What Are Water Utilities & States Doing with Compliance Data?

A Scathing Critique.

A review of “Next Generation Compliance: Environmental Regulation for the Modern Era,” by author Cynthia Giles, published by Oxford University Press.

| By G. Tracy Mehan, III

Former Obama EPA enforcement chief Cynthia Giles has written a very challenging, well-documented critique of the nation’s enforcement regime and recommendations for overcoming naïve assumptions about the efficacy of existing environmental regulations and enforcement. “Next Generation Compliance: Environmental Regulation for the Modern Era,” presents serious questions to both regulator and regulated alike, across all media, including drinking water. The debate will be robust.

“We know now that the dual assumptions at the foundation of nearly all environmental regulation-that most companies comply and that it is up to enforcement to take care of the rest-are wrong,” argues Giles. “In fact, serious violations are widespread. And the principal driver of outcomes isn’t enforcement, it’s whether the regulations are tightly structured to make compliance the path of least resistance, so compliance is good even if enforcement never comes knocking.” 

Based on her review of research by the Government Accountability Office (GAO), EPA programs and its Inspector General, as well as independent scholars, Giles writes that the “rate of serious non-compliance” is 25 percent or more. Serious noncompliance rates for many rules “with big health consequences” are 50 to 70 percent or more. From her perspective, drafting regulations based on the assumption of 100 percent compliance is unrealistic and distorts any serious benefit-cost analysis.

Giles’ examples of what works include the Clean Water Act’s outright ban on discharges without a permit and the mandating of secondary treatment for publicly-owned treatment works (wastewater) across the board (“Just do it!”).

Another is the acid rain cap-and-trade program under the Clean Air Act Amendments of 1990, although she thinks that sophisticated monitoring requirements, default assumptions putting the burden on the regulated entities, and automatic penalties, rather than market dynamics or control-cost differentials between sources, were the main reasons for success. In truth, both enforcement mechanisms and market dynamics combined for the success of that program.

In Chapter 5 (“Next Gen Strategies. A Playbook”), Giles provides a menu of useful techniques for the optimization of compliance or enforcement. Continuous monitoring; self-reporting of facts, not conclusions; third-party verification and auditing; third-party verification and auditing, machine learning and other ideas which, while not cheap, might be more effective than the status quo.

Of great interest to the drinking water sector and state regulators is Giles’ scathing critique of what she describes as a dysfunctional system relative to data reporting and compliance under the Safe Drinking Water Act.

I have previously reviewed this book for the Environmental Law Institute’s The Environmental Forum but did not discuss the drinking water sector, given the audience (mostly lawyers). But the book’s treatment of alleged compliance deficiencies by water utilities deserves a wider discussion within the sector and state program managers. Hence this second review.

Giles’s assertions are provocative. The drinking water community and state regulators should study them, address those that are accurate, correct those that are inaccurate, rebut them or provide context where lacking. The rest of this review will focus on the bill of particulars raised in Next Generation Compliance in the spirit of continuous improvement.

“Although drinking water in the United States is among the safest in the world, it is not as clean as government pronouncements would have the public believe,” opines Giles. Drinking water rules have design flaws “which have resulted in many more violations than are officially claimed.”

Argues Giles, “EPA regularly asserts that fewer than 10 percent of public water suppliers violated one or more drinking water health-based standards each year.  Ten percent with such serious violations is too many. Unfortunately, it’s also incorrect…the actual number of health-based violators is substantially higher, although flaws in the regulations make it impossible to know the real number.”

Regarding pathogens, the author cites a 2006 report by Michael Messner et al. in the Journal Water and Health (footnote 53, p. 28) that this contaminant caused 16.4 million cases of acute gastrointestinal illness a year.

Giles also highlights total coliform as “the single biggest cause of reported safe drinking water violations by community systems (Maura Allaire et al. 2018).  10.6 million people were served by systems that self-reported violations of the Total Coliform Rule (TCR), an average of 10,000 such violations a year from 1993-2003.

