/A (membrane replacement) |
| Cost per 1,000 gal (500 gpm) | ~$0.45 | ~$0.26 | Substantially higher |
| Media/membrane life | 3–12 months | 6–18 months | 5–7 years |
| Empty Bed Contact Time | 5–10+ min | 2.5–5 min | N/A |
| Regeneration | Thermal reactivation | Generally single-use | N/A |
| Footprint | Largest | ~25% of GAC | Moderate |
| Energy intensity | Low | Low | High |
| Short-chain PFAS effectiveness | Less effective | More effective | Removes all |
| Water loss | Minimal | Minimal | 15–25% |
Per-Household Cost Disparities
The most critical cost issue for rate consultants is the dramatic disparity between large and small system compliance costs.
| Population Served | Estimated Annual Cost Per Household |
|---|---|
| Less than 100 residents | $10,090 – $11,150 |
| Small communities (general) | $305 – $3,570 |
| More than 1 million residents | $80 – $105 |
The cost disparity exceeds 100:1 between the smallest and largest systems. Key drivers include the inability to spread fixed costs, limited technical capacity, minimum media volumes, monitoring burden ($300–$600 per sample), and limited financing access. Only 7% of very small water systems (<500 people) use advanced filtration, compared to 28% of the largest utilities. Consumer willingness-to-pay research shows an average of $13.07/month ($156.84/year) — well below actual small-system costs.
Monitoring and Testing Costs
PFAS laboratory analysis costs $250 to $600 per sample using EPA Methods 533 and 537.1. EPA estimated total annual monitoring costs at $36 million nationally. Small systems with a single entry point performing quarterly monitoring at $400/sample would incur approximately $1,600/year in lab costs alone; large systems could face $50,000–$200,000+ annually.
Disposal and Biosolids Costs
Spent media disposal: $1,000–$2,000 per ton for thermal destruction. GAC can be thermally reactivated, but the process must reach temperatures exceeding 1,000°C to destroy PFAS.
Biosolids management costs increased an average of 37% in 2020 and 72% by 2021 in areas with PFAS regulations. The Minnesota PCA study found statewide wastewater PFAS cleanup costs of $14–$28 billion over 20 years, with removal costs of $2.7–$18 million per pound depending on facility size. Small facilities face per-pound costs six times greater than large facilities. The CERCLA hazardous substance designation could add $3.5 billion/year in disposal costs sector-wide (Hazen & Sawyer estimate).
Case Studies
Cape Fear Public Utility Authority (Wilmington, NC): $35.9 million GAC construction contract; annual PFAS filter O&M of $3.7 million (FY2023), rising to $5 million+; total Southside WWTP replacement at $239 million+. Approved $120 million FY2025 budget with a 4.6% average bill increase.
Greater Augusta Utility District (Maine): $3–$5 million treatment system cost with only $200,000 in state grants, leaving a $2.8–$4.8 million gap for ratepayers.
Tucson, Arizona: 22 wells taken offline; advanced oxidation pretreatment facility under construction (January 2025–August 2026).
Orange County Water District (California): $1.8 billion estimated 30-year compliance cost; $267 million near-term capital; every customer now receives PFAS-free water.
Rate Design & Financial Planning
Rate Case Examples
Major rate filings where PFAS was a primary cost driver illustrate emerging practice across the utility sector.
