The Bay Program, in its first-ever attempt to calculate the cost of cleaning up the Chesapeake, says the job could cost $1.1 billion a year.

That would translate to about $178 a year per household, or less than the $250 spent annually per household on soft drinks, according to the Bay Program analysis.

But in documents recently released for review, officials labeled that as a “near worst case” estimate, saying more cost-effective means are probably available to do the job.

“These are conservative, worst case estimates on cost,” said Allison Wiedeman, of the EPA’s Bay Program Office. “I think we will find cheaper ways of doing it than we actually estimated.”

The estimates were included with technical support documents distributed in December with draft water quality standards for the Chesapeake that were developed by the states and the Bay Program. The figures were the basis for calculations released by the Chesapeake Bay Commission late last year showing that it could cost $10.9 billion to achieve the needed nutrient reductions to clean up the Bay. [See “Analysis put Bay cleanup tab at $19 billion,” Bay Journal December 2002].

Unlike that analysis, which sought to calculate the costs of meeting all of the commitments of the Chesapeake 2000 agreement, the Bay Program estimate only looked at costs related to meeting the new water quality standards. And, rather than come up with a total cost, the Bay Program calculated annual costs.

In part, that’s because the cost of cleaning the Chesapeake will not end in 2010 — the operation and maintenance of the nutrient control practices would be ongoing. Also, large capital expenses such as the construction or upgrades of wastewater treatment plants would likely be spread over two or three decades.

The commission’s estimate condensed capital costs into the years between now and 2010 — the Chesapeake 2000 agreement’s deadline for cleaning up the Bay.

The Bay Program’s analysis also shows that the costs would likely be greatest in Virginia and Pennsylvania, in part because those states have spent less on wastewater treatment plant upgrades in recent years than Maryland. By sector, urban areas needing to update stormwater systems could face the biggest financial burden, followed by agriculture and wastewater treatment plants.

But the actual costs — both where they fall in the watershed and who has to pay — could vary dramatically.
The analysis was completed by pricing out a hypothetical mix of nutrient control technologies at hypothetical levels of implementation that would achieve different levels of nutrient reductions. Those scenarios, or Tiers as the Bay Program calls them, included:

  • Tier 1 assumes only that existing policies and levels of funding are maintained into the future. It achieves a nitrogen reduction of about 24 million pounds a year, and no phosphorus reduction.
  • Tier 2 would achieve a 64 million pound reduction in nitrogen, and a 3 million pound reduction in phosphorus.
  • Tier 3 would achieve a 104 million pound reduction in nitrogen, and a 6 million pound reduction in phosphorus.

Those reductions are measured from current estimates that about 285 million pounds of nitrogen, and 19 million pounds of phosphorus, flow off the watershed and into the Bay each year.

Current projections from the Bay Program’s computer models suggest that nutrient reductions slightly beyond Tier 3 will be needed to achieve the proposed water quality standards. Some basins with less of an impact on the Bay may require smaller reductions.

The analysis concluded that it would cost $1,124 billion a year to implement Tier 3 level reductions throughout the watershed, while Tier 2 reductions would cost $552 million and Tier 1 $196 million.
That translates into an average of $178 per household per year for Tier 3, $88 per household for Tier 2 and $31 for Tier 1.

But individuals in most cases would not carry that much of a burden: between a quarter and a third of the costs would come from state and federal sources, if current levels of support remain unchanged.

Bay Program officials, though, believe the cost estimates are high. The tiers were based on applying commonly available nutrient control practices and technologies at various levels of implementation throughout the watershed — not on cost effectiveness.

For example, Tier 3 costs are high in large part because they assume widespread efforts to retrofit stormwater controls on existing urban areas — a practice that is costly and achieves a relatively small amount of nutrient reductions. As a result, decision makers could seek to achieve reductions through other means, such as further discharge reductions at wastewater treatment plants.

“Because the tiers were developed based on technology, and not on cost effectiveness, the Bay Program believes that these costs provide a near worse case scenario of what the total costs might actually be,” the technical support document stated.

Further, the estimates do not take into account new initiatives, such as nutrient trading programs, that may keep costs down. Nor do they take into account the likelihood that the costs of some practices — especially those associated with new technologies — may come down.

For instance, a little more than a decade ago, the Bay Program estimated that new nutrient control technologies at wastewater treatment plants would cost more than $20 for every pound of nitrogen removed. In reality, costs have generally been less than $4 per pound.

Also not included in the estimates is the dramatically increased funding in the 2002 Farm Bill, which would sharply reduce the costs of many nutrient control programs for farmers.

For all of its shortcomings, officials say the analysis provides a credible “first cut” at high-end costs to restore water quality in the Chesapeake. It also provides an idea of whether some regions, or groups, would bear a disproportionate amount of the burden.

Overall, the cost is a fraction of the $573 billion annual income within the Bay watershed. “In the preliminary screening analysis, we don’t see a lot of impacts,” Wiedeman said. “It appears that economics would not preclude moving forward with Tier 3.”

But in a handful of counties, the analysis suggests the costs could exceed 1 percent of household incomes. Wiedeman said that information will help states take a closer look at any areas that may appear to be disproportionately impacted. “This is a watershedwide analysis,” she said. “It can’t possibly get to the detail that states will want to eventually.”

If areas look hard-hit when tributary specific nutrient reduction plans are written during the next year, states may want to do more detailed regional analyses. Such work could help them target Farm Bill or other programs to those regions to reduce any disproportionate financial burden.

The analysis shows that about 90 percent of the cost will fall to Pennsylvania, Virginia and Maryland, with the greatest costs likely to fall to Virginia and Pennsylvania.

By state, Tier 3 costs were $411 million a year for Virginia, $320 million for Pennsylvania, $250 million for Maryland, $66 million for New York, $37 million for West Virginia, $27 million for the District of Columbia and $13 million for Delaware.

Tier 2 costs were $195 million a year of Virginia, $168 million for Pennsylvania, $123 million for Maryland, $31 million for New York, $19 million for West Virginia, and $8 million each for Delaware and the District of Columbia.

By sector, the Tier 3 costs were highest for urban stormwater retrofits at $418 million a year, followed by agriculture at $376 million and wastewater treatment plants at $271 million.

But in Tier 2, the greatest costs were for agriculture, at $226 million a year, followed by wastewater treatment plant upgrades and urban stormwater retrofits, both at $146 million a year.

The analysis only includes the cost of actions aimed primarily at reducing nutrients and sediments to benefit the Bay.

It does not include the costs of addressing combined sewer overflows, which many cities are facing.

lthough those upgrades will offer some small nutrient reductions, they are primarily being fixed because of the threat to human health from untreated sewers. In old combined systems, sanitary sewers and storm sewers are mixed together, causing them to overflow during high rain events.

Also not included are the costs of air pollution regulations, which could benefit the Bay, because those actions are already required for other reasons.

Technically, the states and the Bay Program were not required to calculate the costs of the new regulations. But officials agreed that they should know if excessive costs would prevent the new standards from being met once adopted — something that would force them to rewrite them in the future.