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Groups Say Funding Needed to Cleanup PA Waters Going to Chesapeake Bay

Senators Corman, Vance

The Senate Republican Policy Committee this week held a hearing on the cost of cleaning up Pennsylvania’s waterways to meet federal Clean Water Act nutrient reduction requirements for the Chesapeake Bay and noted their disappointment with Gov. Rendell for not including funding for the initiative in his proposed budget.

184 wastewater treatment plants in the Chesapeake Bay drainage area are facing a 2010 deadline to upgrade their facilities to meet the federal requirements. In addition, farming operations, developers and municipalities with stormwater issues are also facing new, tougher standards.

The hearing was held at the request of Sen. Patricia Vance (R-Cumberland), the prime sponsor of Senate Resolution 224 which passed the Senate last week directing the Joint Legislative Budget and Finance Committee to develop a cost estimate for implementing the Chesapeake Bay Tributary Strategy. (DEP Grants Bay Extensions)

Jon M. Capacasa, Director, Water Protection Division of the U.S. Environmental Protection Agency, told the Committee, “making these reductions by 2010 is not merely aspirational on EPA’s part, as a court order has established this deadline. Failure to remove the impairment by 2010 means EPA will develop and enforce a Total Maximum Daily Load (TMDL) allocation which will address any shortfall, including measures for point sources if the state designed program is not successful.”

If EPA is forced to adopt a TMDL they could impose a state-of-the art cleanup technology requirement on wastewater plants that would impose even heavier burdens on ratepayers.

Capacasa said, “EPA applauds the extensive work already accomplished by the PA DEP working closely with various municipal organizations to consider the burden on users and to identify several creative options to minimize the user burden.”

Department of Environmental Protection Secretary Kathleen McGinty agreed with Senators the cleanup would be costly, but said cutbacks in federal funding for infrastructure have hampered efforts by the state to provide funding needed to implement the Chesapeake Bay Tributary Strategy.

Secretary McGinty said DEP was working to make the cost of compliance cheaper for wastewater treatment plants by implementing the Nutrient Credit Trading Program which now has more than 476,000 pounds of approved nitrogen credits available for purchase.

She noted in October the Pennsylvania Infrastructure Investment Authority authorized the investment of up to $50 million in federal funds to help jumpstart the nutrient trading program.

Secretary McGinty also said Gov. Rendell will form a Sustainable Water Infrastructure Task Force soon by executive order that will make recommendations for infrastructure funding across the state in time to be included in his 2009-10 budget request.

John Brosious, PA Municipal Authorities Association, said the estimated cost of complying with the cleanup requirements for wastewater treatment plants is now over $1.2 billion, significantly higher than the $190 million initial estimate by DEP and more than the $620 million estimate developed by a DEP workgroup last year.

Brosious said while states like Maryland have provided over $1.5 billion to fund upgrades to its wastewater treatment plants to meet the standards and Virginia has committed to providing $700 million, Pennsylvania over the last six years has cut Act 339 operating grants to wastewater treatment plants by $324 million. Both states have fewer treatment plants affected by the requirements.

He also agreed with Secretary McGinty that the federal government has cut its funding of drinking water and wastewater projects over the last three years, but by only $43 million.

Wastewater plants are faced with making decisions now on upgrading their facilities, he said, but so are farmers, municipalities with stormwater problems and others that must significantly reduce nutrient and sediment loadings.

Brosious said PMAA supports additional funding for wastewater plant upgrades, but also for the farm community, noting they supported the $10 million Resource Enhancement and Protection Act (REAP) farm conservation tax credit program.

Several individual municipalities told the Committee about their expected costs of complying with the clean water requirements, including: James Felmlee, Borough of Lewistown, Mifflin County, Frank Rankin, Carlisle Borough, Cumberland County and Fairview Township,York County.

John Bell, PA Farm Bureau, said farmers continue to play a vital role in the cleanup of Pennsylvania waterways and have invested significant amounts of their own money to install conservation practices, a fact that was recognized by the Department of Environmental Protection and others.

Bell outlined several limitations of the current nutrient credit trading program from a farmer’s perspective saying it was never expected to be the “magical answer” to meet the nutrient reduction goals of the Chesapeake Bay Tributary Plan.

One limitation, he said, was a serious lack of trust among purchasers of credits needed to comply with permit requirements because they are concerned they will not have a degree of control over the practices used to generate the credits on farms.

“We continue to be optimistic that nutrient trading can work in the future, and can be helpful in moving Pennsylvania toward meeting the nutrient reduction goals outlined in Pennsylvania’s Chesapeake Bay Tributary Strategy,” Bell said.

Robert J. Fisher, PA Builders Association, told the Committee, “the primary goals of the Tributary Strategy will not be met unless the nutrient credit trading program is significantly reformed to address a number of outstanding issues.”

