VIRGINIA MUNICIPAL LEAGUE - PowerPoint Presentation

VIRGINIA MUNICIPAL LEAGUEOCTOBER 7, 2019 Chesapeake Bay TMDL Phase III Watershed Implementation Plan:WASTEWATER UTILITY IMPLICATIONSChristopher D. Pomeroy, Esq.President 1

WIP3 Admits to Outstanding Local Govt Wastewater Results: 100% (Plus) Compliance “Virginia has implemented one of the most successful point source trading programs in the nation to achieve significant nutrient reductions from the wastewater sector.” Cut 9.93 mlbs/yr N (-50%) & 437,410 lbs/ yr P (-38%) Nitrogen loads for facilities registered … have declined every year since 2010 The facilities currently produce greater than 6 million pounds of unused TN credits every year Phosphorus performance has averaged more then 640,000 pounds of unused TP credits over past 8 yrs 2

Nevertheless, WIP3 Changes the Rules: “Initiative (52): Require Additional Nutrient Reductions From WWTPs” “VA will initiate actions to achieve additional nutrient reductions from ... facilities that have not yet upgraded to achieve 4 mg/l of TN and 0.3 mg/l of TP.” “This action will consist of modifications to the WQMP Regulation to include secondary, “floating” wasteload allocations for significant municipal facilities.”“The floating wasteload allocations will be based on the flow treated by the facility in a given year and nutrient concentrations of 4 mg/l TN and 0.3 mg/l TP.” Some limited exceptions TBD 3

WIP3’s Estimated Impact 46 Facilities Immediately Impacted, Others Later “Of the 87 significant publicly owned treatment works (POTWs) included in the Watershed General Permit, 41 have already upgraded their facilities to achieve 4 mg/l TN and 0.3 mg/l TP.”State Offers Trading, But Removes Most Credits“Because this initiative is being implemented through the WQMP Regulation and the Watershed GP, no facilities will be required to upgrade but rather may choose to trade nutrient credits to achieve their reduction goals.” 4

How We Got to This Point Localities Relied on Decisions & Succeeded Ex: 2005/2007 (State Regulations)Ex: 2010 (EPA TMDL Regulation)Ex: 2012/2017 (State Permit Reissuances)Now State Ordering Changes Late in the GameYear 9 of 15WIP3 Based on False Backsliding Assumption Beginning in 2025, especially in Potomac River Contrary to data and WIP3’s own statements This Fundamental Error Creates the “Need” When the error is corrected, “problem” is solved 5

More About How We Got Here State Gave Industries a Pass and Hit Local Govt Energy, pulp and paper, chemical manufacturers excludedInstead, State put new regulatory burden on LocalitiesVAMWA Offered Numerous CompromisesWould have resulted in full compliance & met State’s goalsFor the First Time in 20 Years, VAMWA’s Recommendations Were Flatly Rejected by State Every other time VAMWA has reach major compromises and agreements that have more than met State’s goals 6

Final WIP3 Initiative (52): State’s Claimed Rationale “In this Phase III WIP Virginia relies upon the continued overperformance by the wastewater sector…”“Virginia … is confident that the sector will continue to out-perform their regulatory requirements.”The use of 2018 flows and the concentration assumptions included in the WIP III input deck…is expected to generate conservative loading projections for 2025 . Actually, Excessively Conservative 7

WIP3 Fails to Take Credit for Existing Overtreatment (Shown in Table) Instead WIP3 Assumes WWTP Discharges Will Spike Up in 2025 to Unrealistically High Levels 8 Basin N ( lbs / yr ) P ( lbs / yr ) Municipal Industrial Total Municipal Industrial Total E Shore 2,514 11,642 14,156 155 704 859 James 925,634 997,378 1,923,012 50,808 76,337 127,145 Potomac 453,765 139,337 593,103 54,456 3,321 57,777 Rapp 49,275 17,431 66,706 8,699 907 9,606 York 1,982 145,131 147,113 1,192 22,369 23,561

