Tag Archives: Water Permitting

Action: 2019 Budget

July 9, 2019. The 2019 legislative session got off to a very slow start. Few bills moved  before the May 9 deadline for substantive bills to pass one chamber of the legislature to stay alive. The pace picked up in the last month as both the House and Senate passed versions of a budget bill (House Bill 966)  and then agreed on a final budget. Governor Cooper immediately vetoed the budget bill for reasons unrelated to environmental provisions. (The Governor’s veto statement  criticized the legislature’s budget priorities; refusal to expand the state’s Medicaid program had been one sticking point.) This blogpost looks at some of the environmental provisions in the budget.

Funding Related to Emerging Contaminants Such as GenX.

Reallocation of state funding appropriated in 2018 to extend water lines in areas with well contamination caused by GenX. In 2018, the legislature allocated $2 million to DEQ’s Division of Water Infrastructure to help local governments extend water lines to properties affected by contamination caused by per‑ and poly‑fluoroalkyl substances (PFAS) including GenX.  Section 12.13 of the  2019 budget bill  reallocates those funds for a number of projects unrelated to PFAS. In February 2019, Chemours entered into a settlement agreement  with DEQ that requires the company to provide a replacement water supply to any person whose well has PFAS contamination above the health advisory level. Under the agreement, the replacement water supply means connection to a public water system unless the well owner declines or DEQ finds it would be prohibitively expensive or unsafe.

Additional funds to address emerging contaminants through water quality permitting. The budget funds five new positions in DEQ to address emerging contaminants. The positions include two new engineers to work on issuance and renewal of Clean Water Act wastewater discharge permits.

State Funding to Eliminate a Conservation Easement and Buy Back Mitigation Credits.   In an unusual (and unprecedented) provision, the legislature earmarked over $800,000 to eliminate a conservation easement on a completed stream restoration project.  The project, restoration of Little Alamance Creek in Burlington, was completed in 2012-2013. The creek had impaired water quality; the restoration project, which included replanting stream bank vegetation, was designed to improve water quality in the creek. The stream restoration project also generated mitigation credits intended to offset the stream impacts of N.C. Department of Transportation (NCDOT)  road construction projects. (Federal and state water quality permits often require the project developer to offset stream or wetland impacts by funding restoration of similar natural resources.)

The City of Burlington donated property for the conservation easement, which runs through a Burlington city park, but later had both aesthetic and public safety concerns about the completed stream restoration.  According to city staff, trees planted along the stream had not overtaken the shrubby undergrowth as expected. City officials were unhappy with the appearance of revegetated stream bank and worried that the vegetation provided cover for criminal activity.

The  budget provision requires DEQ to dissolve the conservation easement on Little Alamance Creek and reimburse funds used to purchase mitigation credits generated by the project. If NCDOT received mitigation credits from the Little Alamance Creek project as expected,  the department will have to buy  mitigation credits from other stream restoration projects to stay in compliance with its road construction permits. In that case, taxpayers will have paid for the mitigation credits twice since there is no possibility of recovering funds already spent on restoration of Little Alamance Creek. If a private developer received any of the credits generated by the project, the state buyback would be used to replace the developer’s credits. The cost is significant; the budget appropriates $837,755.00, but also directs DEQ to draw on other department funds if the actual cost exceeds the amount appropriated.

Removal of the conservation easement may allow the City of Burlington to alter the stream bank vegetation. It isn’t clear whether the city has a specific plan or what impact the changes will have on the stream’s water quality.

Delay Update of  State Water Quality Permits for Large Animal Operations. One of the policy provisions in the budget delays renewal of the water quality permit that covers most large animal operations. DEQ had completed a nearly year-long process to update and reissue the state water quality permits for large animal operations, including swine farms. The general permits set operating conditions for different categories of farms to protect surface water and groundwater from contamination by animal waste. The recently finalized general permits included some new or modified conditions, including a requirement for swine farms to monitor groundwater quality around waste lagoons located in the 100-year floodplain.

The N.C. Farm Bureau filed an appeal to challenge some of the conditions on the new general permits. In Section 12.19, the budget bill prevents DEQ from covering farms under the new general permits until 2020.   In effect, the bill delays enforcement of any new conditions and allows farms to continue to operate under the old permits while the N.C. Farm Bureau pursues its appeal.

During the delay, the budget provision directs DEQ to study whether water quality general permits should be adopted under the rule making procedures in the state’s Administrative Procedures Act. Note: As a practical matter, the process DEQ used to develop and finalize the general permits exceeded the basic public notice and hearing requirements of the APA.

New Legislative Activity on GenX

January 12, 2018.  When the N.C. General Assembly convened on January 10, the House unanimously adopted House Bill 189  – a bill described by House members as a first step toward improving the state response to unregulated water pollutants.

GenX and the path to House Bill 189. EPA began studying the effects of perfluorinated compounds (used in products such as firefighting foam, water repellants and Teflon) more than fifteen years ago.  EPA worked with chemical companies to phase-out the two most common compounds, perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS), because of concerns about persistence in the environment and human health risk.   In 2009, Dupont began manufacturing another type of perflourinated compound, GenX, as a replacement for PFOA. The Chemours Company now operates the GenX manufacturing facility in Fayetteville North Carolina which is  located upstream of drinking water intakes for Cape Fear Public Utility Authority (serving Wilmington/New Hanover County) and several smaller water systems.

GenX has uncertain health and environmental risks and no federal standards exist to guide state permitting and enforcement action. EPA has not adopted a drinking water standard for GenX, identified the compound as a priority water pollutant, or set effluent guidelines for discharge of the chemical under a Clean Water Act wastewater discharge permit (the National Pollutant Discharge Elimination System or “NPDES” permit).  EPA has indicated a  concern that GenX may share some of the environmental and health risks associated with PFOA and PFOS.  GenX is one of many “emerging” or “unregulated” contaminants that can be released to the environment.   An earlier blogpost described the major federal environmental laws touching on manufacture, use and discharge of chemical compounds like GenX and the gaps in those laws.