One of the most significant issues was the lack of targeted state and federal funding to implement the Strategy and a reduction in staff or lack of staff in county conservation districts and within DEP to handle the permits needed to implement the Strategy.

Fisher noted the nutrient credit trading program is particularly important to builders faced with new rules which requirement them to offset any increases in nutrients they generate. Many builders are also facing serious sewer capacity limitations. Both combine, he said, to make an already shaky housing market more difficult.

Fisher recommended creating a Nutrient Credit Trading Bank to provide a predictable source of credits at a fixed cost to developers interested in securing nutrient reductions over 20 or 30 years.

Fisher also said funding should be better targeted, noting that wastewater treatment plants are being asked to spend up to $1 billion when they are only 11 percent of the nitrogen load and agriculture is 63 percent of the nitrogen load. Each sector that contributes needs to have funding support, he said.

The Pennsylvania Environmental Council urged support for a credit trading program that enables wastewater plants and farmers to get the help they need for reducing nutrients to cleanup the Chesapeake Bay watershed.

Brian Hill, President and CEO, and Matthew Ehrhart, Senior Vice President for Watersheds and Working Lands, presented the Council’s comments.

“We believe that nutrient trading will provide a flexible and voluntary option for achieving net water quality improvement to the Chesapeake Bay,” said Hill. “We recognize that it is not a panacea, but it is an important tool to help improve water quality.”

Reducing nutrient discharges from wastewater treatment facilities will be expensive, so PEC is promoting a nutrient trading program in which farmers and other landowners who can remove extra nutrients through their land-management activities could then sell “credits” to those who cannot meet their required reductions, potentially in a cost-effective way.

“We understand that trading presents several challenges, including credit estimation, certification, and market confidence,” Hill said. “However, the Council believes that nutrient trading can work. The Council has learned that partnerships and communication are the key ingredients for the success of the trading program.”

Hill based his comments on the Council’s extensive experience in nutrient management. PEC currently is working with the World Resources Institute to develop NutrientNet, an on-line trading tool that will provide a central, standardized marketplace where farmers, sewage-treatment-plant operators and others will be able to post “buy” or “sell” offers for nutrient credits. The tool will determine the amounts of these credits based on best-management practices (BMPs) involving crop and pasture land, streambanks and conservation tillage.

PEC has also demonstrated how nutrient trading credits work through several its Conestoga River Reserve Auction Project, the Antrim Township Nutrient Trading Project, Exelon-Lancaster Health System Forested Riparian Buffer Project and other projects. PEC is also developing a best-management practices manual for golf courses and other projects.

“We recognize that there are several challenges that remain, including the significant expense for upgrading wastewater treatment facilities and the need for securing long-term sources of nutrient reduction credits to meet the demands of the development community,” Hill said. “The Council supports additional funding for wastewater infrastructure improvements and also recommends a focused effort to find long-term sources of credits for new developments.”

Noting that Maryland and Virginia have together provided wastewater treatment plants with over $1.7 billion in funding assistance, Kim Patten Pennsylvania Deputy Director Chesapeake Bay Foundation, told the Committee in comments, “We urge Pennsylvania to follow the lead of its sister Bay states by closing the existing funding gap that municipalities currently face as they seek to move forward on plant upgrades.

CBF also said Pennsylvania needs to provide additional funding to farmers to help them install conservation practices on their farms. DEP itself identified a $174.2 million annual gap between existing funding levels and the funding that is necessary to meet Tributary Strategy requirements for agriculture.

Patten added there were also funding shortfalls for county conservation districts in Gov. Rendell’s proposed budget for 2008-09. Districts provide significant help to farmers in planning and installing conservation practices.

CBF thanked the General Assembly and Gov. Rendell for supporting the Resource Enhancement and Protection Act (REAP) farm conservation tax credit program which provided $10 million in initial credits to farmers this year, but said much more needs to be done. CBF is recommending REAP funding be increased to $50 million this coming year.

Peter Hughes, Red Barn Trading Company, said his company was formed in 2005 to take advantage of the DEP nutrient trading policy. So far the company has approximately 450,000 DEP-certified nutrient credits for sale in large or small purchases or on a long-term basis.

The Senate Republican Policy Committee is chaired by Sen. Jake Corman (R-Centre).

NewsClips: Sewage Plant Upgrade Come at High Price

Altoona Sewer Rates Stable, At Least for Now

Nobody Gets a Free Pass on Chesapeake Bay Mandate

Hearings Set on High Costs of Bay Cleanup

East Pennsboro Fights Bay Cleanup Rules

Op-Ed: Make Bay Cleanup Rules Fair

DEP Outlines Federal Chesapeake Bay Obligations

Audio Clips: Remarks by Sen. Vance

Remarks by Sen. Eickelberger (R-Blair)

PA Environment Digest Video Blog

On the Hill