A Regulatory Hat Trick

Volume 139, No. 15, Friday, October 3, 2014

Wisconsin regulators have “hat trick” opportunity in Wisconsin with the new Clean Waters, Healthy Economy Act signed into state law this spring.

The law created a clever solution for “point sources” such as cities and cheese factories to meet tough new limits on phosphorus entering Wisconsin waters while helping farmers achieve the same goal.

This fall, regulators must approve the statewide variance for phosphorus regulation found in the law, and with that approval Wisconsin businesses, cities and towns will gain time to develop and pay for phosphorus removal technology, state counties will gain new funds to help farms reduce phosphorus run-off and Wisconsin will achieve the nation’s toughest limits on phosphorus reaching our lakes and rivers.

It’s a hat trick – a triple score for cities and industry, farms and the Wisconsin environment.

Wisconsin’s Department of Natural Resources (DNR) regulates nutrient levels such as phosphorus in waste streams from municipal water treatment plants, and wastewater treatment plants at paper mills, vegetable canning factories, dairy plants and other industries. Wisconsin’s phosphorus regulations, initiated in January 2011, imposed limits for phosphorus in wastewater often 10 times stricter that previous limits, and as low or lower than any other state.

This fall, DNR is tasked to partner with the state Department of Administration to approve a variance for these phosphorus regulations. The variance would slowly lower phosphorus limits for each point source across four, five-year wastewater permit terms, finally reaching the water-quality-based limits (often 0.075 mg/l) that DNR placed in regulation.

At the same time, these cities, cheese factories and paper mills would pay a fee of $50 per pound of phosphorus — the amount of pounds a permittee releases currently over a level of 0.2 mg/l of phosphorus. This fee, paid to counties in each permittee’s watershed, will raise millions for county phosphorus reduction programs on farms.

...dairy plants had already invested hundreds of millions of dollars to remove 98 percent of the phosphorus in their waste streams. The new equipment will demand millions more to capture the last remaining fraction of phosphorus.

The Clean Waters, Healthy Economy Act was a victory for common sense. And assisting the dairy industry is a sure bet for a strong Wisconsin economy. Consider this: new research from the University of Wisconsin reports that the dairy industry, farming and processing combined, supports $43.5 billion, or about 7.9 percent of the Wisconsin total industrial sales or revenue.

The dairy industry employs 78,900 Wisconsin workers and according to agricultural and applied economics professor Steven Deller, author of “Contribution of Agriculture to the Wisconsin Economy,” the ag industry served as a stabilizing force during the recent national recession. Deller told one media outlet this week: “We really need to be looking at how food processing and farm production are linked and how a lot of the growth in farm production is really coming from the ability of food processors to really expand their markets.”

When Wisconsin’s DNR first proposed tough new phosphorus limits in 2009, the cost to the food and dairy industries was estimated at $400 million. This cost reflects cutting-edge ultrafiltration or sand filtration systems that point sources must build onto their wastewater operations to remove the last fractions of phosphorus from waste streams.

Recently, engineers at Symbiont and The Probst Group joined forces to spell out the cost of high-tech phosphorus removal for dairy plants and food processors. Cost data can be quite concrete: an ultrafiltration system added to a mid-sized cheese factory’s wastewater plant would cost $2.8 million and require $138,000 annually to operate; a large cheese factory would pay $9.3 million and face annual operating costs of $1.2 million.

It’s worth noting that long before Wisconsin’s DNR created these new tough phosphorus limits in wastewater, dairy plants had already invested hundreds of millions of dollars to remove 98 percent of the phosphorus in their waste streams. The new equipment will demand millions more to capture the last remaining fraction of phosphorus.

The Wisconsin DNR and Department of Administration have asked industries and cities for data on the cost – the economic impacts – of removing these last fractions of phosphorus. Because this fall these regulators are working with third-party consultants to prepare an economic impact analysis to prove the need for the variance in the Clean Waters, Healthy Economy law. According to the law, regulators can grant the variance if they find that there would be “widespread and significant adverse social and economic impacts” resulting from compliance with low phosphorus limits.

The US Environmental Protection Agency will also need to approve the variance.

A variance that helps towns and cities, cheese plants and paper mills, slowly adopt expensive technology and helps farms reduce phosphorus run-off from fields and results in reduced phosphorus in Wisconsin waters is a must for America’s Dairyland. Now let’s drop the puck and get this hat trick.

John Umhoefer has served as executive director of the Wisconsin Cheese Makers Association since 1992. You can phone John at (608) 828-4550; Fax him at (608) 828-4551; or e-mail John Umhoefer at jumhoefer@wischeesemakersassn. org


Other John Umhoefer Columns

 Flawed Security Program Bilks Wisconsin Dairy
 Leading Cheese Producers
 Success by the Numbers
 It’s Time for Training
 Exports Trump Farm Bill
 Wisconsin Specialty Cheese Institute’s 20-20 Vision
 Addressing Wastewater Head On
 Knowledge Opportunities Abound
 Say No to an Extreme Raw Milk Bill
 A Generation's Gift
 Government-Induced Uncertainty

 Decades Ahead on Food Safety
 Wisconsin’s Hot Winter
 A Successful Campaign for Babcock
 Ireland: Gearing Up For Growth
 Mired in Wash Water
 Less Government, More Dairy
An Interview With Jim Sartorii
The Other Solids Price Crush

 The Policy Answer Is Exports
 Rolling The Dice On Dairy Reforms
 Productive Changes In Wisconsin

 The Successful Idea Of DBIC
 Cheese Cuts Both Ways:
Consolidation and Growth
 IDFA's Deep Dairy Reforms
 Wisconsin In The Spotlight
 An Overbuilt Foundation

 What the New Governor Means To Wisconsin
 No Man's Land
 Dairy & Wisconsin’s New Leadership

Wisconsin Cheese Is Investing, Expanding
 Talking Competition
 Being Big Dairy
Upper Midwest Prospects in 2010
Upper Midwest Growth: Perspectives From The Farm
Blue Skies or Bust
Pushing Back Against A Tough 2009
Support Demand, Not Price
Dairy: A Good Bet in a Bad Economy
Wisconsin's Future: Growth
Keeping Sustainability Real
Nose Dive
Dairy Dives into 2009
Consider This...
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Implement Make Allowances ASAP
Security Reforms
Spring Forward
A Week of Clarity

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