EPA’s Coal Ash Rule Part II: North Carolina

January 8, 2015.   The  previous post  described the basics of the federal coal ash rule. An earlier post provided an overview of the N.C. Coal Ash Management Act of 2014. The next question:  How will the two work together? Although the EPA rule does not require states to adopt and enforce the minimum federal standards, many states (like North Carolina) already regulate coal ash disposal and a direct conflict with federal rules would be problematic.

Based on  a quick review,   N.C. landfill  standards seem to match up fairly well to the federal standards  for coal ash landfills.  A  few  — such as separation from groundwater (4 ft. under state rules versus 5 ft. under the federal rule) — will need to be amended to meet minimum federal requirements.  N.C. law mandates an end to disposal of coal ash in surface impoundments, so N.C. has no standards for construction of new impoundments comparable to those in the EPA rule. But since states can be  more restrictive,  the federal rule  will not require  a change in state policy on use of surface impoundments for coal ash disposal.  The federal rule will overlap with state law in a few areas related to existing coal ash impoundments, including requirements for inspection and record-keeping; structural integrity standards;  closure;  and post-closure care.

A  detailed side-by-side comparison of state and federal requirements will be needed to identify all of the state standards that may require amendment to be consistent with minimum federal standards. This post will focus on two aspects of the federal rule that could have a significant impact on implementation of the North Carolina law — provisions on beneficial use of coal ash  and  timelines for closure of existing impoundments. This analysis is based on the prepublication version of the rule.   If EPA makes  wording changes before publication of the final rule in the Federal Register to correct errors or clarify ambiguous language,  those editorial changes may affect interpretation of the rule.

BENEFICIAL USE. The N.C. Coal Ash Management Act of 2014  (Session Law 2014-122) allows  use of coal ash in structural fill, including reclamation of  surface mines. The law also sets strict standards for large structural fill projects (defined as those using more than 8,000 tons per acre or more than 80,000 tons total of unencapsulated coal ash). The N.C. law  put a one year moratorium on approval of smaller  structural fills to study the adequacy of existing rules for those projects.

The EPA rule  seems to disfavor structural fill projects, defining “beneficial use” to exclude  structural fill/landscape projects using 12,400 tons or more of unencapsulated coal ash unless: 1. the project involves no more risk of release to the environment than use of  conventional  material;  or 2. releases to the environment will meet all environmental and public health benchmarks. The rule makes an exception  for highway projects, deferring to  the Federal Highway Administration’s technical standards for use of coal ash in road projects.  Setting  coal mining to the side (to be regulated under a different law), the EPA rule also defines “beneficial use” of coal ash to exclude disposal in  “sand mines, gravel pits and other quarries”. The federal rule treats placement of coal ash in a surface mine as  disposal rather than beneficial use and requires those projects to meet coal ash landfill standards.

Implications for North Carolina:

♦  The federal requirement that a project using 12,400 total tons or more of unencapsulated coal ash  demonstrate  no greater risk of release to the environment than use of other fill material will add a step not currently required  to permit a  structural fill project under state law.

♦ The  12,400 ton  threshold  potentially affects some projects classified as  small structural fills under the N.C. law (< 8,000 tons per acre or < 80,000 tons total).  Although  Session Law 2014-122   requires  a study of the standards  for  small structural fill projects, the law still allows those projects to be “deemed permitted” based on meeting those standards.  To be “deemed permitted”,  the developer must  submit certain information to DENR in advance but the project does not require an individual permit. The study required under Session Law 2014-122  will now need to consider how the new federal requirement affects both the approval process and the standards for large and small structural fill projects.

♦ New N.C.  standards for large structural fill projects  are very similar to the EPA minimum standards for  coal ash landfills,  although the EPA rule has more stringent standards in a few respects — such as the minimum separation from groundwater.  N.C.’s closure/post-closure requirements for large structural fills also closely match the federal requirements for closure/post-closure care at coal ash landfills. A more detailed comparison will be needed, but  it appears that N.C. would need to make only a few changes in state standards for large structural fill projects to make those standards consistent with the federal minimum  standards for coal ash landfills.

♦ It isn’t immediately clear (at least to me)  whether federal treatment of many structural fills  as disposal projects  — landfills by any other name — will have additional implications for developers of structural fill projects and subsequent purchasers of the property for redevelopment.

♦  It appears that disposal of coal ash in surface mines (other than coal mines) will  be required to  meet federal coal ash landfill standards without regard to the amount of coal ash used.

DEADLINES FOR IMPOUNDMENT CLOSURE.  EPA timelines for impoundment closure run from  the effective date of the EPA rule, which will be six months after publication of the final rule in the Federal Register.  To compare state and federal timelines,  this post assumes the federal rule will become effective on August 1, 2015 (which requires publication of the rule by January 31, 2015). The actual publication date  could move the effective date — and the compliance deadlines — forward or backward. The EPA rule also allows for some exceptions and extensions of time to the timelines. The timelines below are intended  to illustrate how the federal rule compares to the N.C. impoundment closure schedule; the timelines cannot be used to predict the closure date for any individual impoundment.

