Monthly Archives: February 2016

Risk-Ranking Coal Ash Impoundments

February 12, 2016.  The 2014 Coal Ash Management Act, Session Law 2014-122 , required the Department of Environmental Quality (then the Department of Environment and Natural Resources) to propose classifications for  coal ash impoundments in the state as High, Intermediate or Low Risk. The risk classification determines both how quickly the impoundment must be closed and whether closure requires removal of the coal ash for beneficial reuse or disposal in a lined landfill. Only Low Risk impoundments can be closed by de-watering and capping the coal ash in place.  The General Assembly designated Dan River Steam Station, Riverbend, Asheville and the Sutton Plant as high risk by law;  DEQ and the Coal Ash Management Commission have responsibility for classifying the remaining 10 coal ash sites.

Statutory Criteria for Risk Classification. The law, in G.S. 130A-309.211,  listed factors to be considered in classifying the impoundments:

(1)        Any hazards to public health, safety, or welfare resulting from the impoundment.
(2)        The structural condition and hazard potential of the impoundment.
(3)        The proximity of surface waters to the impoundment and whether any surface waters are contaminated or threatened by contamination as a result of the impoundment.
(4)        Information concerning the horizontal and vertical extent of soil and groundwater contamination for all contaminants confirmed to be present in groundwater in exceedance of groundwater quality standards and all significant factors affecting contaminant transport.
(5)        The location and nature of all receptors and significant exposure pathways.
(6)        The geological and hydrogeological features influencing the movement and chemical and physical character of the contaminants.
(7)        The amount and characteristics of coal combustion residuals in the impoundment.
(8)        Whether the impoundment is located within an area subject to a 100‑year flood.
(9)        Any other factor the Department deems relevant to establishment of risk.

DEQ’s Proposed Risk Classifications. On January 29, 2016,  DEQ  released a report providing information to support proposed classifications for most coal ash impoundments.  (Several impoundments have temporary classifications pending complete information on impacts to water supply wells.)  DEQ has based its risk classifications on three “key factors” — one each for groundwater, surface water and dam safety risks:

Groundwater Risk Factor: The number of people served by water supply wells within 1500 feet and down-gradient of the impoundment’s compliance boundary that are potentially or known to be exposed to groundwater contamination related to the impoundment. DEQ used a scale based on the number of people affected by well contamination:  0 people = Low Risk; 11-20 people = Intermediate Risk and  >  30 people = High Risk.  Transitional  classifications of Low/Intermediate Risk and Intermediate/High Risk cover the gaps between the three basic categories.

Surface Water Risk Factor:   The impoundment’s location relative to the 100-year floodplain.   Impoundments located outside of the 100-year floodplain or contained by a stream valley embankment with an engineered discharge (such as a spillway) have been classified as Low Risk. Impoundments sited along the run of a river, in the floodplain, and within the 100-year flood level are classified as  High Risk.

Dam Safety:  Structural integrity and maintenance as reflected in dam safety inspections.    Impoundments that received a Notice of Deficiency  identifying non-structural deficiencies at the last dam safety inspection have been classified as Intermediate Risk.  Impoundments that received a Notice of Deficiency identifying structural deficiencies  at the last inspection have been classified as High Risk. One important note —  a number of impoundments have a High Risk dam safety rating because of structural deficiencies identified in the last inspection, but DEQ has discounted that factor in the overall facility risk rating by assuming  the impoundments will be Low Risk once the structural deficiencies has been corrected.

Other Risk Factors.  The DEQ  report describes a number of  “other considerations”  that were not given the same weight in risk classification as the key factors. “Other considerations”  for groundwater and surface water risk include significant site conditions such as:  toxicity of contaminants exceeding groundwater standards; the extent of groundwater contamination; proximity of coal ash to the water table; potential impact of groundwater contamination on surface waters; location of the impoundment in a stream or drainage way; the water quality classification and use of  nearby surface waters; and proximity to a drinking water intake.

How DEQ Arrived at Each Proposed Classification.  The exact method DEQ used to arrived at the overall classification for each site is something of a mystery.   We know the three “key factors” largely drove the classification because the report tells us that. But there is no explanation of how (or whether) DEQ also used the information on “other considerations”  or even how the three key factors were weighted.

