water quality trading in wisconsin
TRANSCRIPT
Water Quality Trading Update:New Guidance and Prospect of a
Clearinghouse
Government Affairs Seminar
02/20/2020
Andrew Craig and Kevin Kirsch
Wisconsin Department of Natural Resources
What are we going to Cover?
• Updates to the Water Quality Trading Guidance.
• EPA’s 2019 Memo and Draft Guidance
• Cover a couple specific comments submitted by Central States
• Update on the Clearinghouse Legislation
WQT Guidance Update Process
• The Department’s process was already underway prior to EPA’s 2019 memo and draft guidance.
• The Department had extensive conversations with EPA to better understand EPA’s intent and outline our proposed updates.
• Advisory Group Meetings
– October 16th and December 19th
• 21-Day Public Notice just completed
Moving Forward Under One Document
• More details on finding trades
• More details on timing and permit process
EPA Water Quality Trading Guidance
• 2003 Policy and 2009 Toolkit
– DNR’s current framework was negotiated and already incorporates many of the concepts outlined in the EPA 2019 memo and draft guidance such as credit threshold and downstream trading.
• EPA’s 2019 February Memo and September Draft Guidance
– Wisconsin's framework already incorporated many of these approaches but the changes allowed us flexibility to pursue rotational averaging and interim floors.
– EPA’s explanations of its intent are often contrary to how most stakeholders interpret the guidance.
EPA’s 2019 Memo and Draft Guidance
• EPA encourages flexibility in implementing TMDL baselines; however, EPA uses some key phrases in the memo and draft guidance:
– “comply with all applicable water quality standards”
– “be consistent with the assumptions and requirements of wasteload allocations in applicable EPA-approved TMDLs, consistent with 40 CFR 122.44(d)(1)(vii)”
– “provided there is a reasonable assurance that the overall load allocation will, over time, be met”
– “for facilities subject to permit conditions or other legal requirements, a program that uses current conditions as a baseline should require full compliance with legal requirements.”
Proposed Adjustments to Wisconsin’s Framework
• Eligible Trading Areas
• Credit Threshold:
– Rounding up of SnapPlus Credit Thresholds
– Rotational Period Averaging When Using SnapPlus
• Interim Credits:
– Increase Interim Credit Duration
– Interim Credit Floor
• Habitat Adjustment Clarified
• Site Specific Baseline Considerations
Trade Ratios and Uncertainty
• CSWEA Comment: The uncertainty factors are too high with compounding safety factors such as TMDL margin of safety and delivery factors.
– The TMDL MOS addresses the uncertainty between the modeling and relationship of the allocations to the attainment of water quality standards.
– The delivery factor, along with the uncertainty factor, are components of the trade ratio. The delivery factor accounts for the movement of pollutants from the edge of field to the watershed outlet. Models such as SnapPlus and RUSLE2 do not calculate delivery to the watershed outlet.
Uncertainty Factor
• The uncertainty factor accounts for the effectiveness of management practices in reducing pollutant loads over varying environmental conditions and addresses modeling uncertainty.
• Research clearly shows:
– That a system of practices is needed to effectively reduce pollutant loads instead of implementation of just one practice (see Whole Field Management).
– Practices that maintain cover and properly manage nutrients are the most effective.
Eligible Trading Areas Explained
• Upstream means that pollutant reductions “flow past” point of compliance
• Account for delivery using the SPARROW model if not already accounted for in the TMDL
Downstream Trading Policy
• Credits may be generated downstream from a credit user on a limited basis.
• Limited to within the local watershed (HUC 12) unless specified in a TMDL.
HUC 12 Watersheds of Wisconsin
Downstream Trading Policy
• Stakeholder comments:
– Expand beyond HUC12 watersheds
– Should only be allowed in a headwaters situation due to limited upstream trading area.
– No downstream trading should be allowed
– Limit it only to the HUC12
• The existing approach provides flexibility and protects water quality.
TMDLs and Credit Threshold
• TMDLs determine the amount of pollutants, in the form of allocations, that a water can receive and still meet water quality standards.
• To maintain the integrity of the TMDL, if the credit user is not going to reduce its pollutant load but rather rely on a trade, the credit generator must reduce pollutant levels below those required by the TMDL to generate credits.
• In Wisconsin, we also have an interesting interplay between NR 217.13 derived effluent limits and TMDL derived mass allocations. We are the only state in which TMDLs provide relief to point sources and that relief comes as a result of the load allocation.