| Utility | Filing | PFAS Investment | Rate Impact | Key Detail |
|---|---|---|---|---|
| PA American Water | 2023–2024 rate case | Primary driver | $88.1M approved (10.74%) | Filed $199.2M (24.2%); PFAS as primary driver |
| PA American Water | 2025 rate case | $1.2B system improvements | $14/month residential | $18M settlement credits via Litigation Universal Credit Rider (~$26/customer) |
| California Water Service | CPUC A.24-07-003 (July 2024) | $215M PFAS; $1.6B total | 30% base + 25% PFAS = 55%+ | CPUC rejected PFAS memorandum account; authorized $92.3M, $50.8M, $52.4M over 3 years |
| Connecticut Water | WQTA filing (Jan 2026) | $241.7M capital program | 0.53% WQTA surcharge | 26 of 35 sources exceed MCL; Public Act 25-142 authorization |
| Middlesex Water (NJ) | Feb 2024 settlement | $48.3M Park Ave + $255M Olsen plant | $15.4M annual revenue increase | $0.9M depreciation + $3.2M carrying costs for Park Ave reclassification |
| Ridgewood Water (NJ) | 2025 budget | PFAS treatment | $37.07/qtr (50% increase) | Surcharges recover only 64% of PFAS revenue requirement; $1.688M surplus offset |
| Illinois American Water | ICC P2024-0097 (Jan 2026) | $577M ($421M water, $156M WW) | +$14/mo water, +$28/mo WW | 42 miles pipeline, PFAS treatment; 11-month review; CUB opposition |
| Fort Worth | 2025 rate increase | $1.1M PFAS-specific | $1.71/month average | Legal counsel + lab analysis; treatment capital not yet in rates |
| Aqua Pennsylvania | May 2024 | $953M capital program | Pending | $108M PENNVEST funding for PFAS projects over 5 years |
Rate Structure Mechanisms
Three primary approaches are emerging for PFAS cost recovery:
PFAS-Specific Surcharges are the most common emerging approach. Separate bill line items adjusted more frequently than base rates provide cost transparency and faster recovery. Connecticut's statutory WQTA framework (Public Act 25-142) and Ridgewood Water's quarterly surcharge by meter size offer replicable models.
Base Rate Integration incorporates PFAS costs into traditional rate case revenue requirements. This approach integrates PFAS into the standard cost-of-service framework but is slower to adjust. Used by Pennsylvania American Water, Aqua Pennsylvania, and Middlesex Water.
Settlement Credit Riders allow targeted treatment of manufacturer settlement proceeds. Pennsylvania American Water's Litigation Universal Credit Rider distributed $18 million to approximately 690,000 customers (~$26/customer one-time credit). NARUC guidance notes that cost trackers/riders allow faster recovery but cautions that regulators must adequately scrutinize costs.
Cost-of-Service Methodology (AWWA M1)
Under standard M1 methodology (base-extra capacity or commodity-demand), PFAS treatment costs would typically be functionalized as treatment plant capital (allocated on base and extra capacity factors), treatment O&M (allocated on volume/commodity factors), and source of supply if new sources are needed (allocated on demand factors).
PFAS treatment costs are predominantly fixed — treatment infrastructure operates regardless of demand — which supports recovery through base/fixed charges rather than volumetric rates. Practitioners should consider whether PFAS treatment creates a distinct functional cost category warranting separate analysis, particularly where treatment addresses contamination from specific sources. Where pretreatment programs identify industrial PFAS sources, extra-strength surcharges analogous to BOD/TSS surcharges under WEF MOP 27 could be applied.
Revenue Requirements Modeling Under Uncertainty
Use ranges, not point estimates. Given technology and regulatory uncertainty, PFAS revenue requirements should be presented as ranges with confidence intervals. AWWA's Monte Carlo approach (randomizing GAC media life, loading rate, RO recovery) provides a model.
Plan for phased capital programs. Structure 5–10 year capital improvement plans with decision gates. The extended 2031 compliance deadline allows longer amortization of capital projects, reducing annual rate impacts.
Account for settlement revenue as offsets. Document expected settlement proceeds explicitly in revenue requirement calculations. Settlement payments arrive over 13+ years while utilities need upfront capital — a timing mismatch that must be modeled.
Model the full cost picture. Include drinking water treatment, biosolids disposal cost increases (37–72%), pretreatment program expansion, monitoring/compliance, and CERCLA liability exposure.