The path to House Bill 189 began with the 2016 discovery of GenX  in drinking water systems using the Cape Fear River as a water supply source. Later, GenX was also found in private drinking water wells near the Fayetteville facility. Public concern about the health effects of GenX and the adequacy of federal/state regulation of contaminants like GenX created pressure for legislative action.  In August 2017,  the General Assembly  appropriated funds to Cape Fear Public Utility Authority and to UNC-Wilmington to study GenX and water treatment options. The legislation, described here,  made no substantive changes to state law and allocated no funding to programs in the Department of Environmental Quality (DEQ) and the Department of Health and Human Services (DHHS)  responsible for enforcing water quality standards and establishing health guidelines for exposure to environmental contaminants.   The  state House of Representatives, however,  created a Select Committee on River Water Quality to further study the issue of unregulated contaminants between legislative sessions. The substance of House Bill 189 came out of the House select committee’s work.

House Bill 189. The bill does not break new ground in water quality law,  but directs DEQ to undertake several studies that could lead to recommendations for future legislation on unregulated contaminants. The bill also proposes to allocate additional state funds to the issue. Although prompted by GenX,  the bill’s provisions apply more broadly to GenX and other unregulated contaminants. By section:

Sec. 1 Science Advisory Board review of the DHHS process for setting health goals for contaminants and new health goals set by the department. In 2017, DEQ reconstituted the department’s existing Science Advisory Board to provide additional expertise in setting  health goals for exposure to unregulated contaminants. Health goals represent the concentration of a contaminant considered safe for humans based on studies of both immediate, acute effects (such as illness, organ damage, skin irritation or respiratory distress) and long-term effects (primarily increased cancer risk).  H 189 supports DHHS consultation with the Board on health goals and goes further to require  DHHS to notify the Science Advisory Board before issuing a new health goal. The bill then focuses on the process for setting health goals, directing the Science Advisory Board to study the DHHS process and make recommendations. Legislative interest in the process for setting health goals may have arisen from recent controversies over use of health goals to advise property owners on the safety of well water affected by contaminants associated with coal ash. Both legislators and industry representatives have sometimes questioned the scientific basis for a health goal as well as the appropriateness of using a non-regulatory health goal to  guide regulatory decisions such as groundwater cleanup and the obligation to provide alternative water supply. See earlier posts concerning controversy over health goals for contaminants associated with coal ash here and here.

Sec. 2  A study of the Clean Water Act permitting program for wastewater discharges. The bill directs DEQ to study specific issues in the NPDES permitting program: 1. Whether NPDES permit applications require sufficient information about pollutants in the wastewater to be discharged;  2. Monitoring, sampling, and analytical requirements for wastewater dischargers; 3. The process for setting standards or discharge limits for contaminants when there is not an existing state or federal standard; and 4. The timeliness and thoroughness of permit reviews.  A report must be provided to the legislature by April 1, 2018. Parts  2 and 3 of the study likely reflect business/industry interest in the process for setting NPDES  permit conditions. That could lead into a debate over how much DEQ can require through individual permit conditions versus going through a rule making process to set generally applicable permit standards.

Sec. 3. Interstate exchange of information about pollutants entering North Carolina rivers.  DEQ has been directed to better coordinate interstate exchange of information about pollutants entering river basins that  North Carolina shares with neighboring states (West Virginia, Virginia, South Carolina, Georgia, and Tennessee).

Sec. 4. Notice of illegal discharges and the presence of unregulated contaminants in surface waters. This section of the bill creates another DEQ study; this study would focus on: 1.  The adequacy of existing  laws requiring notice of an illegal discharge of untreated waste or wastewater; and 2.  DEQ’s process for informing the legislature and the Environmental Management Commission of the presence of an unregulated contaminant for which no state or federal discharge standard has been set. A report must be provided to the legislature by April 1, 2018.

Sec. 5. Water system liability for the presence of an unregulated contaminant in drinking water. The School of Government at UNC-CH will report to the legislature on the potential civil liability of a water system that distributes water contaminated by a pollutant for which no discharge standard has been set under state or federal law and any difference in liability exposure between public and private water utilities.

Sec. 6. Appropriation of funds to support activities related to unregulated contaminants. H 189 proposes to appropriate just over $1.3  million in one-time funding for  water quality sampling; NPDES permitting; air quality sampling and analysis of atmospheric deposition of GenX; and sampling of groundwater, soil and sediment for GenX and other emerging contaminants. The money would come from unused funds originally appropriated for other purposes, including pilot nutrient management projects in the Jordan Lake watershed.

Sec. 7 Additional funding.  The House proposes to appropriate an additional $479,736 in recurring funds from the state’s General Fund to DEQ for water quality sampling and analysis related to GenX and other unregulated contaminants and $537,000 from the state’s Contingency and Emergency Fund for analytic equipment (presumably a mass spectrometer) to evaluate emerging contaminants.

Impact of H 189. The bill does not set any new legal standards for discharge of unregulated contaminants to North Carolina waters or expand the existing authority of DEQ and DHHS to respond to unregulated contaminants. Instead, the bill mandates several studies that could lay the groundwork for future legislative action. House members stressed that the bill represents just a first step toward improving state response to unregulated contaminants.

Aside from the $537,000 earmarked for the mass spectrometer, the appropriations proposed in H 189 essentially offset another  $1.8 million reduction in the DEQ budget for the 2017-2019 biennium. As a result, the appropriations do not represent an actual increase in DEQ’s budget from 2015-2017 levels. An earlier blogpost noted the impact of past budget cuts on the water quality program.   DEQ  had a two-year backlog of wastewater discharge permit renewals in December 2016 — before the reductions required in the most recent budget. The Chemours permit to discharge wastewater to the Cape Fear River from the Fayetteville Works fell in the category of permits overdue for review and renewal. The GenX controversy has also shown a brighter light on the additional burden on the state water quality program — in expertise, research capability, and analytical equipment — to address a contaminant for which no federal standard has been set.

So the appropriations in H 189 are helpful in offsetting additional DEQ budget cuts, but do not provide a net increase in funding. The appropriations also provide no additional resources to DHHS, which has significant responsibility for assessing and advising on the health impacts of an unregulated contaminant.

Senate response. The Senate adjourned without considering House Bill 189. A statement from Senate President pro tem Phil Berger criticized the bill as ineffective and seemed to oppose the appropriations:

“[H 189] leaves North Carolina taxpayers holding the bag for expenditures that should be paid for by the company responsible for the pollution, fails to give [the Department of Environmental Quality] authority to do anything they can’t already do and authorizes the purchase of expensive equipment that the state can already access for free.”

