The Federal Budget and North Carolina’s Environment

March 24, 2017.  Last week, the Trump administration released the Trump Budget Blueprint which describes in very general terms the President’s budget proposals for federal agencies.  The Blueprint just opens the debate on the 2018 federal budget.  Congress will significantly influence the final budget and members from both parties have already expressed concern about some of Trump’s proposed budget cuts.   Percentage-wise, the deepest cuts in the Trump Budget Blueprint affect the Environmental Protection Agency.  As background for the coming federal budget debate,  this blogpost looks at the potential impact of the Trump budget plan on key state environmental protection programs.

Based on preliminary reports, the North Carolina Chapter of the Sierra Club provided a guide to the potential impact of the Trump budget the day before actual release of the Budget Blueprint. (Full disclosure — I assisted in preparation of the Sierra Club report.)  For each  major state environmental protection program, the report shows the percentage of the program budget currently funded by federal grants and the impact of cuts identified in the Trump budget plan. The report also provides information on other  DEQ activities supported by  federal grants that may be eliminated under the Trump administration’s  budget plan.

I want to focus on information in the Sierra Club report about impacts to Clean Air Act, Clean Water Act and Safe Drinking Water Act programs in North Carolina.   EPA  has delegated federal permitting and enforcement authority under those laws to the state’s Department of Environmental Quality (DEQ). EPA provides oversight to ensure the state programs meet federal requirements,  but DEQ has responsibility for day to day implementation.  DEQ issues Clean Water Act permits for wastewater discharges; Clean Air Act permits for  air emissions and air pollution control equipment; and Safe Drinking Water Act permits for public water systems.  DEQ also enforces water quality, air quality and drinking water standards.  In return for the state taking on those federal permitting and enforcement responsibilities, EPA provides program implementation or “categorical” grants to partially offset the cost.

The Trump Budget Blueprint does not provide detail on many cuts, but specifically proposes a 45% reduction in the EPA categorical grants that support basic state Clean Water Act, Clean Air Act and Safe Drinking Water Act programs. The tables below put the proposed cut in the context of each delegated program’s budget. Some notes on the numbers:

♦ “Total Need” means the complete budget (from all funding sources) for the delegated Clean Air Act, Clean Water Act and Safe Drinking Water Act program.

♦  Both the “total need” and federal funding numbers come from the certified state budget for the 2016-2017 fiscal year.

♦  These numbers only cover the EPA categorical grants for the delegated federal permitting/enforcement programs.  The numbers do not reflect separate federal grants for targeted research or pollution reduction projects like  the Albemarle-Pamlico National Estuary Program. Some of those federal grants reportedly have been targeted for elimination in Trump administration budget plans.

♦ The proposed federal funding cuts shown below are higher than those show for these same programs in the Sierra Club report because the final Trump Blueprint increased the percentage reduction over those reported earlier.

N.C. Clean Air Act Implementation

Total Need Federal Grant % Federally Funded Proposed Federal Funding Cut
$4,854,105 $2,482,845  50% – 45%

Clean Water Act Program Implementation 

Total Need Federal Grant % Federally Funded Proposed Federal Funding Cut
$14,160,554 $6,662,950   50%  -45%

Safe Drinking Water Act Program Implementation 

Total Need Federal Grant % Federally Funded Proposed Federal Funding Cut
$5,870,612 $3,316,895 50% – 45%

In sum: EPA grants provide 50% of the funding for each of the major environmental permitting and enforcement programs delegated to the state under federal law. A 45% reduction in the federal grant would result in a cut of nearly 25% to each of those state programs.  As discussed in an earlier post, many N.C. environmental protection programs have already experienced significant reductions in state funding since 2009-2010. The water quality program has been particularly hard hit.

Deep cuts to the federal grants would force the state to decide whether to make up the loss of federal funds with increased state appropriations from tax revenue or higher permit fees. The alternative would be to accept further erosion of those programs. The question may be particularly acute for the air quality program which is now entirely supported by the federal grant and permit fees.

You can find the entire Sierra Club report here .

NOTE: The original blog post has been revised to more accurately describe the release date for the Sierra Club guide and to note that information on  percentage reductions to these particular programs changed (for the worse) after release of the Sierra Club report. 

Pigs and The Civil Rights Act of 1964

March 7, 2017.  In one of his earliest actions as North Carolina’s Secretary of Environmental Quality, Michael Regan sent a  letter to the editor publicly responding to a U.S. Environmental Protection Agency (EPA)  “letter of concern” about N.C. swine farms.   EPA sent the letter as part of an ongoing investigation of a  2014 environmental justice complaint against the N.C. Department of Environmental Quality (DEQ)  under Title VI of the Civil Rights Act of 1964. The complaint filed by Earth Justice, the Rural Empowerment Association for Community Help (REACH) and the Waterkeeper Alliance argued that a state permit for swine waste systems discriminates against African-Americans, Latinos and Native Americans by allowing members of those minority communities to be disproportionately harmed by air and water pollution associated with the swine waste.

An attempt at mediation of the complaint failed in 2016. The break down in negotiations led  to a new allegation that DEQ violated federal rules against intimidating a person who has complained of discrimination.   In 2016,  EPA resumed active investigation of both complaints. (See this NC Policy Watch story for a helpful timeline of action on the complaint.) EPA’s January 12, 2017 letter of concern identifies gaps in the state’s environmental justice response and also recommends steps DEQ should take to resolve the complaint.

This is the first of two blog posts looking at the intersection of civil rights law and environmental protection programs. The first blog post will describe the legal basis for  the environmental justice movement and some of the practical challenges of applying civil rights law to environmental permitting decisions.  A later blog post will provide more detail on the Earth Justice/REACH/Waterkeeper Alliance  complaint and EPA’s recommendations.

The Civil Rights Act of 1964 and the environment.  Under Title VI of the Civil Rights Act of 1964, no person “can be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance” based on race, color or national origin. (See 42 U.S.C. § 2000d.)  The anti-discrimination law applies to any state agency receiving federal grant funding, including DEQ programs to implement the Clean Air Act, Clean Water Act, Safe Drinking Water Act and other federal environmental laws.

Federal rules applying the Civil Rights Act to  EPA-funded agencies  (40 CFR Part 7) provide a little more detail, but focus on discrimination in employment, contracting and location of public infrastructure.  Those  nondiscrimination requirements mirror conditions on many other types of federal contracts and grants.  The rules also require state programs to designate a person to receive discrimination complaints and to provide a grievance procedure.

Over time, a movement developed to  give greater meaning to language in the Civil Rights Act  guaranteeing the “benefits” of federally funded environmental protection programs without regard to race, color or national origin. The environmental justice movement grew out of concern that minority communities had been denied the benefits of environmental protection in several ways, including:

♦ Disproportionate siting of facilities associated with environmental risk (such as  hazardous waste facilities)  in minority and low income communities.

♦ Greater exposure of minority residents to high levels of pollution and environmental contamination.

♦ Weak enforcement of environmental standards in minority and low income communities.

Over the last thirty years,  a number of studies have looked at the relationship between race,  income and risk of exposure to environmental harm. The National Institute of Environmental Health Services has published a bibliography of studies related to environmental justice that can be found here .

Environmental permitting as a civil rights issue.    Many histories of the environmental justice movement cite EPA’s permitting of a  hazardous waste landfill in a majority  African-American community in  North Carolina as an early environmental justice flashpoint. See: EPA’s environmental justice timeline and the federal Department of Energy’s brief  history of the environmental justice movement.  The 1982 construction of the Warren County landfill, built for disposal of PCB-contaminated soil,  highlighted a new civil rights question:  Do permit decisions made under racially neutral environmental standards still result in a greater pollution burden on minority and low income communities?   

