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CBF: Fundamental Flaws In SB 994 Nutrient Reduction Bill Have Not Been Addressed

Harry Campbell, PA Office Executive Director of the Chesapeake Bay Foundation, Monday wrote to all members of the Senate opposing Senate Bill 994 (Vogel-R-Beaver) saying amendments made in the Senate Agriculture and Rural Affairs Committee last week did not correct the fundamental flaws in the bill.

Campbell said CBF was invited by Sen. Elder Vogel (R-Beaver), prime sponsor of the bill and Majority Chair of the Agriculture Committee, last Thursday to submit suggested amendments to the bill by June 21.

After this letter was sent, Sen. Vogel’s office contacted CBF and said they needed the amendments by Tuesday, confirming again those behind the bill want to move it through the process without adequate time for review.

The text of Campbell’s letter is below--

On behalf of the Chesapeake Bay Foundation (“CBF”), we respectfully submit the following comments regarding Senate Bill 994 (Vogel-R-Beaver).

CBF is the largest nonprofit organization dedicated to the protection and restoration of the Chesapeake Bay, its tributaries, and its resources. With the support of over 200,000 members, our staff of scientists, restoration specialists, attorneys, educators, and policy experts work to ensure that policy, regulation, and legislation are protective of the quality of the Chesapeake Bay and its watershed.

On June 11th, the Senate Agriculture and Rural Affairs Committee passed onto the Senate for consideration Senate Bill 994 which its supporters argue establishes a competitive approach to funding nutrient reductions practices entering into Pennsylvania streams.

In a June 7th letter to Senator Vogel and members of the Committee, CBF called for the Committee to schedule a hearing on this bill before voting given the complexity of the issue and its fiscal and regulatory implications.

The Committee, however, passed the bill with the indication of holding hearings at an undetermined later date.

As you may know, after decades of experience and investment in tangible and science-based efforts we are seeing real reductions in pollution as a result of the Chesapeake Bay cleanup efforts and many locally impaired streams. Maintaining the momentum is essential if we are to achieve our clean water goals and bring the Bay and our streams back to health and economic vitality.

We are grateful to learn that Senator Vogel and the supporters of the legislation are willing to continue work with CBF regarding the details of Senate Bill 994 so as to enhance the bill. As such, we have agreed to provide specific recommendations to the Senator by the close of business day on Friday, June 21st.

That said, we believe that as currently written Senate Bill 994 will not advance cost-effective and affordable nutrient reductions in Pennsylvania streams or the Chesapeake Bay and will likely have limited benefit to but a select few even with the amendments adopted in Committee.

In particular, the current language in this bill creates a system that:

-- Is Neither Cost-Effective nor Affordable

The alternative system proposed in this bill preferentially favors expensive, capital-intensive nutrient reduction technologies. Currently, DEP and PENNVEST offer certified nutrient credits through a market-based online exchange and auction.

The most recent auction in March 2013, nitrogen credits were sold for $2.98 to $3.05 per credit. The technology promoted by Senate Bill 944 is not cost competitive unless the credits are sold at $8 to $10 per credit, its promoters have said.

A December 2012 report by the Legislative Budget and Finance Committee estimated the sustainable cost per credit for this technology at $11 per credit. And while the legislation doesn’t mandate the purchase of more expensive reductions, it threatens to manipulate the market to do so.

The choice is clear—$3 per pound of real certified nutrient credits or $11 per pound of future nutrient reduction?

-- Does Not Create Real, Marketable Credits

Senate Bill 994 does not require the “TMDL parameter credit” to meet the existing regulatory standards under 25 Pa. Code § 96.8 for a marketable nutrient credit and are inconsistent with USEPA nutrient trading guidance.

As a result, any reductions should be considered as imitation credits that have no real market value to the Commonwealth. They cannot be sold to community sewage treatment plants or developers because the reductions cannot be used as "credits" or "offsets" in meeting nitrogen or phosphorus NPDES discharge limits. And, they cannot be sold by the state to help offset the cost of this program which has no funding source.

-- Leaves Unnecessary Risk with Farmers

Family farmers will see no benefits from this bill. Under current state regulations, farmers in Pennsylvania have to meet basic regulatory compliance measures. In particular, farmers who till (plow) land and/or have an identifiable Animal Heavy Use Area disturbing more than 5,000 sq. ft., are obligated to have an erosion and sedimentation plan under Chapter 102 (Erosion & Sedimentation).

This bill promotes an approach that will not help farmers to come into compliance with existing Pennsylvania law. Importantly, farmers who ship manure to a large-scale treatment facility under this bill are not protected from shouldering the burden of transportation costs or tipping fees. And treatment facilities are not obligated to allocate any revenue with participating farmers.

With increased oversight by USEPA and DEP, farmers statewide and in particular within the Chesapeake Bay watershed need all the financial and technical assistance they can get to achieve and maintain compliance.

-- Leaves Unnecessary Risk with the Commonwealth

By not funding this program, Senate Bill 994 could use unidentified sources of taxpayer money to subsidize the technologies promoted in this bill, although proposed amendments restrict funding from being taken from already appropriated conservation programs or monies to be used to reduce nutrients or sediments but does not list those by name.

Pennsylvania is particularly at risk by being forced to purchase so-called credits of pollution reductions under the promise they will occur years in the future. This threatens to derail detailed and regulatory timelines and milestones which require real and incremental reductions in pollution to meet Bay requirements.

If these reductions do not occur, the Commonwealth is at risk for "backstops" that include, but is not limited to, stricter permit limits for sewage treatment plants, expansion of the number of farms and communities regulated by DEP and EPA, the denial of certain new construction permits, and the withholding of water quality-related funding from the federal government.

Truly affordable Bay solutions are already being implemented to help farmers meet regulatory requirements and improve their bottom line. Communities and farmers are investing in improvement projects which drive revitalization, beautification, and meet a number of regulatory requirements for clean water, including local TMDLs and the Bay TMDL.

While technology has a role, long-term public investment in economically questionable private enterprises is not a benefit to the taxpayers of Pennsylvania. New technology can currently enter into a nutrient trading marketplace which allows verified credits to be purchased on the open market.

Given limited resources and thousands of Pennsylvania impaired streams, we believe that emphasis on established clean water programs and pollution reduction practices that provide a large number of additional benefits—like reduced flooding, drinking water protection and improvement, improved herd health, and community revitalization—must be the Commonwealth’s core focus.

In summary, we are grateful of the opportunity to work with Senator Vogel and the supporters of the legislation in order to enhance the bill. To that purpose, we have agreed to provide specific recommendations to the Senator by the close of business day on Friday, June 21st.

Nonetheless, as it is currently written CBF urges members to oppose this Senate Bill 994 if brought to a vote as currently written given the issues detailed herein.


H.L. Campbell III, Pennsylvania Executive Director

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