August 21, 2014. After two weeks of drama in which the House and Senate had a falling out over one critical provision and threatened to adjourn without voting on a final bill, the N.C. General Assembly enacted coal ash legislation by strong bipartisan margins in both chambers. The final bill now goes to Governor Pat McCrory for signature. Senate Bill 729 follows eighteen months of controversy over the environmental impacts of the 33 coal ash impoundments located at 14 electric generating facilities in North Carolina and the McCrory administration’s response to the problems. Coal ash became an urgent legislative priority after a stormwater pipe under an impoundment in Rockingham County ruptured and spilled more that 30,000 tons of coal ash into the Dan River. (Earlier posts on N.C. coal ash impoundments and the Dan River spill here and here.)
What Senate Bill 729 Does:
♦ Sets timelines for conversion from wet to dry ash handling; an end to deposition of coal combustion residuals (CCRs) in wet impoundments; and final closure of all 33 impoundments under environmental standards. Nothing in existing state or federal law otherwise requires any of those actions. Under current law, the state can take enforcement action to require a utility to address unpermitted wastewater discharges or groundwater standard violations associated with an impoundment, but it is more difficult to effect comprehensive policy change through individual enforcement cases.
Under prior N.C. law, CCRs in a wet impoundment had been considered “wastewater residuals” and exempt from the state’s solid waste disposal laws. Senate Bill 729 requires CCRs removed from a wet impoundment to be disposed of as solid waste. Unless put to an approved reuse, the bill requires disposal in a landfill that meets the most current standards for industrial landfills (including a liner system, leachate collection, groundwater monitoring, and financial assurance).
♦ Sets timelines for groundwater assessment and remediation for all 33 CCR impoundments. The state would otherwise have to seek assessment and remediation through enforcement cases. Even in response to enforcement action, existing state rules generally allow the person (or company) responsible for the contamination to propose a schedule for assessment and remediation.
[Note: In litigation over how state groundwater remediation rules apply to pre-1984 CCR impoundments, a superior court judge recently interpreted the rules to require "immediate" removal of coal ash causing groundwater contamination beyond the compliance boundary. Senate Bill 729 reverses that decision; see "Controversies" below.]
♦ Requires the utilities to identify drinking water wells within one-half mile down-gradient of each CCR impoundment; test wells potentially affected by groundwater contamination from the impoundment; and provide an alternative water supply if testing finds a contaminant associated with CCRs at levels exceeding the groundwater standard. Under existing law, DENR can use enforcement authority to require a person responsible for groundwater contamination to identify and test wells for contamination. Enforcement actions focus on conditions at individual sites and the groundwater assessments tend to be more incremental, gradually working out from the known source of contamination and continuing only as far as testing shows high levels of contamination. The comprehensive requirements of Senate Bill 729 may provide more information on well contamination more quickly.
The bill requires the utilities to provide alternative water supply to any well owner whose drinking water well shows high levels of a contaminant associated with coal combustion residuals. Without this kind of statutory remedy, a well owner may have to sue for damage to the water supply well — bearing both the upfront costs of litigation and the burden of proving the impoundment caused the well contamination. Senate Bill 729 requires the electric utilities to provide an alternative drinking water supply within 24 hours and alternative water supply for other purposes (such as bathing) within thirty days based simply on data showing that the well water exceeds the groundwater standard for any constituent associated with CCRs.
♦ Requires the utilities to inspect all CCR impoundments; report on all wastewater discharges (permitted and unpermitted) ; and take action to eliminate unpermitted discharges to surface waters on a timeline set in the law. DENR has existing authority to take enforcement action in response to an unpermitted discharge of wastewater to surface waters, but would normally have to take those actions on a site by site basis. Senate Bill 729 may prompt earlier identification and correction of the violations.
♦ Establishes stricter design, construction and siting standards for large projects using coal ash as fill for construction projects and puts a moratorium on smaller structural fill projects. (Any project using more than 8,000 tons of coal ash per acres or more than 80,000 tons total will be considered a “large” structural fill.) Existing state rules governing use of coal ash as structural fill have significant gaps. The new law fills a number of those gaps by requiring large structural fill projects to be lined; have leachate collection systems; monitor for groundwater impacts and provide financial assurance. The bill also establishes new siting criteria for large structural fills, including setbacks from streams, wetlands, wells and property boundaries.
The bill puts a one-year moratorium on smaller structural fill projects while DENR studies the adequacy of standards for those projects. The bill allows for two exceptions to the moratorium on small structural fills: 1. voluntary compliance with the new, stricter standards applied to large structural fill projects; or 2. use of CCRs as structural fill for a public road project.
♦ Amends the state Dam Safety Act to require Emergency Action Plans for all high or intermediate hazard dams (including CCR impoundments) and sets specific inspection requirements for CCR impoundments.
♦ Amends water quality laws to require earlier notice to DENR and to the public following a wastewater spill that reaches surface waters. Prior law had been unclear about notice to DENR and allowed 48 hours for notice to the public. Senate Bill 729 requires notice to DENR as soon as practicable (and no later than 24 hours after the spill reaches surface waters) and to notify the public within 24 hours. The new notice requirements apply to all wastewater spills and not just those associated with CCR impoundments.
♦ Repeals much of a 2013 regulatory reform provision dealing with groundwater contamination. Senate Bill 729 repeals two significant parts of the 2013 law: 1. a presumption that the groundwater compliance boundary should be at the property line; and 2. restrictions on DENR’s ability to require action inside the compliance boundary to control groundwater contamination. (See the section on groundwater legislation in an earlier post for more explanation of what the 2013 provision did and Senate Bill 729 now undoes.)
