EPA Proposes Narrowing State Power Over Water Projects: What It Means for Vermont
Vermont’s Water Quality Standards that go beyond just chemical purity; including protecting “local activities” like swimming, boating, and the natural beauty of the water, could be "off limits."
The landscape of environmental protection in Vermont is facing a significant shift. A new proposal from the Environmental Protection Agency (EPA), led by Administrator Lee Zeldin, seeks to change how states can influence large-scale infrastructure projects like dams and pipelines.
This proposed 2026 Rule focuses on Section 401 of the Clean Water Act, a fifty-year-old provision that has historically given states a powerful “say” in federal permitting. To help Vermonters understand what is at stake, this article breaks down the technical changes, the federal goals, and the potential impact on Vermont’s rivers and recreation.
What is Section 401?
Since 1972, the Clean Water Act has relied on a type of “teamwork” between the federal government and individual states. While the federal government sets baseline rules, states have the right to enforce their own, stricter standards. Under Section 401, if a project (like a hydroelectric dam) needs a federal license, it must first get a “certification” from the state.
If the state finds the project will harm its water quality, it can deny the permit or add conditions that the developer must follow. For decades, Vermont has used this authority to ensure that projects respect everything from fish habitats to the “look and feel” of our waterways.
The Core Conflict: “Discharge” vs. “Activity”
The biggest change in the EPA’s 2026 proposal is how much of a project a state is allowed to review.
The Broad View (Current Rules): Based on a 1994 Supreme Court case, PUD No. 1 of Jefferson County v. Washington Department of Ecology, states can currently review the “activity as a whole.” This means Vermont can look at how a dam affects fish migration, stream flow, and water levels—not just what chemicals are in the water.
The Narrow View (Proposed Rule): The 2026 Rule wants to limit state review to “discharge-only.” This means a state could only regulate the specific pollutants or water coming out of a pipe or turbine. Under this framework, impacts like low water levels in a reservoir or the blocking of fish by a dam might be considered “off-limits” for state regulation.
The Federal Goal: “Powering the Great American Comeback”
The current administration and Administrator Lee Zeldin have framed these changes as a way to “streamline” bureaucracy and “unleash economic growth.” The Powering the Great American Comeback initiative argues that some states have “weaponized” the Clean Water Act to block energy projects for political reasons.
Parallel to the EPA’s rule, Congress is considering the PERMIT Act (H.R. 3898). This bill would permanently change the law to ensure states can only look at “direct discharges,” making it much harder for future administrations to return to the broader review process.
What This Means for Vermont
Vermont’s Water Quality Standards go beyond just chemical purity; they also protect “local activities” like swimming, boating, and the natural beauty of the water. The 2026 proposal could make these standards much harder to enforce.
1. Hydroelectric Dams on the Connecticut River
Currently, several major dams on the Connecticut River—Wilder, Bellows Falls, and Vernon—are being reviewed for new long-term licenses. The Vermont Department of Environmental Conservation (DEC) has been working to ensure these dams maintain steady water levels to prevent erosion and protect fish. Under the new rule, the dam owners could argue that water levels are a matter of “dam operation,” not “discharge,” potentially removing Vermont’s ability to protect the riverbank.
2. Natural Gas Pipelines
When pipelines are built, they can change how water flows through wetlands and streams. In past projects, like the Addison Natural Gas Project, Vermont used Section 401 to oversee construction methods. If the new rule passes, the federal government could argue that construction methods don’t count as a “discharge,” limiting the state’s oversight of how pipes are buried in sensitive areas.
3. The Recreation Economy
Vermont’s tourism depends on its “pristine” image. The EPA’s own past economic analysis has highlighted that clean, accessible water for fishing and boating is a multi-billion dollar industry. If the state cannot mandate “recreational releases” (ensuring enough water for kayakers) or protect the “aesthetics” (the beauty) of a river, there are concerns that the long-term value of these resources could decline.
A Landscape of Uncertainty
While the EPA suggests the new rule will provide “certainty” for developers, critics point out that the constant back-and-forth between different presidential administrations creates the opposite. Vermont has a history of challenging federal rollbacks in court. Attorney General Charity Clark has already indicated a willingness to join other states in lawsuits to protect state authority over local waters.
What Happens Next?
The EPA officially announced the proposal on January 13, 2026. Here is the expected timeline for public involvement:
Public Meeting: The EPA will host virtual public meetings on January 28, 2026, to hear feedback.
Public Comment Period: Once published in the Federal Register (expected around January 15), the public will have 30 days to submit written comments via Regulations.gov (Docket ID No. EPA-HQ-OW-2025-2929).
Final Decision: The EPA intends to finalize the rule in the Spring of 2026.