Nature of Activity: Rahr Malting, an existing facility on the Minnesota River, had been an indirect discharger to a local POTW, but calculated that they could reduce costs by becoming a direct discharger and constructing and operating their own WWTP. The Rahr plant is situated along a portion of the river for which waste loads are allocated to point sources under a TMDL. The plant’s proposed WWTP was interpreted as a new discharge that could be permitted only if the plant provided offsetting, upstream reductions. Both a stringent discharge limit and an offset clause were written into the facility’s NPDES permit. The plant has financed upstream reductions in nonpoint source phosphorus loadings in exchange for CBOD discharges from their new WWTP. Rahr established a trust fund with an oversight board to implement the trades. Rahr gives funds to the trust fund to implement the BMPs, though Rahr is ultimately responsible for their implementation. Five types of nonpoint source projects are allowed under the terms of the permit: soil erosion BMPs, livestock exclusion from waterways, rotational grazing, set-aside of critical areas, and wetland treatment systems.

Environmental Problem: Algae growth, low dissolved oxygen and eutrophication in the Minnesota River.

Pollutant(s) / Pollution Type(s): The Rahr plant must reduce upstream phosphorus discharges to offset CBOD discharges from their WWTP.

Trade Types: Point/nonpoint

Stage of Implementation: The TMDL waste load allocations were assigned in 1988. The Rahr permit was issued in January, 1997. The plant has contracted for trades with three nonpoint sources thus far.

Relation to TMDL: The permit was designed to comply with TMDL limits.

Number of Potential Participants: Thus far, the trading participants include Rahr Malting plant and three nonpoint sources. Rahr may seek more nonpoint sources in the future. Rahr works with the Coalition for Clean Minnesota River (a member of which sits on the board of directors of the trust fund) and with American Rivers to identify trading opportunities.

Trading Ratios: The trading ratio is 2:1 nonpoint to point. There is an additional cross-parameter ratio of 8 lbs. CBOD : 1 lb. P. The trading ratio accounts for uncertainty and provides a net environmental benefit. The cross-parameter ratio reflects a scientific assessment of the relative impacts on chlorophyl from phosphorus runoff and from CBOD discharge.

Estimated Cost Savings: The impetus for building the WWTP was to realize savings in wastewater treatment costs and avoid uncertainty regarding industrial user fees to the POTW.

Available Written Information: Several brief reports, as well as the NPDES permit, are available from the Minnesota Pollution Control Agency.

Innovative Aspects: The trades are cross-pollutant trades (P for BOD). Five categories of BMPs were specified as permissible under the terms of the permit. After Rahr has met its requirements, the company hopes to build the trust fund into a separate corporate sponsorship for the river and attract money for additional projects.

Obstacles: Negotiations between the plant, environmental groups and the State over setting trading ratios were difficult. Establishing an acceptable ratio between BOD and P was a significant scientific undertaking.

Web Sites: Minnesota River Basin: http://www.epa.gov/surf2/ahr/30/

Contact: Wayne Anderson, Minnesota Pollution Control Agency (651) 296-7323, wayne.p.anderson@pca.state.mn.us