Scenario modeling. At minimum, utilities should model three scenarios: (1) Base case — PFOA/PFOS MCLs at 4.0 ppt with 2031 compliance, four additional MCLs rescinded; (2) Moderate case — all six MCLs retained, compliance deadline 2029 or 2031; (3) Aggressive case — all six MCLs retained plus state standards exceeding federal requirements.
Affordability and Environmental Justice
EPA's December 2024 Water Affordability Needs Assessment established thresholds of 3% and 4.5% of household income. If PFAS compliance gaps are addressed entirely through rate increases, an estimated 30.4 million households (21.5% of U.S. households) would exceed the 2.5% affordability threshold for drinking water alone. PFAS contamination disproportionately affects disadvantaged communities: at least 69% of state-identified disadvantaged communities in California have PFAS in their public water systems.
State affordability programs include Michigan's Water Affordability Program (caps bills at 2–3% of income, funded by $1.25/meter fee), North Carolina's PFAS Treatment System Assistance Program, New Hampshire's PFAS Remediation Grant and Loan Fund, and Colorado's PFAS TAP.
Debt Financing and Credit Implications
At least 70% of U.S. water utilities rely on municipal bonds for capital investment. After EPA's April 2024 rules, PFAS exposure became a proxy for long-term environmental liability used by bond markets, insurers, and credit rating agencies. Moody's treats PFAS risk as a material credit consideration, particularly for small municipal utilities with aged infrastructure or shrinking customer bases. Most PFAS-related bond issuances are expected 2025–2027.
The settlement payment timing mismatch — payments over 13+ years while utilities need upfront capital — argues for bridge financing strategies. Insurance coverage for PFAS is increasingly limited as carriers add PFAS-specific exclusions. Utilities should review coverage and disclose PFAS-related contingencies in bond offering documents.
Funding Sources & Gap Analysis
Federal Funding Programs
| Program | Amount | Structure | Key Details |
|---|---|---|---|
| DWSRF Emerging Contaminants (BIL) | $4 billion | 100% principal forgiveness through SRFs | Priority to disadvantaged communities |
| EC-SDC Grant Program (BIL) | $5 billion ($1B/yr FY2022–2026) | Direct grants | Small/disadvantaged communities; PFAS, perchlorate, manganese |
| CWSRF Emerging Contaminants (BIL) | $1 billion | Through Clean Water SRFs | Wastewater-side PFAS projects |
| WIFIA Loans | $6.5B + $550M SWIFIA | Up to 49% of costs; 35-year terms | Min project $20M ($5M small); below-market rates |
| DWSRF Annual (FY2025) | $8.9B combined CWSRF/DWSRF | Loans with subsidization | Up to 49% additional subsidization for disadvantaged |
EPA's proposed FY2026 budget would slash State Revolving Fund spending by 90%. If enacted, this would dramatically reduce the primary funding mechanism for PFAS infrastructure. Utilities should not assume current SRF levels will continue.
Manufacturer Settlements
| Settlement | Amount | Timeline | Phase 2 Claims Deadline |
|---|---|---|---|
| 3M | $10.3–12.5 billion | 13 years (payments from July 2024 through April 2036) | July 31, 2026 |
| DuPont / Chemours / Corteva | $1.185 billion | Court-approved February 2024 | July 31, 2026 (eligibility cutoff June 30, 2026) |
| Tyco Fire Products | $750 million | November 2024 | — |
| BASF Corporation | $312.5 million | November 2024 | — |
| Total | ~$15 billion | Special Needs Funds: Aug 1, 2026 |
State Funding Programs
| State | Program | Amount |
|---|---|---|
| North Carolina | 48 drinking water/wastewater projects (July 2025) | $204 million |
| Minnesota | BIL emerging contaminants (5 years) | $17 million |
| Minnesota | 3M settlement (Twin Cities metro) | $720 million |
| New Hampshire | PFAS Remediation Grant and Loan Fund | Up to $50 million |
| California | State appropriations (FY 2021–2024) | $100 million |
| California | Anticipated DWSRF/CWSRF EC (FY 2025/26) | ~$233 million |
| Colorado | PFAS Grant Program (Jan 2026 cycle) | Varies |
| Texas | EC-SDC allocation | $114.7 million |
The Funding Gap
Total available federal funding (~$10 billion) plus settlements (~$15 billion over 13 years) covers only a fraction of estimated capital needs ($37–48 billion). The ~$25 billion in available funding leaves a gap of $12–23 billion that must ultimately be recovered through customer rates. Small and disadvantaged systems have the largest per-household costs and the least ability to recover costs through rates.
