In an effort to facilitate compliance with federal nutrient management requirements, Sen. Elder Vogel Jr. (R-Beaver) introduced SB 724, the Watershed Improvement Act. Filing the legislation followed release of a special report by Auditor General Eugene DePasquale on economic consequences of failure in Pennsylvania’s efforts to meet EPA requirements for clean up of the Chesapeake Bay watershed.
Along with providing guidelines for clean water incentives, the bill promotes competitive bidding for the creation of a watershed improvement program and associated initiatives congruent with environmental concerns in the commonwealth. The Watershed Improvement Act’s creation of an umbrella watershed improvement program will provide for establishment of a verified total maximum daily loads (TMDL) parameter credit program.
The state has previously been subjected to high-cost EPA directives for clean water activities, with the Susquehanna watershed under a TMDL requirement. As a high-cost, low-value solution for nutrient reduction such as wastewater and storm water upgrades, the existing approach to addressing bay nutrient reduction issues is not cost-effective, according to Vogel.
Following a 2012 study concluding that agricultural nutrient reductions would significantly reduce Chesapeake Bay nutrient TMDL compliance costs, Pennsylvania’s Legislative Budget & Finance Committee issued a report predicting that a competitively bid verified nutrient procurement program could reduce nutrient compliance costs by up to 80 percent.
The bill establishes a voluntary TMDL parameter permit compliance program. Permittees electing not to opt in to the voluntary compliance program will be asked to demonstrate their alternative compliance method’s cost-effectiveness. The bill also makes provisions for deposits into a watershed improvement fund.
“ERG was pleased to see Sen. Vogel continue his commitment to agriculture and environmental improvement,” said Partner John Nikoloff. “Nutrient credit prices have been depressed by certification of phantom credits, but DEP has wisely taken the lead in working with EPA to establish certification programs that will ensure real removal of nutrients from the watershed. A realistic certification program and support for credit markets can be a useful tool in meeting the state’s Bay watershed improvement targets.”
The LBFC study released in 2013 pointed out that a shift to a competitive bidding program could result in the 80% reduction in the cost of Bay cleanup.
“Auditor General DePasquale has demonstrated a long-standing concern about water quality and potentially negative economic impacts,” Nikoloff said, noting that DePasquale had introduced legislation six years ago to address nutrient credit issues. “If the Commonwealth does not meet the 2017 nutrient reduction targets, there could be significant economic consequences for Pennsylvania taxpayers, especially if the EPA mandates further regulatory changes.
As the Auditor General noted, the Commonwealth and stakeholder industries still have time to implement solutions to meet the 2017 and 2025 sediment and nutrient reduction targets. Developing its own solution might be more efficient and could be less costly than the EPA’s possible mandates. The primary goal should be to protect Pennsylvania taxpayers while protecting and improving the water quality in the Chesapeake Bay region.
The report noted that one of the more financially appealing options is an effective and efficient nutrient credit trading program that provides for a more cost efficient method for National Pollutant Discharge Elimination System (NPDES) permittees to meet their effluent nutrient limits because it allows local choice while using the market system to create competition and innovation.
Such a program would not be a silver bullet resolution to the complex factors affecting TMDLs in the state’s waterways. It is important for the Commonwealth to continue to review and implement other industry best practices, in dealing with both agricultural and municipal stormwater run-off issues. DePasquale noted that Pennsylvania’s Department of Environmental Protection (DEP) must continue to work with the agricultural sector, as well as municipalities, to implement the necessary practices to achieve the nutrient reduction targets, future benchmarks and regulatory mandates.