To Make Up for the Assumed Spike, the WIP3 Adds New Regulations Called “Floating Caps” (Impact Below) 9 TN ( lbs / yr ) TP ( lbs / yr ) Basin Municipal Industrial Total Municipal Industrial Total E Shore -1,404 0 -1,404 -191 0 -191 James -2,759,326 -33,408 -2,792,734 -248,782 -10,005 -258,787 Potomac -15,938 0 -15,938 -5,633 -936 -6,569 Rappahannock -49,071 0 -49,071 -1,497 0 -1,497 York -62,748 -63,712 -126,460 -5,044 -472 -5,516

We Can Meet the WIP3 Target In Much Smarter, More Cost-Effective Way Correct the falsely assumed wastewater load spike Eliminate the new floating cap regulationAccept HRSD’s offer to reduce its James-N allocation by 1 million pounds (thank you)Base WIP3 2025 forecast on these net credits Use resulting credits to cover needs (like WIP3 did) Plenty of credits – No need for costly new regs ! 10

Meet WIP3 Target Smarter: Potomac When the incorrectly assumed WWTP load spike is corrected, the Potomac flips from “Nonattainment” to “Full Compliance” 11 Receiving Basin N:P Ratio N Credits Received from James in Final WIP3 ( lbs / yr ) Take Credit for Overtreatment Additional N Credit Needed to Match WIP3 ( lb / yr ) N Credits From N (lb/yr) N Credits From P ( lb / yr ) Potomac 1.68 404,000 490,041 101,218 -187,259 E Shore 1.34 358,000 1,110 -49 356,939 Rapp 1.67 170,000 204 11,994 157,802 York 1.68 164,000 -60,766 -6,474 231,240

Meet WIP3 Target Smarter: Other Basins Even once the incorrectly assumed WWTP load spike is corrected, there are still credits needed in 3 basins (shown below) 12 Receiving Basin N:P Ratio N Credits Received from James in Final WIP3 ( lbs / yr ) Take Credit for Overtreatment Additional N Credit Needed to Match WIP3 ( lb / yr ) N Credits From N (lb/yr) N Credits From P ( lb / yr ) Potomac 1.68 404,000 490,041 101,218 -187,259 E Shore 1.34 358,000 1,110 -49 356,939 Rapp 1.67 170,000 204 11,994 157,802 York 1.68 164,000 -60,766 -6,474 231,240

As With WIP3, There Is Plenty of James River Credits to Cover Other Basins 13 Receiving Basin Additional N Credit Needed in Receiving Basin to Match N Rcvd from James in WIP3 ( lb / yr ) Exchange Discount Ratio Applied to Transferred James Credits 3.4 mlbs James Credit Exchanged To Other Basins ( lb / yr ) York 231,240 2.197 508,044 Rapp 157,802 3.947 622,858 E Shore 356,939 6.472 2,310,160 The James still has plenty of credits ( 4.2 mlbs ) to cover the other basins, so absolutely no need for new regulations

Prior Upgrade Proposals Beyond HRSD 1 mlbs Reduction (All “Gravy”)Projects (for Future WQIF Agreements)HRSD / Chesapeake-Elizabeth WWTP Spotsylvania County / FMC*South Central Wastewater Authority* * VAMWA Proposal meets WIP3 target without these projects but we still support them because the Owners support them 14

Operations Incentive Grant Concept (More “Gravy”) Establish voluntary prgm for all basins / all WWTPsAnnual incentive payments for exceptional nutrient removal performance producing creditsPartner on 2020 legislation to adopt IncentivesFully operational by 2025, earlier phase-in if possible Consider including Blue Plains too 15

Plus, Other Existing Programs Will Produce Even More Credits Over Time (Even More “Gravy”) WQIF Grants for Nutrient Removal Technology Design & Installation (Va. Code §10.1-2131)WQIF Grants for Nutrient Reducing Flow Transfers (HB 1822 (2019), Va. Code § 10.1-2131)Technology-Based Regulations for New and Expanding Facilities (9VAC25-40-70)PLUS , HRSD SWIFT in future (no credit taken here) 16

While State Says WIP3 “Is Just a Plan,” the Actual WIP3 Language is Mandatory “The Commonwealth will initiate actions to achieve additional nutrient reductions…”“This action will consist of modifications to the Water Quality Management Planning Regulation…” “The floating wasteload allocations will be based on the flow treated by the facility in a given year and nutrient concentrations of 4 mg/l TN and 0.3 mg/l TP…” Hope to Work with State to Fix WIP3 17