The political and legal battle over the Warren County landfill raised two interconnected issues common to many environmental justice controversies: 1.  Was the decision to put the PCB landfill  in a community with a largely  minority population (greater than 60% African-American) influenced by race?  The concern was not that state officials had an affirmative intent to harm African-Americans, but that the state rejected more suitable sites to  put the landfill in a community where residents had little political power to resist. 2. Did the U.S. EPA permit for the landfill fail to provide adequate safeguards against environmental harm?

Immediately after construction of the Warren County landfill,  two members of Congress asked the General Accounting Office (GAO) to look at the  first question.  The GAO study of hazardous waste landfills in  eight southeastern states (including North Carolina)  found in part :

There are four offsite hazardous waste landfills in [the] eight States. Blacks make up the majority of the population in three of the four communities where the landfills are located. At least 26 percent of the population in all four communities have income below the poverty level and most of this population is Black..

Early efforts to consider disproportionate impacts to minority communities in environmental permitting.   An Executive Order and Memorandum on Environmental Justice issued by President Clinton in 1994 represents one of the first federal efforts to address environmental justice in permitting.  The goal of the Executive Order and memo, which directly applied only to federal agencies,  was to   “prevent…minority communities and low-income communities from being subject to disproportionately high and adverse environmental effects”. The memo directed federal agencies to:

  1. Include impacts to minority and low income communities as part of  environmental review.  Environmental impact statements prepared  under the National Environmental Policy Act (NEPA) should evaluate the human health, economic and social effects on minority  and low-income communities and require mitigation of significant impacts.
  2.  Reach out to the community.  During the environmental review, the federal agency should consult with the community about potential effects and mitigation measures and make meetings, documents and notices easily accessible.
  3. Consider air quality impacts of federal agency actions on minority and low-income communities.  EPA should  ensure that review of the air quality impacts of a  proposed federal action includes consideration of the  impact on minority and low-income communities. 
  4. Provide access to information.  Federal agencies should provide  minority and low income communities with  access to public information on  human health,  environmental planning, regulatory requirements and enforcement standards. 

In short, the executive order and memo focused on process —  outreach, information, analysis of impacts and mitigation.  It did not change any environmental permitting standards.

What does the Civil Rights Act of 1964 require of federally-funded state environmental permitting programs? EPA has struggled to provide clear guidance to the states on how to apply the Civil Rights Act of 1964 in state environmental permitting programs.  A 2014 EPA plan, Considering Environmental Justice in Permitting , set out a roadmap for considering environmental justice in federal and state permitting. EPA’s implementation plan proposed several years of additional work  with a goal of completing work on the guidance in 2017.

The challenges.  Addressing environmental justice concerns in permitting  has some basic challenges:

♦ Civil rights laws and environmental protection laws speak different languages. Civil rights law focuses on discrimination based on race, color or nationality;  environmental laws and rules set permitting standards based on public health and ecological impacts without regard to community demographics.  An environmental permitting standard may not always be effective, but on its face the standard applies the same way in wealthy subdivisions, poor neighborhoods, and low income communities.

♦ Permitting agencies rarely have the authority to decide where a proposed  facility will be located.  DEQ cannot decide that a swine farm or  landfill or hazardous waste storage facility would best be located here rather than there.  As the permitting agency, DEQ responds to a permit application that proposes a specific type of facility in a particular location. DEQ can deny the permit — but only if the project would violate  environmental standards in state law or rules and those standards do not make community demographics a  permitting criteria. Instead, the standards focus on environmental and public health impacts without regard to the nature of the community likely to be affected.

♦  Race-neutral factors like the availability of suitable land and land cost often drive the permit applicant’s site selection.  Large acreage at low cost often correlates to rural land, low income communities and a greater impact on minority populations.

What permitting programs can do. State environmental permitting programs can use the kind of outreach described in the Clinton memo to actively bring minority residents into the permitting process.  Many state environmental programs now also have permit criteria that include consideration of  the cumulative impacts of proposed and existing facilities  in the community.  That allows the permitting agency to look beyond the individual impact of a proposed facility and prevent environmental harm caused by clustering multiple  pollution sources in a minority or low income community.

Does the Civil Rights Act require more? The environmental justice  complaint about N.C. swine farms and EPA’s letter of concern suggest the state’s obligations may go further. More about that in the next post.

The State of the Environment Department: By the Numbers

January 12, 2017. Governor Roy Cooper inherits an environment department that looks very different than it did four years ago. The new Department of Environmental Quality (DEQ) is much smaller in size and scope than the old Department of Environment and Natural Resources (DENR).  Since 2011, legislators have moved conservation and research programs out of the department.  DEQ’s environmental protection programs  lost non-regulatory conservation and research partners like Soil and Water Conservation, Forestry, Parks and Recreation and the Museum of Natural Sciences.

The environmental programs remaining in DEQ also lost a significant number of positions.  The incoming administration will face some immediate challenges in providing timely permit reviews, inspections and compliance assistance with staffing at levels inadequate to respond to an upturn in economic activity.

About the numbers. The numbers below come from information provided by DEQ during the transition between the McCrory and Cooper administrations; reports submitted to the legislature by DENR/DEQ; and legislative budget documents.

Environmental programs experienced some position reductions in  2009-2010 due to recession-driven budget cuts; those cuts tended to focus on vacant positions. Since 2011, the nature of the position cuts have changed.  Instead of setting a budget reduction target and giving the department flexibility to meet it,  the legislature increasingly identified specific positions for elimination or focused cuts on particular programs in the department. Many of the targeted reductions affected water quality programs (including stormwater and sedimentation control) and multi-agency staffing in the department’s seven regional offices.

DEQ by the numbers:

18%   Percentage reduction in water quality and water resources staff.

41% Percentage reduction in water quality/water resources staff in DEQ regional offices. The seven regional offices house staff from multiple DEQ programs. Staff based in the regional offices do initial site visits for permit applications; provide technical assistance; and inspect permitted facilities for their respective programs.  A 2011 budget provision specifically targeted the regional offices for position cuts: 3 administrative positions; 6 positions in the Asheville Regional Office; and another 21 positions among the seven regional offices to be either eliminated or shifted from state funds to another funding source. The cuts in regional office staff came on top of program-specific position cuts, further reducing program staff and limiting the number of staff geographically accessible to the public.

45%   Percentage reduction in state sedimentation program staff since 2008; staffing levels fell from 65 in 2008-2009 to 36.9 in 2015-2016. The sedimentation program implements the state law requiring erosion control measures on active construction sites to prevent sediment from reaching rivers, lakes and streams.

12,000  The number of construction sites the state sedimentation program staff has  responsibility for monitoring.

Every 12-14 Months: Frequency of state inspection of  sedimentation sites based on current staffing levels.

2 Years. The average time required to issue  a Clean Water Act wastewater discharge permit. (The National Pollutant Discharge Elimination System or “NPDES” permits.)

42%  The percentage of industrial discharge NPDES permits that have expired and not yet been renewed with updated permit conditions.

34%  The percentage of major municipal NPDES permits that are expired and need renewal.

20% Reduction in Division of Coastal Management staff since 2010. DCM  issues permits for major development projects affecting coastal resources; supports public beach access projects;  and manages the state’s coastal reserve sites for research and education activities.

40% Reduction in core Division of Marine Fisheries staff since 2011. (The figure does not reflect the Shellfish Sanitation staff moved into DMF from the Division of Environmental Health in 2012.)

27.9 Administrative positions eliminated department-wide since 2015. (Budget, purchasing, IT, personnel, and public information staff.)

9%    Percentage of DEQ’s authorized positions that are currently vacant (161). By comparison, the much larger Department of Environment and Natural Resources had only 40 unfilled positions in the summer of 2012.