It isn’t clear which expenditures in H 189 the Senate wants to shift to the polluter or how that could be done. Most of the H 189  appropriations cover basic state water quality monitoring, permitting and compliance work.  NPDES permit fees cover a percentage of permitting costs, but those fees  do not vary based on a facility’s violation history.  The legislature has also tended to view fee increases very skeptically out of concern for the impact on business and industry.  A person responsible for illegally contaminating surface water or groundwater can be held financially responsible for cleanup costs and steps to minimize health impacts (such as providing bottled water to the owner of a contaminated well) , but state  law does not currently require a violator to pay any additional amount toward support of basic regulatory activities.

Senator Berger’s statement indicated the Senate may take up legislation related to GenX in the next regular legislative session that begins in May.

GenX: The State Enforcement Case

November 14, 2017.  An earlier post discussed some of the issues surrounding detection of a perflourinated compound known as GenX  in the Cape Fear River and in water systems using the river as a drinking water source. On September 7, 2017, the  Department of Environmental Quality (DEQ)  issued a Notice of Violation and filed a legal complaint against the Chemours Company alleging violations of the federal Clean Water Act and state groundwater rules related to GenX. This post looks at the specific allegations in the state enforcement case.  ( A copy of the entire complaint can be found on  DEQ’s GenX  webpage.)

One piece of background information —  Dupont  began manufacturing GenX at the Fayetteville Works in 2009, but transferred the operation and associated environmental permits to the Chemours Company in 2015.  The sequence of events surrounding GenX begins under Dupont management, but the enforcement case names only the Chemours Company — the current owner and permit holder — as defendant.

The enforcement case against Chemours makes two basic claims:

1. Chemours violated the Clean Water Act by discharging GenX to the Cape Fear River under a water quality permit that did not authorize any discharge of GenX.  The state claims neither Dupont nor Chemours  told DEQ that wastewater discharged from the Fayetteville Works to the Cape Fear River would contain GenX and other perflourinated compounds.   According to the complaint,  state water quality staff  understood that the GenX manufacturing plant opened in 2009 would use a “closed loop” system and dispose of all wastewater off-site.   In fact,  a consent agreement between the U.S. Environmental Protection Agency (EPA) and Dupont under the Toxic Substances Control Act (TSCA)  only allowed manufacture of GenX  under conditions requiring Dupont to effectively eliminate GenX from both the wastewater discharge and air emissions associated with the manufacturing process.

The complaint alleged that Chemours,  in applying for its most recent National Pollutant Discharge Elimination System (NPDES) permit under the Clean Water Act,  did not tell DEQ that other operations at the Fayetteville Works generated wastewater containing GenX as a byproduct. (The implication is that Dupont had also failed to disclose the presence of GenX  as a byproduct when applying for earlier water quality permits.) Chemours discharged wastewater from those operations to the Cape Fear River.

DEQ alleges Chemours violated the Clean Water Act by failing to tell state permit writers that  wastewater from the Fayetteville Works contained GenX (and other perflourinated compounds) and by discharging GenX  to the Cape Fear River under an NPDES permit that did not authorize discharge of those compounds.

2. Chemours  violated state groundwater standards.    According to the DEQ complaint,   Chemours’ hazardous waste permit has required groundwater monitoring since at least 2003 and included sampling for PFOA (the older perflourinated compound replaced by GenX ).  After detection of PFOA  in the Cape Fear River in 2015, DEQ required supplemental groundwater monitoring to determine whether groundwater at the Fayetteville Works could be the source. It isn’t clear from the complaint whether the hazardous waste permit required monitoring for PFOA from the beginning and expanded the scope in 2015 or first required PFOA in 2015. DEQ did not specifically require monitoring for GenX until August of 2017. The initial sampling detected GenX in 13 of 14 monitoring wells on the grounds of the Fayetteville Works.

Under state rules, the  groundwater  standard for any contaminant that does not  occur naturally is the lowest measurable level  (the “practical quantification level” or “PQL”) unless the rules set a higher standard based on evaluation of health and environmental risk. Since GenX does not occur naturally and state rules set no other standard, the allowable concentration of GenX would be the PQL of 10 nanograms/liter (equivalent to 10 parts per billion).  The 2017 monitoring detected levels of GenX ranging from 519 ng/ltr to 61,300 ng/ltr. All five wells located adjacent to the Cape Fear River had levels of GenX exceeding 11,800 ng/ltr. DEQ found the test results documented widespread groundwater contamination on the Fayetteville Works site exceeding  both the 10 ng/ltr groundwater standard and the threshold for human health effects  identified by the state Dept. of Health and Human Services (140 ng/ltr level).

Status of the enforcement case.  The DEQ complaint asked, in part, that Chemours immediately stop any discharge of GenX and related compounds to the Cape Fear River.  On September 8, 2017 (the day after filing the enforcement case), DEQ entered into an agreement with Chemours to resolve the discharge issue. Under a partial consent agreement,  Chemours agreed to continue voluntary measures undertaken early in the summer to prevent discharge of process wastewater containing GenX to the Cape Fear River.  The partial consent agreement also required Chemours to take similar steps to prevent discharge of two other perflourinated compounds from the “single source of significance” of those compounds at the Fayetteville Works.

The partial consent agreement did not resolve all potential violations at the Fayetteville Works.  The consent agreement did not address any of the groundwater standard violations alleged in DEQ’s September 7, 2017 complaint. DEQ also expressly reserved the right to take additional enforcement action in the event of future unpermitted discharges or violations associated with other chemicals. In fact, DEQ issued a new Notice of Violation to Chemours today based on a previously unreported spill at the Fayetteville Works. That NOV  alleges that Chemours violated its NPDES permit by failing to notify DEQ of an October 6, 2017 spill of dimer acid flouride ( a precursor to GenX) from the manufacturing line.

Still to come. With respect to the groundwater violations, DEQ’s September complaint asked the court to order Chemours to:

♦ Remove, treat or control any source of perflourinated compounds at the Fayetteville Works that could contribute to groundwater contamination. Consistent with state groundwater rules, that  would need to be done under a plan approved by DEQ.

♦ Fully assess the extent of groundwater contamination and develop a plan to address the groundwater contamination. (Again, both the assessment and corrective action plans would be subject to DEQ approval).

It does not appear that Chemours has an approved groundwater assessment plan yet and the groundwater corrective action plan can only be developed once the assessment has been done. In the meantime, DEQ has directed Chemours to provide an alternative source of drinking water to 50 households near the Fayetteville Works whose water supply wells have been contaminated by perflourinated compounds.

