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Duke Energy, American Electric Power Purchase First Interstate Water Credits

The Ohio River Basin | Image credit: National Fish Habitat Partnership

Duke Energy, American Electric Power and Hoosier Energy are the first buyers of interstate credits for water nutrients in the United States' new pilot program. The Electric Power Research Institute (EPRI) on Tuesday officially launched the program for water-quality trades in the Ohio River Basin. The initiative tests water-quality improvement strategies in the world’s 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.

Several parties, such as industrial sources, farmers and the general public, contribute to nutrient loading, which may lead to serious ecological problems. EPRI says the transactions will produce cleaner watersheds, advance sustainability practices, and test more cost-effective regulatory compliance options.

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.

“These early credit transactions will immediately improve watershed and farm health, and will serve as a foundation for ongoing discussions on the potential for water quality trading to meet regulatory compliance obligations in the future,” said Jessica Fox, an EPRI technical executive and director of the water quality trading program.

Because the affected watersheds cross state lines, working on an interstate basis is essential, according to EPRI. In August 2012, Indiana, Kentucky and Ohio signed a first interstate trading plan where the states can operate under the same rules so that a water quality credit generated in one state can be applied in another. This framework set the stage for the pilot trades. 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 around 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.

In related news, a new report by sustainability specialists Anthesis in association with the Water Footprint Network found that businesses and governments must tackle energy and water use in tandem or risk major disruption. Consequently, 15 leading businesses from 11 different sectors, including Sainsbury’s, Boots UK, GlaxoSmithKline, Nestlé and Nokia have committed to looking at their carbon-water management holistically.

In California, widespread drought is forcing the issue of water conservation, but many companies have turned to innovation to save water. Targeting data centers, which are some of the largest water hogs, several Silicon Valley firms are implementing water-conservation programs. For instance, eBay has installed cooling fans among the rows of computer servers while switching to passive cooling systems. In 2013, the company began using recycled water on part of its Mountain View campus landscaping, saving 9 million gallons of water. The company already employs smart irrigation systems that respond to changes in the weather.


Currently based in Washington, D.C, Mike Hower is a writer and strategic communicator helping to drive the conversation at the intersection of sustainable business and public policy. He holds a B.A. in Political Science and History from University of California,… [Read more about Mike Hower]


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