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CWFP Priority Principal Forgiveness

Priority Principal Forgiveness (Priority PF) is an incentive that may be awarded in addition to general Principal Forgiveness (PF). There are three categories of Priority PF, as established in the Clean Water Fund Program (CWFP) annual Intended Use Plan (IUP): regionalization, phosphorus reduction and energy efficiency. There is the caveat that no more than 70% of the total CWFP financial assistance amount can be awarded as PF.

Regionalization Priority Principal Forgiveness

Eligibility

At least one publicly-owned wastewater treatment plant (WWTP) discharge must be eliminated and the sewage redirected to a neighboring municipality.

Available incentive

Regionalization Priority PF will be awarded in the amount of $3,000,000 for the elimination of the first WWTP discharge, with an additional $1,500,000 awarded for each additional WWTP discharge eliminated as a part of the same project. The award will be allocated proportionally to the municipalities involved based on the costs of regionalization attributed to each municipality. 

Required documentation

To receive funding, eligible applicants must indicate their eligibility within the Project Information screen of the CWFP application and submit it prior to the deadline, describe their affiliation with other municipalities involved in the project and submit a proposed or executed intermunicipal agreement with their application. The intermunicipal agreement must include all municipalities involved in the regionalization project, must have a term for at least the life of the loan and meet all other intermunicipal agreement requirements. An executed copy of the intermunicipal agreement is required prior to the loan closing.

Phosphorus Reduction Priority Principal Forgiveness

Eligibility

Eligible municipalities must meet the criteria below.

  • Meet the eligibility requirements for general PF.
  • Discharge less than 150 pounds of phosphorus per month (based on average flows from the past five years) or have an alternate phosphorus limit (pursuant to s. NR 217.04(2), Wis. Adm. Code), or serve a population of less than 10,000.
    • For applicants with an alternative phosphorus limit per s. NR 217.04(2), Wis. Adm. Code, the phosphorus-related project must increase wastewater user charges to greater than 2% of the applicant's median household income (MHI) in order to qualify.
  • Have a final water quality-based effluent limit for phosphorus less than or equal to 0.3 mg/L as a monthly average limit (or 0.1 mg/L as a 6-month average limit), involve a new installation of filtration or similar phosphorus removal process which is necessitated by a stringent phosphorus limitation, or be located in an implemented total maximum daily load (TMDL) area for phosphorus.
  • Must involve upgrades to the WWTP that are necessary because of the final or interim phosphorus limitation. This includes upgrades that will allow treatment to lower levels of phosphorus in a surface water discharge or construction of groundwater discharge facilities to eliminate or reduce discharge of phosphorus to a surface water.
  • Must involve phosphorus reduction-related upgrades to the WWTP. The Phosphorus Reduction PF is only calculated on the phosphorus reduction-related WWTP upgrade costs.

Available incentive

The phosphorus reduction incentive will be available at two levels.

  • For applicants where the project covered by the application is necessary in order to meet the final water quality-based effluent limit for phosphorus, the PF incentive will be equal to 50% of the phosphorus reduction-related project costs, as determined by the DNR, up to a cap of $1,000,000.
  • For applicants where the project covered by the application is necessary in order to meet an interim limit for phosphorus that is less stringent than the final limit, the PF incentive will be equal to 25% of the phosphorus reduction-related project costs, as determined by the DNR, up to a cap of $500,000.

The Phosphorus Reduction PF is only calculated on the phosphorus reduction-related WWTP upgrade costs. The overall phosphorus-related capital costs will be calculated by totaling the difference in capital costs of the cost-effective alternative with new phosphorus limits vs. capital costs of the cost-effective alternative without new phosphorus limits. There is a lifetime cap of $1,000,000 in Phosphorus Reduction PF for any one municipality, regardless of how many phosphorus reduction-related projects are needed to meet final limits.

Required documentation

Eligible applicants must provide and/or attach the following information on the Project Information screen of the CWFP online application and submit it prior to the deadline.

  • A breakout of the major components associated with the phosphorus reduction portion of the project. Include the purchase and installation costs associated with each of those components.
  • Either an estimated or an approved phosphorus cost percentage. The phosphorus cost percentage should be calculated as PP = PC/DC where PP is the phosphorus percentage expressed as a decimal; PC is the construction costs associated with the phosphorus components of the project (this should be the sum of the phosphorus cost breakout); and DC is the construction costs associated with the total design capacity.
  • A parallel cost estimate specific to the phosphorus costs. Use the parallel cost percentage (PCP) calculation method described in Attachment 2 of the “Guidance for Septage Considerations in Municipal Wastewater Facility Planning and for Application of Zero Percent Clean Water Fund Loans.” Replace the septage costs with phosphorus-specific costs.
  • Indicate whether the design of the project is intended to meet the final phosphorus limit or an interim limit.

Energy Efficiency Priority Principal Forgiveness

Eligibility

Eligible municipalities must be the recipient of an energy efficiency incentive from Focus on Energy.

Available incentive

Energy Efficiency Priority PF will be awarded as a one-to-one match of the Focus on Energy incentive up to a cap of $50,000 per project. The award is based on availability and will be allocated on a first-come, first-served basis, based on the DNR's receipt of the required documentation.

Required documentation

Applicants must provide documentation of the incentive agreement from Focus on Energy. For prescriptive awards, the applicant will need to request pre-approval from Focus on Energy, in order to obtain an incentive agreement. This documentation is not required at the time of application submittal but must be provided prior to loan closing.

Securing Our Future: Water & Wastewater Infrastructure Funding Opportunities webinar

Contact information
For information on this topic, contact:
Lisa Bushby, CWFP Coordinator or Becky Scott, Environmental Loans Section Manager

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