3  Programs or services entirely eliminated through budget cuts since  2009:  the Neuse River Rapid Response Team (provided response to fish kills and pollution incidents in the Neuse River); the Office of Environmental Education; and the Division of Water Quality’s well drilling team (drilled monitoring wells used to investigate groundwater quality/quantity).

Some of the consequences. Loss of staff has already lengthened some  permitting times and the department’s permitting programs are not in a good position to respond to increased development activity as the economy continues to improve. Staff reductions have also affected DEQ’s ability to provide compliance assistance and enforce environmental laws. The U.S. Environmental Protection Agency (EPA) has expressed concern about the failure of federally delegated programs in DEQ to follow the department’s enforcement policy.  EPA has also questioned the  adequacy of the state’s stormwater program.

Changing Cleanup Standards for Leaking USTs

Oct. 26, 2016. In June, the Department of Environmental Quality (DEQ) released new guidance on remediation of groundwater contamination caused by leaking petroleum underground storage tanks (USTs). The guidance document significantly changes the approach to remediation of  high risk UST sites. Under rules adopted by the Environmental Management Commission (EMC), groundwater contamination at high risk UST sites must be remediated to meet state groundwater quality standards if that is feasible. 15A NCAC 2L.0407(b).

The new guidance directs environmental consultants to assume the cleanup standard for most high risk sites will be  “Gross Contaminant Levels”, which represent contamination at  levels  as much as 1000 X the  groundwater protection or drinking water standards. The guidance raises a number of questions about the impact of more limited cleanup on groundwater and property owners; consistency with EMC rules; and whether the new guidance should have gone through rulemaking  to allow for public comment and adoption by the EMC.

UST Rules. The UST program operates under “risk-based” remediation  rules  that allow less groundwater remediation on sites posing a low risk to public health, safety and the environment and require more extensive remediation on high risk sites.  Existing UST rules require petroleum-contaminated sites to be classified as high, intermediate or low risk based on site conditions and assign a cleanup standard to each risk classification. High risk sites must be remediated to meet the state’s groundwater protection standards to the extent feasible. The groundwater standards set limits  for individual contaminants at the level safe for unrestricted use of the groundwater  — including use as a drinking water supply. Intermediate risk UST sites only have to be remediated to “Gross Contaminant Levels”, which allow contamination at levels as much as 1000 X  the groundwater protection standard or drinking water standard to remain at the end of remediation. Low risk sites may not require any remediation even though contaminant levels  greatly exceed groundwater protection standards.

Under existing rules adopted by the Environmental Management Commission, UST risk classifications are based on a snapshot of conditions around the petroleum release and the likelihood that petroleum contamination will reach water supply wells or create some other imminent health, safety or environmental hazard.  Under  EMC rules (15A NCAC .0406), a UST site is considered “high risk”  if:

(a)  a water supply well… has been contaminated by the release or discharge;
(b)  a drinking water well is located within 1000 feet of the contamination source;
(c)  a water supply well not used for drinking water is located within 250 feet of the source;
(d)  the groundwater within 500 feet of the contamination source could be a future water supply source because there is no other source of water supply;
(e)  the vapors from the discharge or release pose a serious threat of explosion due to accumulation of the vapors in a confined space; or
(f)  the discharge or release poses an imminent danger to public health, public safety, or the environment.

New DEQ guidance on high risk sites. 
North Carolina Petroleum UST Release Corrective Action Phase Project Management: A Calibrated Risk-Based Corrective Action Decision & Implementation Guide, effective June 1, 2016, moves away from the principle of  remediating groundwater at high risk UST sites  to meet state groundwater protection standards.  Instead, the guidance assumes most  sites classified as “high risk” can be remediated only to Gross Contaminant Levels (GCLs).

The guidance document cites data indicating that groundwater contamination plumes contract over time, reducing risk to nearby wells that have not already been contaminated.  Based on state laws directing DEQ to consider factors that limit  risk to nearby wells, DEQ has directed remediation companies to assume older high risk UST sites can be remediated to Gross Contaminant Levels. Under the new guidance, the key factor will be the stability of the contaminant plume. If the plume has stabilized or become sufficiently predictable for DEQ to conclude the contamination does not represent an expanding threat, the cleanup will largely rely on “monitored natural attenuation” of the contamination (natural reduction in contaminant concentrations over time) and the cleanup standard will be based on the GCLs.

A few observations about the new guidance:

♦ The guidance document acknowledges the new remediation guidelines have been driven by a  lack of sufficient state funds to fully remediate even high risk UST sites.

♦ The idea of reviewing high risk classifications based on the age of the site and stability of the plume makes sense, but the new guidance appears to focus on just one risk factor — proximity of the UST’s petroleum release  to existing water supply wells.  The guidance shifts to much more limited cleanup as long as the plume has stabilized and/or alternative water supply is available to well owners affected by petroleum contamination.

The guidance does not appear to consider another factor listed in the Environmental Management Commission’s  risk classification rule — whether groundwater within 500 feet of the UST release may be needed as a future water supply. In areas where groundwater represents the only local water supply source, the EMC risk classification rule intended to protect the groundwater as a potential water supply even in the absence of existing water supply wells.  The new guidance document seems to focus solely on the potential impact to existing wells.

♦  Reliance on GCLs as the final cleanup standard means higher levels of petroleum contamination remain in the groundwater at the completion of remediation. In the absence of extended monitoring, making GCLs the default remediation standard for plumes close to existing water supply wells or in areas where water supply wells may be installed in the future transfers risk from the UST owner to nearby property owners.  UST risk classifications rely on a snapshot of conditions around the petroleum release.  A change in conditions can lower risk (as the guidance document assumes), but conditions can also change in ways that increase risk.  Installation of a new water supply well  or changed  use of an existing well can affect the behavior of the contaminant plume, exposing well users to petroleum contamination.  Given that possibility,  greater monitoring of  high risk sites remediated only to gross contaminant levels may be needed.

♦  Since the guidance document changes implementation of the UST rules,  it likely would be considered a “rule” under the state’s Administrative Procedure Act.  In addition to creating a presumption that  gross contaminant levels will be the cleanup standard for all UST sites — a departure from the existing EMC rule — the guidance document establishes specific triggers for reexamination of an existing site classification. The new DEQ guidance may or may not be good policy, but any policy generally applicable to UST owners and operators would be considered a rule and the Environmental Management Commission has rule-making authority over the UST program. Failure to use the rule-making process also sidesteps any opportunity for comment by UST owners/operators, remediation companies, adjacent property owners or other members of the public on the potential impact of the changes.

♦  The change in UST remediation standards is only the latest step back from protection of groundwater as a water supply resource important to the state’s future.  A significant number of North Carolinians rely on groundwater for water supply either; around 50% of the population drinks water from private water supply wells or well-based water systems. Farms  often rely on water supply wells for irrigation and water supply for animals. In recent years, the direction of state policy has moved consistently toward less remediation of groundwater contamination because of the cost to the state or the cost to the polluter. The question is whether those cost/benefit calculations given enough consideration to the long-term costs of groundwater contamination.

The Ongoing Controversy Over Coal Ash and Well Contamination

August 21, 2016. The controversy over changing state advice to well owners near Duke Energy’s coal ash impoundments has exploded again over conflicting accounts — within the McCrory administration — of the basis for “do not drink” letters sent in 2015 and later withdrawn. Two earlier posts here and here provide background on groundwater and drinking water standards for vanadium and hexavalent chromium (the contaminant of greatest concern).

In 2015, the N.C. Department of Health and Human Services (DHHS) sent health advisory letters to the owners of wells with concentrations of hexavalent chromium (chromium 6 or Cr-6)  above 0.07 ppb.  The 0.07 ppb threshold represented the concentration of Cr-6 associated with an increased cancer risk of 1:1 million. In early 2016, the McCrory administration rescinded most of the letters and advised well owners that water meeting the federal drinking water standard for total chromium  (100 ppb) should be considered safe to drink. The total chromium standard covers both chromium-3 and the more toxic chromium-6.

