State Innovation Grant Program: Colorado
Developing a Cross-Media Environmental Permitting Approach through
Facility Environmental Management Systems (2002 Competition)
ie innovation urani rrogram 10 support
efforts led by state environmental agencies to test innovative approaches
for achieving better environmental results and improved efficiency in
permitting programs. Between 2002 and 2007, the State Innovation Grant
program competition awarded over six million dollars to support 35 state
projects that test permitting innovation for a variety of regulated entities
including several small business sectors. Asummary of the awards by year
appears in the table below.
State Innovation Grant Program Statistics, 2002-2007
Competition Proposals Proposals Total Program
Year Submitted Selected Funding ($)
2002/2003
$618,000
$1.425 Million
$1.479 Million
Cumulative
$1.243 Million
$1.611 Million
$6.376 Million
"Innovation in Permitting" has been the theme of the State Innovation Grant
competition since its inception. In the last three competition cycles states
received awards for projects in the following three categories:
• The Environmental Results Program (ERP) is an innovative
approach to improving environmental performance based on a system
of the interlocking tools of compliance assistance, self-certification
(sometimes, where permissible, in lieu of permitting), and
statistically-based measurement to gauge the performance of an entire
business sector. The program utilizes a multimedia approach to
encourage small sources to achieve environmental compliance and
pollution prevention. (See: http://www.epa.gov/permits/erp/)
• Environmental Management System (EMS) is a system involving a
continual cycle of planning, implementing, reviewing and improving the
processes and actions that an organization undertakes to meet its
business and environmental goals. EMSs provide organizations of all
types with a structured system and approach for managing
environmental and regulatory responsibilities to improve overall
environmental performance and stewardship.
(See: www.epa.gov/ems/info/index.htm)
• Performance Track is a partnership that recognizes top
environmental performance among participating US facilities of all types,
sizes, and complexity, both public and private.
(See: http://www.epa.gov/performancetrack/)
NCEI has provided awards also for projects testing watershed-based
permitting, and for permit process streamlining in past competitions. For
more information on the history of the programs, including information on
solicitations, state proposals, and project awards, please see the EPA State
Innovation Grants website at httD://www.eDa.aov/innovation/statear '
Project Background:
In 2003, The Colorado Department of Public Health
and Environment (DPHE) received a State Innovation
Grant to undertake a three-year Environmental
Management System (EMS) Permit Pilot Program.
By using EMSs to augment regulated facilities'
environmental permits, the program intended to
address the environmental limitations of technology-
based standards while reducing regulatory burdens
on businesses. Early in the project, DPHE shifted its
approach to integrating a facility's EMS with its
permits, rather than attempting to substitute an EMS
for the permits. DPHE sought to test whether this
approach would yield greater environmental benefits
and higher compliance rates than traditional permits,
while at the same time provide businesses with
enhanced flexibility to meet environmental goals and
reduce administrative burdens.
DPHE expected that by granting facilities the
authority to determine how best to meet their
environmental goals, the program would encourage
facilities to innovate and prevent pollution. The
department also hoped the program would foster
involvement by community stakeholders and
generate better information for regulators and the
public through annual external audits. Other program
goals included:
• Enabling regulators to consider cross-media
impacts and benefits in decision-making;
• Leveraging state regulatory resources by using a
participating facility's EMS to replace and/or
augment DPHE's regulatory functions, (i.e.
inspections, minor permit modifications, and
compliance reporting);
• Reducing administrative burdens by consolidating
NCE
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ENVIRONMENTAL INNOVATION
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all environmental permits into one cross-media
permit, and establishing a single point of contact at
DPHE; and
• Establishing stakeholder involvement and public
participation provisions throughout the EMS
permitting process.
The EMS Permit Pilot Program was conceived and
implemented by a cross-media team of DPHE
employees. DPHE team members invited
stakeholders, including representatives from the
regulated community, environmental and community
organizations, and local and federal government
entities, to help develop the program. This broader
stakeholder group developed the specific
components of the program, including: eligibility
criteria for regulated facilities, permit requirements,
public participation provisions, criteria for operational
flexibility, requirements for continual improvement
projects, and compliance monitoring and reporting
requirements.
Project Description
DPHE initially developed regulations to give them the
authority to develop and implement the EMS permit
pilot, a move that was supported by Colorado
legislature through the passage of new legislation.
