Reference please? My Bayesian estimate is that it is much more likely that you misunderstood badly or believed fake news than that the EPA was upset about a drinking water spill.
I can't find a reference, unfortunately. This was in the Arkansas River watershed, likely back in the 1990s, and so has likely not made it over the digital divide, yet. Consequently, we might only have my memory of the event to depend on. I will concede that it may have been local (Colorado) authorities, and not the US EPA.
But my point still stands: Drinking water is surprisingly and counterintuitively an environmental hazard. It is easy to conclude that the local environmental agency is being irrational without good science media explaining.
It is well-understood that chlorinated water causes fish kills:
The article mentions "millions of gallons of raw wastewater dumped into Puget Sound in 2000, 2006 and 2009" as well as "millions of gallons of wastewater began flooding the plant" [this time, in 2017].
I could find no source indicating that the flooded water was "treated drinking water", nor that the EPA pitched a fit.