DEQ’s September complaint focused on actions necessary to stop the  discharge of GenX to the Cape Fear River and address groundwater contamination,  but state law also authorizes DEQ to assess civil penalties for these violations. The maximum civil penalty for each violation of state water quality laws or rules is $25,000 and if a violation continues over a period of time, state law  authorizes DEQ to assess daily penalties.  (N.C. General Statute 143-215.6A.) The actual penalty amount per violation depends on a number of factors set out in the law, including the extent of harm and whether the violation was intentional. In the case of a continuing violation, DEQ would also have to decide what time period merits daily penalties. DEQ usually develops the penalty assessment separately from legal action to obtain compliance and has not yet proposed penalties for the Chemours violations.

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. 

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.

The Dan River Coal Ash Spill and Environmental Policy

March 3, 2014.  The February 2 coal ash spill at Duke Energy’s Dan River steam station (see an earlier post for more on the spill) puts some recent and still pending environmental policy decisions in a  new light.

Preventing state environmental programs from adopting standards “more stringent than” federal standards.  In 2011, the General Assembly prohibited environmental agencies  from adopting a rule  “that imposes a more restrictive standard, limitation, or requirement than those imposed by federal law or rule, if a federal law or rule pertaining to the same subject matter has been adopted”. You can find the statute (G.S. 150B-19.3)  here.   The increasing evidence of water quality problems associated with coal ash  ponds may test those limits on state regulation —

♦  The question is whether  new state rules on  coal ash disposal or closure of existing coal ash ponds would be considered  “more stringent” than existing  federal rules.  Federal rules exempt  coal ash from regulation as a hazardous waste, but include ash as a “solid waste” and set minimum standards for solid waste landfills. On the other hand, coal ash ponds aren’t considered solid waste landfills so the solid waste rules don’t apply.  Federal  Clean Water Act rules  regulating  stormwater and wastewater discharges apply to the ponds, but nothing in the existing  federal rules requires  a coal ash pond to meet  construction standards  to minimize groundwater impacts or obligates  the utility company to move coal ash from a pond to a disposal facility with less environmental risk. Given that landscape — federal rules  address some, but not all,  concerns about coal ash disposal — can state environmental programs fill the gaps by imposing additional requirements without specific statutory authority?

♦ The exceptions in G.S. 150B-19.3 are inadequate to get ahead of an environmental  problem that poses a long-term risk, but  not a   “sudden, unforeseen” threat.  Few of the problems associated with coal ash ponds would be considered sudden or unforeseen. Both federal and state regulators have long known that  unlined ash ponds pose  some  risk of groundwater contamination. The massive spill at  TVA’s Kingston plant in 2008  focused attention on the possibility of  structural failure of a coal ash  impoundment.  The U.S. Environmental Protection Agency  has been working on federal  coal ash disposal regulations off and on for over ten years because of these and other concerns. As obvious as the problems surrounding coal ash disposal have now become, the exceptions in G.S. 150B-19.3 don’t seem to give environmental agencies a way to address those problems through rulemaking.

♦  If state agencies  need  additional  statutory authority   to adopt  state rules that go beyond current federal regulation of coal ash disposal,  rulemaking could not begin until after the 2014 legislative session that  begins in mid-May.  Rule adoption often takes two years. The other alternative would be  for the General Assembly itself to set standards for coal ash disposal through legislation. Legislation can move much more quickly than rulemaking, but the last effort to enact state legislation on coal ash  failed due to opposition from the utility companies. See  this  post for more information on  earlier state legislation and  a link to the 2009 coal ash disposal bill.

Efforts to limit state review of engineered plans and drawings.  North Carolina’s professional engineers (PEs)   have lobbied for several years to limit state review of plans prepared  by  PEs and to constrain the ability of regulatory staff to require  changes to  engineering  plans. The most recent effort  led to language in the Regulatory Reform Act of 2013 (Session Law 2013-413)  requiring a study of state and local review of engineering plans. Section 58 of S.L. 2013-413  requires DENR, the Department of Transportation, the Department of Health and Human Services and local governments to study:

“(iii) the standard scope of review within each permit program, including whether… staff are requiring revisions that exceed statutory or rulemaking requirements when evaluating such permits or plans; [and]

(iv) opportunities to eliminate unnecessary or superfluous revisions that may have resulted in the past from review processes that exceeded requirements under law, and opportunities to otherwise streamline and improve the review process for applications and plans submitted for approval.”

The history and recent failure of the Dan River stormwater pipe reinforces the value of having a second, objective review of engineering plans and decisions.  The  early decision by utility company engineers (before state regulation) to expand the ash pond over a metal stormwater pipe and the apparent failure to plan for maintenance of the pipe likely contributed to the spill.   In the aftermath of the February spill, it became clear that current Duke Energy staff  did  not know how the stormwater pipe had been constructed — incorrectly  assuming that  the entire stormwater pipe was concrete.    Even in real time response to the Dan River spill, Duke Energy  and  DENR  engineering staff  sometimes reacted very differently to the same information. Duke Energy did a camera inspection of  a second, smaller stormwater pipe at the Dan River site to check its condition.  According to news reports,  Duke Energy staff  planned no immediate action based on the results of the camera inspection other than continued monitoring.  A state dam safety engineer who looked at the same video showing  leaks and pooling of water in the  pipe concluded that  the  second  pipe could also be discharging coal ash to the Dan River. Water quality testing  confirmed high levels of arsenic in discharges from the pipe and the dam safety program ordered Duke to close the second pipe within 10 days.  When an error carries potentially high risks or costs,  review of engineering plans and decisions can be critical — simply because  state and local environmental staff will look at the same situation through different eyes.

Note: The Study of Review of Engineering Work has been submitted to the legislature’s Environmental Review Commission and the General Assembly could consider legislation on state/local review of engineering plans in the upcoming legislative session.

Limiting DENR’s ability to order steps to contain groundwater contamination. The Regulatory Reform Act of 2013 also does two significant things to limit (or defer) steps to contain or cleanup groundwater contamination: 

♦ The law makes the property line  the presumed “compliance boundary” for groundwater contamination caused by a permitted waste disposal facility  (including  a  coal ash pond).  State rules allowed for some exceedence of groundwater standards near a waste disposal area, but generally put  the compliance boundary at 250 feet around the footprint of the facility or  at the property line whichever is closer.  Causing an exceedence of  groundwater standards beyond the compliance boundary violates the permit. The new law  presumes  groundwater contamination associated with a waste disposal facility  can be allowed to migrate to the property boundary — including any  adjoining  property in the same ownership. The law does not change existing compliance boundaries set by permit, but sends a strong message about future permit terms  and regulatory requirements. The change would potentially allow the owner of a waste disposal facility to contaminate a much greater area of groundwater without any obligation to remediate. Using the property line as the compliance boundary also leaves little safety margin to protect the groundwater rights of  nearby  property owners.

