Alex_Johnson_headshotBy Alex Johnson, Senior Freshwater Solutions Director at The Freshwater Trust.

Many wastewater agencies in California find themselves facing stricter limits in upcoming NPDES permits for nontoxic pollutants like phosphorus, nitrogen, salinity and temperature. Instead of costly infrastructure upgrades, managing your watershed via tools such as water quality trading or an offsets program may now be a cost-effective solution for meeting Clean Water Act compliance obligations. Such watershed programs can bring together regional stakeholders to develop an integrated approach to improving water quality, restoring critical river habitat and applying public compliance dollars in more cost-effective and ecologically appropriate ways.

What is the watershed management approach?

In watersheds where agricultural and urban operations impact instream water quality, a watershed management approach can be a viable compliance solution. By developing a trading or offsets program, a wastewater agency can meet its regulatory requirements by incentivizing land management practices or installing structural conservation measures at a watershed scale.

Actions that address temperature and nutrient impairments may include streamside re-vegetation, irrigation upgrades, livestock exclusion fencing, cover cropping, wetlands restoration, and more. These actions work holistically to create a more resilient watershed and more reliable water resource.

Because wastewater agencies and their consulting engineers are often more used to dealing with “gray infrastructure” solutions to compliance than “green infrastructure” solutions, here are a few questions to ask yourself to see if a watershed management compliance option is a good fit.

Is watershed management right for both the watershed and the facility?

The watershed’s local ecology as well as the wastewater facility’s potential projected future exceedance factor into the necessary size and cost of a trading or offsets program.

  • Ecology: Does the discharge create localized impacts that need to be addressed prior to trading?
  • Loading: How many reductions are needed to meet load allocations or offset projected potential exceedance?
  • Supply: Is there sufficient pollution reduction potential from lesser or unregulated nonpoint sources in the watershed to offset facility impact?
  • Costs: How do costs of a trading or offsets program compare with other compliance solutions?

Often the first step in addressing these questions is to conduct a feasibility analysis to identify the range of possibilities and gaps.

Is watershed management for compliance possible within your regulatory framework?

Beyond the facility and its watershed, a successful program also requires guidance and support at the federal, state and regional levels.

  • Does the regulatory framework support—or at least allow– water quality trading or offsets?
  • Are trading/offsets understood and supported by regulators, environmental stakeholders, and permit writers?
  • How will credits for watershed actions for compliance be calculated, verified, and tracked?

The State Water Resources Control Board and EPA Region 9 have supported watershed management and trading for compliance. A pair of Water Board memorandums outline the general legal requirements for a water quality trading program. California has implemented several successful pilot trading programs, including the Grassland Area Farmers Tradable Loads Program and the Santa Rosa Nutrient Offset Program.

Given the differences in regulatory support for these options in different states, the National Network on Water Quality Trading has recently formed to push for greater cohesiveness of application across the nation.

How does watershed management for NPDES compliance work?

Watershed management programs for compliance are based on a system of credits generated by restoration actions that more than offset the potential worst impacts of discharge. Credits are verified and registered through a rigorous, third-party process. Project sites where restoration actions occurred are then maintained and monitored for 5 to 20 years to ensure sites are performing as intended and meet the approved credit standards.

Point source to nonpoint source water quality trading and other types of offset programs can be more cost-effective and often make better ecological sense than end-of-pipe technology controls. These programs focus ratepayer dollars on the dispersed sources of environmental impacts, as opposed to marginally improving a single discharge. This approach does require more coordination and innovation than technology upgrades at a facility, but clear frameworks have emerged.

  • Build a road map for how a watershed program will function by using a third-party contractor, building staffing internally, or a hybrid approach.
  • Define the watershed partners that will be needed to manage a program nonprofits, watershed councils, soil and water conservation districts, and other local experts can provide support.
  • Define potential nonpoint source landowners where restoration actions could take place.
  • Devise a realistic implementation schedule (which can then become an NPDES compliance schedule), given capacity in the watershed to both allow for and perform the necessary work.
  • Develop the funding mechanism, and hold an RFP process if appropriate.

The good news is that as more organizations, wastewater agencies and regulators gain experience with watershed management programs for compliance, these alternatives become more turn-key and comparable to the traditional solutions. In coming years, we see these programs as having great potential to scale to meet the water quality challenges we face today. Do you?

The Freshwater Trust is a conservation nonprofit with more than 30 years of experience fixing rivers in the Western U.S. Alex has led the analysis, development and implementation of some of the first water quality trading programs in the Pacific Northwest. He works directly with private and public entities in California, Oregon and Idaho to develop watershed restoration solutions to achieve Clean Water Act compliance or conservation goals.