5 Colo. Code Regs. § 1002-72.22
The provisions of 25-8-202(1)(c), and (2) and 25-8-205, C.R.S. provide the specific statutory authority for adoption of these regulatory amendments. The Commission also adopted, in compliance with 24-4-103(4) C.R.S., the following statement of basis and purpose.
BASIS AND PURPOSE
The 1997 revisions to the Cherry Creek Reservoir Control Regulation authorize and establish the general parameters for a phosphorus Trading Program for the Cherry Creek Basin. The Trading Program, to be administered primarily by the Authority in accordance with guidelines drafted by the Authority, allows credits for nonpoint source phosphorus reduction projects, that remove phosphorous beyond required BMPs, to be allocated to point source dischargers. (See Section 72.4 .) The goal of the Trading Program is to allow those trades which will have a net water quality benefit in the Basin and maintain the inlake chlorophyll a level of 15 ug/l.
Because of the Authority's basinwide activities and the condition of the Cherry Creek watershed, the Cherry Creek Basin is suitable for a Trading Program, and the Authority has the experience to implement the Trading Program. The Authority has, and continues, to monitor nutrients and other parameters, from point and nonpoint sources in the surface water and alluvial groundwaters in the watershed and to evaluate the condition of the Reservoir. In part, these data have shown that phosphorus loading to the Basin is less than projected in the 1985 Cherry Creek Basin Water Quality Management Master Plan ("Master Plan"). The Authority is developing a trend line to track the relationship, over time, of phosphorus loads and inlake chlorophylla levels. The Authority is reevaluating and refining, as appropriate, the models and or bases for calculating the assimilative capacity of the Basin, determining the phosphorous/chlorophylla relationship in the Reservoir, and predicting point and nonpoint phosphorus loads in the watershed, all of which will be considered for the 1998 update to the Master Plan. In addition, the Authority has constructed four major nonpoint source projects, located close to the Reservoir, that have demonstrated effective phosphorus removal. The Authority is committed to ensure the operation and maintenance of these projects into the future.
Under the Trading Program, the Authority is authorized to approve two types of trades. (See Section 72.4(8)(b).) The Authority may:
Net water quality benefit will be specifically considered for each trading project, trade ratio, and award of trade credits. Only nonpoint source projects that remove phosphorous beyond required BMPs will qualify for trading. Required BMPs are those temporary BMPs such as construction erosion controls or longterm BMPs for new development mandated by the local jurisdiction or the Authority. Trade credits will not be awarded for those projects, or those portions of projects, implemented to meet the required BMPs. Moreover, all approved trades, trade projects, trade ratios, and phosphorus pounds awarded in trades remain subject to continued Authority oversight and may be rescinded or modified, as appropriate, in accordance with monitoring data or other evidence. In addition to the stringent requirements for trades and projects, dischargers who wish to receive trade credits must demonstrate compliance with several criteria, including compliance with effluent limitations and optimal treatment efficiency of the discharger's facility. Lastly, all point source dischargers awarded trade credits remain subject to the limitations in their discharge permits, and no discharge based upon the award of phosphorus from the Trading Program shall be permitted until the subject discharge permit is amended, as appropriate, by the Division. When considering permit applications for increased phosphorus based upon allocations from trading, the Division may, if appropriate for the phasing of the facility, include less than the facility's total wasteload allocation in the facility's discharge permit. In issuing the permit, the Division must comply with this Control Regulation and any other applicable statutory or regulatory requirements, including the Colorado Discharge Permit System Regulations.
The Authority has agreed with the Division to implement the Trading Program in two phases. In the first phase, commencing upon approval of these 1997 revisions, the Authority will proceed with the Trading Pool and award of credits therefrom pursuant to Section 72.4 (and as further described under Sections 72.4). The Trading Pool in this initial phase also will limited to phosphorus pounds from the Authority's four largest, established nonpoint source projects: Shop Creek Water Quality Improvements, Quincy Outfall Water Quality Improvements, Cottonwood Creek Water Quality Improvements, and East Shade Shelter Shoreline Stabilization Project. As an additional safety margin, the Authority has proposed, during Phase I trading, to set aside -- and not use -- 500 pounds per year from the total nonpoint source phosphorus wasteload allocation (10,290 pounds per year), thus reducing the total nonpoint source allocation to 9,790 pounds per year during Phase I trading.