Key Deadlines & Action Items
Federal Compliance Deadlines
| Deadline | Action | Status |
|---|---|---|
| June 25, 2024 | PFAS NPDWR effective date | Completed |
| July 8, 2024 | CERCLA PFOA/PFOS designation effective | Completed |
| Spring 2026 | EPA final rule on compliance deadline extension and MCL modifications | Pending |
| Mid-2027 | Original initial monitoring deadline (3 years from effective) | Active — unchanged |
| October 13, 2026 | TSCA § 8(a)(7) PFAS reporting deadline (most manufacturers) | Active |
| April 13, 2027 | TSCA reporting deadline for small business importers | Active |
| April 2029 | Original full MCL compliance deadline | Subject to extension |
| 2031 | Proposed extended PFOA/PFOS compliance deadline | Pending finalization |
Settlement Claims Deadlines
| Deadline | Action |
|---|---|
| July 31, 2026 | DuPont / Chemours / Corteva Phase 2 claims filing deadline (eligibility cutoff June 30, 2026) |
| July 31, 2026 | 3M Phase 2 settlement claims deadline |
| August 1, 2026 | Special Needs Funds application deadline |
| Through April 2036 | 3M settlement payment period (13 years) |
Utilities that have not filed settlement claims should do so immediately. The DuPont (eligibility cutoff June 30, 2026; claims filing deadline July 31, 2026), 3M (July 31, 2026), and Special Needs Funds (August 1, 2026) deadlines cannot be recovered if missed.
State-Specific Deadlines
| Date | State | Action |
|---|---|---|
| October–December 2025/2026 | Maryland | Initial PFAS monitoring sampling |
| January 1, 2026 | Vermont | Updated Water Supply Rule effective; quarterly sampling begins |
| March 31, 2027 | California | State monitoring order deadline |
| April 2027 | Illinois | Initial monitoring deadline |
| July 1, 2026 | Minnesota | PFOS HRL must be revised to 15 ppt |
| October 1, 2027 | Maryland | Biosolids PFAS limits take effect (50 ppb) |
| April 2029 | Colorado | State MCL compliance deadline |
| 2030 | Maine | LD 1503 PFAS product ban effective |
| 2032 | Minnesota | Amara's Law ban on avoidable PFAS uses |
Immediate Actions (2026)
- File settlement claims before June–August 2026 deadlines.
- Complete PFAS monitoring — federal deadline is mid-2027; some states require earlier.
- Assess source water PFAS levels at all entry points.
- Begin treatment technology evaluation including pilot studies.
- Engage rate consultants to model revenue requirements under multiple scenarios.
- Apply for all available grant funding: BIL DWSRF, EC-SDC, state programs, WIFIA loans.
- Review insurance policies for PFAS coverage and exclusions.
Near-Term Actions (2026–2028)
- Incorporate PFAS into the CIP with phasing aligned to compliance deadlines.
- Design and procure treatment systems — allow 18–24 months for design, permitting, and construction.
- File rate cases or surcharge applications with settlement offsets documented.
- Establish pretreatment monitoring for industrial users in wastewater systems.
- Develop biosolids contingency plans in states with emerging restrictions.
- Communicate proactively with customers and governing boards about costs and timelines.
