Virginia Nutrient Credit Trading: Nonpoint Source Offset Options

Kurt StephensonDept of Ag & Applied Economics

Virginia TechKurts@vt.edu

Virginia Nutrient Credit Trading Program

Establish stringent mass load caps for N and P and to provide point sources compliance options for meeting those load caps.

Trade Design and Sequencing

In general, the Virginia nutrient trading program requires point sources to exhaust point source compliance options first before allowing any nonpoint source trades.

This applies to both existing and new/expanding point sources.

Existing Point Source Compliance1.Devise plan to meet wasteload

allocation (WLA) (individually or as bubble)

2.If discharge > WLA, must purchase credits from another point source

3.If no PS credits available, secure equivalent NPS credit by paying into Virginia Water Quality Program.

New/Expanding Point Source Compliance: Offsets

1A) Meet limit of technology concentration standard for N and P, and

1B) Acquire WLA to offset new discharge:

• Buy WLA from point source

• Acquire NPS offset at 2:1 rate

• If none above, “other means”

• If none above, payments into WQIF

Nonpoint Source Credits/Offsets

Nonpoint source credits/offsets are reductions in nutrient load beyond a baseline.

Defined in statute as: “achieve reductions beyond those already required by or funded under federal and state law”

§62.1-44.19:15.B.1b

Must be within same tributary

Nonpoint Source Offsets

Any nonpoint source offsets must be included within the point source’s individual VPDES permit.

Thus offsets do not represent a transfer of legal responsibility to limit nutrient discharges.

Opequon Project: Evaluating Urban Offset Options

Avoiding legal exposure for NPS nonperformance – What potential offset projects could be performed under the local government authority

Options:

1) Urban BMPs (constructed wetlands, wet ponds, bioretention areas, sand filters)

2) Connecting private septic to public sewer system

3) Land conversion on land owned or controlled by local government

Opequon Project: Offset Options Being Evaluated

Project team developing a cost screening tool that would allow rapid assessment of cost to generate offset for these options

Planning, not implementation, tool.

Opequon Project: Screening Tool

Current draft guidelines allow for offsets from enhancing/retrofitting existing stormwater BMPs or stream/wetland restoration.

Urban offset must be • Consistent with Erosion/Sediment Control laws• Consistent with VA’s stormwater management program• Compliant with federal MS4 rules• Consistent with Ches Bay Preservation Act.

Urban BMPs

Sample of Stormwater Screening Tool

Septic Connections

Current draft guidelines allow for offsets from “retrofitting” existing septic systems

EPA has approved increases in wastewater treatment plant’s WLA by connecting existing septics to central sewer.

• Nitrogen examples include 20lbs N/yr/septic

Urban Offset Wildcard

Proposed Strategy Allocation Reduction Factor (SARF) – A portion of all urban NPS offsets generated will be allocated to achieve tributary strategy goals for urban NPS

NPS Credits:Land Conversion

Conversion of some types of land to less intensive nutrient uses could be eligible for NPS credit. For example:

• Cropland to forest or parkland.• Hayland/pasture to forest or parkland

Fee simple or conservation easement.