Once allocated to the Trading Pool during Phase I, the phosphorus pounds from the four projects may be awarded to any eligible discharger. Phase I trades will only be implemented to allocate phosphorous to either, new dischargers that do not have an existing allocation, or to existing dischargers that are providing advanced phosphorous treatment to achieve the greatest possible reduction of phosphorous yet, due to growth pressures, are in imminent danger of exceeding their allocation.
The entire Trading Program may be implemented after the Authority has completed evaluations of the Reservoir and assimilative capacity of the watershed and, in consideration of these findings, the Authority has prepared and the Commission approved the 1998 update to the Master Plan and revisions to this Control Regulation. After these evaluations and Commission approval of the Master Plan update, the Authority will have a greater scientific basis for the final phase of the Trading Program. In addition to first phase trades, the Authority may then approve trades for individual nonpoint source projects under Section 72.4 , and the Trading Pool may be augmented with phosphorus pounds from additional Authority projects.
In addition to the Trading Program, the 1997 revisions establish a new Emergency Pool for temporary phosphorus allocations (Section 72.4), and modify the Reserve Pool to consist of pounds available for permanent phosphorus allocations to dischargers. (Section 72.4 .) Formerly, the "Reserve Pool" was used for temporary allocations; the more aptly-named Emergency Pool now serves this function.
SPECIFIC AMENDMENTS
Definitions for the following terms were added to Section 72.2 : "Emergency Pool," "Reserve Pool," "trade ratio," "Trading Pool," and "Trading Program."
Section 72.3 has been amended to reflect that the total phosphorus allocation for point sources may be exceeded if the point source dischargers' allocations have been increased with phosphorus pounds from the Trading Program.
Section 72.4 , which lists specific phosphorus wasteload allocations by individual source, likewise has been amended to reflect that a discharger may exceed its designated allocation to the extent of phosphorus pounds awarded from the Trading Program, Reserve Pool, Emergency Pool, or through temporary transfers. Section 72.4 also sets forth an allocation of 100 pounds to the Emergency Pool and changes the allocation for the Reserve Pool to 203 pounds.
Section 72.4 , "Temporary Transfer of Phosphorus," has been amended to streamline and expedite phosphorus awards. These changes are addressed below along with the discussion of similar amendments to Sections 72.4 and 72.4(7).
Section 72.4(6) has been renamed "Emergency Pool." The Emergency Pool will be used for temporary phosphorous allocations in emergencies. The Reserve Pool will be used to provide longterm wasteload allocations, based upon, in addition to the other factors enumerated at Section 72.4 , the need of the applicant and a comparison of the need of the applicant, other dischargers, and availability of phosphorous pounds.
Section 72.4 , now provides for a "Reserve Pool" and sets forth the procedures for awards of phosphorus pounds from the Reserve Pool.
Sections 72.4 (temporary transfers), 72.4(6) (Emergency Pool), and 72.4(7) (Reserve Pool) all streamline and expedite the award of phosphorus by authorizing the Authority to accept applications and make decisions on these three types of phosphorus awards. In the previous version of this Control Regulation, the Division, not the Authority, made decisions on temporary transfers and temporary allocations. The change was appropriate because the Authority, as the agency specifically responsible for water quality in the Basin, is well suited to make informed and timely decisions on applications. As reflected in all three revised Sections, the allocations of phosphorus shall become effective upon the Authority's final decision, subject to appeal. However, no discharge based upon these allocations is permitted until the Division's issuance or amendment of the applicant's discharge permit incorporating the allocation.
New Section 72.4 establishes the Trading Program. In addition to the procedures and criteria set forth in this Control Regulation, the Authority will implement the Trading Program in accordance with guidelines developed by the Authority.
Section 72.4 describes the general scope of the Trading Program and the Authority's primary role in implementation of the program. Section 72.4 identifies the two types of trading -- awards of Trading Pool phosphorus pounds and individual nonpoint source projects trades -- authorized under the program.
Section 72.4 sets forth the criteria for approving Authority nonpoint source projects for inclusion in the Trading Pool. The Authority will consider comments from the Division on proposals to include projects in the Trading Pool, evaluations of project removal efficiencies, and determinations of appropriate trade ratios. During the first phase of the Trading Program, the Authority will propose and consider comments from the Division on four Authority projects -- Shop Creek, Quincy Drainage, Cottonwood Creek, and East Shade Shelter.