Appendix A: Complete Regulatory Timeline
| Date | Action | Citation |
|---|---|---|
| March 2002 | TSCA SNUR for PFOS-related chemicals | 67 FR 11008 |
| 2006 | PFOA Stewardship Program launched | EPA, epa.gov/pfas |
| January 2009 | Provisional health advisories: PFOA 400 ppt, PFOS 200 ppt | EPA (January 8, 2009) |
| October 2009 | PFOA/PFOS added to CCL 3 | 74 FR 51850 |
| May 2012 | UCMR 3 published; monitoring 2013–2015 | 77 FR 26072 |
| May 2016 | Updated lifetime advisory: 70 ppt individually or combined | 81 FR 33250 |
| November 2016 | CCL 4 published | 81 FR 81099 |
| February 2019 | EPA PFAS Action Plan | EPA 823-R-18-004 |
| December 2019 | FY2020 NDAA: 172 PFAS added to TRI | P.L. 116-92 |
| March 2020 | Preliminary regulatory determination for PFOA/PFOS | 85 FR 14098 |
| January 2021 | FY2021 NDAA: DOD PFAS procurement restrictions | P.L. 116-283 |
| March 2021 | Final regulatory determination for PFOA/PFOS | 86 FR 12272 |
| October 2021 | PFAS Strategic Roadmap 2021–2024 | EPA, epa.gov/pfas |
| November 2021 | IIJA/BIL enacted: ~$10B PFAS funding | P.L. 117-58 |
| June 2022 | Interim advisories: PFOA 0.004 ppt, PFOS 0.02 ppt | 87 FR 36848 |
| March 2023 | Proposed PFAS NPDWR | 88 FR 18638 |
| October 2023 | TSCA § 8(a)(7) reporting rule finalized | 88 FR 70516 |
| April 10, 2024 | Final PFAS NPDWR announced | EPA Press Release |
| April 26, 2024 | Final rule published; effective June 25, 2024 | 89 FR 32532 |
| April 19, 2024 | CERCLA designation for PFOA/PFOS | 89 FR 39504 |
| June 7, 2024 | AWWA v. EPA filed (D.C. Cir. No. 24-1188) | D.C. Circuit |
| July 8, 2024 | CERCLA designation effective | 89 FR 39504 |
| December 2024 | Preliminary Effluent Guidelines Plan 16; draft CWA criteria | EPA |
| January 2025 | Trump administration begins; EPA Admin Zeldin | — |
| February 2025 | D.C. Circuit grants 60-day stay in AWWA v. EPA | Court order |
| April 2025 | EPA announces retention of PFOA/PFOS MCLs, rescission of 4 others | EPA Press Release |
| May 14, 2025 | Compliance deadline extended to 2031; PFAS OUT initiative | EPA Press Release |
| September 17, 2025 | CERCLA designations retained; passive receiver problem acknowledged | EPA Press Release |
| November 13, 2025 | TSCA reporting rule narrowed | FR Doc 2025-19882 |
| January 21, 2026 | D.C. Circuit denies EPA motion to vacate 4 MCLs | Court order, No. 24-1188 |
| Spring 2026 (planned) | EPA final rule on compliance modifications | — |
Appendix B: Treatment Cost Data Tables
B.1 EPA Annual Cost Breakdown
| Category | Annual Cost | % of Total |
|---|---|---|
| Water system treatment and disposal | $1,506 million | 97.3% |
| Water system monitoring | $36 million | 2.3% |
| Water system administration | $1 million | 0.1% |
| Primacy agency implementation | $5 million | 0.3% |
| Total | $1,548 million | 100% |
B.2 Technology Cost Comparison (Detailed)
| Parameter | GAC | Ion Exchange (IX) | RO / Nanofiltration |
|---|---|---|---|
| Relative capital cost | Moderate | Lower than GAC | Highest (3x+ GAC) |
| Capital expenditures (per m³) | $0.01–$0.51 | Similar to GAC | 3x+ GAC |
| Media cost per pound | ~$2 | $4–$12 | N/A |