Within the last two weeks, the conflict between DHHS and the Department of Environmental Quality (DEQ) over the content of the health advisory letters  again made headlines. This post describes the roles of  DHHS and DEQ in groundwater contamination incidents; explains the criteria for developing groundwater standards; and makes a few observations on the implications of the conflict for future groundwater contamination incidents.

The role of DHHS in groundwater contamination incidents and development of groundwater standards. When contamination affects drinking water wells,  DHHS toxicologists often advise on the potential health effects. If there is no existing drinking water or groundwater standard for the specific contaminant, the toxicologists use established protocols to assess the contaminant’s short-term  and long-term health effects. Acute health effects include organ damage, skin rashes, respiratory problems and other short to intermediate term problems. Long-term health effects often focus on increased cancer risk. DHHS may also work with the Department of Environmental Quality (DEQ) to develop a health-based groundwater standard for a contaminant that has no existing numeric standard in state or federal rules.  DHHS toxicologists advise rather than regulate. DEQ has responsibility for enforcement of state groundwater standards and oversight for groundwater cleanup.

Cancer risk as a factor in setting groundwater standards and assessing groundwater contamination.  Both state and federal environmental agencies consider increased  cancer risk as a factor in assessing groundwater contamination and setting goals for groundwater cleanup.  North Carolina’s  groundwater rules list a  1:1 million increased cancer risk as a primary criteria for setting groundwater quality standards.  In 15A NCAC 2L.0202(d),  the rules require a state groundwater standard to be based on the lesser  of  the

(1)  Systemic threshold concentration calculated as follows: [Reference Dose (mg/kg/day) x 70 kg (adult body weight) x Relative Source Contribution (.10 for inorganics; .20 for organics)] / [2 liters/day (avg. water consumption)];

(2)  Concentration which corresponds to an incremental lifetime cancer risk of 1×10-6;

(3)  Taste threshold limit value;

(4)  Odor threshold limit value;

(5)  Maximum contaminant level[the federal drinking water standard]; or

(6)  National secondary drinking water standard.

Based on recent public statements by DHHS scientists, DHHS and DEQ staff in the Division of Waste Management calculated increased cancer risk associated with Cr-6 exposure using a standard protocol. The two agencies concluded that  0.07 ppb represented the break-point for the 1:1 million increased cancer risk.  The  DEQ/DHHS calculation of increased cancer risk associated with > 0.07 ppb of  Cr-6  then became the basis for  “do not drink” letters sent to well owners in 2015.

Health advisories based on groundwater contamination. DHHS has long worked with DEQ staff  to  advise well owners on health risks associated with groundwater contamination. Both DHHS and DEQ report to the Governor, creating  a strong incentive for the agencies to agree on assessment of public health risk.  Environmental and public health experts may debate  the appropriate standard for a contaminant,  but  public conflict between the two agencies is  extremely unusual and may be unprecedented.

The split between DHHS and DEQ over advice to well owners.  According to DHHS scientists, the 0.07 ppb standard for CR-6 based on increased cancer risk reflected the consensus of DHHS public health experts and staff in DEQ’s Division of Waste Management.  DEQ leaders, however, encouraged DHHS to advise well owners that water exceeding the 0.07 standard should still be considered safe to drink as long as Cr-6 levels did not exceed the federal drinking water standard of 100 ppb.  DEQ publicly raised  concerns about the DHHS health advisories  in a January 2016 presentation to a legislative committee. The presentation compared the 0.07 ppb standard  to the federal drinking water standard and to standards adopted by other states.  Within a month after the legislative presentation,  DEQ and DHHS sent new letters advising well owners that well water with Cr-6 levels below 100 ppb should be considered safe to drink because the water meets federal drinking water standards.  Recent  statements by state toxicologist Ken Rudo and state epidemiologist Megan Davies (who has resigned over the issue) make it clear that DHHS public health experts did not believe the existing state and federal standards for total chromium sufficiently protected human health and objected to the revised letters.  The 100 ppb standard for total chromium represents an increased cancer risk orders of magnitude higher than the 0.07 ppb standard — 1:700 increased risk of cancer versus  1:1 million increased risk.

Some observations:

♦   The state’s groundwater standard remains 10 ppb for total chromium and the Coal Ash Management Act of 2014 directs DEQ to use state groundwater standards in assessing drinking water wells around coal ash impoundments.  DEQ  has not  proposed a specific state groundwater standard for Cr-6 based on the DEQ/DHHS cancer risk calculation. As a result, the 0.07 ppb standard remains a health advisory rather than an enforceable groundwater standard. The federal drinking water standard of 100 ppb does not apply to either groundwater assessment or evaluation of well safety near coal ash impoundments.

♦  According to Secretary Donald van der Vaart, DEQ does not question the DHHS calculation of increased cancer risk associated with Cr-6.   Given the gap between the total chromium standard of 10 ppb and the 0.07 ppb threshold for a 1:1 million increased cancer risk associated with chromium-6,  the  total chromium standard does not meet a basic criteria for a N.C. groundwater standards — which requires a groundwater standard to be based on the 1:1 million increased cancer risk —  and should be reviewed.

♦ State and federal agencies routinely use the  1:1 million increased cancer risk as a criteria  for developing health-based standards for permitting  and to set environmental remediation goals.  Both state and federal programs also recognize that there may be a need to move off the 1:1million cancer risk criteria in individual cases because it is not technically or economically feasible to meet the standard.  In those instances, the agency can adjust a groundwater cleanup goal  (for example) to reflect the limits of available technology.

Going forward.  As a practical matter, the difference between the DHHS health-based standard and the state groundwater standard has no direct enforcement consequences for Duke Energy. For the time being, the applicable state groundwater standard continues to be the total chromium standard of 10 ppb.  Under 2016 amendments to Coal Ash Management Act,  Duke Energy must  provide a permanent alternative water supply to all well owners within 1/2 miles of a coal ash pond which makes both the  cancer risk  threshold and the state groundwater standard irrelevant to decisions about alternative water supply.

Assuming no change in the state groundwater standard, the 10 ppb total chromium standard will also drive development and approval of  groundwater remediation plans for areas surrounding the coal ash impoundments.

The cancer risk threshold for Cr-6  does raise questions about the adequacy of the state’s  total chromium standard.  The DHHS calculation of cancer risk suggests the  existing total chromium does not meet one of the basic criteria for state groundwater standards — protection against a 1:1 million increase in cancer risk.

The public conflict between DEQ and DHHS raises two other questions —

Should  state environmental and public health agencies inform citizens  of the health risk  associated with contamination that meets existing regulatory standards? DHHS public health officials felt an obligation to inform well owners of the higher cancer risk potentially associated with elevated levels of CR-6; DEQ took the position that the warnings were unnecessarily alarming if the well water met federal drinking water standards.

The other question is more technical and would inevitably come up in any reevaluation of the groundwater standard for chromium: Is there any economic or technical reason not to use the more stringent 0.07 ppb standard as the basis for assessing risk of human exposure to Cr-6 in groundwater and setting groundwater remediation goals?  The choice of a standard has implications  beyond the immediate controversy over coal ash impoundments and so far there has not been a practical critique of the 0.07 ppb threshold based on technology or cost.  The reason behind DEQ’s objection to the DHHS 0.07 ppb threshold as a basis for health advisories still isn’t entirely clear since it appears most  public water systems  in the state meet the DHHS health-based standard. Those that don’t meet the 0.07 ppb standard come much closer than a number of the wells  DEQ argued should be considered safe because the water meets the federal drinking water standard of 100 ppb.