♦ The law  limits DENR’s ability to require the operator of a permitted waste disposal facility to take steps to remediate or contain groundwater contamination within the compliance boundary. The law ties DENR’s hands until the contamination has migrated beyond the compliance boundary unless DENR can show that:

(1)   The contamination has already caused a water quality violation in adjoining classified waters  or a violation “can be reasonably predicted to occur”;

(2)  The contamination poses an imminent threat to the environment, public health, or safety;

(3)  The contamination will cause a violation of any standard in groundwater occurring in the bedrock, including limestone aquifers, unless  the violation has no  potential to adversely affect a water supply well.

At the very least, DENR will have to meet a significant new burden before directing the owner of a waste disposal facility to take steps to prevent further migration of groundwater contamination.  It appears that clear evidence of groundwater contamination  moving  offsite — affecting another property owner’s groundwater  — will not be enough by itself to allow DENR to require steps to contain the contamination.  DENR  will have to  demonstrate that  groundwater standards will be violated. In the worst case, the horse will be well out of the barn before the state can act.

Reorganization and Review of N.C. Water Programs

August 7, 2013. An earlier post talked about reported plans for reorganization of water programs in the Department of Environment and Natural Resources and legislation directing DENR to combine the Division of Water Resources and the Division of Water Quality.  Since then,  DENR’s plans have become public and the General Assembly  adopted budget provisions related to the reorganization. On  August 1, 2013,  Secretary John Skvarla announced that all of the stormwater programs in the Division of Water Quality would move to the Division of Mineral, Energy and Land Resources effective that same day and the remaining water quality programs would become part of a reorganized Division of Water Resources. You can find the press release here.

Stormwater. Transfer of the stormwater programs significantly  changes the responsibilities of the Division of Mineral, Energy and Land Resources.  The Division of Water Quality  managed a number of different state and federal stormwater programs, including: a state coastal stormwater  program  designed to protect shellfish waters from bacterial contamination;  stormwater control requirements associated with the Neuse River, Tar-Pamlico River, Falls Lake and Jordan Lake nutrient strategies;  federal  stormwater programs (delegated to the state by EPA)  that issue permits for municipal and industrial stormwater discharges and for  stormwater generated by active construction sites. The Division of Energy, Mineral and Land Resources (DEMLR)  has no stormwater experience other than a supporting role in  construction stormwater  permitting   (through the DEMLR sedimentation program)  and no experience managing  federal  Clean Water Act programs. Taking on a much broader range of stormwater programs and responsibility for delegated federal programs could make for a steep learning curve.

Transfer of the stormwater programs to DEMLR separates NPDES stormwater permitting from NPDES permitting for wastewater discharges.  (National Pollutant Discharge Elimination System — or “NPDES”– permits are the federal  Clean Water Act permits required for discharge of pollutants to surface waters.)  The move also separates programs that  work together to reduce pollution loading to water bodies — like Falls Lake and the Neuse River estuary — that have become impaired by  pollutants coming from both point sources and nonpoint sources.

One  footnote on the stormwater move — legislation  that directs DENR to combine programs in the Division of Water Quality and the Division of Water Resources  assumes that  stormwater programs will remain in the reorganized Division of Water Resources.  The section of House Bill 74 (Regulatory Reform Act) that directs DENR to  reorganize the water programs also makes changes in a number of water quality laws to reflect the reorganization and substitutes  “Division of Water Resources” for “Division of Water Quality”   in state stormwater laws. I am guessing that reflects a lapse in communication rather than a conflict between DENR and the General Assembly – but in the short term, several state laws seem to  identify the Division of Water Resources as the stormwater permitting agency.

Other Water Quality Programs.  Remaining Division of Water Quality (DWQ) programs will move into the reorganized Division of Water Resources (DWR) under director Tom Reeder. The state budget  attached a $2 million budget reduction to the water program reorganization.  Using the reorganization to cut programs and people has risks. After four years of budget cuts, it will be difficult to reduce the combined water programs by another 12.4%  without hurting critical functions. In reality,  there has been little overlap in the activities of the two divisions; DWQ had responsibility for water pollution programs and DWR focused on water supply  — quantity rather than quality. It is not clear that the additional budget reduction will leave the state with effective water quality and water supply programs.  DENR will also need to be sure program  cuts don’t threaten its  ability  to meet federal requirements for delegated permitting authority under the Clean Water Act and Safe Drinking Water Act.   Those  requirements go beyond simply having people to issue permits. In addition to  meeting regulatory and planning standards set in federal law,  the federal grant agreements  link to specific performance measures for  state permitting and compliance activities. The earlier post on reorganization proposals talked about some of the  program requirements linked to delegation of Clean Water Act permitting.

A July  video  message from Division of Water Resources director, Tom Reeder,  to  staff in the Water Resources and Water Quality divisions provides some insight into  next steps for the water  programs.  New information about the reorganization was limited, although Reeder said the new organization of around 700 employees would have fewer managers (and no deputy director).  After briefly talking about the reorganization, Reeder described plans for a review of water programs and rules that will begin right away and be completed by the end of December. The purpose of the review goes beyond identifying duplication of programs in the newly combined divisions. Reeder describes it as an effort to eliminate rules and programs that  are overly burdensome or  ineffective.

In the  video, Reeder  specifically mentions riparian buffer rules as a program area needing review. It isn’t clear whether  that means minor adjustments or wholesale revision of the buffer rules, but  the  buffer rules are a good example of  one potential pitfall in  the review process — some rules are part of larger water quality strategies and  the burdens and benefits need to be looked at in that context. Buffer rules put an additional burden on real estate developers and property owners, but  using  buffers  as part of a broader  nutrient reduction strategy can   lower  the  cost  to  other nutrient sources  (including municipal wastewater treatment plants and agricultural operations).  Continuing to balance the burden among point and nonpoint sources will be particularly important where buffer rules rules account for some of the  load reduction required to meet an  EPA-approved Total Maximum Daily Load for impaired waters.

