A temperature limit is placed on the Medford facility by the Oregon Department of Environmental Quality (DEQ) and is articulated as a thermal load limit that is expressed in kilocalories per day. A kilocalorie is a unit of energy. One kilocalorie represents the amount of energy required to raise the temperature of a liter of water by 1.0 degree Celsius (or about a quart by 1.8 degrees Fahrenheit). Working with the city, The Freshwater Trust estimated current and future impacts of the facility’s warm water discharge on the Rogue River and determined that the facility could potentially exceed their temperature limit by 300 million kilocalories per day at certain times of the year. So that is the amount of energy that would have to be removed from Medford’s discharge to comply with the new limits.

One credit equals one kilocalorie per day. For trading in Oregon, offsets must happen at a 2:1 ratio. In other words, to account for every kilocalorie of temperature impact, two kilocalories of benefit must be generated. This ratio accounts for the fact that trees and plants will spend their first few years growing before they mature and begin to provide significant shade. Medford must acquire 600 million temperature credits to offset its 300 million compliance obligation. Credits must be generated from restoration actions that meet rigorous quality standards, and all credit-generating planting sites are reviewed by a third-party verifier. For transparency, credits are also registered on a third-party web registry.

The Oregon Department of Environmental Quality (DEQ) approved this arrangement because it wanted to incentivize quicker, bigger investments to address river degradation and loss of aquatic habitat—a key limiting factor contributing to water quality issues in the Rogue River Basin. To account for the period where trees are growing, DEQ applied a 2:1 ratio to Medford’s exceedance. The DEQ’s decision is further supported because the City is building shade credits in anticipation of a projected future exceedance from its wastewater treatment facility, and because the facility’s discharge is not currently causing hot spots that would endanger aquatic biota such as salmon.

The program will generate approximately 100 acres of restored riparian habitat (streamside forest) within the trading area established by Oregon DEQ. This area includes a section of the Rogue River near the Medford facility, the Applegate River, Little Butte Creek and Evans Creek.

The City of Medford’s water quality trading program will cost approximately $6.5 million dollars over a 20- to 30-year period (7 to 10 years for planting followed by 20 years of monitoring, maintenance and stewardship). This total is in comparison to an estimated one-time payment of $15 million the City of Medford would have spent on a grey infrastructure solution. The natural compliance solution of planting trees is significantly less expensive for regional rate-payers, with costs spread out over several years.
It’s important to note that the Medford trading program is a compliance program designed to maximize environmental benefit; it is not simply a restoration program with a few compliance perks. The Medford program is a wastewater infrastructure project that includes riparian restoration actions. Therefore, much of the cost associated with the Medford program is to ensure it has credibility as a permit compliance program and can meet the rigorous requirements of the Clean Water Act. The additional benefit of this investment is that the quality of the credit-generating riparian projects is often higher than traditional restoration programs because they’re funded to a level that promotes rapid implementation of large acreages and ensures the successful development of planted vegetation over 20 years.

On a per-acre basis, the cost of the Medford water quality trading program is greater than the per-acre cost of many grant-based restoration programs, such as those typically implemented by local groups using funds from Oregon Watershed Enhancement Board, or local landowners using USDA conservation incentive program dollars. The costs of the Medford program must incorporate the additional cost of long-term site maintenance and monitoring. Planting sites must be maintained and monitored over many years – 20 to 30 versus the typical three to five – in order to ensure that intended environmental benefits are being achieved. The Freshwater Trust must also conduct monitoring and reporting necessary to meet a regulatory standard to assure the public that the trading program is working.

Participating landowners are making a significant long-term commitment. The acreage being planted on their property is retained exclusively for the purpose of ensuring full development of planted vegetation over the 20-year life of the project. Landowners must also provide access to the project area for the purposes of monitoring and maintenance, so an annual payment helps offset the burden of such restrictions. Compensation makes recruitment of important sites more practical. Landowner compensation is in line with other conservation incentive programs, such as those offered by USDA.

Site selection is a two-step process. First, The Freshwater Trust uses project-specific GIS tools to identify sites that have good restoration potential. This work evaluates sites on a number of factors, including credit-generating potential, environmental benefits and endangered fish habitat value. Based on the outcomes of our GIS model (known as the StreamBank® BasinScout® methodology), staff contact landowners and propose projects.

The second step is negotiating terms with landowners for a long-term commitment. Once the decision to move ahead occurs, the project details are agreed to and recorded in a signed lease for the life of the project. Our objective is to maximize conservation actions within the available budget, within the bounds of the trading region and compliance requirements.

Given the nature of Medford’s discharge and temperature dynamics in the Rogue River, the Medford facility would have needed to use their grey solution (an effluent storage pond) for two to four weeks each year in the month of October. That’s a lot of rate-payer money and infrastructure for only a few weeks of operation each year. Instead, the watershed approach is not only cheaper but it’s permanent. Once established, the planted trees produce shade benefits year-round, even when compliance is not at stake. That means water temperature and the fish that depend on cool temperatures are benefitting when it really matters, especially when the sun is hottest and flows are lowest in the mid to late summer.
Approximately 100 acres of streamside forest will be restored as a result of this program. New trees provide valuable habitat (including insects that form a key part of the aquatic food web), sequester carbon from the atmosphere, stabilize riverbanks, and absorb nutrients from agricultural and residential runoff. Over time, trees also fall into the river, naturally improving habitat complexity in the river.

The short answer is that it depends on where you put it. This one program by itself will not lower the general average temperature of the entire Rogue River because it’s addressing only Medford’s contribution to the Rogue’s temperature problem. There are other dischargers in the Rogue basin each contributing to the overall temperature problem; however, the nonpoint source impacts in the basin (lack of riparian vegetation, irrigation withdrawals, and channel modifications) play a much larger role in the warm water temperatures than the point source impacts. The planting sites do create valuable pockets of shade where salmon can rest, spawn and rear. Over time this program---when combined with additional conservation work and other trading programs---could restore hundreds of stream miles involving thousands of restored streamside forest acres, which would make a measurable difference on the river’s temperature, particularly in critical areas where fish need it most. In other watersheds with many dischargers, such as Oregon’s Willamette River, Idaho’s Boise River, or California’s San Joaquin River, the cumulative effects of water quality trading across many facilities may have a significant impact on the regulated parameter. This is what we mean by the “scale” or size of programs to make a difference.
The biggest benefit of water quality trading are often these broad environmental benefits. If Medford had built a storage lagoon, it would have spent more than twice as much money, while abating a small percentage of overall temperature effects on the river, and none of these ancillary ecosystem functions would have been restored. This overall context of the program is important to keep in mind when evaluating program efficacy and value.