| Cost per 1,000 gal (500 gpm system) | ~$0.45 | ~$0.26 | Substantially higher |
| Regenerated media cost per 1,000 gal | ~$0.08 | N/A (single-use) | N/A |
| Virgin media cost per 1,000 gal | ~$0.12 | N/A | N/A |
| Media/membrane life | 3–12 months | 6–18 months | 5–7 years |
| Bed volumes before replacement | Baseline | 10x–20x of GAC | N/A |
| EBCT | 5–10+ min | 2.5–5 min | N/A |
| Regeneration | Thermal reactivation (>1,000°C) | Generally single-use | N/A |
| Footprint | Largest | ~25% of GAC | Moderate |
| Energy intensity | Low | Low | High (high-pressure) |
| Short-chain PFAS | Less effective | More effective | Removes all PFAS |
| Water loss | Minimal | Minimal | 15–25% (reject stream) |
| O&M increase vs. baseline | Baseline | Lower per-gallon | 60%+ increase vs. GAC |
| Spent media disposal cost | $1,000–$2,000/ton (or reactivate) | $1,000–$2,000/ton | Concentrate disposal (15–25% cost add) |
B.3 Per-Household Cost by System Size
| Population Served | Low Estimate ($/yr) | High Estimate ($/yr) | Disparity vs. Largest |
|---|---|---|---|
| < 100 residents | $10,090 | $11,150 | ~100x–130x |
| Small communities (general) | $305 | $3,570 | ~3x–43x |
| > 1 million residents | $80 | $105 | Baseline |
B.4 Disposal and Biosolids Cost Data
| Cost Category | Estimate | Source |
|---|---|---|
| Spent media thermal destruction | $1,000–$2,000 per ton | EPA Interim Guidance (2024) |
| Biosolids management cost increase (2020) | 37% average | NACWA/WEF/NEBRA Survey |
| Biosolids management cost increase (2021) | 72% | Stantec/NACWA |
| MN wastewater PFAS cleanup (20 years) | $14–$28 billion | Minnesota PCA (2023) |
| PFAS removal cost per pound (wastewater) | $2.7M–$18M | Minnesota PCA (2023) |
| Small vs. large facility cost ratio | 6x higher for small | Minnesota PCA (2023) |
| CERCLA disposal cost impact (sector-wide) | $3.5 billion/year | Hazen & Sawyer (via NACWA) |
| Short-chain vs. long-chain removal cost | 70% more expensive | Minnesota PCA (2023) |
Appendix C: State Regulation Comparison Matrix
C.1 Regulatory Framework
| Element | Texas | California | Maryland | Illinois | Colorado |
|---|---|---|---|---|---|
| State MCL adopted? | No | No (NLs/RLs only) | No (enforces federal) | Yes (Part 620) | Yes |
| PFOA/PFOS standard | Federal 4 ppt | NL 4 ppt / RL 10/40 ppt | Federal 4 ppt | 4 ppt (state) | State MCL |
| More stringent than federal? | No | Partially (PFHxS NL 3 ppt) | Partially (4 ppt discharge) | No (equivalent) | Faster timeline |
| MCL rulemaking underway? | No | Yes — highest priority 2026 | No | Completed Jan 2026 | Completed |
| Biosolids PFAS limits? | No | No (investigation) | Yes (50 ppb, Oct 2027) | No | No |
| Industrial discharge limits? | No | No (monitoring orders) | Yes (4 ppt, HB 1153) | No | No |
| Key state agency | TCEQ | State Water Board / DDW | MDE | Illinois EPA | CDPHE |
| Regulatory posture | Compliance only | Most aggressive | Moderate-aggressive | Moderate-proactive | Proactive |
C.2 Contamination & Enforcement
| Element | Texas | California | Maryland | Illinois | Colorado |
|---|---|---|---|---|---|