Section 72.4 describes the criteria for awards of phosphorus pounds from the Trading Pool to point source dischargers discharging in the Basin. The Authority may approve awards based upon, in addition to other factors, need, the facility's treatment efficiency, compliance with effluent limitations, completeness of application for phosphorus pounds, consistency with the trading guidelines, Master Plan and this Control Regulation, the facility's plans for expansion, and net effect on water quality. When determining need for credits from the Trading Pool, the Authority will consider whether the facility's treatment flows are at or near capacity, whether the facility's wasteload allocation is insufficient to accommodate wastewater flows from the facility's expansion, and whether the facility's plans for expansion and quantity of desired credits are reasonable. When determining the treatment efficiency of applicants for credits from the Trading Pool, the Authority will consider whether the facility is operated efficiently and achieves optimal results expected for the facility's wastewater treatment technology.
Section 72.4 identifies the criteria for Authority approval of individual nonpoint source project trades. In addition to other factors, the Authority will consider generally the same criteria enumerated at Section 72.4 for awards of Trading Pool pounds, the technical specifications of the project, and quantification of the project's phosphorus removal. The Authority will consider, in its decision-making, comments from the Division on applications for trades for individual nonpoint source projects, evaluations of project effectiveness, and determinations of appropriate trade ratios and number of phosphorus pounds to be awarded.
Section 72.4 describes the factors to be considered when determining the trade ratio for each project in the range of 1.3:1 to 3:1. These factors include operation and maintenance of the project, effect of net water quality, and a margin of safety. Trade ratios for all projects remain subject to Authority oversight and may be adjusted from time to time based upon monitoring data or other evidence. In order to reflect the effects on varying hydrologic years on project effectiveness, phosphorus removals for projects will be determined on the basis of representative data and will be reevaluated periodically.
Section 72.4 sets forth operation and maintenance requirements for all trade projects. The Authority shall ensure operation and maintenance of Authority projects, and project owners of individual nonpoint source projects must own, operate, and maintain the projects in order for their phosphorus trade credits to remain viable.
Section 72.4 provides that all allocations awarded pursuant to the Trading Program and all Authority decisions on trades will be effective upon the Authority's final decision. However, dischargers are required to obtain from the Division any necessary new or revised discharge permits before discharging phosphorus credits awarded.
Section 72.4 reflects that all trades, trade ratios, pounds in the Trading Pool, and pounds awarded in trades remain subject to Authority oversight indefinitely and may be modified, as appropriate.
New Section 72.4 , entitled "Adjudicatory Hearings," describes the procedures for appeals under this revised Control Regulation. Under Section 72.4 , persons adversely affected or aggrieved by Authority final decisions on temporary transfers and awards of phosphorus from the Emergency or Reserve Pool may request a hearing before the Commission. Section 72.4 provides that persons adversely affected or aggrieved by Authority final decisions on assignment of pounds to the Trading Pool, on awards of phosphorus from the Trading Pool, or on trades involving individual nonpoint source projects, may request a hearing before the Commission. Section 72.4 indicates that all appeals must be filed no later than thirty (30) days after the Authority's final decision and that all adjudicatory hearings will be conducted pursuant to C.R.S. 1973, 24-4-105.
Section 72.5 , regarding wastewater treatment plant sizing for site approval and permits, has been amended to include consideration of allocations from temporary transfers, Emergency Pool, Reserve Pool, or the Trading Program.
Section 72.6 has been deleted, because the concept of point source discharges receiving credits for nonpoint source removals is now addressed in Section 72.4 , "Trading Program." Section 72.6(4) becomes Section 72.6(3).
Section 72.8 has been amended to require that the Authority's annual report to the Commission includes information on the Trading Program. New Section 72.8 provides that during the Commission's regular reviews of the Control Regulation, phosphorus allocations from the Reserve Pool, Emergency Pool or Trading Program not already reflected in the listings in Sections 72.3 and 72.4 shall be reviewed and, if appropriate, codified in such listings.
PARTIES TO THE RULEMAKING HEARING
5 CCR 1002-72.22