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.

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