Fact-Checking the History of Coal Ash Regulation in N.C.

July 27, 2016. Misunderstanding history makes it more likely  the same mistakes will be made again. In that spirit, a fact-check of recent DEQ statements1 about the history of coal ash regulation in North Carolina:

“In 2007, a previous administration changed landfill laws and specifically exempted coal-ash ponds from many environmental requirements.”

The statement seems to be referring to the Solid Waste Management Act of 2007 which amended landfill siting and construction standards.  Two provisions related to coal ash landfills, but nothing in the law directly addressed coal ash ponds. Coal ash was not the main focus of the 2007 law, which responded to several controversial applications to construct new landfills for household waste and construction debris. As a result, the law  focused on concerns specific to those  proposals — impacts on wildlife refuges and parks; the size and height of waste disposal areas; separation from groundwater; and guarantees the landfill owner could pay for  environmental remediation.

The first of two provisions in the 2007 law affecting coal ash allowed utilities to construct a lined coal ash landfill on top of an old coal ash disposal site under specific standards. The second provision exempted coal ash landfills on the site of a coal-fired power plant from some of the new landfill siting requirements.   Coal ash landfills located on power plant sites continued to be regulated as industrial landfills under standards that required liners;  groundwater monitoring; and setbacks from waters and wetlands. The Department of Environment of Environment and Natural Resources (“DENR”) did not request either coal ash provision.

“In 2009, the state exempted Duke Energy from having to show that its coal-ash ponds were structurally sound. If that information had been required, the corroded pipe under the Dan River coal ash pond might have been found and the spill avoided.”

In 2009, the General Assembly actually repealed a state Dam Safety Act exemption for coal ash impoundments. See Session Law 2009-390.   Before 2009,  coal ash ponds had been entirely exempt from the dam safety law.  Repeal of the exemption made coal ash impoundments subject to the dam safety law  for the first time — requiring compliance with dam safety standards; regular state inspections; and DENR review/approval of plans for expansion or repair.

DEQ’s statement may be focused on language in the 2009 legislation that allowed existing coal ash impoundments to “… be deemed to have received all of the necessary approvals  from [DENR]  and the Commission for Dam Safety for normal operation and maintenance”. In effect, the law allowed impoundments built before repeal of the exemption to continue to operate as if the state had permitted the original construction.  Those impoundments, however, would be inspected going forward and required to comply with dam safety orders to address structural deficiencies.  On balance, the 2009 legislation greatly increased rather than diminished state oversight of coal ash impoundments under the Dam Safety Act.

The Dam Safety Act amendments did not cause state and federal regulators to miss critical information about the Dan River stormwater pipe that later ruptured. Both the U.S. Environmental Protection Agency (EPA) and DENR dam safety staff became aware of the stormwater pipes at the Dan River impoundment in 2009-2010. Before inspecting N.C. impoundments as part of the federal response to the TVA coal ash disaster,  EPA asked electric utilities to provide information on  structural conditions at each impoundment site in the state. Maps of the Dan River site that Duke Energy provided to state and federal inspectors incorrectly identified the stormwater pipes as concrete rather than corrugated metal.   The error meant state and federal inspectors did not have complete and accurate information as background for the inspections,  but not because the 2009 law allowed electric utilities to shield information about the impoundments — it didn’t.

Note:  It later became clear that internal Duke Energy inspection reports had flagged the metal pipes at Dan River for attention as early as the 1980s. In accepting a plea deal to a large federal penalty for the Dan River spill,  Duke Energy acknowledged a pattern of neglect that included failure to take the advice of its own engineers in 2011 and 2012 to do camera inspections of the stormwater pipes.

“In 2010 federal regulators required leaks from all coal ash ponds to be evaluated. No action was taken in North Carolina for three years.” 

By 2010,  EPA  had taken several steps to get a better handle on coal ash impoundments. In 2009, EPA  launched the nationwide effort to assess the structural integrity of coal ash impoundments.   Based on information provided by the electric utilities, EPA did on-site inspections of  eight higher risk  N.C. impoundment sites in 2009-2010 including the Dan River facility.  Inspectors from the state’s water quality, waste management and dam safety programs accompanied EPA on most of those inspections.  Also in 2009-2010, state dam safety inspectors did an initial dam safety inspection of every coal ash impoundment as the first step in bringing those impoundments under the Dam Safety Act.

On a different track, EPA  provided new guidance to states on permitting  discharges  from coal ash impoundments under the Clean Water Act ; the new guidance recognized that  discharges could result from seeps and leaks through impoundment walls.  In 2010-2012, the state water quality program began increasing  groundwater monitoring requirements for coal ash ponds and  revising stormwater permits for impoundment sites. It may be that state programs gave higher priority to  structural impoundment problems, groundwater contamination and stormwater permitting in 2010-2012 and lower priority to  addressing the water quality impacts of leaks. It is difficult to know without more information.

“In 2011 the state gave Duke Energy approval to use Sutton lake, a recreational area in Wilmington, as a dumping ground for coal ash.” 

Sutton Lake has not been used for coal ash disposal. Coal ash from the Sutton Power Plant went into one of two coal ash impoundments;  outlets release water from the impoundments to Sutton Lake. Another outlet releases water from Sutton Lake to the Cape Fear River.  The earliest Clean Water Act permit for the Sutton Plant accessible on the DEQ  website (from 1996)  treated the outlet to the Cape Fear River as the permitted discharge point and applied effluent standards there. Although the permit also put water quality limits on discharges from the coal ash impoundments to Sutton Lake, the lake was regulated as a cooling pond — part of the wastewater treatment system — rather than as “waters of the State” protected under the Clean Water Act.  Every renewal of the 5-year Clean Water Act permit from 1996 through  2011 continued that approach. Apparently water quality staff revisited the question of whether Sutton Lake should be treated as a cooling pond or as “waters of the State”  in  2011, but decided to maintain the approach used in earlier permit renewals. In 2014, the department (now the Department of Environmental Quality) looked at the issue again and concluded — correctly, I think — that the permit should be modified to treat Sutton Lake as “waters of the State” and put effluent limits on discharges to the lake. It isn’t clear why the water quality program and the Environmental Management Commission reached a different conclusion in issuing and renewing earlier permits.

“For many years Duke Energy monitored the water under its ponds and found hundreds of samples that did not meet groundwater standards. Again, no action was taken. In fact, the prior administration created a policy instructing regulators not to fine Duke if the company said it would correct the problem.”

The state water quality program  first began requiring comprehensive groundwater monitoring for coal ash constituents in 2009-2010, imposing new groundwater monitoring conditions as Clean Water Act discharge permits for the impoundments came up for renewal.  The new conditions covered key contaminants associated with coal ash and required groundwater monitoring to be done under a state-approved plan to insure monitoring wells would be appropriately placed to detect violations.  Given the  time required to install monitoring wells and collect a full cycle of monitoring results, little data  showing a  groundwater standard violation related to coal ash would have been available before 2010.  None of the groundwater violations cited in DEQ’s  2014 enforcement action concerning the Sutton Power Plant predate 2009;  most come from the period between 2010 and 2014.

Before 2009-2010, most of the state’s coal ash impoundments operated without significant groundwater monitoring for decades.  Electric utilities built many of the impoundments in the 1960s and 1970s  before any environmental regulations applied.  In the late 1970s,  the state began issuing federal Clean Water Act permits for discharges from the impoundments to rivers, lakes and streams. Environmental regulation focused on the quality of water discharged from the upper layers of the ash ponds to surface waters rather than the coal ash itself.  In the 1980s-1990s, the state began putting  groundwater monitoring conditions on the discharge permits, but the monitoring focused on very basic parameters. For the Sutton Plant,  those parameters were:   water level,  pH, chlorides, iron, arsenic, selenium and total suspended solids. Groundwater concerns had not yet focused on contaminants specifically associated with coal ash.

