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« on: April 05, 2008, 03:13:52 PM »

at PA water plants creates sticker shock
Municipalities contemplate suit over lack of support for Bay-related nutrient reduction efforts.

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By Karl Blankenship
Anyone in Williamsport, PA, who didn't know they lived in the Chesapeake Bay watershed is getting an education.

Rate payers of the Williamsport Sanitary Authority, which serves about 50,000 people, could see their quarterly water and sewer bills jump from $60 to $190.

The reason: Two treatment plants that serve the area are facing upgrades estimated to cost $150 million. More than half of the expense is for nutrient reduction improvements to help clean up the Chesapeake Bay, nearly 200 miles downstream from the West Branch Susquehanna community.

"Devastating," is the way one local government official summed up the impact to residents and businesses.

They're hardly alone. Scranton is looking at a $37 million tab to upgrade its wastewater treatment plants, of which $16 million is to pay for nutrient reductions. Hazelton's sewage plant will need a $29 million upgrade, of which $15 million is for Bay-related nutrient reductions.

Similar news is spreading across Pennsylvania's portion of the watershed, where 183 wastewater treatment plants must reduce discharges of nitrogen and phosphorus, which degrade Bay water quality.

All of the states in the watershed are facing hefty price tags to reduce sewer plant discharges-a recent EPA report estimated the needed nutrient upgrades will cost more than $4 billion across the watershed.

But the issue has become especially heated in Pennsylvania, where a backlash is stirring as scores of local governments are threatening a lawsuit over the issue.

Unlike their counterparts in Virginia and Maryland, who are getting hundreds of millions of dollars in state grants to help pay for Bay-related upgrades, Pennsylvania municipalities have been left largely on their own to meet the goals.

"There is a lot of resentment that no help is coming," said state Sen. Patricia Vance, a Republican who represents portions of Cumberland and York counties.

"I want to make it very clear, it's not that any of us think we shouldn't clean up the Chesapeake," Vance added. "That is not the issue. The issue is, how does one fund it?"

She and others were disappointed in February when Gov. Ed Rendell, despite mounting complaints about the costs, proposed a budget with no new money targeting the problem. Instead, her promised to name a panel to study statewide water infrastructure issues.

Administration officials have said they do not support new state taxes to support the upgrades. Instead, of grants, they say facilities should use existing loan programs or participate in the state's fledgling, and controversial, nutrient trading program.

"The governor does see there is an issue and a concern," said Neil Weaver, a spokesman for the Department of Environmental Protection, "but he also realizes that there have been other options out there."

Pennsylvania and other states in the watershed agreed in 2000 to achieve nutrient and sediment reductions to restore Bay water quality by 2010. Meeting Bay water quality standards is required under the federal Clean Water Act.

The state developed a tributary strategy-its road map for meeting Pennsylvania's portion of the cleanup goal-which called for reducing the amount of nitrogen reaching the Bay to 71.4 million pounds from 112.7 million in 2000. The lion's share of that reduction, 32 million pounds, would come from agriculture.

But the strategy also called for "point sources"-wastewater treatment plants and industries-to reduce nitrogen discharges reaching the Bay from 12.7 million pounds to 10.5 million pounds a year.

In December 2004, Pennsylvania, joined the EPA and other jurisdictions in the watershed in signing a policy requiring that tributary strategy goals for dischargers be written into permits for point sources.

After that, Pennsylvania officials contend they spent more than two years in meetings with stakeholders, including wastewater treatment plant operators, discussing how the goals would be incorporated into legally enforceable permits.

"We've been talking about this for years," Weaver said. "Everyone was on board."

But as plant upgrade estimates came in, municipalities have gotten sticker shock.

The original tributary strategy had estimated the point source cost at about $376 million. State officials frequently cited an even lower number-$190 million.