The North Carolina Coal Ash Management Act requires closure of all active and inactive coal ash ponds by December 31 2029, but prioritizes closure based on risk. The  North Carolina  law lists factors to be used in prioritizing impoundments for closure, but  generally leaves the decision on risk classification to the Department of Environment and Natural Resources (DENR) and the Coal Ash Management Commission. (The law itself designates four impoundments as high risk.)

N.C. Impoundment Closure Dates

December 31, 2018 High Risk
December 31, 2024 Intermediate Risk
December 31, 2029 Low Risk

While the state law provides a straightforward timeline for  closure of each category of impoundments,  it may be a  year before all of the impoundments in the state have been assigned  a risk category.

The EPA rule requires closure of existing impoundments based on specific conditions. The rule gives first priority for closure to “inactive impoundments” and then to unlined impoundments that have caused groundwater violations and active impoundments that do not meet new location and structural integrity standards.  Inactive impoundments have a hard closure deadline.  The other two deadlines follow from  assessing conditions at active impoundments.

EPA Impoundment Closure Dates

January 31, 2018 Inactive ImpoundmentsN1
August 1, 2020 or later (based on sampling) Leaking Unlined ImpoundmentsN2
August 1, 2020-January 31, 2024 Nonconforming Active ImpoundmentsN3

N1: “Inactive impoundment” includes any impoundment that stops receiving coal ash  before the federal rule goes into effect ( six months after publication of the final rule).  Inactive impoundments must be closed within three years; otherwise the utility will have to bring the impoundment into compliance with location and structural integrity standards for  existing impoundments and install a groundwater monitoring system.  But see the previous post for  more  on  application of the federal rule to inactive impoundments located at closed  electric generation facilities.

N2: The rule gives impoundment owners 18 months to determine whether an existing impoundment has a liner meeting standards in the rule and up to two years to install a groundwater monitoring system and collect background samples. (The two time periods run concurrently.)  Within six months after detecting a groundwater standard violation for a listed contaminant, an unlined impoundment must stop receiving coal ash and begin closure.  The listed contaminants: antimony, arsenic, barium, beryllium, cadmium, chromium, fluoride, lead, mercury, molybdenum, selenium, thallium, cobalt, lithium, and radium 226 and 228 combined.  Closure must generally be  completed within 5 years.

N.C.’s water quality program began requiring groundwater monitoring around coal ash ponds several years ago and groundwater standard  violations  have already been documented at a number of  impoundments.  The date in the chart reflects the earliest possible 5-year closure deadline based on  the existence of  monitoring data  showing  an  exceedence of a groundwater standard  at the time the federal rule goes into effect. For unlined impoundments that do not already have a groundwater monitoring system, the earliest closure deadline  could be as late as   January 31, 2023. Since groundwater monitoring will be ongoing, it is also possible for closure to be triggered by a groundwater exceedence detected later.

N3:  The federal rule allows up to three years from the effective date of the rule for a utility to demonstrate compliance with new standards for existing, active impoundments. An impoundment  found not to meet the standards must stop receiving coal ash within six months and start the closure process. The 5-year closure deadline  runs from the date the utility determines that an existing impoundment does not meet the  standards. So the earliest closure deadline (for impoundments determined to be nonconforming at the time the federal rule goes into effect) would be  between August 1, 2020 and January 31, 2021.   The latest possible closure deadline  (for a utility that takes the full three years to assess compliance with the standards) would be between  August 1, 2023 and  January 31, 2024. The rule allows for an extension of time under specific circumstances.

 Several things to note:

♦  The federal rule could push a significant number of N.C. impoundments to closure within the next 3-9 years  based on the number of inactive impoundments and  an additional number  of active impoundments that may not meet  federal  location/structural integrity standards or have groundwater standard violations for listed contaminants. By comparison, the N.C. rule would allow 10-15 years for closure of all but the most high risk impoundments.

♦  One way  to  reconcile the state’s  risk-based priorities for closure with the federal rule  would be to base the state’s high risk classification on factors  (such as groundwater contamination) that will drive early closure of existing impoundments under the federal rule. Since DENR has not yet developed guidelines for risk classification of impoundments, there will be an opportunity to take the federal rule into consideration.

♦  The EPA rule requires final closure of  inactive impoundments within three years. As of spring 2014, Duke Energy identified 16 of the 32 impoundments in  North Carolina as inactive.   Twelve of the sixteen are  located at the site of a closed  coal-fired  power plant.  Given the complexity  of the federal rule as applied to inactive impoundments at closed generating plants — and some degree of confusion within the federal rule itself (see the previous post)  — it isn’t immediately clear how many of North Carolina’s inactive impoundments will be affected by the early closure deadline. Depending on the final interpretation of the federal rule, a significant number of N.C. impoundments could be required to complete closure within the next three years.

CONCLUSION. In a number of ways,  North Carolina has a stronger overall framework for regulating coal ash disposal than the federal rule provides. But there are a few areas where North Carolina will need to  decide how to reconcile state and federal requirements to avoid  conflicts. Otherwise, electric utilities could be in compliance with the North Carolina program but still vulnerable to citizen suits for enforcement of the federal requirements.