Neuse River Compliance Association: A Success Story but What Does the Future Hold?

The Neuse River Basin, which is a major river basin located within North Carolina, is subject to one of the earlier nutrient total maximum daily loads (TMDLs) / nutrient management strategies implemented in the United States. In 1988, the Neuse River Estuary was classified a nutrient sensitive water (NSW) based on repeated occurrence of algal blooms and fish kills. Following its classification as a NSW, North Carolina developed and, in 1997, implemented the Neuse River Nutrient Sensitive Waters Management Strategy which was based on achieving a 30% nitrogen reduction goal in the Neuse Estuary from a 1991 – 1995 mean baseline. EPA-approved TMDLs established nitrogen load allocations to achieve the 30% reduction goal. Since 2003, NPDES discharges within the Neuse River Basin with permitted flows of greater than 0.5 million gallons per day (mgd) have been subject to complying with stringent annual average load based nitrogen allocations. In addition, discharges also must comply with moderate, quarterly average phosphorus concentration limits beginning in 1993, as required by the NSW classification.As part of the development of the Neuse River Management Strategy, dischargers worked closely with regulatory agencies to allow development of a trading organization. The Neuse River Compliance Association (NRCA) was created in 2002 for the Neuse River Basin and allows for collective watershed compliance with the nitrogen load allocation for participating NPDES dischargers and sets in place a mechanism for nutrient trading, including point and nonpoint trading. The NRCA received its NPDES permit effective January 1, 2003.As one of the earliest such compliance associations, the NRCA makes for an excellent case study for discussing the benefits, drawbacks, and challenges of a nutrient trading organization for effective watershed-level nutrient management. The Neuse River Nutrient Management Strategy has resulted in significant reduction of nitrogen point source loads to the Neuse River Basin. The NRCA has provided flexibility to its members to collectively comply with the nitrogen TN load allocation and has been a success to date. Although the Neuse River Nutrient Management Strategy requires 30% nitrogen reduction goals be met for other sources, including nonpoint and stormwater, water quality monitoring indicates that the nitrogen load limit for the Neuse Estuary is not being met and that there has been an increase in nitrogen loads to the Neuse Estuary in recent years. While the NRCA has been a success to date, members face significant challenges ahead in securing nitrogen mitigation credits needed to accommodate growth in the area with the NRCA anticipated to be at its total TN discharge allocation before 2040. The challenges with the current rules for obtaining cost effective mitigation credits stress the importance of reasonable trading rules for promoting point to nonpoint source trading.