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FAQ: Generating and Selling SRCs

1. Is my property a good candidate to generate SRCs?

You can generate SRCs with a voluntary green infrastructure (GI) project, but some SRC-generating GI projects will be more cost effective. Factors that can make an SRC-generating project more cost-effective may include:

  • Installing GI to manage runoff from relatively large impervious areas (roofs, parking lots, etc.)
  • Installing GI on areas of the site that are not needed for other uses.
  • Installing GI within the Municipal Separate Storm Sewer System (MS4), making the project eligible to participate in the SRC Price Lock Program and sell SRCs to DOEE.

Because they are relatively small, single-family homes are unlikely to have opportunities for cost-effective, SRC-generating GI. However, DOEE offers other support and incentives to encourage residential-scale stormwater management.

2. Who buys SRCs?

You can sell SRCs on the open market to large development projects that trigger the District’s stormwater management regulations. These sites are required use green infrastructure (GI) to retain stormwater runoff, but they have the option to meet up to 50% of their requirement off-site using SRCs. This is called an Off-Site Retention Volume (Offv) obligation. Offv obligations must be satisfied annually, creating sustained demand for SRCs.

DOEE also buys eligible SRCs through the SRC Price Lock Program. This program helps to create demand for SRCs from areas where GI is needed the most. Participants in the SRC Price Lock Program also have the option to sell on the market to regulated projects.

3. Will I be able to sell my SRCs, and at what price?

When selling SRCs on the market, prices are negotiated between buyers and sellers. DOEE publishes all SRC trading prices in the SRC and Offv Registry, including averages for each year and over the most recent 12 months. You can use these values to help negotiate an SRC price for your trade if you choose to sell on the market. The SRC market price fluctuates with supply and demand.

Through DOEE's SRC Price Lock Program, eligible SRC generators also have the option to sell SRCs to DOEE at fixed prices without losing the option to sell to another buyer on the market. The option to sell to DOEE effectively constitutes a price floor in the SRC market and offers certainty about the revenue from an SRC-generating project. To be eligible, participants must construct new, voluntary SRC-generating projects located in the Municipal Separate Storm Sewer System (MS4).

4. What is the maximum SRC selling price?

The In-Lieu Fee (ILF) has the effect of creating a price ceiling in the SRC market. As an alternative to using SRCs, regulated projects can meet their Off-site Retention Volume obligation by paying ILF to DOEE. As a result, SRCs are unlikely to sell for more than the ILF price. DOEE adjusts the ILF price annually for inflation.

5. How does DOEE track SRC trades?

DOEE tracks SRC Trading Program statistics, including SRC sales, using its Stormwater Database. DOEE publishes information about available SRCs and prior transactions through the SRC and Offv Registry. The terms of SRC sales are negotiated privately between the buyer and seller, and DOEE is not involved in these negotiations.

When an SRC sale is negotiated, the seller submits the Application to Transfer SRC Ownership through the Stormwater Database. Sale prices and quantities are published in the SRC and Offv Registry, but the identities of buyers and sellers are not.

6. When is a good time for a property owner to consider installing an SRC-generating project?

Property owners who are already planning construction or landscaping may want to consider installing an SRC-generating green infrastructure practice at the same time. This may be cost effective since construction resources are already mobilized on the site. This is an especially good option for sites that do not trigger the District’s stormwater management regulations because any runoff retained by GI beyond the pre-project conditions may be eligible to generate SRCs. Sites located in the MS4 also have the opportunity to participate in the SRC Price Lock Program.

7. I want SRC-generating Green Infrastructure on my property. What resources does DOEE offer?

If your site is at least 0.5 acres and is located in the MS4, you can apply for DOEE’s SRC Site Evaluation Program. This free program assesses sites for SRC generating potential, identifying good opportunities for green infrastructure (GI) installation and developing preliminary GI designs. It provides a first step for property owners who are interested in the SRC Trading Program, but need assistance evaluating GI feasibility.

You can also refer to the list of SRC-aggregating businesses that are working to identify GI opportunities on properties whose owners are interested in the financial and other benefits of SRC-generating GI. You can indicate your interest in working with one of these businesses on the SRC and Offv Registry. Some properties may also be eligible for DOEE’s RiverSmart Programs.

8. What is the SRC Certification Process?

Projects that meet the SRC eligibility requirements can generate SRCs in up to 3-year certification periods once the project is built (DOEE will also certify SRCs in 1 or 2-year increments).

