Dear Mr. Bryan and associates,

The Fulcrum Foundation (“Fulcrum”) is a nonpartisan organization dedicated to
improving state-level regulatory environments through research, policy development,
legislative engagement, and implementation support. As a part of its mission to
advocate for regulatory relief in critical sectors of the American economy, the
Foundation produces public comment on state-level regulatory proposals across the
U.S., designed to help highlight the economic costs of regulation and improve regulatory
outcomes.

The cost of commercial building in the U.S. has increased dramatically over the past 20
years.1 A significant portion of these costs relate to the cost of environmental
permitting.2

Therefore, Fulcrum appreciates this opportunity to provide comment on this Notice of
Intended Regulatory Action (“NOIRA”)) to 9VAC25-196, relating to Virginia Pollutant
Discharge Elimination System (VPDES) General Permit for Non-Contact Cooling Water
Discharges of 50,000 Gallons Per Day or Less, and we thank the Virginia Department of
Environmental Quality (the “Department”) for their consideration of our input. We hope
to contribute to the Department’s understanding of the potential economic impacts of
several policy options described herein, with the confidence that this analysis will be
useful in deliberations over the form and estimated impact of the eventual proposed rule
and other actions in the future.

Our response consists of two sections, which proceed as follows: First, we identify
several policy options that the Department might consider in designing a proposal intended to reduce costs and increase economic development while still maintaining
appropriate environmental safeguards. Next, we provide a brief estimate of the potential
economic impact of these policy options if they were to be adopted by the Department.

Recommended Considerations for Reform

Because this regulatory action concerns a general permit intended for relatively low-risk
noncontact cooling water discharges, the Department should use this rulemaking as an
opportunity not only to update permit conditions, but also to improve the efficiency of
permit administration. Streamlining the permitting process can reduce unnecessary
compliance costs and regulatory uncertainty for businesses while preserving the
environmental protections required under the Clean Water Act and Virginia law.

Although the existing general permit is already more efficient than an individual VPDES
permit, several administrative improvements could further reduce unnecessary burdens
on regulated entities without compromising environmental protection.

• Establish review deadlines for complete registration statements. Under the
  current regulations, new applicants or existing general permit holders seeking
  coverage under the general permit must submit a registration statement at least sixty
  days prior to the date on which permit coverage is desired. Existing facilities seeking
  to transition from an individual VPDES permit must submit the registration statement
  at least 240 days before the expiration of the individual permit.3 However, the
  regulations establish no corresponding deadline for the Department to determine
  whether a complete registration qualifies for coverage, leaving applicants with
  uncertainty regarding important operational planning details (for example, when they
  will be able to commence operations, how long they will have to make application
  adjustments, or whether or not to apply for or renew an individual VPDES permit).
  The Department should establish reasonable review deadlines for registration
  statements in advance of desired coverage deadlines (e.g., 30 days for new or
  existing permit, 180 days for transitions) to provide greater predictability for
  regulated entities.
• Implement automated completeness review within the electronic permitting
  system. The regulations already contemplate electronic submission of registration
  statements once the Department’s electronic permitting system is fully implemented.4
  The Department should enhance this system by incorporating automated
  completeness checks that identify missing information or required attachments
  before an application is submitted. Such a system would reduce processing delays, minimize incomplete applications, and decrease administrative workload for both applicants and the Department.
• Adopt performance-based monitoring requirements for compliant facilities. Current permit conditions generally prescribe fixed monitoring frequencies regardless of a facility's compliance history. The Department should consider allowing facilities that demonstrate consistent compliance over multiple permit terms to qualify for reduced monitoring frequencies where appropriate, thereby directing regulatory resources toward higher-risk dischargers while reducing unnecessary compliance costs for low-risk facilities.
• Simplify processing of minor administrative amendments. While the current regulations contain procedures for changes in ownership and notices of termination, they do not appear to establish a simplified process for other non-substantive administrative changes. The Department should expressly allow minor administrative amendments (such as updates to facility contacts, mailing addresses, or other non-operational information) to be processed through an abbreviated notification procedure rather than requiring more extensive administrative review.
• Allow incorporation by reference of previously submitted technical information. Applicants should be permitted to incorporate by reference engineering reports, technical analyses, maps, and other supporting documentation that have previously been submitted to the Department and remain accurate, rather than requiring duplicate submissions during permit renewals or administrative updates. This approach would reduce paperwork for applicants while allowing the Department to rely upon information already contained within its permitting records. To the extent that this is already current practice, the regulatory text should make this explicit. Subject to existing legal constraints under the Clean Water Act and Virginia water quality standards, the Department should also use this rulemaking as an opportunity to evaluate whether the current eligibility threshold of 50,000 gallons per day remains technically justified or whether modifications could safely expand access to this streamlined permitting mechanism. Specifically, the Department should conduct a technical analysis to determine whether a higher discharge threshold (or alternatively, risk-based eligibility criteria based on discharge characteristics, receiving water conditions, and demonstrated environmental performance) could appropriately allow additional low-risk facilities to qualify for coverage under the general permit. Because general permits substantially reduce administrative costs for both regulators and permittees compared to individual permits, expanding eligibility where supported by sound technical analysis could improve regulatory efficiency without diminishing environmental protection.

