Offsetting Credits & Incentives
Stormwater credits are ongoing reductions in a customer’s stormwater fee provided for private stormwater management activities that reduce demand on the stormwater system and/or reduce the utility’s costs. Credits are typically offered for on-site stormwater management practices that manage peak rate, run-off volume and/or water quality. They may be extended to other activities such as maintenance of public facilities on private property, public education support, and other specific green initiatives.
Credits provide property owners the opportunity to control their fees, recognize private stormwater management and support stormwater program goals.
New Jersey Requirements
Under New Jersey’s “Clean Stormwater and Flood Reduction Act,” which enables implementation of stormwater utilities and stipulates requirements for establishing user fee funded programs, the “utility” must provide for:
- a partial fee reduction in the form of a credit for any property that maintains and operates a stormwater management system that met State and local stormwater management standards at the time they were approved, and that effectively reduces, retains, or treats stormwater onsite;
- an additional partial fee reduction in the form of a credit for any property which has installed and is operating and maintaining current stormwater best management practices, approved by the county, municipality or authority; and
- an additional partial fee reduction in the form of a credit for any property which has installed and is operating and maintaining green infrastructure which exceeds stormwater management requirements adopted by the Department of Environmental Protection or the local stormwater ordinance.
In all of the instances noted above, the credit is associated with property where the stormwater practice is installed, operated and maintained.
Credit Program Considerations
As indicated above, while there are certain stipulations for establishing a stormwater credit program in New Jersey. Utilities should consult the NJDEP Guidance when considering the following in the context of their mission and goals:
- -Defining the types of stormwater management practices that are recognized in their credit program;
- -Defining credit program technical criteria including design requirements, ongoing maintenance requirements, and technical documentation;
- -Defining credit program administrative requirements including the application process, term of credits, and eligibility criteria;
- -Determining the amount of fee reduction offered as well as the overall maximum credit a property may receive.
Additionally, credits are likely to impact stormwater revenues and influence overall cost recovery from customers. Prior to implementation, the complexity and administrative requirements of a stormwater credit program should be considered in the context of the overall costs and benefits to the stormwater utility.
A credit program is a mechanism by which utilities can offer customers opportunities for a fee reduction if they lower their impact/demand on the system, enhance the nexus between the cost of providing stormwater service and the customer charge, and foster “buy-in” amongst the community. Further, credit programs also provide a venue for stormwater utilities to promote green initiatives, sustainable development and environmental stewardship across their service area(s).
Stormwater incentives are one-time monetary assistance that can be offered to customers to help them engage in stormwater management practices. These may take the form of grants, loans, in-kind services, or resource sharing. Incentive programs can vary greatly, as some utilities offer rain barrels, others provide design assistance to customers, while others offer rebates for deploying stormwater management practices. More robust grant programs help accelerate a property owner’s return on investment by making the project more economically viable to the property owner.
While incentives are not as prevalent as credits, they may provide utilities the opportunity to provide one-time grant assistance to property owners to partially offset costs of deploying Best Management Practices (BMPs). Incentive programs can help to further stormwater goals and build overall program support.