According to the Pennsylvania Municipal Authority Association, which represents wastewater plant operators, 44 plants have received engineering estimates to date. The cost for nutrient upgrades at those facilities is $512 million. Association officials say they expect the total cost for nutrient-related upgrades to be around $1.2 billion. Because the upgrades are typically being combined with other improvements, the actual bill to wastewater authorities could be twice that.

The DEP disputes those figures, although it now pegs the cost at about $620 million.

Weaver said the higher estimates assume all of the plants will require costly construction upgrades. "This is not a mandate for them to have to take the capital projects to upgrade their facilities," Weaver said.

Instead, he said, the DEP is encouraging plants to take advantage of the state's nutrient trading program, which allows wastewater treatment plant operators to meet their obligations by purchasing nutrient reduction "credits" from farmers or other dischargers who have reduced nutrients.

To settle the question, the state Senate in February unanimously approved a resolution introduced by Vance directing the legislative Budget and Finance Committee to determine how much the upgrades will cost.

"Let's find out the true price and quit fooling around," Vance said. "That's the bottom line."

Weaver insisted such a study was unnecessary and questioned its usefulness because it is not likely to include the trading option pushed by the DEP.

"The main concern with this is they are not looking at alternative ways of upgrading and reducing the nutrients," he said. "The study they are providing is all structure and capital improvements costs."

But the trading program has attracted relatively little enthusiasm from wastewater treatment plant operators, many of whom view it as untested and risky-especially in trades with nonpoint sources such as farms, where nutrient reductions are hard to measure. An analysis by the PMAA also suggested that, over the long term, the cost of purchasing credits every year exceeds the cost of upgrades for most facilities.

Instead, many would like to see the state follow the example of Virginia and Maryland, which offer grants-which unlike loans, do not have to be paid back-to help fund the upgrade cost.

Virginia has made more than $900 million in grants-from state appropriations and bond sales-available for upgrades in recent years.

Maryland in 2004 created the Bay Restoration Fund financed by the so-called "flush tax," which levies a $2.50 monthly fee on households. It raises about $65 million a year to help pay for wastewater treatment upgrades. The state also plans to issue bonds, backed with revenue from the fund, to accelerate implementation.

In contrast, Pennsylvania has made about $28 million in grants available for wastewater treatment plants in recent years.

"When you look at what Pennsylvania is doing comparatively to Maryland or Virginia, it becomes quite stark that as far as provding state funding sources, we're way behind," said Harry Campbell, a scientist with the Chesapeake Bay Foundation's Pennsylvania Office, which has been urging the state to help fund upgrades.

Rather than considering any Bay-specific measure, Rendell in February announced the creation of a Sustainable Water Infrastructure Task Force, which would report by Oct. 1 on options to address state drinking and wastewater infrastructure needs. The state has a backlog of $18 billion in water infrastructure needs beyond its Chesapeake Bay obligations, according to Rendell.

But any funding options that stem from the task force could not be implemented before the 2009-10 budget, which starts July 1, 2009. That's too late for wastewater treatment plants that are contracting for upgrades now, critics say.

"The problem is here, the problem is now," said Rep. Scott Perry, a Republican who represents portions of York and Cumberland counties. "There is no reason to hold it up for a task force. We know the issues, we know the goals. We need to find a solution."

Perry in February proposed legislation that would provide $300 million in matching grants to wastewater treatment plants over 10 years.

He acknowledged the $300 million may not provide enough immediate relief for facilities under pressure to upgrade by 2010, so he also suggests the upgrade time frame be extended to keep the program affordable within the current budget.

"We don't want to raise taxes to do this," Perry said. "We want to be able to use what we have, and we think that money is available right now, so that's what we are going for."

His bill also addresses another frustration voiced by municipal officials: Their plants contribute only about 11 percent of the nitrogen that reaches the Bay from Pennsylvania. Most of the rest comes from agriculture.

But Rendell's budget cut spending for some key agricultural programs that help the Bay, including a reduction of nearly $1 million-or 33 percent-for county conservation districts, which provide technical assistance to farmers who want to implement conservation programs on their land. It also froze spending on the state's Nutrient Management Fund, which also assists farmers.

