ATLANTA -- Utilities, farmers and government agencies that move water from one body of water to another for irrigation, flood control, power generation or municipal supplies do not need a U.S. EPA permit under a rule that the agency made final today.

The rule announced at a conference of water managers here flows from EPA's view that transfers that do not add pollution are not subject to the Clean Water Act's National Pollutant Discharge Elimination System (NPDES) program.

But polluted water can be transferred under some circumstances. EPA will not prohibit the movement of water that fails to meet water quality standards no matter what the effect on the receiving water body.

Benjamin Grumbles, EPA's assistant administrator for water, said the agency would try to solve pollution problems at their source, where the permit program is most effective, rather than hold entities seeking to transfer water accountable for pollution they did not cause.

The rule does prohibit intervening uses during the transfer -- whether for municipal, industrial or commercial purposes -- without a permit.

"Clean water permits should focus on water pollution, not water movement," Grumbles told reporters at the American Water Works Association's annual convention at the Georgia World Congress Center.

Utility managers generally welcomed the rule, but it quickly drew the threat of a lawsuit from an environmental group that contends such activities spread pollution from degraded water bodies to pristine areas.

David Guest, an attorney with Earthjustice in Florida, said he expects to challenge the rule within two weeks in the 11th U.S. Circuit Court of Appeals in Atlanta.

"Obviously, we're very disappointed at this," Guest said in a telephone interview. The new rule, he said, effectively authorizes most transfers "regardless of how dirty the transferred water is and regardless of how clean the receiving water is."

Guest added, "That's not what the Clean Water Act is for, and why EPA is exempting these types of water transfers, I don't know."

EPA proposed its transfer rule in 2005, when it entered a court fight over the the pumping of polluted water from suburbs and sugarcane fields into the Everglades and Lake Okeechobee. The Miccosukee Tribe and environmental groups sued the South Florida Water Management District, arguing that the district needs federal pollution permits for its operations. EPA entered the dispute on the district's side.

The case in 2004 went to the Supreme Court. The high court remanded it to federal district court, which ruled water transfers require a permit if they add pollutants to the receiving water body. The case is under appeal.

Water supply, irrigation issues

Large-scale water transfers are common in the West, where the Bureau of Reclamation oversees a program providing irrigation to about 140,000 farmers working more than 10 million acres.

Some of the nation's largest metropolitan areas -- including New York, Los Angeles and Denver -- use interbasin transfers for drinking water. And other, fast-growing cities are expected to increasingly look to such movements.

Chips Barry, director of Denver Water, which has nearly 1.2 million customers in metropolitan Denver, said the rule provides regulatory certainty as water managers seek to move water from the Colorado River basin west of the Continental Divide to the South Platte River basin east of the divide.

"Getting a pollution control permit to do that would have been in my view contrary to the purpose and intent of the Clean Water Act," Barry said. "We're pleased that EPA has clarified this so we can continue to move large volumes of clean water from one side of the Rocky Mountains to the other."

Elsewhere, concerns about rising water use and the prospect of an explosion in interbasin transfers have spurred new protective measures. The governors of eight Great Lakes states and two Canadian provinces, for example, have reached agreement in principle on protecting the lakes' water from being siphoned to outside areas. The agreement, known as the Great Lakes Basin Compact, awaits ratification by three states and could be finalized this year.

Grumbles said EPA welcomes such agreements, adding that the new rule does not preclude states, tribes and other government entities from drafting laws governing water transfers. But he maintained that Congress had not intended for the Clean Water Act to be used as a regulatory tool in such matters.

"EPA's water transfer rule gives communities greater certainty and makes clear they have the flexibility to protect water quality and promote the public good without going through another new federal permitting process," Grumbles said.