Pennsylvania Nutrient Credit Trading Program –

SWEP Annual Regulatory Update Seminar

October 31, 2013

• Topic is regulatory updates – why Nutrient Trading?

• What is it?

• Where were we and …

• Where are we going?

Overview

• Reduce current level of uncertainty and risk

• Maximize use of available resources:

– Technical/financial resources of buyers and sellers

– DEP/PENNVEST resources to manage/implement the program and the auction

• Enhance program transparency

• Provide opportunity for public participation where appropriate

• Compliance with EPA Requirements

– Technical Memoranda Under Development

Goals to Define Enhancements

New Opportunities & Synergies

• Flexible County Planning Targets – Chesapeake Bay Watershed Implementation Plan

• Bay Pollutant Reduction Plans for MS4 Communities

• Stormwater Offsetting

• Chesapeake Bay Watershed Permit

• Opportunities for Working Together

• Achievement of Water Quality Goals

• Environmental Protection

• Effective and Efficient Sharing of Resources

Exciting Results

• 2004- Chesapeake Bay Tributary Strategy was issued to include a description of the market based program.

• 2006- Final Program Policy, Appendix and 3 Attachments were published.

• 2010 - 25 Pa. Code §96.8 Program Regulations published as final.

• 2012 - EPA Evaluation of Program Completed Stakeholder Group Convened

• Current - Process of Defining Program Enhancements • Summer 2015 - Revised Regulations

Existing Program

Participation in the nutrient credit trading program is voluntary. Those that may be able to take advantage of the potential cost-savings of the program include:

• Any facility with a cap load for nutrients or sediment;

• Any individual, public or private, voluntarily implementing nutrient or sediment reduction measures to generate credits & earn revenue from the sale of those credits;

• any developer that seeks to create a new or expanding discharge that must meet the zero net load; and

• any aggregator that seeks to arrange for the sale of credits generated by another person, or arranges for the credits to be certified, verified and registered.

Who Can Participate?

Credit Summary

Compliance Year 2012

Activity Certified Verified Registered

TN TP TN TP TN TP

WWTFs with New Concentration Criteria

300,229 28,391 298,345 28,068 212,518 10,041

WWTF Under Cap Load 873,913 75,313 811,584 47,448 222,787 16,520

Nonpoint Source Ag BMP 68,743 221 22,494 433 26,472 0

Nonpoint Source Manure 1,357,580 167,370 176,845 21,138 161,804 6,510

NPS Treatment w/Permit 1,720,454 54,315 0 0 0 0

TOTALS 4,338,919 327,810 1,309,268 97,087 623,703 33,203

TOTAL TRADES 50

Business Process

• Application Submitted to DEP Pollutant Reduction Activity & Location Verification Plan & Credit Calculation Methodology

• DEP Final Action on each Application after 30-day comment period

• Self-verification process • Documentation submitted to

DEP in accordance with the approved verification plan

• DEP approval via email notification

• Signed contract • Linked to buyers NPDES permit

• Certification Standard of pollutant reduction activities

• Definition of Credit Calculation Methodology & Verification

• DEP Final Action on Standard after 30-60 day comment period

• Standard Good for Five Years • Self-certification or Notice of

Participation

• Location of pollutant reduction activity is identified

• DEP Final Action on Verification applications will be published on a monthly basis in PA Bulletin

• Credits can be sold & registered during the 30-day appeal period

• Signed contract • Linked to buyers NPDES permit

• Wastewater Treatment Facilities • Agriculture:

– Land Management Practices • NRCS Standard • Practices Approved by the Chesapeake Bay Program

– Animal Waste • NPS Treatment Technologies

– Sampling Protocols for wet vs dry process – Stationary vs Mobile Process (Gasification)

• Forestry Practices • Impervious Surface Reduction Through Retrofits or New

Infrastructure – Existing Stormwater

• Process to Add Others

Program Business Process – Standards to be Developed

• Goal: – Provide additional resources to incentivize installation

of agriculture practices

– Mitigate costs for treatment plant upgrades

• Baseline - Point at Which Generate Credits

• Baseline = Regulatory Compliance + Threshold = – Erosion & Sedimentation/Conservation Plan +

Nutrient Management Plan + either: • 35 foot buffer

• 100 foot setback

• 20% reduction off the top

Before “TMDL Land”

• TMDL Defines Baseline

• Process of Redefining Baseline: – Agreement that meets the intent of the TMDL

– Defensible, sound science and easy to explain

– Manageable with existing resources

– Not too difficult to participate

• Key Features of Current Proposal: – Start October 1, 2015

– Point Source … Achieve 6 mg/L TN and 0.8 mg/L TP concentration

– Nonpoint Source … Performance Based on lb/acre, or percent reduction basis

After “TMDL Land”

• Regulation Development

– Early 2014 -- EQB Approves Draft Regulations

– Mid 2014 -- Public Comment Period

– Early 2015-- EQB Approves Final Regulations

– Summer 2015 -- Regulations Published in Pennsylvania Bulletin

• Implementation

– October 1, 2015 – Revisions to Baseline Take Affect

– October 1, 2015 – Watershed Permit Effective Date

– 2017 to 2018 -- Midpoint Assessment of Progress Made in the Chesapeake Bay TMDL

– 2018 -- Renewal of the MS4 General Permit

PROPOSED Key Dates

Veronica (Nicki) Kasi

vbkasi@ pa.gov 717.772.4053