Groundwater concerns increased after 2000 as EPA continued to lay the groundwork for a federal coal ash disposal rule. In 2006, electric utilities began voluntarily  monitoring for contaminants associated with coal ash in the face of pressure from environmental organizations and expected federal rulemaking.  Most of the data from the voluntary monitoring could not be used in state enforcement actions.  Under state groundwater rules, a violation exists only if the impoundment causes an exceedence of groundwater standards at or beyond a compliance boundary around the pond.  (For most N.C.  impoundments, the compliance boundary is set 500 feet from the edge of the pond.)  Wells used by the utilities for the voluntary groundwater monitoring had not been placed to document groundwater standard violations at the compliance boundary.  But based on the voluntary monitoring results,  the state water quality program  put broader groundwater monitoring conditions on impoundment permits and required monitoring to be done under a state-approved well-siting plan to insure the data could be used for future enforcement.

The enforcement policy mentioned in the DEQ statement refers to 2010 groundwater enforcement guidance developed by water quality staff.  Since the expanded groundwater monitoring requirements applied to facilities that had operated for many years without monitoring, the water quality program developed a policy that put the enforcement emphasis on remediation of contamination rather than assessment of penalties for activities that had been unregulated  or lightly regulated for much of the facility’s history.

What the fact-checked history suggests:

It is difficult to contain environmental impacts 20 to 40 years after the fact. Both state and federal regulators struggled to understand and address problems associated with a method of coal ash disposal electric utilities had already invested in and become reliant on by the time environmental impacts became a concern.

The basic arc of state and federal regulation looks like this: In the 1970s,  state and federal regulators focused on discharges from existing coal ash ponds to surface waters. There was a quiet period between issuance of the first Clean Water Act discharge permits for coal ash impoundments in the late 1970s through the 1990s.  Regulators assumed the electric utilities were maintaining the impoundments properly and indicators of  groundwater contamination associated with coal ash had not reached critical mass. EPA began working on a federal coal ash disposal rule in the late 1990s, but abandoned the proposed rule in 2000 in the face of strong political opposition. Between 2000 and 2008, troubling data on groundwater and surface water pollution associated with coal ash ponds accumulated and the 2008 TVA spill undermined confidence in the electric utilities’ maintenance of impoundments.  Both state and federal regulatory efforts accelerated in 2008-2009, leading to state permitting changes and renewed efforts to adopt a federal coal ash disposal rule. (EPA finalized the federal rule in 2015.)

The issues surrounding coal ash have not been the responsibility of any one administration or a single branch of government. The history spans multiple governors of both political parties and legislative as well as executive action.  Coal ash provisions in the 2007 Solid Waste Management Act came out of direct negotiation between the electric utilities and legislators.  In  2009, the General Assembly repealed the Dam Safety Act exemption for coal ash impoundments,  but did not move a bill to set comprehensive state standards for coal ash disposal out of committee.

Leaps in state law on coal ash  management followed specific crises — the coal ash impoundment exemption from the Dam Safety Act survived until the 2008 TVA spill put a spotlight on poor maintenance. In  2009, the  General Assembly had no interest in moving comprehensive coal ash disposal legislation; that only changed after the 2014 Dan River coal ash spill .

By 2009, accumulating evidence of groundwater contamination and other water quality concerns led the state water quality program to use existing permitting authority to require more groundwater monitoring around coal ash impoundments and increase stormwater requirements. Those  efforts to use existing permitting tools more effectively laid the foundation for later groundwater enforcement actions.

 

 1 The statements  in bold appeared in  a recent letter by DEQ Assistant Secretary Tom Reeder to the Raleigh News and Observer.

2016 Legislative Session in Review: Environmental Legislation

July 12, 2016. The 2016 General Assembly session resulted in changes to several environmental laws, but ended without final action on a major regulatory reform bill.  Among the more significant environmental provisions enacted outside the budget bill:

Coal Ash. House Bill 630 eliminated the Coal Ash Management Commission, giving the Department of Environmental Quality (DEQ) authority to make decisions about final closure of coal ash impoundments.  The bill also changed the criteria for prioritizing impoundment closures and required Duke Energy to provide a permanent alternative water supply to  well owners within 1/2 mile of a coal ash impoundments (unless separated from the impoundment by a river or lake) and to other well owners potentially affected by the migration of groundwater contamination from the impoundments. See an earlier post for more detail on H630  changes to the 2014 Coal Ash Management Act.

Commissions.  House Bill 630 responded to the Governor’s constitutional objections to three state regulatory commissions — the Coal Ash Management Commission, the Oil and Gas Commission, and the Mining Commission. The Governor successfully challenged  the laws creating  all three commissions as violating separation of powers; in part, the Governor objected to the legislature’s power to appoint a majority of each commission’s members.  A post on the N.C. Supreme Court decision can be found here.  The Governor vetoed an earlier bill (Senate Bill 71)  attempting to resolve the separation of powers issue by giving the Governor a majority of commission appointments.  The Governor’s position  on Senate Bill 71 suggested an ongoing objection to any  commission exercising executive powers unless the Governor had authority to appoint a majority of the members without legislative confirmation;  direct the actions of the commission;  and remove commissioners at will.

The Governor’s Office reportedly accepted H630 as a compromise. The  bill eliminates the Coal Ash Management Commission,  but retains the Oil and Gas Commission and the Mining Commission under conditions the Governor had previously objected to — legislative confirmation of appointees and the ability to remove commissioners only for cause. [Note: Although there have been indications that the Governor’s Office agreed to H630, the Governor has not yet signed the bill.]

Renewable Energy. Two provisions in Senate Bill 770 (N.C. Farm Act of 2016) amended laws related to renewable energy specifically to benefit agricultural sources, such as swine waste-to-energy projects. Sec. 10 of the bill extends the state’s renewable energy tax credit (25% of project costs)  to projects in service by January 1, 2020 (previously January 1, 2017) as long as the facility began construction by December 31, 2013.  The extension will likely benefit some swine waste-to-energy projects that have been in the works for several years, but are not yet generating electricity. Sec. 18 of the same bill gives  poultry and swine waste-to-energy projects priority over other renewable energy generation projects in connecting to electric utility delivery systems.

Sediment Pollution. Sec. 14 of Senate Bill 770 amends G.S. 113A-52.01 to add production of  “[m]ulch, ornamental plants, and other horticultural products”  to the list of agricultural activities exempt from the state’s Sedimentation Pollution Control Act (or “Sediment Act”). The Sediment Act otherwise requires activities disturbing an acre or more to maintain a stream buffer and use erosion barriers to keep sediment out of rivers, lakes and streams. The addition of ornamental plants will not raise many questions, but mulch is not an agricultural product similar to the others. Including mulch production in the Sediment Act exemption will raise two questions:

1. What kinds of operations will be covered by the mulch exemption?  Mulch operations include  large-scale municipal  waste disposal facilities that mulch yard waste and have no relationship to agriculture.

2. How will the mulch exemption affect Clean Water Act permitting? The exemption seems to go beyond the federal stormwater exemption for agriculture. That is important because most land-disturbing activities in N.C.  meet federal construction stormwater requirements by complying with the state Sediment Act.  If the Sediment Act exempts activities that don’t also fall under a Clean Water Act stormwater exemption, the activity may require  a separate federal stormwater permit.