DPHE then selected five facilities, that the agency
considered to be environmental leaders within their
respective industries, to participate in the EMS Permit
Pilot Program. One of these facilities ultimately
dropped out of the program. DPHE arranged for third-
party baseline assessments, which included
measurement of existing environmental conditions, and
an EMS audit to be conducted at each participating
facility. Following the completion of the assessments,
DPHE assisted facilities with developing or
implementing their EMSs.
Next, DPHE and the facilities worked together to
complete the EMS permit application process.
Facilities were asked to identify the requirements of
their existing air, water, and waste permits. Then, if
they chose, facilities could add other applicable
environmental requirements to their EMS permit.
Facilities were also asked to list their requests for
operational flexibility, provide relevant data for DPHE
and local agencies to perform equivalency
determinations, propose continual improvement
projects, and submit a compliance certification form. In
addition, DPHE worked with facilities to create a
Community Involvement and Communications Plan
(CICP) that outlined how the facility would effectively
communicate with community stakeholders.
To ensure that the EMS permits were considered
equivalent to facilities' existing environmental permits,
DPHE developed specific environmental standards
and work practices requirements for EMS permits.
They also required facilities to participate in external
audits to assess compliance with environmental
requirements in the EMS permit. The department
conducted an initial inspection at each facility during
the pilot program, and then provided a third-party
consultant to conduct annual compliance audits. Lastly,
prior to issuance of the EMS permits, DPHE solicited
inputs from stakeholders and conducted a public
comment process as required by state law.
Results
DPHE found that its Environmental Management
System (EMS) Permit Pilot Program was a success.
EMS performance and regulatory compliance data
analyzed over the course of the program showed
improvements in environmental performance
compared to the baseline assessments. Follow-up
assessments conducted by a third-party auditor at the
conclusion of the pilot program document an overall
improvement in environmental performance across the
four participating facilities, as shown in Table 1.
Table 1
Area/Media Type
Emissions of air pollutants
Hazardous wastes generated
Electrical energy used
Natural gas consumed
Average %
Improvement in EBPIs
15%
27%
3%
10%
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The public participation requirements of the pilot
program yielded benefits as well by enhancing
communication with the community and involvement
by the public. DPHE noted that although developing
the CICP required an upfront investment of the
facilities' time and resources, it ultimately increased
their awareness of community concerns. The CICP
also helped stakeholders understand the facilities'
environmental impacts and plans for improvement
under the EMS permit.
One limitation of the project noted by DPHE was the
U.S. EPA's decision to have participating facilities
maintain their conventional environmental permits
throughout the EMS permit pilot program. This made
it difficult to test the efficiency of the EMS permit
program, as DPHE staff had to dedicate significant
time to maintaining the existing permits, leading to
conflicting priorities and resistance to the EMS
permitting process. Moreover, the requirements of
the existing permits prohibited DPHE from granting
participating facilities full operational flexibility, which
also affected facilities' ability to pursue unique
continuous improvement projects.
Overall, with the completion of the EMS Permit Pilot
Program, DPHE has forged a new permitting and
regulatory approach that relies on a performance-
based EMS permit to serve as a facility's
environmental permit(s). Action taken by Colorado's
General Assembly during the 2007 legislative
session with passage of Senate Bill 07-218
institutionalized the program on a permanent basis
within DPHE.
Project Contacts:
For more specific information on the
Colorado State Innovation Grant, please
contact one of the individuals below:
Phyllis Woodford
Colorado Department of Public Health and Environment
Denver, CO
303.692.3477
phvllis.woodford@state.co.us
Dale Murphy
U.S. Environmental Protection Agency- Regions
Denver, CO
303.312.6126
murphy.dale@epa.gov
Beth Termini
U.S. Environmental Protection Agency-Region 1
Boston, MA
617.918.1662
termini.beth@epa.gov
Program Contact:
Sherri Walker
State Innovation Grant Program
U.S. Environmental Protection Agency
Washington, DC 20460 (MC1807T)
(202)-566-2186; FAX (202) 566-2220
walker.sherri@epa.gov
Connection to EPA's Goals
This program directly supports EPA's Strategic Goal
#5, focused on compliance and environmental
stewardship, by promoting an innovative approach to
improve compliance and pollution prevention. It also
supports several Cross-Goal Strategies through
exploration of improved compliance assistance
approaches and incentives to achieve environmental
protection.
United States
Environmental Protection
Agency
Office of Policy,
Economics and Innovation
(1807T)
February 2008
EPA-100-F-08-014
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