When PFAS Costs Outpace Funding: A Practical Planning Framework

For many municipal wastewater managers, per- and polyfluoroalkyl substances (PFAS) are no longer simply a hypothetical concern. They are a growing problem for budget planning, with long-term effects on the construction and operation of publicly owned treatment works (POTWs), biosolids use and disposal programs, and other ratepayer-funded operations. Easing these impacts will require utility managers and other municipal decision-makers who are responsible for compliance, cost recovery, public trust, and rates to carefully consider the related risks.

The immediate challenge is straightforward. Wastewater systems receive PFAS from upstream sources but often bear the downstream management burden. In April 2024, the U.S. Environmental Protection Agency (EPA) designated perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS) as hazardous substances under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). In January 2025, the EPA released a draft sewage-sludge risk assessment indicating that, in some scenarios, acceptable risk thresholds may be exceeded when sewage sludge containing PFOA and PFOS is land-applied.  

Presently, not every wastewater utility faces the same financial exposure. Yet many agencies must look beyond one-time testing costs or short-term project funding and ask a tougher question: what happens if funding covers only the first layer of response costs, while the highest expenses arise later in the form ongoing disposal, monitoring, and compliance? Recognizing that cleanup is not a one-time event compels municipalities to evaluate the full lifecycle costs of PFAS management, rather than just the initial outlay.  

As utilities evaluate these long-term obligations, many are looking beyond grants and traditional funding sources to understand what options exist to recover PFAS-related costs. For some municipalities, that includes exploring legal avenues to hold PFAS manufacturers accountable for contamination-related expenses that may otherwise fall on ratepayers.

What Federal and State Funding Typically Covers

Federal and state funding can help utilities respond. The Infrastructure Investment and Jobs Act appropriated $1 billion from FY 2022 to FY 2026 to the Clean Water State Revolving Fund (CWSRF), specifically for emerging contaminants such as PFAS in wastewater and stormwater, and for non-point-source pollution. The EPA explains that a sizable portion of this assistance is available through loans, and the revolving fund is designed to support eligible clean water-quality projects rather than absorb every downstream cost indefinitely.

In practice, grants and loans may support activities such as sampling, pilot work, planning, design, and certain treatment-related capital needs. They help utilities build an informed response and can ease the burden of early-stage compliance planning. However, for wastewater agencies, the funding picture remains different from that on the drinking-water side, where PFAS-specific funding programs have generally been more visible and more directly tied to enforceable drinking-water standards. For example, EPA’s small or disadvantaged communities emerging contaminants grant program is aimed at public water systems, not wastewater utilities.

That distinction matters. Available PFAS funding is unlikely to translate into full coverage for the costs of biosolids management or other future compliance costs. In addition, the funds appropriated by the Infrastructure Act to supply the CWSRF will likely run out this year, and the “Big Beautiful Bill” (at least in its current form) contains no CWSRF funding.

Where Cleanup Costs Extend Beyond Funding

This reality makes the budget issues imposed by PFAS more complicated. Even when initial testing or project development is funded, utilities can still face a long list of ongoing or harder-to-predict expenses. EPA’s April 2024 enforcement-discretion memorandum states that the agency does not intend to prioritize certain passive receivers, including POTWs, for CERCLA enforcement. However, that policy does not erase the underlying designation, or eliminate the possibility of third-party claims or state enforcement action based on a utility’s prior practices or ease the disposal-related costs imposed by state regulations of biosolids.

For many systems, these additional costs of biosolids and sludge management represent the most immediate concern. Michigan’s biosolids PFAS program, for example, sets concentration-based requirements and response steps tied to combined PFOA and PFOS levels, including monitoring, source-reduction planning, and land-application limits at specified thresholds. Maryland has also imposed PFAS-related biosolids sampling requirements under its existing authority. Other states have gone further: Maine and Connecticut have set bans on the land application of all biosolids, which can create significant cost pressure when utilities must turn to alternative disposal options. Even where federal wastewater standards remain incomplete, utilities may still face the increased costs of state-level compliance, including hauling and disposal of substances that have been designated as hazardous materials under federal law.

The Financial Ripple Effect for Municipal Systems

Once those pressures reach the budget, the effects spread quickly. Wastewater systems are often expected to remain self-supporting, which means unplanned PFAS expenses can strain operational needs, capital planning, and efforts to avoid rate increases.

PFAS can also compete with other priorities. A utility may be planning for aging infrastructure, nutrient removal, weather resilience, workforce needs, or consent-order obligations, even as PFAS introduces new monitoring, source-tracking, treatment evaluation, hauling, or landfill costs. Because typical wastewater treatment processes are not designed to remove or destroy PFAS, utilities may find themselves paying more to manage PFAS concentrations in sludge and biosolids, only to have them persist in their effluent.  

Evaluating Long-Term Financial Exposure

For municipal wastewater systems, a practical planning framework begins with a broader definition of cost. The question is not only “What will our first round of testing or treatment evaluation cost?” but also “What might this mean for biosolids hauling contracts, landfill access, monitoring frequency, consultant support, source-identification efforts, communications planning, and future capital upgrades if rules tighten further?” Additionally, decision-makers must consider the impacts of consuming scarce staff time and of undertaking contingency planning.

A second step is to identify where risk enters the system. Consider upstream industrial and commercial contributors, landfill leachate, and other incoming sources as key components of the wastewater PFAS picture. Utilities that understand those pathways are generally better positioned to estimate exposure, document impacts, and make informed financial decisions. 

Many utilities are looking beyond initial grants, loans, and pilot funding to assess the true long-term cost of PFAS-related remediation and management. For some, that evaluation may include pursuing legal options to recover costs from the companies that manufactured and profited from PFAS, not to replace sound utility planning but to complement it.  

A measured early review of exposure, documentation, and available options can help preserve flexibility before costs escalate further. This approach is particularly relevant because recent drinking-water settlements did not resolve wastewater, biosolids, or sludge claims, which remain active areas of legal and regulatory attention. 

As PFAS-related obligations continue to evolve, understanding all available options is critical. If you'd like to discuss your system's specific circumstances, we welcome the opportunity to connect.

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