What didn’t happen.   Several efforts to enact legislation significantly restricting wind energy development  failed, although Sen. Harry Brown has already indicated an intent to reintroduce a bill prohibiting erection of wind turbines in designated military air corridors in 2017. Proposals to repeal the ban on landfill disposal of electronics and to end the state’s electronics recycling program also failed.  Legislators apparently could not reach agreement on bills attempting to clarify the protocol for advising well owners on the heath effects of well contamination — an issue sparked by controversies over conflicting advice given to well owners near coal ash impoundments; those bills never got to a floor vote. The Senate received House Bill 593 (Amend Environmental Laws 2)  from the House and expanded the bill to include a number of additional  provisions on stormwater, beach nourishment, stream mitigation and other issues. The House did not concur in the Senate changes, leaving those proposals to die with adjournment.

2016 Legislative Session in Review: The Budget

July 7, 2016. A few notes on how the General Assembly allocated state funds for the environment.

A New Trend Toward Funding Environmental Studies at UNC-CH   The legislature directed (and in most cases funded) the University of North Carolina at Chapel Hill to study  or convene stakeholder groups on  environmental and natural resource policies rather than assigning those projects to the Department of Environmental Quality (DEQ)  or to a legislative study committee:

♦  The budget directs UNC to create a North Carolina Policy Collaborative  to “facilitate the dissemination of the policy and research expertise of UNC for practical use by State and local government”. The Collaborative will focus on research related to natural resource management, including “research related to the environmental and economic components of the management of the natural resources within the State of North Carolina and of new technologies for habitat, environment and water quality improvement.” The legislature appropriated $1 million to the UNC Board of Governors for the N.C. Policy Collaborative for the 2016-2017 fiscal year.

♦ A UNC-led stakeholder group will study efforts to “ecologically restore and achieve economic sustainability” the state’s shellfish aquaculture industry.  The budget provision directs the UNC-Chapel Hill Chief Sustainability Officer (Brad Ives, former Assistant Secretary in DEQ) to lead the stakeholder group. The legislature did not appropriate funds for the effort.

♦ The budget creates a new study of water quality programs to reduce nutrient pollution focused on the Falls Lake and Jordan Lake nutrient reduction strategies. See an earlier post for more detail on the substance of this  budget provision and the effect on enforcement of the Falls Lake and Jordan Lake water quality rules. The legislation gives the UNC-CH Chief Sustainability Officer responsibility for this study as well and provides funding  at $500,000 per year for six years. (The budget provision allocates an additional $1.3 million to DEQ in 2016-2017 to  study  in situ technologies to reduce nutrient impacts.)

These represent unusually large and extended state investments in environmental studies. The combined UNC/DEQ  appropriations for environmental research, collaboration and water quality studies total  $2.8 million just for FY 2016-2017. The UNC nutrient study will be  funded at $500,000 per year for  another five years beyond that. By comparison,  the legislature appropriated only $100,000  for a one-year study of another high profile environmental issue —  hydraulic fracturing — in 2011-2012.  Another reference point may be the annual budget of  $4.1 million for the state’s  non-point source water pollution program; the 2016-2017 appropriations for environmental studies represent 2/3 of the annual operating budget for the non-point source water pollution program.

Earmarked Funds for Water and Wastewater Infrastructure.  Most new funding  for DEQ’s Water Infrastructure Division to support local government water and wastewater projects has been earmarked for specific projects. Of the approximately  $18.8 million in water/wastewater funding added to DEQ’s  2016-2017 budget, the legislature directed approximately $16.6 million to the following projects:

$400,000 to an unnamed municipality  (population < 100) for wastewater improvements needed to eliminate illegal wastewater discharges.

$1,000,000 to Duplin County for improvements to the on-site wastewater system at an elementary school

$700,000 to the Town of Fontana Dam for wastewater system upgrades

$14.5 million to fund extension of water lines to cities and counties in an as-yet unformed Regional Water and Sewer Authority intended to include Guilford County, Rockingham County and one or more municipalities. If the Regional Water and Sewer Authority is not formed by June 30, 2017, the funds revert back to the state’ General Fund. (In other words, the funds cannot be allocated to other water and wastewater projects.)

Restoration of Funds for Commercial UST Cleanups and the Water and Air Quality Account:  Some  transportation-related environmental programs have long been funded by a small portion of the state’s gas tax.  Those programs include the Commercial Underground Storage Tank Fund, (which pays to clean up petroleum contamination from leaking underground storage tanks at convenience stores, gas stations and other businesses) and the N.C. air quality program. In 2015, the legislature replaced the on-going gas tax allocation to these two  programs with a one-time appropriation and ordered a program review.  The main purpose of the review was to look at the diversion of gas tax money from the Highway Fund to non-highway uses — a legislative concern for several years. The 2016 budget restores the gas tax allocation to both programs, putting them back on a stable (although not necessarily adequate)  funding source.

House-Senate Compromise on Watershed Rules

June 30, 2016. The House has begun debate on a  compromise version of the 2016-2017 budget bill (House Bill 1030) that resolves differences between House and Senate budget proposals. The new budget bill includes a modified version of a Senate provision on watershed-based water quality rules. See an earlier post  for more on the original Senate provision in Sec. 14.13 of the budget bill. The significant pieces of the compromise provision:

The scope  of the budget provision has been reduced. The new version of Sec. 14.13 only applies to nutrient rules adopted for the Falls Lake and Jordan Lake watersheds.

The provision no longer sunsets existing nutrient rules. The budget provision still funds a UNC study of nutrient rules (focused on the Falls Lake and Jordan Lake rules) and directs the Environmental Management Commission to review and readopt  those nutrient management rules based on recommendations from the study.  But the bill no longer automatically sunsets existing rules.

The UNC study of nutrient management strategies.  The budget provision now funds the study for six years at $500,000 per year ($3 million for the entire study) and has separate report-back dates for the two watersheds — December 31, 2018 for  Jordan Lake and December 21, 2021 for Falls Lake. In part, the provision requires UNC to compare water quality trends  in Falls Lake and Jordan Lake to implementation of the different parts of the nutrient strategies. Since a number of the nutrient rules have not yet gone into effect because of legislative delays, evaluating the effectiveness of the rules based on water quality trends will be difficult. That is particularly true for wastewater discharge limits and stormwater controls that have never been implemented or only partially implemented in the two watersheds.

Delayed implementation of the Jordan Lake and Falls Lake rules. The provision further delays implementation of the nutrient management rules until at least 2019 for the Jordan Lake watershed and 2022 for the Falls Lake watershed.

DEQ study of in-situ technologies to address nutrient-related water quality problems. The budget provision continues to require a DEQ study of in situ technologies to reduce nutrient problems — now focused on algaecides and phosphorus-locking technologies. The DEQ study will be entirely separate from the UNC study of nutrient management strategies and  receives a separate appropriation of  $1.3 million for a trial of in situ technologies.    The final report will be due on March 1, 2018.

Exclusion of areas within the Jordan Lake watershed from stormwater requirements. The compromise  budget includes a new  subsection 14.13(f)  that says new impervious surface added in the Jordan Lake watershed between July 31, 2013  and December 2020 (after study and readopting of the rules as required under the budget provision) should not be counted as built-upon area for purposes of developing nutrient reduction targets under the Jordan Lake stormwater rules.  It isn’t entirely clear what this means.

Under  federal Clean Water Act requirements, the state has an obligation to cap discharges of any pollutant causing impaired water quality. These caps (called a Total Maximum Daily Load  or “TMDL”) must be approved by the U.S. Environmental Protection Agency. The Jordan Lake rules cap nutrient loading at a level necessary to address impaired water quality in the Jordan Lake reservoir; meeting the TMDL  requires a reduction  in nutrient loading  from the   baseline years  of 1997-2001. The rules then allocate the reductions proportionately to the different arms of Jordan Lake and to major nutrient sources in those watersheds – wastewater dischargers, stormwater runoff from developed areas, and agricultural activities.

