1. WATERSHED PERMITTING IN NORTH CAROLINA NPDES PERMIT NCC000001 BECAME EFFECTIVE JAN 1, 2003 NEUSE RIVER COMPLIANCE ASSOCIATION MORRIS V. BROOKHART, P.E.

2. DURHAM RALEIGH AREA: 6,192 SQ. MILES 3,497 FRESHWATER STREAM MILES POPULATION: 1,354,000

3. BACKGROUND  TAR PAMILICO NUTRIENT TRADING  BASINWIDE WATER QUALITY PLANS  FORMATION OF THE LNBA  1995 FISH KILLS IN NEUSE ESTUARY

4.  30% REDUCTION IN TOTAL NITROGEN TO ESTUARY - ADMINISTRATIVE RULE  POINT SOURCE TN 24% OF TOTAL  INCLUDED POINT-SOURCE GROUP COMPLIANCE OPTION  POINT SOURCES CAN PURCHASE TN ALLOCATION FROM WETLANDS RESTORATION - $11 PER LB x 200% x 30 YRS ~ $7 PER GAL. OF TREATMENT CAPACITY  EXPANDING PLANTS < 3.5 Mg/l TN 1997 NUTRIENT MANAGEMENT STRATEGY

5. PHASE I TMDL – 1999: 30 % REDUCTION FROM 1995 NOT BASED ON CALIBRATED NUTRIENT RESPONSE MODEL. DID DIRECT FOCUS TO ESTUARY. BASIS OF CURRENT WASTELOAD ALLOCATIONS PHASE II TMDL – 2001: 30% REDUCTION FROM 1995 BASED ON SEVERAL MODELS AND STUDIES GREATER TRANSPORT IN MAIN STEM INCREASED POINT SOURCE % TEMPORARY ALLOCATION – FINAL PENDING SPARROW MODEL RESULTS. ADAPTIVE MANAGEMENT PROPOSED TMDLS – ESTUARY TN

6. KEY ELEMENTS BEFORE BASINWIDE TN PERMIT  CONCEPT OF GROUP COMPLIANCE TAR-PAMILICO AGREEMENT – 1989  THE LOWER NEUSE BASIN ASSOC. GROUP WATER QUALITY MONITORING $2 MILLION STATE GRANT INTERNAL TN MONITORING SUCCESS AT REDUCING NITROGEN AT MEMBER PLANTS

7. LOWER NEUSE BASIN ASSOCIATION MEMBERS ANNUAL TOTAL NITROGEN DISCHARGE 1995 - 2001 0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 1995199619971998199920002001 ANNUAL POUNDS TOTAL NITROGEN LNBA TOTAL NITROGEN ALLOCATION

8. INDIVIDUAL NPDES PERMITS  PHOSPHORUS – 2 Mg/l QUARTERLY AVG  AMMONIA – 2 Mg/l SUMMER; 4 Mg/l WINTER  TOTAL NITROGEN – ANNUAL MASS ALLOCATION  LOWER LIMITS DUE TO LOCAL CONDITIONS  SAMPLING, MONITORING AND REPORTING

9. TOTAL NITROGEN ESTUARY WASTELOAD ALLOCATION 70% OF 1995 TN LOAD = 1.64 MILLION LBS BASIS OF INDIVIDUAL ALLOCATIONS: SUM OF MUNICIPALS: 3.7 Mg/L @ PERMIT FLOW +SUM OF INDUSTRIALS: 3.15 Mg/l @ PERMIT FLOW +SUM OF PLANTS < 0.5 MGD: 1995 + GROWTH 1.64 MILLION LBS

10. EQUITY / COST-EFFECTIVENESS  PERMIT FLOW vs 1995 ACTUAL FLOW  TRANSPORT LOSS IN RIVER UPPER BASIN DISCHARGER: 10 LBS TO RIVER; 1 POUND TRANSPORTED TO ESTUARY MID BASIN: 10 LBS TO RIVER; 5 LBS TRANSPORTED TO ESTUARY DISCHARGER AT ESTUARY: 10 LBS TO ESTUARY  SOME ADJUSTMENTS WERE MADE

11. INDIVIDUAL NPDES PERMITS  a. ANNUAL TN LOAD IS < ALLOCATION or  b. PERMITTEE IS CO-PERMITTEE MEMBER OF GROUP COMPLIANCE ASSOCIATION IN COMPLIANCE WITH TN LIMIT IF:

12. GROUP COMPLIANCE PERMIT CO-PERMITTEE MEMBERS, INDIVIDUAL ALLOCATION AND TRANSPORT FACTORS ARE LISTED IN APPENDIX A APPENDIX B LISTS ALL POINT SOURCE DISCHARGERS WITH TN ALLOCATION SUM OF CO-PERMITTEES ESTUARY TN LOAD IS LESS THAN ASSOCIATION ESTUARY TN ALLOCATION

14. GROUP COMPLIANCE PERMIT CO-PERMITTEE IS IN COMPLIANCE WITH PERMIT IF: A.THE ASSOCIATION IS WITHIN ITS ESTUARY ALLOCATION or B.THE CO-PERMITTEE IS WITHIN ITS ESTUARY ALLOCATION

15. GROUP COMPLIANCE PERMIT OFFSET PAYMENTS AND ENFORCEMENT: A.IF THE ASSOCIATION EXCEEDS ITS ESTUARY ALLOCATION, OFFSET PAYMENT IS MADE TO WETLANDS RESTORATION FUND - $11 PER LB. B.ADDITIONAL APPROPRIATE ENFORCEMENT ACTION CAN BE TAKEN FOR NON-COMPLIANCE

16. GROUP COMPLIANCE PERMIT REPORTING REQUIREMENTS: CO-PERMITTEE MONTHLY DMRs GROUP COMPLIANCE MID-YEAR REPORT PAST YEAR - FOR INFORMATION ONLY EACH CO-PERMITTEE ESTUARY LOAD ASSOCIATION ESTUARY LOAD CHANGES IN MEMBERSHIP OR TN FOR NEXT CALENDAR YEAR GROUP COMPLIANCE YEAR-END REPORT

17. GROUP COMPLIANCE PERMIT REPORTING REQUIREMENTS: GROUP COMPLIANCE YEAR-END REPORT FOR CALENDAR YEAR EACH CO-PERMITTEE ESTUARY LOAD ASSOCIATION ESTUARY LOAD CHANGES IN MEMBERSHIP TRANSACTIONS AFFECTING ALLOCATIONS ASSOCIATION TN CONTROL STRATEGY PROGRESS AND PLANNED ACTIVITIES

18. OPERATION OF COMPLIANCE ASSOCIATION A WORK IN PROGRESS  BY-LAWS JUNE 2002  INITIAL POLICIES AND PROCEDURES – JUNE 2003  INTERNAL INCENTIVES  FUTURE TRADING  COSTS OF TN REDUCTION  UNCERTAINTIES

19. TOTAL NITROGEN FLOW