Abstract: Session A  11:20 am (Back to Session A)
Restoring the Chesapeake Using Private Capital

Troy Anderson
Ecosystem Investment Partners
Baltimore, MD

Most of the Chesapeake Bay watershed is listed as impaired because of excess nitrogen, phosphorus and sediment pollution stemming from agricultural operations, urban and suburban storm water runoff, wastewater facilities, air pollution, and other sources, including onsite septic systems. Despite some reductions in pollution during the past 25 years from restoration efforts by a variety of public, private and non-profit groups, there has been insufficient progress toward meeting the water quality goals for the Chesapeake Bay and its tributaries.

In 2010, the EPA established a Chesapeake Bay TMDL, the largest ever developed by the agency. The TMDL set Bay watershed load limits of 185.9 million pounds of nitrogen, 12.5 million pounds of phosphorus, and 6.45 billion pounds of sediment per year. This equates to a 25% reduction in nitrogen, 24% reduction in phosphorus and 20% reduction in sediment. Bay jurisdictions include Delaware, Maryland, New York, Pennsylvania, Virginia, West Virginia, and the District of Columbia.

In Maryland, numerous efforts are being funded to bring the State into compliance with its share of the TMDL. Chief among them was the establishment of the Chesapeake & Atlantic Coastal Bays Trust Fund (the “Trust Fund”) which dedicates between $25 million and $50 million annually to acquire reductions in nutrient and sediment from projects that restore streams, wetlands and other degraded land features in watersheds targeted for the highest reduction potential.

In 2016, the Trust Fund leadership encouraged Ecosystem Investment Partners, LLC (EIP) to propose projects whereby EIP would provide all of the up-front investment required to identify, design, permit construct and maintain stream restoration projects in their targeted areas. EIP’s investment will be returned only upon completion of the restoration and demonstrated success through long-term (5 year) monitoring.  The goal is to provide the State with the nutrient and sediment reductions it seeks through a performance-based delivery of fully realized projects (rather than the traditional “pay-for-program” projects where the State assumes all project risk and expense up front.)

In 2017, EIP put this plan into action by fully funding the permitting, design, construction and long-term maintenance into restoring 8,201 linear feet of severely degraded streams.  The restoration used typical Natural Channel Design techniques that create a riffle and pool habitat structure.  The project was permitted in March and construction completed in the fall of 2017.    

Using the Maryland Department of Natural Resources Nutrient and sediment reduction calculator, the project is projected to reduce 6,219 pounds of Nitrogen, 1,850 pounds of phosphorous, and 1,344 tons of suspended sediment that discharge into the Chesapeake Bay.  All land, design and construction costs were fully funded by EIP prior to any payments being received.  A payment schedule was established based on specific success criteria where the funds are only released after agency approval.   A real-life example of a “pay for success” full delivery project using private funds to improve water quality in the Chesapeake Bay.  

Over a mile and a half of streams were restored in an effort to help the state of Maryland attempt to achieve the EPA’s TMDL reduction in the Chesapeake Bay.  The effort began in 2016 with permitting while construction was completed in December of 2017.  Using the Nutrient and sediment reduction calculator, The Maryland DNR determined that the completed project will prevent 6,219 pounds of Nitrogen, 1,850 pounds of phosphorous, and 1,344 tons of suspended sediment from flowing into the Chesapeake Bay.  The project was entirely funded by private capital on a “pay for performance” full delivery method.