Administration Awards $1.3B In Loans, Grants For Water Infrastructure Projects

On April 10, the Healey-Driscoll administration announced that 185 projects across the Commonwealth are eligible to receive approximately $1.3B in low-interest-rate loans and grants to fund construction, planning and asset management projects designed to improve water quality, upgrade or replace aging drinking water and wastewater infrastructure, and cut treatment plant energy use and costs.

The awards will use nearly $173M in additional funding from the federal Bipartisan Infrastructure Law, according to the administration.

“This year’s unprecedented investments will go a long way toward improving the quality of life and implementing environmental safeguards that will last generations,” said Gov. Maura Healey.

Lt. Gov. Kim Driscoll said State Revolving Fund assistance “is vital to helping communities construct and modernize critical water infrastructure and address the problems presented by emerging contaminants and lead.”

State Treasurer Deborah Goldberg, chair of the Clean Water Trust, said the increase in grant funding plus low-interest loans through the trust “allows communities to finance cost-effective projects.”

The State Revolving Fund, administered by the Massachusetts Clean Water Trust, finances projects implemented by cities and towns, regional water supply and wastewater treatment districts, and the Massachusetts Water Resources Authority.

The projects include 61 clean water construction projects totaling approximately $880M, and 50 drinking water construction projects totaling approximately $381M. An additional $4M will be offered by the trust as grants for 39 Asset Management Planning projects.

Communities offered SRF financing in this round must decide to move forward with the project by June 30 and secure local funding authority.

Energy and Environmental Affairs Secretary Rebecca Tepper said the SRF loan program helps water utilities to not only update their infrastructure, but also invest in innovative technologies that result in reduced energy consumption, resource conservation, production of renewable energy, and climate resiliency.

“As the climate crisis puts a strain on our water supply,” she said, “it’s critical that we replace old, inefficient treatment works with green, energy-efficient infrastructure.”

In accordance with the Clean Energy Results Program under the direction of the Massachusetts Department of Environmental Protection, 35 of the water infrastructure projects receiving financing are for renewable energy, energy efficiency or green infrastructure initiatives. Energy use at wastewater and drinking water treatment facilities is a major contributor to overall energy consumption for many cities and towns, with communities statewide spending approximately $150M per year on electricity to treat 662 billion gallons of wastewater and drinking water, according to the MassDEP. About 30% of municipal energy use derives from water treatment.

Of the new projects, 64 are eligible to receive principal forgiveness, which is awarded to renewable energy projects and for projects in communities that meet the affordability criteria established by the Massachusetts Clean Water Trust. The affordability criteria factors in per capita income, unemployment rate and population trends.

The Commonwealth has offered to reduce the SRF borrowing rate from 2% to 1.5% for communities that support the Housing Choice Initiative. Twenty applicants have the Housing Choice designation: Acton, Andover, Barnstable, Billerica, Brockton, Everett, Franklin, Lawrence, Littleton, Lowell, Melrose, Nantucket, Plymouth, Quincy, Somerville, Stoughton, Sudbury, Taunton, Tyngsborough, and Worcester.

The SRF is composed of two programs that have provided more than $8B to Massachusetts projects: the Clean Water Fund, first capitalized in 1989; and the Drinking Water Fund, which began operation in 1999. Click here for more information on the two SRF programs.

This year, the Clean Water SRF provides $903M in financing for clean water projects. Approximately $878M will finance 59 new construction projects, $2M will be allocated toward financing two previously approved multi-year projects, $3M has been allocated to the emergency set-aside account, $5M will be directed to the Community Septic Management Program to remediate failed septic systems in participating communities, and $15M has been set-aside to finance planning and PFAS design projects.

The Drinking Water SRF provides $431M in financing for drinking water projects. Approximately $311M will finance 39 new construction projects, approximately $69M will be allocated toward financing 11 previously approved multi-year projects, $5M will fund an emergency set-aside account, $10M has been set-aside to finance planning and PFAS design projects, and $35M has been set-aside to finance lead service line replacement projects.

An additional $4M will be offered by the trust as grants for 39 Asset Management Planning projects, with 27 communities qualifying with Clean Water projects and 12 communities qualifying with Drinking Water projects.

To be eligible for Clean Water or Drinking Water SRF loans, municipalities, wastewater districts and water suppliers filed applications with MassDEP last year demonstrating that proposed projects offer significant public health or water quality benefits, have local funding authorization, and demonstrate that there is a commitment on the borrower’s part to file a timely loan application. The projects on the 2023 SRF list must now file loan applications and receive MassDEP approval to obtain funding.

The MassDEP announced that it will open the next SRF project solicitation for proposals to be considered for the 2023 intended use plan no later than June 5.