| PWS exceeding EPA MCLs | ~50 | 100+ wells shut down | 63 systems (~165K people) | 47 systems (438K people) | Multiple systems |
| Peak military contamination | Lackland 680K ppt | 62 bases with PFAS | JB Andrews 435K ppt | Chanute 644K ppt | Schriever 870K ppt |
| AG enforcement action? | Yes (Dec 2024) | Multiple (ongoing) | Yes (2023) | Yes (Feb 2023) | Yes |
| Major litigation | Fort Worth ($420M) | OCWD, Sacramento, Fresno | W.L. Gore class action | IL AG v. manufacturers | Multiple military |
| Biosolids issue? | Yes (Johnson County) | Under investigation | Moratorium on permits | MWRD monitoring | Metro WW $700M+ |
C.3 Cost & Funding
| Element | Texas | California | Maryland | Illinois | Colorado |
|---|---|---|---|---|---|
| State PFAS appropriations | None identified | $100M (2021–2024) | Not separately identified | Not separately identified | PFAS Grant Program |
| BIL SRF funding | ~$2.9B total; $114.7M EC-SDC | $700M+ EC funding | $76M SRF awards | $288M water infrastructure | Available |
| Largest published cost | Fort Worth: $420M lawsuit | OCWD: $1.8B (30-year) | Baltimore: ~$1B estimated | IAW: $577M rate case | Thornton: $80M; Metro WW: $700M+ |
| Rate case with PFAS | Fort Worth ($1.71/mo) | Cal Water (30%+25%) | MD-American (pending) | IAW ($14/mo + $28/mo) | Multiple |
C.4 Compliance Timeline
| Milestone | Texas | California | Maryland | Illinois | Colorado |
|---|---|---|---|---|---|
| Initial monitoring deadline | April 2027 (federal) | March 2027 (state order) | Oct–Dec 2025/2026 | April 2027 | State schedule |
| MCL enforcement | 2029/2031 (federal) | State MCL TBD (2026+ rulemaking) | April 2029 (federal) | April 2029 | April 2029 (state) |
| Biosolids PFAS limits | None | None (pending) | October 2027 | None | None |
| Industrial PFAS limits | None | None | 4 ppt (HB 1153) | None | None |
References
Federal Register Notices
- TSCA SNUR for PFOS: 67 FR 11008 (March 11, 2002)
- CCL 3: 74 FR 51850 (October 8, 2009)
- UCMR 3: 77 FR 26072 (May 2, 2012)
- Lifetime Health Advisory: 81 FR 33250 (May 25, 2016)
- CCL 4: 81 FR 81099 (November 17, 2016)
- Preliminary Regulatory Determination: 85 FR 14098 (March 10, 2020)
- Final Regulatory Determination: 86 FR 12272 (March 3, 2021)
- Updated Interim Health Advisories: 87 FR 36848 (June 15, 2022)
- Proposed PFAS NPDWR: 88 FR 18638 (March 29, 2023)
- TSCA § 8(a)(7) Reporting Rule: 88 FR 70516 (October 11, 2023)
- Final PFAS NPDWR: 89 FR 32532 (April 26, 2024); correction at 89 FR 49006
- CERCLA Designation: 89 FR 39504 (May 8, 2024)
- TSCA Proposed Revision: FR Doc 2025-19882 (November 13, 2025)
Public Laws
- FY2020 NDAA: P.L. 116-92 (December 20, 2019)
- FY2021 NDAA: P.L. 116-283 (January 1, 2021)
- Infrastructure Investment and Jobs Act: P.L. 117-58 (November 15, 2021)
- Connecticut Public Act 25-142 (effective July 1, 2025)
EPA Documents and Reports
- EPA PFAS Action Plan, EPA 823-R-18-004 (February 2019)
- PFAS Strategic Roadmap 2021–2024 (October 18, 2021)
- Economic Analysis, EPA-815-R-24-001 (April 2024)
- Benefits and Costs Fact Sheet (April 8, 2024)
- Technologies and Costs, EPA-815-R-24-012 (April 2024)