♦ Imposes a new fee on electric utilities that own CCR impoundments to support implementation of the law. The bill allocates funds for 25 new positions in DENR to work on coal ash and 5 positions in the Department of Public Safety to support the Coal Ash Management Commission.
Creating a new Coal Ash Management Commission in the Department of Public Safety with authority to overrule DENR decisions on prioritization of impoundments for closure and approval of closure plans — but without the expertise or staff support to make those decisions. The Department of Public Safety has no experience with implementation of state and federal environmental laws and the bill authorizes a small staff of five to support all of the commission’s activities. Commission appointment criteria do not require any member to have expertise in groundwater hydrology or water quality - likely to be critical in prioritizing sites for closure and approving closure plans.
The bill provides few guiding standards for classifying impoundments based on risk. Risk classification will be one of the most important decisions required under the law because the classification determines whether coal ash has to be removed from the site or can potentially be capped in place. The bill lists a number of factors to be considered, but provides no guidance on how to translate the factors into high, intermediate and low risk classifications. Existing state programs that use similar classification systems to guide remediation work have gone through rulemaking to adopt specific criteria for defining high, intermediate and low risk. In the absence of rulemaking, the lack of legislative guidance could lead to inconsistent and arbitrary decision-making. Senate Bill 729 identifies four sites for immediate closure and in debating the bill a number of legislators questioned the basis for prioritizing those four over others with similar environmental problems. Those kinds of question aren’t going to go away when the prioritization process shifts over to DENR and the new commission.
The bill authorizes the Coal Ash Management Commission to issue variances from the impoundment closure deadlines, although the final version of the bill allows only one variance of no more than three years for an individual impoundment.
In debate on the final bill, Democratic lawmakers again raised concerns about the impact on ratepayers if utilities try to recover assessment and cleanup costs in a rate case. Senate Bill 729 prevents utilities from recovering costs associated with an illegal spill (like the one on the Dan River), but only puts a brief moratorium on recovery of costs associated with assessment, cleanup and closure of coal ash impoundments. The moratorium ends January 15, 2015 — before the utilities are likely to have incurred significant costs. Some legislators would clearly prefer to leave the cost recovery issue entirely to the N.C. Utilities Commission; others suggested the General Assembly will have time to revisit the cost recovery issue next session.
A number of environmental organizations have criticized the bill for potentially allowing use of capping in place to close impoundments that have CCRs in close proximity to groundwater. This issue nearly derailed the bill completely as House and Senate conferees tried to reach agreement on a final bill. Both House and Senate versions of the bill required removal of CCRs from impoundments classified as high or intermediate risk. Although worded differently, both versions of the bill allowed low risk impoundments to be closed by dewatering the coal ash and installing an impermeable clay cap over the ash under standards applied to closure of solid waste landfills – the practice known as “capping in place”. Neither version of the bill addressed the concern that a “low risk” impoundment may be in close proximity to groundwater, allowing CCRs to be a continuing source of groundwater contamination even after installation of a cap.
House members raised the issue for the first time in conference and proposed new language to bar “capping in place” if any part of the impoundment was located below the seasonal high water table. See an earlier post for more on the conflict between House and Senate conferees and the cost concern in the background of debates over capping in place. The final bill did not include the language proposed by House conferees, but added a sentence barring approval of a “cap in place” closure
…unless the Department finds that the proposed closure plan includes design measures to prevent, upon the plan’s full implementation, post-closure exceedances of groundwater quality standards beyond the compliance boundary that are attributable to constituents associated with the presence of the impoundment.
The new language would allow the utilities to cap in place CCRs in close proximity to groundwater as long as the closure plan includes other measures (such as engineered groundwater remediation systems) to prevent groundwater standard violations beyond the compliance boundary. The language clearly does not provide as high a level of protection as a separation between the coal ash and groundwater — but would be consistent with existing state rules allowing DENR to approve a groundwater remediation plan based on use of engineered systems to treat or control the contamination source and prevent groundwater violations beyond the compliance boundary. The question may be the level of confidence in DENR’s review and approval of remediation measures and the utilities’ commitment to long-term maintenance of remediation systems.
A final (related) controversy has to do with language in Senate Bill 729 to overrule a recent superior court decision interpreting state groundwater rules to impose more rigid remediation requirements on waste disposal systems permitted before 1984. An earlier post discusses the issue and Judge Ridgeway’s decision (now on appeal to the N.C. Court of Appeals) in more detail. In brief, the judge interpreted state rules to require immediate removal of the contamination source at any pre-1984 waste disposal site where contamination has caused a exceedance of a groundwater standard beyond the compliance boundary. At a waste disposal facility, the contamination source usually turns out to be the waste disposed of in the facility – which could be garbage put in a landfill or coal ash placed in an impoundment. The judge’s interpretation does not allow the alternative of using engineered groundwater remediation systems to treat or control the source of contamination at these older facilities — something the rules allow for newer facilities.
Senate Bill 729 reverses the effect of Judge Ridgeway’s decision by requiring groundwater remediation rules to be applied consistently to all waste disposal facilities without regard to the date of permitting. Legislative intervention seemed to be driven by some combination of concern about completely foreclosing the possibility of capping coal ash in place and the impact of the decision on county and municipal waste disposal sites permitted before 1984.
The bill now sits on the Governor’s desk, waiting for signature or veto.