A lawsuit that could cost Cape Cod towns and property owners billions of dollars to reduce the amount of nitrogen that is discharged from septic systems is now in mediation.

The lawsuit, filed a year ago in U.S. District Court by the Conservation Law Foundation and the Coalition for Buzzards Bay, claims that the U.S. Environmental Protection Agency has failed to enforce a water-quality management plan that was developed in 1978 in order to attain standards set by the federal Clean Water Act.

As a result, the suit contends, property owners on the Cape could be facing an estimated $4 billion to $8 billion in wastewater infrastructure-related costs in order to reduce the amount of nitrogen that gets into groundwater.

The two environmental groups and the EPA agreed to meet until December in an effort to reach an agreement in the case, which could have nationwide implications for how septic systems are regulated. Officials from the state and Barnstable County have been invited to take part in the 90-day mediation period, according to Andrew Gottlieb, executive director of the Cape Cod Water Protection Collaborative.

The suit also claims that the EPA and the state Department of Environmental Protection have failed to enforce a section of the Clean Water Act law that requires a regional treatment plan to be updated annually and be approved by both agencies. The regional treatment plan could be used to specifically target nutrient discharge levels from septic systems.

Nitrogen and other nutrients that originate from septic systems, fertilizers and road run-off are considered to be the biggest remaining threat to water quality in Massachusetts. On Cape Cod, an estimated 85 percent of homes rely on septic systems.

Under current standards, septic systems are considered diffuse, or “non-point,” sources of pollution and are regulated by local boards of health. Septic systems are designed to eliminate bacteria, but they don’t remove nitrogen from wastewater.

The EPA regulates “point-source” facilities, such as wastewater treatment plants, which discharge into bodies of water. Such systems must meet stringent standards, and the amount of nitrogen they can release is limited.

Gottlieb said the pending lawsuit could result in septic systems being ruled in violation of the Clean Water Act.

One way to reduce nitrogen discharges would be to expand sewer systems and connect more properties, so wastewater would go to treatment plants. For a limited time, Cape communities can apply for no-interest loans from the state’s Clean Water Revolving Fund for reducing nitrogen and other nutrients in water through means such as sewer systems.

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