The Division of Water Resources has formed an outside involvement committee to help with the review of water programs and rules. You can find the Reeder video on YouTube. Discussion of the reorganization and review of water rules begins around the 7-minute mark.

Legislative Wrap-up I: Water Quality

July 30, 2013:  A summary of legislative action on water quality-

Budget-  The final budget directs the Department of Environment and Natural Resources (DENR) to combine programs in the Division of Water Quality (DWQ)  and the Division of Water Resources DWR) and reduces the budget for the reorganized programs by $2 million.  The $2 million cut amounts to a 12.4% reduction to the combined programs. The budget also make two specific  program cuts  that reduce appropriations for water resource and water quality programs by another $735,257.  Total reductions may go even  higher than $2.7 million if water resource/water quality  programs also share in the  2% department-wide reduction required by  the final budget.   Although both the Division of Water Resources and the Division of Water Quality deal with water, the two have very different responsibilities and little overlap in functions; it  will be  difficult for  the reorganized programs to absorb another 12.4 % cut  without hurting program delivery.

Division of Water Quality (DWQ) has responsibility for preventing and reducing water pollution in the state’s rivers, lake, streams and groundwater supplies.  By delegation of authority from the U.S. Environmental Protection Agency, DWQ  issues federal Clean Water Act permits to wastewater and stormwater  dischargers. DWQ also issues state water quality permits for animal waste management systems, injection wells, and for land application of waste.

Division of Water Resources monitors water supply – the amount of water in rivers, lakes, streams and aquifers rather than its quality. DWR has responsibility for state and local water supply planning; drought monitoring and drought response; and approval of  water transfers from one river basin to another (for example, taking water from an intake on the Neuse River to provide drinking water to a city  in the Cape Fear River basin).  The Public Water Supply section in DWR enforces the federal Safe Drinking Water Act, which regulates drinking water systems to ensure that the water coming out of the tap is safe to drink.

Both divisions have river basin planning programs –  DWR water supply plans  use data on water use to model for future water supply  and DWQ  water quality plans track data on pollutant levels,  identify sources of  pollution and provide a foundation for addressing water  quality  problems.  The two types of planning complement each other, but neither can take the place of the other.  It will be important to continue to have strong water quality and water supply planning programs if the state is to have a scientific and technical basis for good water policy decisions.

The budget will test DENR’s  ability to continue to deliver good science, timely permit reviews, compliance assistance, and enforcement with fewer resources. The department will also have to keep an eye on the effect of reduced state appropriations on  federal grants supporting programs in the two divisions. The state receives a significant amount of  federal grant money to support activities required under the delegated Clean Water Act and Safe Drinking Water Act programs.  Those grants require a certain level of state “match” money — which is often provided in the form of state-funded positions in those programs.

Jordan Lake –  Legislation delays further implementation of the Jordan Lake Nutrient Strategy for three years  (Senate Bill 515).  The General Assembly had already delayed  the original Jordan Lake compliance dates for reducing  the amount of  nitrogen and phosphorus in wastewater discharges (until 2016) and for implementing new development stormwater programs (until 2014). The practical effect of the bill will be to  push those dates out three more years.  A number of local governments in the Jordan Lake watershed have already started implementing  local stormwater ordinances and can continue with those programs. The purpose of the delay is to allow the state to “[explore]  other measures and technologies to improve the water quality of the Lake”.  A related budget provision  earmarks   $1.35 million from the 2013-2014 appropriation for the Clean Water Management Trust Fund  for a pilot project to test the use of technology to improve water quality in Jordan Lake.   The budget provision describes the technology to be tested very specifically in three pages of bill text and seems  to direct funds to a particular product.  Both in committee and on the floor of the House, legislators identified the technology as SolarBee— a technology used to aerate water tanks and raw water reservoirs.  The bill exempts the pilot project from normal state contract procedures, which means DENR will not be required to advertise for bids.

Prospects for the success of the pilot project are already in doubt. A  prominent North Carolina scientist, Professor Emeritus Kenneth H. Reckhow of Duke University, has said that aeration technologies are not effective in large water bodies like Jordan Lake.  Even if the  technology can improve in-lake conditions, the U.S. Environmental Protection Agency  has put the state on notice that  in-lake treatment cannot substitute for pollution reductions required under the Clean Water Act (7_10_2013 Letter to Rick Glazier re B Everett Jordan Reservoir TMDL-1).  If EPA holds to that position, the technology  will fail its primary purpose — which is to relieve upstream communities in the Jordan Lake watershed  of the need to  invest in wastewater treatment plant upgrades and stormwater controls on new development.

Groundwater (and possibly coal ash) – Section 46  of  House Bill 74 (Regulatory Reform Act)  seems to narrow DENR’s ability to address groundwater contamination caused by a permitted waste disposal site.  When the state issues a  permit for land application of  waste or for  waste disposal in a landfill, the permit sets a groundwater compliance boundary. Some degree of groundwater contamination will be allowed inside the compliance boundary,   but the permit holder cannot cause groundwater  standards to be violated outside the compliance boundary.   The new language in House Bill 74  continues to allow the Environmental Management Commission (EMC) to set compliance boundaries by rule and by permit, but creates  a presumption that the compliance boundary will be the property line. (By comparison, landfill permits have  generally set the groundwater compliance boundary at 250 feet from the actual waste disposal area.)

The bill then goes on to limit the circumstances in which  DENR can require  “cleanup, recovery, containment, or other response” to groundwater contamination inside the compliance boundary. Before requiring any action inside the compliance boundary, DENR would have to show that the groundwater contamination: 1. has already caused a violation of water quality standards in nearby surface waters or can reasonably be predicted to cause a water quality standard violation; 2. presents an imminent threat to the environment or to public health and safety; or 3.causes a violation of groundwater standards in bedrock (which seems to mean contamination of deep groundwater).

The presumption that the property line will be the compliance boundary  will likely create pressure on the EMC to allow much larger compliance boundaries  than in the past. Expansion of the compliance boundary carries with it the possibility of  larger areas of groundwater contamination. The new law also makes it more difficult for  DENR   to require  a permit holder to take action inside the compliance boundary –even to contain or reduce the flow of contaminated groundwater off site.   DENR could only require steps to contain contaminated groundwater by showing that the groundwater contamination had caused –or will cause — a specific water quality violation or an imminent threat to health, safety or the environment. The fact that the contamination has moved beyond the compliance boundary (and perhaps already migrated off  the property and toward a river or lake) will not be enough. The clear risk will be that  acting only  after a problem already exists will create a larger and more expensive problem to remedy in the future.

