- Colorado’s Water Quality Control Division updated its fee schedule for water quality permits in a rulemaking that took effect June 30, 2026.
- The changes stem from a 2023 state law that shifted fee-setting authority from the legislature to state regulators, giving the division more flexibility to keep pace with program costs.
- Public meetings are scheduled for August through October 2026 to gather input on the next round of proposed fee increases tied to a spring 2027 rulemaking.
Thursday, July 16, 2026 — Most Coloradans never think about the paperwork behind their tap water. But behind every glass of clean drinking water and every treated drop of wastewater flowing out of a city sewer plant, there is a state agency doing the work, and that work costs money.
The Colorado Water Quality Control Division, a branch of the Colorado Department of Public Health and Environment, is the agency responsible for making sure Colorado’s drinking water is safe and that the state’s rivers, lakes, and groundwater stay clean. The division issues permits, conducts inspections, provides technical help to water systems, and enforces state and federal water quality laws.
Until recently, the fees that help pay for that work were locked into state law, meaning the legislature had to pass a bill every time fees needed to change. That created long gaps between updates and left the division scrambling to keep programs funded.
A New Law Gave Regulators More Flexibility.
In 2023, the Colorado legislature passed Senate Bill 23-274, which handed the job of setting water quality fees to the Water Quality Control Commission, a state board that oversees the division. Under the new law, the commission can update fees through a public rulemaking process without waiting for the legislature to act.
The commission adopted the first set of fees under this new approach in May 2024. Those fees took effect July 15, 2024, and included a 13 percent increase for drinking water systems and a 13 percent increase for commerce and industry permit holders. A second round of changes came in October 2025, with increases ranging from 13 to 14 percent across various permit categories. Most recently, the commission approved a 3.5 percent inflationary adjustment in May 2026, which took effect June 30, 2026.
The old statutory fee provisions were formally repealed on July 1, 2026, meaning Regulation 102 is now the sole authority for what permit holders pay.
What Is Regulation 102?
Regulation 102
, formally titled the Water Quality Control Division Cash Fees regulation, is the rulebook that spells out exactly what different types of water users and waste generators pay to the state each year. The fees feed into two separate accounts: the Drinking Water Cash Fund and the Clean Water Cash Fund.
The Drinking Water Cash Fund supports the division’s work under the federal Safe Drinking Water Act, which sets standards for public water supplies. The Clean Water Cash Fund supports work under the federal Clean Water Act, the Colorado Water Quality Control Act, and the state’s On-Site Wastewater Treatment Systems Act, which covers septic systems.
Fees vary widely depending on the type of facility and the amount of water it uses or treats. A community water system serving a small town pays a different annual fee than a large metro system. An industrial manufacturer that discharges wastewater pays based on the volume it discharges. A homeowner applying for a new septic permit pays a flat fee of $23.
Water quality certifications, which are required for certain construction projects that could affect waterways, are tiered by complexity. A simpler project pays $1,161 for what the regulation calls a Tier 1 certification. A more involved project pays $4,012 for a Tier 2 certification. The most complex projects pay based on actual staff costs, classified as Tier 3.
In addition to annual fees, there are fees for applying for a new permit, modifying an existing one, and requesting certain technical determinations from the division. Permit application fees are set at 50 percent of the applicable annual fee. Minor permit modifications cost 25 percent of the annual fee, while major modifications cost 55 percent.
As part of this latest round of rulemaking, the commission also cleaned house by eliminating 35 fee categories that were no longer in use.
Built-In Inflation Protection.
The regulation includes a mechanism to prevent the same kind of funding gap that prompted the 2023 law in the first place. Each year, the commission can adjust fees by up to 4 percent based on the Consumer Price Index for the Denver-Aurora-Lakewood area. If a larger increase is needed, the commission must go through a full stakeholder engagement process before making the change.
Accountability Built Into the Rules.
The regulation also puts new expectations on the division itself. The division is required to propose rules by June 30, 2028, that set specific timeframes for permit decisions. Those proposed rules could include provisions that would require the division to refund fees or face other consequences if it misses deadlines.
Additionally, the division must report twice each year on its progress reducing the backlog of permit applications, improving permit processing, and engaging with stakeholders. The regulation requires the division to maintain a backlog-reduction schedule for general permits, general permit certifications, and individual permits.
Public Has a Voice in What Comes Next.
The division is already looking ahead to a proposed spring 2027 rulemaking that would establish a new multi-year fee schedule for both drinking water and clean water programs. The goal is to give water utilities, businesses, and other regulated entities a more predictable picture of what fees will look like several years from now.
To shape that proposal, the division is hosting a series of public stakeholder meetings. Those paying drinking water fees, as well as holders of permits for public or private utilities and commerce and industry operations, are invited to attend sessions on Thursday, August 27, 2026, from 9 to 11 a.m., and Wednesday, October 7, 2026, from 9 to 11 a.m.
Separate meetings are scheduled for those connected to on-site wastewater treatment systems, commonly known as septic systems, on Wednesday, September 2, 2026, from 9 to 11 a.m., and Thursday, October 8, 2026, from 9 to 11 a.m.
Those interested in participating can register through the Colorado Department of Public Health and Environment’s water quality engagement webpage.
The Bigger Picture.
Colorado’s approach reflects a growing trend among Western states to make regulatory funding more sustainable and transparent. Water quality programs depend heavily on a mix of federal grants, state general funds, and cash fees paid by permit holders. When fees fall behind the cost of running the programs, service levels suffer, permit backlogs grow, and compliance oversight can slip.
By moving fee-setting authority to the commission and building in regular review cycles, Colorado is trying to keep its water quality programs financially stable without requiring legislative action every few years.
For water utilities, businesses, and homeowners with septic systems, the practical takeaway is straightforward: costs are rising, and more increases are likely in the coming years as the state works to fully fund the programs that keep Colorado’s water clean.
Regulation 102 is on file with the Colorado Secretary of State’s Office under 5 Code of Colorado Regulations 1002-102. The Water Quality Control Division can be contacted at cdphe.commentswqcd@state.co.us.