You can apply for an initial period of SRC certification after your project successfully completes its Final Construction Inspection and you submit an as-built Stormwater Management Plan. To avoid a lapse in SRC certification at the end of your first SRC certification period, you should schedule a maintenance inspection approximately 6 months prior to the start of your next 3-year certification period. You should submit your SRC application approximately 3 months prior to the start of your next 3-year certification period. For each application, you need a maintenance contract or plan that covers the full 3-year certification period.

The diagram below shows the timeline for receiving SRC certification for a hypothetical project.

9. What are voluntary Green Infrastructure practices?

Voluntary green Infrastructure (GI) practices are those that are not installed to provide on-site compliance for a regulated development project’s stormwater management requirement. Rather than meeting a regulatory requirement, voluntary practices are installed solely to generate SRCs and to achieve other benefits (e.g. improved aesthetics or environmental stewardship). Voluntary GI practices can be located on sites in the District that do not trigger the District’s stormwater management regulations. Voluntary practices can also be located on regulated sites as long as they are installed outside the regulated area. The retention volume of a voluntary GI practice can be used to generate SRCs above a pre-project baseline. New, voluntary GI in the MS4 is also eligible for participation in the SRC Price Lock program.

Permeable pavement installations that disturb 5,000 square feet or more may be considered a regulated activity. This may be the case if DOEE determines that reducing stormwater runoff is not the primary purpose of the installation (e.g. the primary purpose of the project is to improve the use of an existing parking lot).

10.  Can sites that trigger the District’s stormwater management regulations generate SRCs?

Sites that trigger the District’s stormwater management regulations can generate SRCs in two ways: by installing green infrastructure (GI) within the site’s regulated area that retains stormwater beyond regulatory requirements, up to the volume of runoff in a 1.7-inch storm, or by voluntarily installing GI outside the regulated area on an adjacent part of the site. While sites that generate SRCs by exceeding their SWRv are not eligible to participate in the SRC Price Lock Program, sites that generate SRCs by voluntarily installing GI outside of the regulated area can participate in the SRC Price Lock Program if they are located within the MS4.

11.  How many SRCs will my project generate?

Each SRC represents one gallon of SRC-eligible stormwater retention maintained for one year. A voluntary project’s SRC eligibility is based on the net increase in stormwater retention after the green infrastructure (GI) is installed or the impervious surface is removed (i.e. the post-project retention minus the pre-project retention). For regulated projects, SRC eligibility is based on exceeding the site’s regulatory requirement, called the Stormwater Retention Volume. In both cases, SRC eligibility is capped at the runoff generated on the site by a 1.7-inch storm. The project’s engineer should calculate SRC eligibility while preparing its Stormwater Management Plan.

The volume of stormwater retained on a site depends on the following factors:

  • The volume of stormwater that GI practices on the site have the capacity to retain, regardless of storm size. Depending on the type of practice, this will be based on the GI storage volume, surface area, infiltration rate, or other factors. Detailed instructions for this calculation can be found in Chapter 3 of DOEE’s Stormwater Management Guidebook (where GI practices are referred to as best management practices, or BMPs).
  • The maximum volume of stormwater runoff that the GI practices will receive during a 1.7 inch-storm. The area that drains into a GI practice (including the area of the practice itself) is referred to as its Contributing Drainage Area (CDA). The volume of stormwater that a practice receives from its CDA depends on the size of the CDA and the type of surface within the CDA. This is calculated using the following formula found in Appendix A of the Stormwater Management Guidebook:
    • Vmax (gallons) = 1.7/12 * ((.95 * Impervious Area)+(.95 * BMP area) + (.25 * Compacted area)) * 7.48

If you install a practice with a large storage capacity but a small CDA, the practice may not generate a large number of SRCs because it is oversized and will have empty capacity during a 1.7-inch storm. Similarly, if you install a practice with a small storage capacity but a large CDA, the practice may not generate a large number of SRCs because it will not be able to retain most of the runoff that it receives. If a practice’s storage capacity is greater than the maximum volume of stormwater that it will receive in a 1.7-inch storm, consider reducing the practice’s size or increasing its CDA. If the volume of runoff that a practice will receive is greater than its storage volume, there may be opportunities to generate additional SRCs by increasing its size or installing additional GI.

You can use DOEE’s Financial Return Calculator to develop and refine estimates of the number of SRCs your project may generate.