Perry said if local governments are asked to spend hundreds of millions of dollars to do their share, they should be assured that the full job of cleaning the Bay is accomplished by others as well. His legislation would make $10 million in tax credits available each year to farmers to encourage the implementation of runoff control practices.

"If we're going to spend a bunch of money and not clean up the Bay, that's not something I'm interested in," Perry said.

John Brosious, deputy director of the PMAA, said the bill "will put the Chesapeake Bay in the budget debate. It's our hope they will realize both we and the agricultural sector need some financial assistance from the state of Pennsylvania and it is just not happening."

The outlook for Perry's legislation is uncertain.

Chesapeake Bay initiatives lack the political support in Pennsylvania that they get in Maryland and Virginia. Although half of the state drains into the Bay-and the Susquehanna River is the source of half of the freshwater entering the Chesapeake-the state does not touch the Bay.

And while the bulk of the population in both Virginia and Maryland lives in the Bay watershed, neither of Pennsylvania's two largest cities-Philadelphia and Pittsburgh-drain into the Chesapeake. Most lawmakers in the General Assembly represent areas outside the watershed, making passage of any major Bay funding difficult without leadership from the governor.

"The governor should be making this a priority," said the CBF's Campbell. "We would hope that in the budget coming from the governor that this would be made a priority, not that the legislative bodies would have to make it a priority."

Meanwhile, anger continues to grow among local governments as sky-high upgrade estimates continue to pile up. "When they first came out and said $190 million, that was a nice figure and didn't sound like a whole lot," said Perry Albert, executive director of the Capital Region Council of Governments. "But it's not a true figure."

Albert's group is contemplating a suit against the state, contending it is forcing a huge unfunded mandate on local governments. "What we would like to see happen is that they put a moratorium on this until such time as they can come up with some funding," Albert said.

So far, he said, more than 60 local governments have agreed to contribute toward the suit.

Weaver said it was "unfortunate" that municipalities were considering legal action against the state, saying it has an obligation under the Clean Water Act to help meet Bay water quality standards.

"We are extremely disappointed that these municipalities would go ahead and take the time, and take the money, away from their rate payers, because it is taxpayer money, to go ahead and sue the department over something that is a federal mandate," he said.

Pennsylvania Nutrient Reduction at a Glance

To clean up the Bay, the EPA and all jurisdictions in the watershed (Pennsylvania, Maryland, Virginia, Delaware, New York, West Virginia and the District of Columbia) agreed to reduce the average annual amount of nitrogen reaching the Bay from an estimated 285 million pounds in 2000, to 175 million pounds a year by 2010. They agreed to reduce phosphorus from 19.1 million pounds in 2000 to 12.7 million pounds.
Those goals were divided among the states. Pennsylvania's obligation was to reduce nitrogen from 112.7 million pounds to 71.9 million pounds. For phosphorus, it needs to reduce from 3.5 million pounds to 2.3 million pounds.
Pennsylvania's tributary strategy determines how those reductions are to be made. For example, for nitrogen, it calls on agriculture to reduce nitrogen losses from 56.2 million pounds to 24.1 million pounds. Urban runoff must be reduced from 7.6 million to 3.9 million pounds; septics from 4 million to 3 million pounds; and wastewater dischargers from 12.7 million to 10.5 million pounds. Various other sources account for the rest. State officials say the reductions sought from each source are roughly equivalent to the proportion of their total nutrient contribution.
Pennsylvania has a phased approach for wastewater treatment plants to meet their nutrient limits. Phase I plants-mostly larger plants-are required to meet new discharge limits by 2010 to meet Bay goals. Facilities may meet their goals through either structural upgrades or trading. Permits for other plants require meeting their goals over the next several years to help maintain the goal once it is met. New dischargers are required to find offsets for any additional nutrient releases, either by purchasing them from other facilities or from farmers and other runoff sources.
Karl is the Editor of the Bay Journal.

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