- BAT/SSCT Document, EPA-815-R-24-011 (April 2024)
- WBS-Based Cost Models for IX and GAC (January 2024)
- Interim Guidance on PFAS Destruction and Disposal (April 2024)
- PFAS Enforcement Discretion and Settlement Policy (April 2024)
- Water Affordability Needs Assessment (December 2024)
- Preliminary Effluent Guidelines Program Plan 16 (December 2024)
GAO Reports
- GAO-25-107897, "Persistent Chemicals: Information on EPA's Analysis of Costs for its PFAS Drinking Water Regulation" (July 30, 2025)
Court Cases
- American Water Works Association et al. v. EPA, No. 24-1188 (D.C. Cir., filed June 7, 2024)
- D.C. Circuit Order denying motion to vacate (January 21, 2026)
Industry Association Publications
- AWWA WITAF 56 Technical Memorandum, PFAS National Cost Model Report (2024)
- NACWA, "Correcting PFAS Myths" (July 18, 2023)
- NACWA, Cost Analysis of PFAS on Biosolids (2020, Rev. 1)
- NARUC, "Alternative Rate Mechanisms"
- WEF, "PFAS in the Water and Wastewater Sectors"
Rate Case and Regulatory Filings
- PA PUC, PAWC Rate Case Decision (July 2024); $18M Bill Credits (November 2025)
- CA PUC, California Water Service GRC Application A.24-07-003 (July 2024)
- Middlesex Water Company, Form 10-Q (2024)
- Connecticut Water, WQTA Filing (January 2026); CT Legislature Public Act 25-142
- Ridgewood Water, 2025 Budget Review Memo (Raftelis, February 19, 2025)
- Illinois American Water, ICC Docket P2024-0097 (January 2026)
Settlement Documents
- 3M Settlement Final Court Approval (March 29, 2024)
- DuPont/Chemours/Corteva Settlement (February 2024)
- Tyco Fire Products Settlement, $750M (November 2024)
- BASF Corporation Settlement, $312.5M (November 2024)
State Agency Sources
- TCEQ PFAS Drinking Water; TWDB EC Programs
- California SWRCB PFAS; DDW General Orders; EC/PFAS Funding
- MDE PFAS Action Plan (December 2023); PFAS in Biosolids Fact Sheet
- Illinois EPA PFAS Statewide Investigation; Part 620 Groundwater Standards
- Colorado CDPHE PFAS; Water Quality Grants
- NJ DEP PFAS Standards; Michigan PFAS Response MCLs; MA PFAS MCL
- NY DOH PFAS; NC DEQ PFAS Standards; Maine DWP PFAS
- Vermont DEC PFAS; NH DES PFAS; Wisconsin DNR PFAS MCLs; MN DOH PFAS
Legal and Policy Analysis
- BCLP State-by-State PFAS Standards (updated regularly)
- ALL4 State PFAS Regulatory Update (March 2025)
- Harvard EELP PFAS Tracker
- AMWA PFAS Litigation
- Crowell & Moring, "EPA Seeks Vacatur" analysis
- BBK Law, "EPA Announces Plan to Modify PFAS Drinking Water Rule" (May 2025)
Consulting and Engineering Reports
- Black & Veatch, "PFAS Regulation: Calculating the Cost of Compliance"
- UNC Environmental Finance Center, "Navigating PFAS Treatment"
- Raftelis, Ridgewood Water 2025 Budget Review
- Hazen & Sawyer, PFAS removal cost estimates
- Minnesota Pollution Control Agency, Wastewater PFAS Cost Study (2023)
This report is for informational and planning purposes only. It does not constitute legal advice. Regulatory developments are ongoing; verify current status with primary sources before relying on this information for compliance or rate-setting decisions. Last updated March 2026.
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