12.  What are the maintenance requirements for generating SRCs?

When you generate SRCs, you have an obligation to maintain the SRC-generating green infrastructure in accordance with the Stormwater Management Guidebook and the site’s DOEE-approved Stormwater Management Plan through the period of SRC certification. DOEE certifies SRCs for up to 3 years at a time, but can also certify SRCs in 1-year or 2-year increments.

To generate SRCs, you must pass a DOEE inspection within the six months prior to your SRC certification application. As part of your application, you must provide a maintenance contract or maintenance plan that details the specific actions that will be taken to provide maintenance.

13. What happens if I want to remove my SRC-generating Green Infrastructure?

When you generate SRCs, you have an obligation to maintain the SRC-generating green infrastructure (GI) through the period of SRC certification. After the SRC certification period ends, you can remove or stop maintaining your GI without facing any penalty because your maintenance obligation has ended.

If you want to remove your SRC-generating GI during the SRC certification period, you will need to retire a pro-rated portion of your SRCs, compensating for the part of the SRC certification period during which the GI is removed. If you have already sold or used the SRCs and therefore cannot retire them, you will need to purchase replacement SRCs to retire or pay ILF.

For example, you might install two GI practices that each retain 5,000 gallons and be eligible for 10,000 SRCs annually. Over a 3-year SRC certification period, you would receive 30,000 SRCs. If one of the GI practices is removed after the first year of the SRC certification period, you must retire 10,000 SRCs representing the 5,000 gallons of capacity lost in both year 2 and year 3.

14. What happens if an SRC-generating property is sold?

Whether working with an SRC-aggregating business or not, changes in property ownership should not prevent a site from participating in the SRC program. In the event of a change in site ownership during a period for which SRCs have already been certified for the site, the core issues of importance to DOEE are:

  • Who is responsible for maintaining SRC-generating green infrastructure (GI) through the end of the current certification period? The original owner of the SRCs that DOEE has already certified is responsible for maintenance of the GI throughout that certification period (typically 3 years). This obligation can also be transferred by mutual consent and with notice to DOEE.
  • Who has the right to certify additional SRCs in future years? Under DOEE’s regulations, the current property owner has the right to the SRCs but this right can be transferred. When a person applies to certify SRCs, they attest that they have the legal right to the SRCs.

For sites that are working with an SRC-aggregating business, DOEE recommends that the SRC-aggregating business and site owner discuss who will be responsible for maintenance and who will have the right to certify additional SRCs in the event of a change in site ownership. These terms could be included in a contract between the site owner and the SRC-aggregating business and could be defined differently in different scenarios. For example, an SRC-aggregating business could have the right to the SRCs under both current ownership and in the event of a change in site ownership. The SRC-aggregating business and the current site owner could agree to an easement that grants the SRC-aggregating business continued rights to access the site, maintain the GI, and receive SRCs in the event of a change in site ownership. DOEE recommends that these terms be agreed to prior to constructing the SRC-generating GI.

For sites that are not working with an SRC-aggregating business, the site buyer and seller should discuss the same issues of maintenance responsibility, as well as SRC ownership and right to sell any unsold SRCs that have already been certified. These agreements can take whatever form suits the buyer and seller. As an example, DOEE might certify 30,000 SRCs for a site over a 3-year period. If the site is sold after the end of the first year, the previous site owner could agree to transfer 20,000 SRCs to the new site owner, who could in turn agree to assume responsibility for GI maintenance for the remaining 2 years of the certification period. The SRC value and cost of maintenance could be considered in determining the price of the sale. Alternately, the previous site owner could retain ownership of all 30,000 SRCs and (with the new site owner’s permission) continue to maintain the SRC-generating GI throughout the certification period. In both scenarios, the new site owner could also have the right to SRCs generated in future certification periods or could grant this permission to the previous site owner.

15. If I generate SRCs, can I also receive a RiverSmart Rewards discount?

Yes, properties with SRC-generating GI can also qualify for RiverSmart Rewards discounts on DOEE’s Stormwater Fee and DC Water’s Impervious Area Charge. After submitting an application to certify SRCs, you will be prompted to submit your RiverSmart Rewards application. You can also complete a separate RiverSmart Rewards Application through the Stormwater Database.

Since the discount is applied to the water bill, the property owner is the recipient of this incentive even if the GI is built or maintained by an SRC-aggregating business.