Example: Buck Steam Station.  Looking in greater depth at the classification of  one coal ash facility  provides a little more insight into DEQ’s classification decisions. DEQ has  temporarily  given Buck Steam Station a Low-Intermediate classification until the department receives additional information on impacts to water supply wells. If no well users near Buck Steam Station are  affected  by contamination associated with the impoundments (or well users have an alternate water source),  DEQ intends to classify the Buck  impoundments as Low Risk. Well impacts will be the deciding factor in the proposed classification. Buck rated as Low Risk under the key factor for surface water impacts because the impoundments are outside the 100-year flood plain. The three impoundments at Buck rated as  High Risk for dam safety, but DEQ assumed the  impoundments would  be Low Risk once the deficiencies have been corrected.

Looking  beyond the three key factors,  however, Buck rated as  high risk on a number of other groundwater and surface water parameters including:   contaminants exceeding state groundwater standards at or beyond the compliance boundary;  proximity of coal ash to the water table;  and discharge of contaminated groundwater to surface waters. It rated Intermediate risk based on the use of adjacent surface waters (the Yadkin River has been classified for water supply) and proximity to a drinking water intake. On some other parameters related to surface water, Buck Steam Station rated as low or intermediate risk.  See pages 92-99  for the entire list of risk ratings for the Buck impoundments.

The Buck classification seems to be fairly representative. Overall,  the  “other considerations”  discussed at great length in the report are  irrelevant to DEQ’s proposed classifications.  The one exception has to do with groundwater; after focusing the “key factor” for groundwater on impacts to down-gradient water supply wells, DEQ has deferred classification of several sites to get additional information on up-gradient and side-gradient wells.   It is also unclear how DEQ weighted different risk levels for the three key factors to arrive at an overall classification.   The Cape Fear Steam Station  was ranked Low Risk for groundwater (no impacted wells); High Risk for surface water (all of the impoundments are in the 100-year floodplain); and High Risk for  half of those impoundments because of dam safety deficiencies. But the facility as a whole received a classification of Intermediate Risk.

There may be more method to the  proposed classifications than it appears. It is possible that DEQ weighted the key factors and “other considerations”  or viewed some conditions as mitigating others.  Since the report does not provide any explanation, it is difficult to know.  The Coal Ash Management Act itself did not provide any guidance on how to translate nine statutory criteria into three risk classifications. Normally, that gap would be filled through rulemaking.   In the absence of  rules (or even a clear explanation in the DEQ report), it is hard to identify  the principles underlying the classification decisions.  The approach to groundwater risk classification may be particularly controversial since an impoundment that contains a very large volume of coal ash; extends below the water table; has documented groundwater standard violations at or beyond the compliance boundary; and discharges contaminated groundwater to surface water could be classified as Low Risk as long as no existing water supply wells users are affected.

Next Steps.  DEQ has scheduled public meetings on the proposed classifications as required under the law.  Those meetings will take place in March.  The final decisions on classification will be made by the Coal Ash Management Commission.  (Assuming the Commission can be reconstituted in time; see an earlier post on the Commission’s inability to act because  appointments to the Commission violated the N.C. Constitution.)

Appointments to Environment/Energy Commissions Violated N.C. Constitution

February 1, 2016. On January 29, 2016, the N.C. Supreme Court issued a decision in McCrory v. Berger — a lawsuit filed  by Governor Pat McCrory  to challenge the constitutionality of two recent state laws that created new executive branch commissions dominated by legislative appointees. The ruling in the Governor’s favor means the three commissions cannot act until the General Assembly changes the statutes governing commission appointments.

Background. The lawsuit concerned appointments to the Coal Ash Management Commission,  the Oil and Gas Commission,  and the Mining Commission. The Coal Ash Management Act of 2014  gave the Coal Ash Management Commission authority to (among other things) make final decisions on closure of coal ash impoundments.  The 2014 Energy Modernization Act eliminated the  Mining and Energy Commission (created in 2012) and divided its regulatory responsibilities  between a new Oil and Gas Commission and a reconstituted Mining Commission. In each case, the legislature gave itself the power to appoint a majority of the commission members.

The lawsuit filed by Gov. McCrory argued the legislative appointments violated the N.C. Constitution. In March of 2015, a special panel of three superior court judges ruled in the Governor’s favor, concluding that the N.C. Constitution bars legislative appointments to commissions that have executive authority. “Executive authority” generally means authority to implement existing laws as distinct from legislative authority to adopt new laws.   See an earlier post  on the superior court decision.