Proposed Changes
• Site Specific Baseline
• Rounding
• Rotational Averaging
• Interim Floor
• Increase Interim Credit Timeframe
When applied together, these changes will help increase opportunity and certainty for WQ Trades and still
improve Water Quality
Site-specific baseline
• Apply TMDL % reduction to current conditions to arrive at credit threshold
• Used for sources not explicitly quantified in TMDL
– Streambank/gully Erosion
– Unique sources of pollution
• Agricultural fields not addressed by SnapPlus edge-of-field number
WQ Trading and TMDLs
• WDNR translated TMDL SWAT model inputs in SnapPlus within some* TMDL areas * Lower Fox, Upper Fox/Wolf, Wisconsin River
• Output: ‘Edge of Field’ baseline pollutant loss for each TMDL sub-basin– Expressed in lb/ac/yr ; rotational average
• Edge of Field methodology described within Upper Fox/Wolf and WI River TMDL reports
WQ Trading in TMDL areas
Source: Lower Fox TMDL Edge of Field Baseline and Reduction Targets
TMDL
Subbasin Area (acres)
Baseline
(lb/ac/yr)
TMDL %
Reduction
Target
(lb/ac/yr)
LF 100 1795.36 3.35 84 0.54
LF 200 1598.59 4.37 84 0.70
LF 300 5711.93 2.67 84 0.43
Rounding
• Propose rounding edge of field reduction targets up to nearest half pound interval
• Reasons:
–SnapPlus annual edge of field P loss estimates based upon multiple runoff factors
– Less confident with SnapPlus results at or below 1 lb/acre
Rounding
Source: Lower Fox TMDL Edge of Field Baseline and Reduction Targets
Range Rounded Value
(lb/ac/year) (lb/ac/year)
0.01 - 0.59 = 0.5
0.60 - 1.09 = 1.0
1.10 - 1.59 = 1.5
Subbasin Area (acres)
Baseline
(lb/ac/yr)
TMDL %
Reduction
Target
(lb/ac/yr)
Rounded Target
(lb/ac/yr)
LF 100 1795.36 3.35 84 0.54 0.50
LF 200 1598.59 4.37 84 0.70 1.00
LF 300 5711.93 2.67 84 0.43 0.50
Credit Threshold
(can use highest number)
Rotational Averaging
• Propose moving from annual based to a rotational average reduction method for calculating credits
• Averaging period reflects 5 year permit term; 6 year maximum length
• Reasons:
–TMDL Edge of Field Baseline values based upon rotational average
–More certainty/flexibility to generate credits during 5 year permit term
Rotational Averaging Example
• Can be used in TMDL and non-TMDL areas
Value Type Field AcresPTP 2018
PTP 2019
PTP 2020
PTP 2021
PTP 2022
PTP 2023
PTP 2024
PTP2025
Baseline Crop 32A 39.8 Corn Soy Corn Soy Corn Soy Corn Soy
Baseline PTP 32A 39.8 160 120 160 120 160 120 160 120
Trade Crop 32A 39.8 Corn Soy Prairie Prairie Prairie Prairie Prairie Prairie
Trade PTP 32A 39.8 160 120 20 20 20 20 20 20
P Reduction 32A 39.8 n/a n/a 140 100 140 100 140 100
Table 7 – Example Rotational AveragePTP = Potentially Tradeable Phosphorus
Average = 120 lbs./yr.
Interim Floor Concept
• Prior policy required meeting the credit threshold before any credits are generated. The interim floor can be used in place of the credit threshold in TMDL areas.
• Interim floor equivalent to a farm based TBEL
• Based on reach-specific SnapPlus modeling
• Reflects what reductions can be achieved while keeping cropland in production
Conservation Scenario Results
Subbasin
Baseline
(lb/ac/yr)
TMDL %
reduction
Target
(lb/ac/yr)
Rounded
Target
(lb/ac/yr)
InterimFloor
(lb/ac/yr)
Whole Field
Management
(lb/ac/yr)
LF 100 3.35 84 0.54 0.50 0.62 0.28
LF 200 4.37 84 0.70 1.00 0.80 0.34
LF 300 2.67 84 0.43 0.50 0.52 0.27
Credit Threshold
(highest number)
Results show that “Whole Field Management”, as defined in Appendix H of
the guidance, can generate long-term credits and achieve nonpoint
reductions without taking land out of production.
10-Year Interim Credit Duration
• Duration is a balancing act between progress towards TMDL implementation and long-term solutions for dischargers.
• Department received comments to both extend interim credit duration beyond the proposed 10 years and keep it at the previous 5 years.
• 10 Years is consistent with nonpoint source implementation mechanisms and contract length for cost share programs. Farmer reluctance to sign a contract for > 10 years.
Water Quality Trading Clearinghouse
• Senate Bill 91 and Assembly Bill 113 provide for the establishment of a 3rd party to establish a clearinghouse to facilitate trading.
• Program to be administered via contract through DOA and in consultation and approval with DNR consistent with statutes and program guidance.
• Once signed by the Governor, DOA will need to develop clearinghouse guidance and solicit bids.
Water Quality Trading Clearinghouse
• Some portions of the procedure are outlined in the proposed bill while others will need to be defined by DOA in contract.
• The process will take time both to develop and for the clearinghouse to implement.
Questions, Comments, or Concerns:
Wastewater: [email protected]
Runoff Management/Ag: [email protected]
Standards/TMDLs/Modeling: [email protected]
Statewide
Coordinators