CHERRY CREEK BASIN TRADING PROGRAM (CO)

Nature of Activity: A basin-wide trading program was implemented for the Cherry Creek Reservoir Basin as part of the State’s control regulation (Colorado’s mechanism for implementing a TMDL) in 1997. The program allows trading within the framework of a TMDL. The trading program is administered by the Cherry Creek Basin Water Quality Authority. The Authority was created by the Colorado legislature and operates under State law to undertake various water quality projects and charges fees and assessments to support the programs. Trading may occur if a source implements measures to reduce its phosphorus load below the reduced levels mandated by the TMDL. After the efficacy and the efficiency of a proposed excess reduction has been reviewed, the Authority can approve the excess reduction as a credit that may be sold. The credit may then be purchased as an offset by a discharger seeking to increase its load. The program allows both Basin Authority trades (in which the credits are bought through the Authority) and private project trades (in which the user and generator of the credits interact directly). Credits from Basin Projects are put in a reserve pool of credits. Three trades have occurred since the program’s inception. One trade involved a phosphorus credit purchase by a mid-size POTW from another POTW. Purchases of 20 lbs. of phosphorus by a small POTW from the Authority’s reserve pool of credits account for the other two trades.

Environmental Problem: Eutrophication of the Reservoir.

Pollutant(s) / Pollution Type(s): Phosphorus.

Trade Types: Point/point and point/nonpoint.

Stage of Implementation: Offsets had been allowed in principle via the control regulation since 1985, however the final trading guidance was approved in 1997. Three trades have occurred since the program’s inception.

Relation to TMDL: The trading is part of the TMDL. The control regulation was revised in 1998 to implement trading.

Number of Potential Participants: There are twelve wastewater treatment plants and various nonpoint sources in the area.

Trading Ratios: Credits are traded with ratios ranging from 1.3:1 to 3:1, depending on the uncertainty of the effectiveness of the control measure.

Estimated Cost Savings: Unknown

Available Written Information: A brief report is available from U.S. EPA. A full report is forthcoming from the Water Environment Research Foundation.

Innovative Aspects: The program allows both Basin Authority trades (in which the credits are bought through the Authority) and private project trades (in which the user and generator of the credits interact directly). Credits from Basin Projects are put in a reserve pool of credits. The authority has taxing power established in State law.

Obstacles: Unknown

Web Sites: Middle South Platte - Cherry Creek: http://www.epa.gov/surf2/hucs/10190003/

Contact: Dick Parachini, Colorado Department of Public Health and Environment, (303) 692-3500, dick.parachini@state.co.us