The provision appears to be linked to an ongoing controversy and threatened litigation over groundwater contamination and seeps from ponds where coal-fired power plants have disposed of coal ash. The Catawba Riverkeeper has filed a notice of intent to sue under the Clean Water Act over contamination from two coal ash disposal sites — a  Duke Energy  coal ash pond associated with the Riverbend Steam Station and a Progress Energy coal ash pond in Asheville. The Duke Energy coal ash pond is located on the banks of Mountain Island Lake and near a water intake for the City of Charlotte.  Monitoring around the coal ash pond has detected contaminants in groundwater that exceed groundwater standards, but the Division of Water Quality has not yet decided whether corrective action will be necessary. The Riverkeeper’s complaint claims that contaminants from the coal ash are reaching the lake in seepage from the impoundment and through a groundwater connection to the lake. The House Bill 74 language means that groundwater violations alone –even beyond the compliance boundary — would not necessarily require  steps  to  contain  an ongoing flow of contaminated groundwater to the lake.  DENR would first have to show that the groundwater contamination is causing or will cause an actual water quality standard violation in the lake or  an imminent threat to health, safety or the environment.

Regulatory Reform – More on regulatory reform in a later post, but House Bill 74 includes a requirement that agencies review and readopt existing rules of “substantive public interest”   every ten years.  The bill defines “substantive public interest” so broadly that it will  cover  every environmental rule of any real substance. The state’s Rules Review Commission will set the initial schedule for review of rules, but the bill directs the commission to schedule surface water and wetland standards for review in the first round of rule review.

Miscellaneous – This post only covers the most significant water quality legislative. House Bill 74 contains a number of other minor changes, including technical amendments to the laws on permitting animal waste management systems and an exemption from riparian buffer requirements for agricultural ponds.

Failed Water Quality Legislation – One major change did not happen. The N.C. Homebuilders Association had pushed legislation to eliminate state water quality permitting requirements for wetlands that do not fall under federal Clean Water Act permitting jurisdiction. An earlier post provides some background on the difference between federal and state wetlands jurisdiction.  The language first appeared in a Senate farm bill (Senate Bill 638), but was dropped from the bill once it reached the House. The Senate agreed to the change — possibly because farmers already have broad exemptions from wetland permitting requirements. During the last few days of the legislative session, the exemption language popped up again  in a Senate committee substitute for House Bill 938. The House sent the bill to committee and never took it up for a concurrence vote. The bill will still be eligible for consideration next year when the General Assembly reconvenes in May.

Removing State Protection for Isolated Wetlands

June 26, 2013: An earlier post talked briefly about a section of Senate Bill 638 (N.C. Farm Act  of 2013) that would eliminate water quality protection for isolated wetlands by excluding wetlands that fall outside federal Clean Water Act jurisdiction from the definition of “waters of the state”. Although the language has changed somewhat, the bill approved by the Senate last month still has the effect of removing water quality protection from wetlands that fall outside federal permitting jurisdiction.  The limit on federal jurisdiction has nothing to do with the value of the wetland — it has to do with how the U.S. Constitution divides responsibility between the  federal  government and the states. Congress’ authority to regulate interstate commerce has been the constitutional basis for federal environmental laws, so Clean Water Act permitting programs only apply to navigable waters (including tributaries and wetlands connected to those waters). Wetlands that have no connection  to navigable waters  fall entirely under state jurisdiction. Section 20 of Senate Bill 638 (as it passed the Senate)  would remove state protection for those “isolated” wetlands and allow the wetlands to be filled, excavated or used for waste disposal without a water quality permit.

As noted in the earlier post, the wetlands provision appears in a farm bill but developers may get most of the benefit. Since then, I have looked back at the state’s isolated wetlands rules and found that most (and possibly all) agricultural activities are already exempt.  The isolated wetlands permitting rule, 15A NCAC 2H.1301, has a list of exemptions from the permit requirement and the first is for  “[a]ctivities that are described in 15A NCAC 02B .0230”.  The activities described in 15A NCAC 02B.0230 include:

     (1)  normal, on-going silviculture, farming and ranching activities such as plowing, seeding,   cultivating,minor drainage and harvesting for the production of food, fiber and forest products, or upland soil and water conservation practices…

(2)  maintenance, including emergency reconstruction of recently damaged parts, of currently serviceable structures such as dikes, dams, levees, groins, riprap, breakwaters, causeways, and bridge abutments or approaches, and transportation structuresand other maintenance, repairs or modification to existing structures as required by the NC Dam Safety Program;

(3)  construction and maintenance of farm or stock ponds or irrigation ditches.  In addition, new pond construction in designated river basins with riparian buffer protection regulations also must comply with relevant portions of those regulations;

(4)  maintenance of drainage ditches, provided that spoil is removed to high ground, placed on top of previous spoil, or placed parallel to one side or the other of the ditch within a distance of 20 feet and spoils are placed in a manner that minimizes damages to existing wetlands; and ditch maintenance is no greater than the original depth, length and width of the ditch;

(5)  construction of temporary sediment control measures or best management practices as required by the NC Sediment and Erosion Control Program on a construction site…; and

(6)  construction or maintenance of farm roads, forest roads, and temporary roads for moving mining equipment where such roads are constructed and maintained in accordance with best management practices…

The existing agricultural exemptions are so broad, that it is difficult to think of anything that may still be a problem for farmers — but at the very least an amendment intended to protect agricultural activity could be much narrower than the language adopted by the Senate. Having easily passed the Senate, the bill is now in the House where the path has become a little rockier. It appears that the N.C. Homebuilders Association has been lobbying hard for the provision, but a new version of the bill approved by a House Judiciary subcommittee this morning dropped the wetland language. The bill now goes to the House floor; an effort to amend the bill to restore language excluding isolated wetlands from water quality permitting requirements is likely.

