You are on page 1of 31

Several options exist to meet WQBELs and TMDL allocations including: Adaptive Management Modifying wastewater treatment systems

ms Modifying your production process to limit additives or raw materials Trading Options can be used in combination

Water quality trading is an exchange of pollutant reduction credits. A buyer with a high pollutant control cost can purchase pollutant reduction or treatment from a willing seller.

Trading can produce substantial cost savings but must result in an improvement in water quality and a net reduction of the pollutant being traded.

Wisconsins History with Trading

Fox River Basin
Developed guidance, element list, issue summary, and reports.

Rock River Basin

Developed a framework and pursued some trades but lack of sufficient economic incentives prevent trades.

Red Cedar Basin

City of Cumberland Trade

WQT May be Used To:

Demonstrate compliance with WQBELs Offset pollutant load from new or expanding discharger

WQT Guidance Not Applicable to TBELs

WQT not allowed when localized exceedance of water quality standards will occur

Phosphorus Nitrogen

Total Suspended Solids (sediment)

Dissolved Oxygen-related Parameters (e.g.,
biochemical oxygen demand)

Credits must be generated upstream of credit users discharge

Credits may be generated within the drainage area for the impaired segment (segmentshed)

Credit threshold is the pollutant load below which reductions must be made to generate pollutant reduction credits.
Credits Generated by Point Source
Threshold is lesser of WQBEL or TBEL

Credits Generated by Nonpoint Source

Lesser of TMDL LA or Performance Standard (e.g., ch. NR 151) 5-yr Interim Credit = Reduction from Existing Pollutant Load

Final Trade Ratio = Delivery + Equivalency + Reserve + Uncertainty Habitat Adjustment For trades involving point and nonpoint sources the trade ratio cannot be lower than 1.2:1 (1.2 pounds of nonpoint for every pound of point source pollutant). For trades located upstream in the same HUC-12 the equation simplifies to: Final Trade Ratio = 0.2 + Uncertainty Habitat Adjustment

Delivery (distance between generator and user)

TMDL Same factors used in TMDL Non-TMDL USGS SPARROW model for P, N and sediment

Equivalency (form of pollutant)

Not necessary with phosphorus Not yet specified for N and TSS (sediment)

Downstream Trade Ratio Factor:

Percent Difference between Buyers Load and Total Load at Point of Discharge < 25% 25 - 50% 50 - 75% 75% > Downstream Trade Ratio Factor

0.2 0.4 0.6 0.8

Reserve Factor Reserve sets aside a portion of the pollutant credits to help offset liability and uncertainty between the buyer and seller associated with potential failure of management practices.
Pollutant / Constituent Total Phosphorus Total Suspended Solids (TSS or SSC) Total Nitrogen Thermal Reserve Factor 0.2 0.2 Currently Not Available Not Applicable

BMP or Practice
Whole Farm Management with multiple practices

Uncertainty Trading Ratio


Applicable Technical Standards


Schedule for Credit Use

Conservation Easement Companion Crops (perennial vegetation) Tillage Mulch Till No-Till Grassed Water Way Nutrient Management First Trade Term: Prior to Confirmation with Soil Testing Second Trade Term:Confirmation with Soil Testing Subsequent Trading Terms

1:1 1:1

NRCS 327 Conservation Cover

Notes This includes an approved nutrient management plan, filter/buffer strips, grassed water ways, conservation or no-till tillage, and cover crops. Credit for land out of production. Provides continuous protection to soil surface.

3:1 3:1 2:1

NRCS 345 Mulch Till NRCS 329 No-till NRCS 412 Grassed Waterway NRCS 590 Nutrient Management Once it has been established through soil testing that nutrient levels are dropping and that the nutrient management plan is being followed the trade ratio can be lowered in subsequent permit/trade cycles.




Habitat Adjustment Factor

NRCS Technical Standard 395 658 657 Description Stream Habitat and Improvement and Management Wetland Creation Wetland Restoration

Final Trade Ratio = Delivery + Equivalency + Reserve + Uncertainty Habitat Adjustment For trades involving point and nonpoint sources the trade ratio cannot be lower than 1.2:1 (1.2 pounds of nonpoint for every pound of point source pollutant). For trades located upstream in the same HUC-12 the equation simplifies to: Final Trade Ratio = 0.2 + Uncertainty Habitat Adjustment

Credits Generated by a Nonpoint Source

SNAP-Plus and RUSLE2 for agricultural field practices New Barnyard Tool working with UW SLAMM and P-8 for urban practices

Credits Generated by a Point Source

Effluent monitoring

Credits must be generated before they are used

Point source pollutant reduction must be measurable BMP in-place and effective

Credit use timing depends on credit source

Point source Averaging period of limit
Nonpoint Anytime during calendar year (highly variable discharge exception)

Phosphorus WQBEL Permit language allowing credits to be used when demonstrating compliance with the limit Reporting requirements for source and amount of credits acquired Certification by permittee that BMPs are in place and are effective

DNR provides ground rules for brokers and central exchange.

Credit user and generator may use a contract.



Credits Credit User

Credit Generator

Compliance option focusing on water quality improvements, rather than a phosphorus offset Allows point sources to work with nonpoint sources to reduce overall phosphorus loads so that water quality criteria can be attained
Interim Limits with extended compliance schedule.

NR 217.18, Wis. Adm. Code

NOT an option for all point sources

Specific eligibility requirements must be met

Eligibility Requirements
1. Receiving water exceeding
the WQC


NPS contribute >50% of P load or NPS must be controlled

Filtration or equivalent technology required to meet

NOT water quality trading

End of pipe compliance option


NOTE: MS4s considered nonpoint under adaptive management

Must use sound scientific data and rationale PRESTO also available
Calculates basin specific average annual phosphorus loads from point and nonpoint sources

PRESTO combines three concepts: Watershed Delineation, Effluent Aggregation, and Pollutant Runoff
Watershed Delineation Effluent Aggregation Pollutant Runoff

Adaptive Management selected as preferred option

Develop the
Adaptive Management Plan

NR 217.18(2)(d)

Step 1: Identify partners Step 2: Describe the watershed and set load reduction goals Step 3: Conduct a watershed inventory Step 4: Identify where reductions will occur Step 5: Describe management measures Step 6: Estimate load reductions expected by permit term Step 7: Measuring success Step 8: Financial security Step 9: Implementation schedule with milestones

Point Sources Partners to develop the plan

County LWCDs Consultants WDNR staff

Partners reducing P loads to receiving waters

Agricultural producers Non-permitted urban sources MS4s Other point sources

Voluntary compliance options for WPDES permit holders to comply with phosphorus requirements Options will be used when it is economically preferable to control nonpoint sources or other point sources of P Both require nonpoint and/or other point source reductions Contractual agreements should be made Need to look in same watershed (HUC 12)

Adaptive Management Pollutants Covered End Goals Implementation Area TP (and possibly TSS) Attaining the water quality criteria Watershed-focused

Trading All pollutants except toxics Offsetting the limit Upstream-focused


No trade ratios

Trade ratios apply

In-Stream Monitoring Level of Documentation Needed

Implemented throughout the permit term

Required General watershed information

Generating credits before they can be used

Not required Field-by-field documentation