Pennsylvania could generate up to $500 million annually to help clean polluted streams and the Chesapeake Bay by charging large users of water a fraction of a cent per gallon. That’s the findings of a report released June 6 by a joint committee of the Pennsylvania General Assembly.
The bipartisan Legislative Budget and Finance Committee conducted the study to look at the costs and revenues should a new water use fee be enacted.
Three attempts to pass such a water fee bill have failed, but Rep. Michael Sturla, D-Lancaster, introduced another such bill during the 2017 budget season.
Just before the bill’s introduction, the five Pennsylvania members of the Chesapeake Bay Commission — a body of state legislators, cabinet secretaries and citizens from Pennsylvania, Maryland and Virginia — stressed the need for a dedicated fund to address Pennsylvania’s water pollution woes and its lagging performance in Bay cleanup efforts. Sturla is a member of the commission.
The new report lists the industries that use most of the water withdrawn from Pennsylvania’s surface and ground sources each year. According to the state Department of Environmental Protection, that number in 2015 totaled 25.8 trillion gallons. Hydroelectric power, thermoelectric power and public water supplies accounted for 98.4 percent of the withdrawals. Hydroelectric power, alone, accounted for 92 percent. The remaining 1.6 percent of withdrawals served commercial, agriculture and recreational land users, such as golf courses and ski resorts.
Sturla’s bill would levy a fee of 0.001 cent per gallon on water withdrawals greater than 10,000 gallons per day, with the fee reduced to 0.0001 cent per gallon if similar amounts of water withdrawn are returned to the source. Under the bill, agricultural, municipal and nonprofit withdrawals would be exempt.
Based on 2015 usage data, those fees would raise about $2.6 billion per year, with most of that amount — $2.4 billion — coming from hydroelectric plants along the Susquehanna.
“The impacts of the legislation on existing hydropower resources is unclear and could be wide-ranging and, as a result, we will continue to monitor it,” said Andrew Davis, a spokesman for Brookfield Renewable, which owns several energy facilities in Pennsylvania, including the Holtwood and Safe Harbor dams on the lower Susquehanna.
Instead of solely focusing on the proposed bill, the report evaluates various scenarios of rates and revenue, all based on 2015 withdrawal rates. For example, the report breaks down how much per gallon would be charged to each of 11 sectors of industry — such as commercial, agriculture and public water — should the fund raise $100, $300 or $500 million a year.
“I’m still trying to digest it — there’s a lot of data to be sorted through,” said Marel King, Pennsylvania director of the Chesapeake Bay Commission, soon after the report was released. King took on the task of summarizing the findings for commission members. “The combination of rates and exemptions at this point seem infinite.”
Research for the report included reviews of water use programs in 11 other states. According to the report, only three of them charge an annual fee for water withdrawals: Minnesota, Wisconsin and New Jersey.
“However, no state imposes a fee that would generate anything remotely close to what is being contemplated in [the bill],” said Christopher Latta, deputy executive director of the Legislative Finance and Budget Committee. For example, he said, approximately $4.7 million is generated in Minnesota, $5.1 million in New Jersey, and $1 million in Wisconsin.
The study did not research or speculate on whether those costs would be passed on to electric consumers or to people buying lift tickets or enjoying a round of golf.
Sturla’s bill would support water protection programs across the state that impact not only the Chesapeake, but also the Ohio River and Delaware Bay, although most of the water use is in the Susquehanna Basin.
About $65 million would go to state environmental agencies, some that have seen budget cuts for nearly 16 years. That includes $5 million for the Fish and Boat Commission, which has been at the center of a legislative battle to allow the agency to close an estimated $2 million gap in revenue by raising the fees for fishing permits.
John Arway, executive director of the commission, told the committee that the funds would “remove the need to raise the fishing license fees and take the burden off the backs of the boaters and anglers that spend $1.2 billion a year in Pennsylvania.”
Rep. Garth Everett, a Republican representing parts of two counties in the northern part of the state, said that conceptually there isn’t anyone in the general assembly who is against clean water. Everett, also a member of the Bay Commission, said last year that he was going propose another water use fee bill. He decided not to bother, and he doesn’t think the Sturla bill will get any traction because of the opposition of the Republican-dominated legislature to increased taxes or fees is too strong.
“The political reality — even if Mike Sturla’s bill is the most perfect bill that was ever drafted — the chances of it passing with the current membership is less than zero,” Everett said. “Even if we put it in my name it would be, ‘Oh here comes Garth and the Chesapeake Bay again.’ We need someone who is viewed more moderately. We put the snowball together — we just need someone to throw it.”