“This is a reporting system in full failure mode.” 

Giles believes the actual number of such violations are actually “significantly underreported” since, for larger systems, violations were based on the percentage of samples exceeding the threshold.  Thus, operators might take more than the required number of samples and bring down the percentage exceeding the standard to below violation levels. According to a study by the State of Massachusetts (where the author once served as an assistant commissioner of the environment), this is called “sampling out.” Moreover, Giles says many systems just do not report since that has fewer consequences than reporting violations. Finally, Giles cites another study that says states did not report nearly 17 percent of TCR violations. States also fail to tell EPA about a “stunning” 71 percent of the monitoring and reporting violations (EPA 2006).

“The net effect of these structural problems is that EPA really does not know how widespread TCR violations have been, except that they are many times higher than what EPA was saying in public reports,” writes the author. 

Giles notes EPA did revise the TCR rule making it much harder to know if systems are experiencing pathogen contamination. Five percent of samples exceeding the threshold is no longer a violation but only triggers an obligation to conduct a self-assessment. “Not surprisingly, almost no violations of total coliform requirements were reported by states in FY17.”

The author is unsparing in her criticism of under-reporting of violations of the Lead and Copper Rule (LCR) relative to corrosion control before the recent changes instituted by the Trump administration and accepted, in part, by the Biden EPA. Again, the gaming of sampling in homes is, to the author’s mind, a big issue. Beyond that, “An EPA review [2006] discovered that states only told EPA about 8 percent of the LCR health-based violations. Eight percent.” GAO found that states did not disclose 84 percent of the LCR monitoring and reporting violations. Adding salt to the wound, Giles comments, “This is a reporting system in full failure mode.” 

Giles’ criticism notwithstanding, a 2016 EPA white paper noted that corrosion control by water utilities has been “a major improvement in public health.” The number of large utilities with a 90th percentile sample value exceeding the LCR level of 15 parts per billion decreased over 90%.” The Revised Lead and Copper Rule regulations going into effect, e.g., mandatory inventories of lead service lines and removal of same, will, no doubt, improve things even more. Indeed, this is a mandate the author applauds as consistent with “Next Gen” principles.

Monitoring violations are no laughing matter according to Giles, citing a GAO finding that such violations “were a strong and statistically significant predictor of health-based violations.”

“The net effect of these giant holes in reporting by states is that EPA’s official record about drinking water system compliance dramatically undercounts violations,” maintains Giles. “Somewhere between 25 percent and 50 percent of the health-based violations, and up to 90 percent of monitoring violations, are not counted in EPA reports.”

While the actual number of systems violating drinking water standards isn’t known, Giles believes that “it is likely twice, or more, what is stated in EPA’s public reports.”

Reading “Next Generation Compliance” is not a pleasant experience for anyone in the drinking water sector, EPA or state service. Many responses come to mind that might mitigate Giles’ indictment: changes in rules to date; the general success of the sector in international terms; not enough money for (fill in the blank), infrastructure, O&M, rural water, state agencies; the size and diversity of a continental nation; political control over municipal systems, etc.

This reviewer did reach out to the author enquiring if she might be willing to engage in a dialogue with representatives of the drinking water sector. She is willing but restricted by her current position at EPA and its conflict-of-interest rules. Maybe at some future date, we will be able to have a conversation with her. But in the meantime, we should probably talk amongst ourselves.


The book “Next Generation Compliance: Environmental Regulation for the Modern Era,” by author Cynthia Giles, published by Oxford University Press, is available for free download at nextgencompliance.org. A hardcover edition is also available for purchase.


G. Tracy Mehan, III, was assistant administrator for water at the U.S. Environmental Protection Agency. He is also an adjunct professor at Scalia Law School, George Mason University (Arlington, Va). He may be contacted at gtracymehan@gmail.com

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