Nutrient Trading Frameworkin the Coosa Basin

Alabama Water Resources Conference

September 6, 2012

A Feasibility Study of Nutrient Trading in Support of the Weiss Lake TMDL

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Since 2000 the Partnership has been:

• Diverse – Comprised of water with-drawal permit holders, local governments, and other advocacy entities with interest in water issues

• Collaborative – Formed voluntarily, membership by choice

• Largely self-funded• River Basin Centered - Geographic

boundaries nearly coincide with the Coosa Basin

Introduction – North Georgia Water Resources Partnership

Drought Years of the late 1990s Highlighted Need for:• Regional Planning• Integrated Planning for Water Supply, Wastewater

Treatment, and Stormwater Management

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• The Coosa Basin to Weiss Lake• Drainage area over 5,200 square miles• Majority of the watershed in Georgia

Focus Area - Coosa River Basin to Weiss Lake

Source: USEPA 2008Brown and Caldwell

• Lake Weiss TMDL completed in 2008• In order to meet Alabama Chlorophyll a

standards, total phosphorus (TP) reduction targets set

• 30% phosphorus load reduction goal at the Georgia/Alabama state line.

• GAEPD considering TP permit limits for NPDES discharges of 1.0 mg/L (major) and 8.34 lbs/day (minor)

• Georgia can meet 30% TP reduction “in any number of ways” (point and/or non-point measures)

• The TMDL acknowledges that non-point sources are major contributors to the phosphorus loading

Background

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Point Sources930 kg/day29%

Non-Point Sources2,280 kg/day71%

Source: USEPA Weiss Lake TMDL (2008)

• Growing Season Median TP Loads to Weiss Lake

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Model Results for Existing Conditions

What is Water Quality Trading?

• An approach to meet water quality standards in a more efficient method.

• Based on the fact that sources in a watershed can face very different costs to control the same pollutant.

• Trading programs allow facilities facing higher pollution control costs to meet their regulatory obligations by purchasing environmentally equivalent pollution reductions from another source at lower cost

• Thus achieving the same water quality improvement at lower overall cost

• A credit is a tradable unit of pollutant reduction (i.e. pound of TP)

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Water Quality Trading Programs

Source: USEPABrown and Caldwell

• Programs in the US (as tracked by EPA)

• 48 with at least one trade

• Includes a range parameters and trading frameworks

• Identify and Evaluate potential Nutrient Trading Frameworks

• Evaluate Existing Phosphorus Loads within the Coosa River Basin

• Identify and Evaluate Alternatives/Reduction Strategies

• Set Up Pilot Point to Non-Point Trade

Coosa Basin Tasks

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• Type of Trading• NPDES Approach• Administration• Trading Factors

Key Framework Considerations

• One point source to one point source trading

• Multiple facility point source trading

• Point Source Exchange Credits

Types of Trading Point Source – Point Source

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One to one trading

Multiple Facilities

• One point source to one non-point source trade

• One point source to multiple non-point source trades

• Non-point source credit exchange

Types of TradingPoint Source – Non-point Source

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One to one trading

Credit Exchange

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• Individual Permit – trades would generally be executed through contracts between trading parties, and then documented in NPDES permits

• Watershed Permit - A similar alternative is the issuance of a group NPDES permit (or “general watershed permit”) that represents the aggregate wasteload allocation (WLA) for all participating sources. Typically, a point source can attain compliance by staying under its individual WLA or purchasing credits under the general watershed permit.

NPDES Approach

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• Agreement between individual parties – trades arranged through direct negotiation between buying and selling sources

• Credit exchange – administered by:• a coalition of dischargers• the state• private third-party broker

Administration

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• The factors modify the rate from something other than a one-to-one ratio between credits needed at point A and reductions achieved at point B.

• Generally, the magnitudes for different locations within the watersheds estimated from models.

Trading Factors

• Many trading frameworks have included the use of factors to adjust the credit exchange rate.

Example of USGS SPARROW ModelPhosphorus delivery for the Flint River in Northern

Alabama

Proposed Coosa BasinNutrient Trading Framework Elements

• Type of Trading• Point Source – Non-point source

• NPDES Approach• Individual Permit

• Administration• Individual Negotiations

• Trading Factor• Proposed 1:1 ratio

Trades between individual parties

EPD review & approve trading framework and modify NPDES

permits

Public participation

Develop basic trading guidance

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• Definition of the units of trade.• Definition of the manner in which credits

would be calculated for point and nonpoint source load reduction projects.

• A procedure for verifying BMPs or nutrient load reductions.

• Templates for trading agreements between parties

• Common language for incorporation into NPDES permits.

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Trading Guidance

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• This step is currently underway

• Gathering available models and studies to understand phosphorus loads

• Identify high phosphorus load subwatersheds

• Identify potential point source partners

• Identify potential non-point source partners

Evaluate Phosphorus Loads

Identify and Evaluate Alternatives and Pilot Trade

• Identify potential point to non-point source trade

• Identify BMPs to reduce TP (type, size, number)

• Identify potential sites for BMP implementation

• Conduct site visit of potential BMP sites

• Develop concept plan for BMP

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Lower Boise Wetland Concept

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• Nutrient Trading is a cost effective solution for meeting water quality requirements that is supported by the EPA and Georgia EPD.

• The North Georgia Water Resources Partnership is currently investigating the feasibility of developing a nutrient trading framework and pilot trade for the Coosa Basin.

Summary

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Questions?

Questions?

Acknowledgements:

• North Georgia Water Resources Partnership• Laurie Hawks and Clifton Bell, Brown and

Caldwell