Nutrient Trading Framework in the Coosa Basin Alabama Water Resources Conference September 6, 2012 A Feasibility Study of Nutrient Trading in Support of the Weiss Lake TMDL

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 Brown and Caldwell2 Drought Years of the late 1990s Highlighted Need for: Regional Planning Integrated Planning for Water Supply, Wastewater Treatment, and Stormwater Management

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 3 Source: USEPA 2008 Brown 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 Brown and Caldwell

Non-Point Sources 2,280 kg/day 71% Source: USEPA Weiss Lake TMDL (2008) Growing Season Median TP Loads to Weiss Lake Brown and Caldwell 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) Brown and Caldwell

Water Quality Trading Programs Source: USEPA Brown 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 Brown and Caldwell

Type of Trading NPDES Approach Administration Trading Factors Key Framework Considerations Brown and Caldwell9

One point source to one point source trading Multiple facility point source trading Point Source Exchange Credits Types of Trading Point Source – Point Source Brown and Caldwell 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 Trading Point Source – Non-point Source Brown and Caldwell One to one trading Credit Exchange

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 Brown and Caldwell | Footer | Date12

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 Brown and Caldwell | Footer | Date13

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 Brown and Caldwell | Footer | Date14 Many trading frameworks have included the use of factors to adjust the credit exchange rate. Example of USGS SPARROW Model Phosphorus delivery for the Flint River in Northern Alabama

Proposed Coosa Basin Nutrient 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 Brown and Caldwell

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. Brown and Caldwell Trading Guidance

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 Brown and Caldwell | Footer | Date17

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 Brown and Caldwell Lower Boise Wetland Concept

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 19Brown and Caldwell

Questions? Brown and Caldwell | Footer | Date20

Questions? Acknowledgements: North Georgia Water Resources Partnership Laurie Hawks and Clifton Bell, Brown and Caldwell