Potential Economic Benefits of Recommended Policy Options

An analysis of active permit records obtained from the Virginia Environmental
Geographic Information System (VEGIS) indicates that this general permit is currently
used by only 18 active facilities statewide,5 suggesting that it serves a relatively narrow
class of dischargers. The active permittees include small hydroelectric projects, landfill
gas-to-energy facilities, manufacturers, industrial gas producers, mineral processing
facilities, and a small number of geothermal heating and cooling systems. This limited
utilization raises the question of whether the current eligibility criteria (including the
50,000 gallon-per-day discharge threshold) remain appropriately calibrated or whether
additional low-risk facilities could safely qualify for coverage under the general permit.
A modest increase in the gallons per day discharge threshold, if supported by technical
analysis demonstrating continued protection of water quality, could expand eligibility for
smaller power generation facilities and other water-cooled commercial and institutional
facilities (e.g., small enterprise data centers, regional colocation facilities, university data
centers, or certain combined heat and power or distributed energy projects). Extending
streamlined permit coverage to these low-risk facilities would reduce administrative
costs and improve permitting certainty while allowing the Department to concentrate
resources on larger or more environmentally complex discharges that warrant
individualized review.

Within the universe of individualized VPDES permits, Fulcrum’s review of VEGIS data
identified approximately 50 permit holders that appear to operate industrial facilities
where noncontact cooling water or similar cooling-related discharges may be present,
including power generation facilities, manufacturing plants, chemical facilities, and
research institutions. Although additional technical review would be necessary to
determine which facilities meet the eligibility criteria for an expanded cooling-water
general permit, if only a small share of these potentially eligible facilities could transition
from individual VPDES permits to a general permit, permittees could realize meaningful
aggregate cost savings.6

More importantly, reducing unnecessary permitting costs and uncertainty could improve
the economic feasibility of smaller power generation projects, industrial expansions, and
other facilities that operate on narrow margins, supporting additional investment and
development in Virginia.

Conclusion

In sum, we thank the Department for considering our comments on this Notice of
Intended Regulatory Action, and we welcome the opportunity for additional engagement
on this issue if so desired. We applaud the Department for seeking public input at this
early stage and encourage the Department to consider the various options we have
presented. If designed carefully, the Department has the opportunity to use future
revisions to 9VAC25-196 to encourage further economic development and support
continued prosperity in Virginia.
Sincerely,

Caleb Taylor
Chief Executive Officer
The Fulcrum Foundation

1 For example, according to the US Bureau of Labor Statistics, the “Producer Price Index” (a measure of the cost of production in various industries) for New Industrial Building Construction has increased over 92% since 2007, nearly twice the average rate of inflation (56%) over the same period. Also see Musarat, Muhammad Ali, Wesam Salah Alaloul, M. S. Liew, Ahsen Maqsoom, and Abdul Hannan Qureshi. "Investigating the impact of inflation on building materials prices in construction industry."; Journal of Building Engineering 32 (2020): 101485.
2 For example, see Christopher S. Decker, "Corporate Environmentalism and Environmental Statutory Permitting, Journal of Law and Economics 46, no. 1 (2003): 103–129, or William Swanson, "Permitting Delays, Regulatory Regimes, and Investment: Evidence from the Clean Water Act," SSRN Working Paper, May 2026.
3 See Virginia Pollutant Discharge Elimination System (VPDES) General Permit for Noncontact Cooling Water Discharges of 50,000 Gallons Per Day or Less, 9VAC25-196-60 (2022), Virginia Law Administrative Code.
4 Virginia State Water Control Board, 9VAC25-31-1020, "Implementation of Electronic Reporting Requirements for VPDES Permittees, Facilities, and Entities Subject to this Part," Virginia Administrative Code, accessed July 14, 2026, https://law.lis.virginia.gov/admincode/title9/agency25/chapter31/section1020/
5 Virginia Department of Environmental Quality, Virginia Environmental Geographic Information System (VEGIS), Virginia Pollutant Discharge Elimination System (VPDES) Permits dataset, accessed July 13, 2026, https://gisdata.deq.virginia.gov/
6 The Department charges roughly $2,000 just in fees for industrial minor permits with standard limits. See Virginia Department of Environmental Quality, Virginia Administrative Code, 9VAC25-20-142: Permit Maintenance Fees. This is not including the additional administrative and carry costs associated with permitting, which can amount to thousands per month. A parcel worth $1 million financed at 80% loan to value at an interest rate of 10% (3 points over the current prime rate) is $80,000 in annual interest expenses. The average prevailing property tax rate in Virginia is approximately 0.8%. The same parcel, at
a prevailing tax rate of 0.8%, generates $8,000 in annual tax expenses. $88,000 in annual carry costs is approximately $1,692 per week over 52 weeks. See Federal Reserve Board, H.15 Selected Interest Rates (Daily) (July 13, 2026); Tax Foundation, “Property Taxes by State and County, 2024”.