So  the new Sec. 14.13(f) raises several issues –

  1. The new subsection  is written as though local governments in the Jordan Lake watershed develop their own stormwater nutrient reduction targets and can change the reduction target by excluding newly developed areas.  In reality, the reduction targets have been based on  allocation of the  reductions required  to meet the Jordan Lake TMDL under  EMC rules and a watershed model developed by DEQ.
  2. It  assumes that the nutrient reduction target assigned to stormwater would change based on development over this 7-year time period, but the target is based on reduction from the historic baseline of 1997-2001. The one thing that changes by delaying implementation of the Jordan Lake stormwater rules is that more areas will fall under requirements for stormwater retrofits of existing development rather than stormwater rules for new development projects.
  3. If the intent is to exclude these recently developed areas from future implementation of  Jordan Lake stormwater rules for new or existing development, DEQ may have to allocate greater reductions to other nutrient sources in order to meet the Jordan Lake TMDL approved by EPA.

A new cross-reference to Chesapeake Bay stormwater measures. Another new subsection, Sec. 14.13(i),  requires the state to allow stormwater measures approved by the Chesapeake Bay Commission for use in meeting the Chesapeake Bay  TMDL to also be used to meet the Jordan Lake  and Falls Lake TMDLs  based on the same nutrient reduction credit allowed under the Chesapeake Bay program.  The Chesapeake Bay Program (rather than the Chesapeake Bay Commission) maintains the Chesapeake Bay TMDL model and seems to be the gatekeeper for pollution reduction credits included in the model. Credits for nutrient removal under the Chesapeake Bay model  will likely turn out to be a range based on the type of stormwater measure; the area; the volume of stormwater treated; etc. It isn’t immediately clear  what — if any — stormwater measures would be authorized under this provision that are not already allowed under state rules.

A Senate Proposal on Coal Ash and Commissions

June 29, 2016. The N.C. Senate quickly brought to committee and then to the floor a new bill attempting  to resolve the separation of powers conflict over  appointments to the Coal Ash Management Commission, the Mining Commission and the Oil and Gas Commission.  (The Governor had vetoed an earlier bill to address the separation of powers issue; see this post for background on the previous bill and the Governor’s objections.)

The new bill, a  repurposed  House Bill 630 , represents a compromise between the Governor’s Office,  the Department of Environmental Quality (DEQ), and Senate leaders. House leaders did not participate in the negotiation and will have to vote to accept the changes for H 630 to  become law. A summary of H 630 as it passed the Senate below:

The Commissions. The bill eliminates the Coal Ash Management Commission, leaving implementation of the Coal Ash Management Act entirely to DEQ.  The Mining Commission and the Oil and Gas Commission remain,  but those laws have been amended to  give the Governor power to appoint a majority of the commission members subject to confirmation by the legislature. The bill also slightly modifies the Governor’s power to remove a commission member, adding “for good cause” to existing provisions that  allow the Governor to remove a member for misfeasance, malfeasance or nonfeasance.  (It isn’t clear how much “for good cause”  adds to the Governor’s removal power.)

The bill previously vetoed by the Governor had amended the appointment provisions for all three commissions and clarified the Governor’s power to remove commission members. In vetoing that bill, the Governor’s Office argued that commissions operating outside the Governor’s full  direction and control cannot constitutionally make executive decisions. The Governor’s Office also rejected the idea of legislative confirmation of appointees as another violation of separation of powers.  Agreement to H 630 suggests the Governor’s Office has softened on those positions, but the price of the agreement may have been elimination of the Coal Ash Management Commission.

Implementation of the Coal Ash Management Act.  H 630 also makes significant changes to the 2014 Coal Ash Management Act (CAMA).

♦  H 630 requires  Duke Energy to provide a permanent alternative water supply to well owners within 1/2 mile of the compliance boundary around a coal ash impoundment and to well owners in areas where groundwater contamination associated with the impoundment is expected to migrate based on hydrogeologic studies.

♦  By eliminating the Coal Ash Management Commission, the bill gives DEQ complete control over the risk classification of impoundments and approval of final closure plans.

♦  The process for assigning final risk classifications to each impoundment has changed significantly:

— The bill eliminates the list of specific risk classification criteria in the 2014 law, leaving only general language on consideration of  “risks to public health, safety, and welfare; the environment; and natural resources”.

—  The number of impoundment sites with predetermined risk classifications has expanded from the four sites designated as High Risk in the 2014 Coal Ash Management Act to include an additional 3 sites designated by H 630  as Intermediate Risk. Impoundments classified as High Risk or Intermediate Risk under CAMA must be excavated and the coal ash removed for disposal in a lined landfill or beneficial reuse. Citizen’s suits over coal ash at the three sites designated as Intermediate Risk had ended in settlement agreements requiring excavation and removal of the coal ash in those impoundments.

—  H 630 allows every other impoundment site  (seven total) to be classified as Low Risk as long as Duke Energy: 1.   provides a permanent alternative water supply to potentially affected well owners as required under the bill;  and 2. resolves all  structural dam safety issues.  Under CAMA, Low Risk sites can potentially be closed by dewatering and capping the ash in place instead of removing the ash for disposal or reuse. For those  seven sites, a final classification decision can remain open until Nov. 30 2018 (or Nov. 30 2019 if DEQ grants an extension) to allow  Duke Energy time to complete alternative water supply projects and dam safety improvements. Impoundments that fail to meet the Low Risk criteria by those dates would automatically be classified as  Intermediate Risk.

Having reduced the criteria for Low Risk classification to just the two, the bill provides no opportunity  for additional public input before DEQ finalizes those impoundment classifications.

♦ The bill gives DEQ more power over final closure plans. In addition to removing oversight by the Coal Ash Management Commission, the bill allows DEQ to determine the final closure plan rather than simply approving or disapproving a plan proposed by Duke Energy.  Theoretically, DEQ could reject a Duke Energy proposal to excavate an impoundment rather than cap the coal ash in place. The bill doesn’t provide criteria for DEQ to apply in making final closure decisions.  (The 2014 CAMA had directed the Coal Ash Management Commission to consider economic and technical feasibility; protection of public health, safety,  welfare, the environment and natural resources; and potential impact on cost to ratepayers.)

♦  H 630 keeps existing CAMA language  prohibiting  approval of a cap in place closure plan unless the plan will “prevent…post-closure exceedances of groundwater quality standards beyond the compliance boundary”, but adds an alternative closure standard that may be less protective of groundwater.

Under the new alternative,  DEQ could  also approve a cap in place closure plan under standards in federal coal ash disposal rules.  Unlike  CAMA, the federal rule does not explicitly bar use of capping in place if the capped coal ash would be a continuing source of groundwater contamination, saying only that the closure plan must:

Control, minimize or eliminate, to the maximum extent feasible, post-closure infiltration of liquids into the waste and releases of CCR, leachate, or contaminated run-off to the ground or surface waters or to the atmosphere…

[40 CFR 257.100(b). This rule applies to closure of inactive coal ash impoundments, but similar language appears in closure standards for active impoundments.]

The standard in the federal rule does not clearly require a cap in place closure plan to prevent  post-closure groundwater standard violations. Allowing use of the federal closure standard could be interpreted to give DEQ discretion to authorize capping in place as long as leaching of contaminants to groundwater will be “minimized”  — a lesser requirement than preventing post-closure groundwater contamination beyond the compliance boundary.  The challenge will be how to square application of the federal closure standard with groundwater corrective action requirements in other sections of the Coal Ash Management Act.

♦ A new section on coal ash reuse  requires Duke Energy to identify three coal ash sites that would each be  capable of processing 300,000 tons of ash for cement products — two sites to be identified in January 2017 and a third by July 2017.  The bill directs Duke Energy  to begin work on contracts/permit applications  as soon as possible after identifying the sites and to begin operation within 24 months after receiving permits.

The Senate version of H 630 has now gone back to the House for a concurrence vote.