First Interstate Credits for Water Trading Sold

Duke Energy, Hoosier Energy, and American Electric Power are the first buyers in the interstate credits for water nutrients in the United States pilot program. The Electric Power Research Institute (EPRI) today officially launched water quality pilot trades in the Ohio River Basin. The program tests water quality improvement strategies in the world’s largest and only interstate water quality trading program.

Water quality trading is a market-based approach that could enable facilities to meet permit limits using nutrient reduction credits from farmers who implement conservation practices, EPRI says.

EPRI says the transactions will produce cleaner watersheds, advance sustainability practices, and test more cost-effective regulatory compliance options, according to the electric utility industry’s research organization.

Collectively, the companies purchased 9000 stewardship credits, agreeing to retire the associated nutrient and ecosystem benefits, rather than apply them towards possible future permit requirements. The buyers can use the credits to meet corporate sustainability goals and may also be considered for future flexible permit compliance schedules by the participating states.

At full-scale, the project could include up to eight states in the Ohio River Basin and potentially create credit markets for 46 power plants, thousands of wastewater facilities and other industries, and approximately 230,000 farmers.

Stewardship credit trades will continue through 2014 and 2015 to test critical programmatic features such as an online credit registry and live trading auction.

Photo: USACE Flickr photostream