N.C. Supreme Court opinion. The N.C. Supreme Court opinion disagrees with the superior court decision on one key point — the Supreme Court ruled that the N.C. Constitution does not entirely bar the legislature from making appointments to executive branch commissions.  The court interpreted the Constitution’s “appointments clause” to allow the legislature to make appointments to statutorily-created offices including commission seats. The court ruled, however, that  legislative appointments to the Coal Ash Management Commission,  Oil and Gas Commission  and Mining Commission violated the separation of powers clause in Art. I, § 6 of the N.C. Constitution,  which requires that  “[t]he legislative, executive, and supreme judicial powers of the State government shall be forever separate and distinct from each other.”

The court concluded that the appointments scheme for the three executive branch  commissions interfered with the Governor’s constitutional duty to insure that state laws are faithfully executed:

In light of the final executive authority that these three commissions possess, the Governor must have enough control over them to perform his constitutional duty. The degree of control that the Governor has over the three commissions depends on his ability to appoint the commissioners, to supervise their day-to-day activities, and to remove them from office.

The court pointed to three factors that combined to create an unconstitutional legislative  interference with the Governor’s executive powers and responsibilities:

1. Each commission has authority to take final executive action  (i.e., the Coal Ash Management Commission has the final authority to prioritize coal ash ponds for closure and approve final closure plans);

2. The legislature appointed a majority of the members to each commission; and

3. The legislature limited the Governor’s ability to remove commission members by allowing removal only for cause (such as misconduct).

The implication of the decision is that a separation of powers violation has occurred when all three conditions exist.  The court included a footnote specifically suggesting that the outcome may be different with respect to a body like the Rules Review Commission that exercises a different kind of authority.

The court refused to address another separation of powers issue raised in the case. The Governor  argued that the legislature also violated separation of powers  by statutorily directing the Coal Ash Management Commission (CAMC)  to operate “independently” of the executive department where it is housed.  (Legislation creating the CAMC placed the commission under the Department of Public Safety.) The Supreme Court held the issue had been mooted by the portion of its decision ruling appointments to the CAMC unconstitutional.  The issue could come up again if the  legislature changes the appointments statute in response to the court’s decision,  but leaves the “independence” provision  in place.

Implications.  The three commissions directly named in the case cannot act until the legislature changes the unconstitutional appointment provisions and new appointments are made.  The Coal Ash Management Commission (CAMC) began meeting in 2014, but has not met since the March 2015 superior court decision that first ruled appointments to the CAMC unconstitutional. In the meantime, other pieces of the Coal Ash Management Act have moved  forward; a newly appointed CAMC will need to catch up.  The Oil and Gas Commission took over implementation of state laws on oil and gas development from the Mining and Energy Commission, so the court’s ruling could delay decisions related to hydraulic fracturing.

Two other pending lawsuits  raising similar separation of powers issues may be affected by the McCrory v. Berger decision. The N.C. State Board of Education sued to challenge Rules Review Commission authority over rules adopted by the Board.  The Board of Education raises several constitutional issues, including a separation of powers violation based on the fact that all Rules Review Commission members are legislative appointees.   The McCrory v. Berger footnote about the Rules Review Commission seems to caution against assuming the court would also find  RRC  appointments to violate separation of powers.   The footnote suggests that the Rules Review Commission’s specific function — to review and object to rules adopted by executive branch agencies — may put it in a different category than the commissions addressed in McCrory v. Berger.

Another pending separation of powers case  in Wake County Superior Court challenges the constitutionality of appointments to the Mining and Energy Commission (MEC). The MEC  seems to fit the McCrory v. Berger template: the commission had authority to take executive actions; the legislature made a majority of commission appointments; and the Governor only had the power to remove a commission member for cause. But the case also presents an additional question: Are actions taken by an unconstitutionally appointed commission void? Over a two-year period, the MEC developed and adopted state rules for hydraulic fracturing.  Plaintiffs in the MEC case (Haw River Assembly and a Lee County property owner) have asked the Wake County judge to rule appointments to the MEC unconstitutional and  void the rulemaking actions already taken by the commission.  The superior court judge had delayed hearing the MEC case until the N.C. Supreme Court issued a decision in McCrory v. Berger. While the Supreme Court decision now provides a roadmap for addressing the separation of powers issue, it doesn’t provide any guidance on how a separation of powers violation affects past commission actions.