The McCrory Administration Remakes the N.C. Water Quality Program

June 25, 2013:   The N.C. water quality program has been innovative, award-winning and a frequent target of complaints — complaints about  excessive regulation and complaints about poor customer service. The complaints probably result in part from the reach of water quality rules. Over the last 15-20 years,  water quality programs have expanded to address pollution that gets to rivers and streams indirectly —  in runoff from parking lots, roads, lawns and agricultural activities, for example. The expanded scope of the water quality program responded to specific state water quality problems and a new (beginning in the 1990s)  federal focus on “nonpoint sources”.  (The term “nonpoint source” distinguishes these indirect sources of water pollution  from “point sources”, such as pipes and ditches,  that directly discharge waste to rivers, lakes and streams.) In the 1970s and 1980s, the Division of Water Quality  mostly regulated municipal wastewater systems and industrial discharges to rivers and streams.  A simple subdivision development only needed a water quality permit if the  construction involved filling a wetland or stream.  Since the 1990s,  water quality rules have had a much greater effect on real estate development, agriculture, and even the activities of individual property owners.  Any regulatory program that touches so many citizens and activities will generate controversy and complaints — some legitimate and  others not.

The McCrory administration has begun moving toward a major reorganization of the  water quality programs in DENR’s Division of Water Quality (DWQ). It is not yet clear what the state’s water quality program will look like in the end or even what the McCrory administration wants to achieve,  but Secretary John Skvarla has been publicly and harshly critical of the Division of Water Quality’s customer service. Word has  started to get out about  first  steps in reorganization of the division.  Both the division director and deputy director  have recently  taken new assignments;  former director Chuck Wakild  will retire in August.  Reports are that the first reorganization move will be to transfer all  stormwater programs from the Division of Water Quality  to the Division of Energy, Mineral and Land Resources effective  August 1 2013.  The transfer will have a big impact — the Division of Water Quality now manages a number of different state and federal stormwater programs.  State stormwater programs include coastal stormwater  rules designed to protect the quality of shellfish waters and stormwater requirements associated with the Neuse River, Tar-Pamlico River, Falls Lake and Jordan Lake nutrient rules. Federal  stormwater programs  (Clean Water Act programs delegated to the state by EPA)  issue permits for municipal and industrial stormwater discharges and construction stormwater permits for active construction sites.

The Division of Energy, Mineral and Land Resources (DEMLR)  has no stormwater experience  (other than a supporting role in  DWQ’s issuance of construction stormwater permits)  and no experience managing  federal  Clean Water Act programs. Taking on the stormwater programs will greatly increase the portfolio of a division already struggling to meet the enormous workload associated with shale gas rule making.  The move will also separate  federal  stormwater programs from other federal Clean Water Act permitting programs delegated to DWQ, requiring a bit more effort to coordinate water quality strategies that require control of both point and nonpoint pollution sources. It appears that the remaining DWQ  programs will become part of an expanded Division of Water Resources.

As the McCrory administration  moves forward with reorganization plans, a few things to watch for and think about:

Will the reorganized programs have enough  staff to  review permits, inspect  projects,  enforce  environmental  laws and meet federal grant requirements? Even in the construction stormwater program where there has long been a cooperative agreement between DWQ and DEMLR’s sediment program,  merging staff from the two divisions does not yield a single program with enough staff to meet its responsibilities under state and federal law.  Budget cuts in the sedimentation program over the last five years have take too great a toll.  The temptation to use reorganization as a way to cut positions will be great; it should only be done if the new organization can continue to meet all of its state and federal responsibilities. The same holds true for transfer of DWQ programs to the Division of Water Resources; some programs in the two divisions  appear to do similar things, but in reality have very different purposes.  Reorganization decisions will need to keep those different  program functions in mind.  Staffing levels also affect the federal grants that support much of the water quality program;  state-funded staff positions provide much of the required state match for federal grant dollars and at a certain point eliminating state-funded positions jeopardizes the federal funding.

Will reorganization decisions maintain all of the functions needed to meet Clean Water Act requirements?  Permits are only a small part of the state’s federal Clean Water Act responsibilities. The state must also have an ongoing water quality planning program  that regularly reviews water quality standards; identifies rivers, lakes and streams that are not meeting water quality standards;   develops  plans to improve water quality; and develops best management practices to reduce nonpoint source pollution.

The Division of Water Quality’s water quality planning program provides much of the information and analysis needed to meet the planning requirements of the Clean Water Act.  Planning programs may appear less critical than permitting, but the planning program provides the monitoring data needed to evaluate the effectiveness of water quality rules, pinpoint pollution problems,  and develop the right solution. A planning program that meets federal requirements is also necessary for the state to  have a delegated Clean Water Act permitting program.

Will the reorganization maintain the expertise needed to evaluate water quality trends, find solutions to impaired water quality, provide good advice to permit applicants, and advocate the state’s position on water quality policy to EPA? Many water quality programs (especially the delegated federal programs) are very complex. Water quality staff need to understand both the science and the law to help permit applicants through the process. There are also times that EPA and the state will disagree on an issue that affects a Clean Water Act permitting program;  DENR will need the knowledge and experience to make a case for the state’s position.

— Will changes that affect federal Clean Water Act programs require EPA approval? The answer  will depend on what kind of changes are made (to organization structure, staffing and program functions)  and how the existing program description approved by EPA was written. Generally, program changes have to be submitted to EPA for approval along with a certification by the Attorney General that the water quality program continues to meet requirements of the Clean Water Act.

N.C. has made tremendous gains in water quality over the last 20 years. Some of the more visible signs of progress have been better management of swine waste, innovative approaches to stormwater control, creation of GIS tools to better predict stream and wetland impacts, and development of river-basin water quality plans that provide a big picture of water quality conditions, threats and trends. One of the real challenges of environmental protection programs is that success often means avoiding a problem — success is the swine waste lagoon that doesn’t fail, the fish kill that doesn’t happen, drinking water supplies unaffected by algae. The challenge for the McCrory administration will be to improve what needs to be improved in the state’s water quality programs without undermining their effectiveness. Water supply will be key to the state’s economic future — and the quality of the water is as important as the quantity.

Note: A new version of House Bill 94 (Amend Environmental Laws) came up in the Senate Agriculture and Environment Committee this  morning. The bill included a new section that directs DENR to combine the Division of Water Quality with the Division of Water Resources.  The senator presenting the bill indicated that DENR had asked for the reorganization authority, but the details of the bill language do not match up with reported plans for moving the stormwater programs to the Division of Energy, Mineral and Land Resources.  The version of House Bill 94 approved by the committee shifts the stormwater programs to the Division of Water Resources with other water quality programs. Either the DENR plan has changed or the bill needs a little more work.