By DOUG GRAVES

Ohio Correspondent

PICKERINGTON, Ohio — In August 2012, Ohio, Indiana and Kentucky signed a trading plan that made it the world’s largest water quality trading program around.

The goal then was to eventually span to include up to eight states and potentially create a market for 46 power plants, thousands of wastewater utilities and approximately 230,000 farmers. The key objective of this plan was to move millions of private dollars into the farm economy by paying farmers for reducing nutrient loading.

Last week agricultural agency representatives from Ohio, Indiana and Kentucky gathered at the Coyote Run Farm of David Hague and Tammy Miller to witness the signing of an amendment to that Ohio River Basin Water Quality Trading Project. The amendment helps better define the rules of the program to ensure that the best science and the most efficient implementation approaches are used. The signing marks the next phase of the project.

Putting the amendment into action were Jeff Harmon, Deputy General Counsel, Kentucky Energy and Environment Cabinet, Bruno Pigott, Commissioner, Indiana Department of Environmental Management, Craig Butler, Director of the Ohio EPA, and David T. Daniels, Director of the Ohio Department of Agriculture.

Other dignitaries included Brian Brandt, Director of the American Farmland Trust, Peter Stangel, COO of the U.S. Endowment for Forestry and Communities and many conservationists and natural resource officials from Ohio, Indiana and Kentucky.

According to Jessica Fox, Senior Program Manager with the Electric Power Research Institute (EPRI), the event will accelerate the innovative injection of private money into local watersheds and symbolize a continuing commitment of the states to work together to support farmers, protect critical water resources and reduce greenhouse gas emissions.

“The EPRI, American Farmland Trust and a team of collaborators have been working since 2012 with the support of the states of Ohio, Indiana and Kentucky to install best management practices (BMP) that generate water quality credits to achieve broader water quality improvements,” Fox said. “Under this funding opportunity, EPRI is releasing $600,000 across the three states to plant trees and complimentary agricultural BMPs. Funding applications will be ranked first by the cost per pound of nitrogen and phosphorus runoff avoided, and secondarily by the related positive benefits to the environment and community.

“EPRI is not an advocate for water quality trading per se, but as a research organization we are committed to testing under what conditions it can be socially, environmentally and economically sustainable.”

Water quality trading is an innovative market-based approach to water quality improvements in the tri-state area. In lieu of water discharging plants and water treatment facilities those at EPRI, as well as conservationists and natural resource officers, are trying to find ways of redirecting runoff nutrients of nitrogen and phosphorus and keeping them out of the waterways.

“Farmers can engage into conservation practices that can absorb these nutrients and keep them out of our waterways,” said Christopher Mahoney, EPRI Communications Manager.

“We are also working to sell credits,” Fox told the group. “Revenue from credit sales will ultimately determine the economic viability of this project. All revenue is reinvested into more farms and project implementation. The realization of many credit transactions will be critical to the continued success of this project and will determine if it moves beyond pilot stage.”

According to Fox, there are eight key elements of this funding opportunity:

•First, project applications will be reviewed on a rolling basis until all funds are expended through Jan. 15, 2018.

•Projects must be fully installed only on private land and not later than July 15, 2018.

•Funding covers up to 80 percent of the total cost of the project.

•At least 60 percent of requested funds must be applied towards tree planting, with no more than 40 percent applied towards complimentary BMPs.

•Contract length for forest planting is 20 years, complimentary structural projects is 10 years, and complimentary seasonal projects is five years.

•Payments will be made after project installation and on-site verification, followed by annual maintenance payments.

•The project must reduce its runoff of total nitrogen and/or total phosphorus below current conditions and otherwise comply with applicable legal requirements.

•If accepted, producers will sign agreements with their local Soil and Water Conservation District or state agency for the implementation of the conservation practices, with payments made by the same agency.

Coyote Run Farm has already started such management practices with the planting of 15 trees at this day’s gathering. The farm plans to plant 3,000 trees on the premise by next spring in order to absorb the many nutrient runoffs already on the farm.

“We’re hoping this effort scales up,” said Brian Brandt, Director of the American Farmland Trust. “We’ve had a limited number of participants to this point in our phase one funding. 31 participated in the first round of this project. This is our pilot state but hopefully it will rise to a much larger scale.”

The state contacts related to this funding opportunity include: Chad Amos (Ohio) 614-562-0243, Kimberly Richardson (Kentucky) 502-782-6849 or Tara Wesseler-Henry (Indiana) 765-745-0306.