Monthly Archives: June 2016

House-Senate Compromise on Watershed Rules

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

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

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

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

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

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

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

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

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

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

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

A Senate Proposal on Coal Ash and Commissions

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The Future of Watershed-Based Water Quality Rules

June 22, 2016. A controversial water quality provision in the N.C. Senate’s proposed budget would repeal (and perhaps replace –that is less certain) all state rules adopted over the last twenty years to address pollution problems caused by excess nutrients.  Sec. 14.13 in the Senate version of House Bill 1030 further delays full implementation of the Falls Lake and Jordan Lake rules; creates a  $2 million study of nutrient management programs; and repeals all existing water quality rules addressing nutrients pollution effective December 31, 2020.

The Senate Proposal.  The provision requires the state’s Environmental Management Commission (EMC) to adopt new nutrient management rules based on the study results, but repeals all  existing rules at the end of 2020  even if no alternative  rules are in place.  In addition to Jordan Lake  and Falls Lake, the repeal/replace provision would affect water quality rules in the Tar-Pamlico River Basin; the Neuse River Basin; the Catawba River Basin; the Randleman Reservoir watershed; and the endangered species management plan in the Yadkin-PeeDee River’s Goose Creek watershed. It would also apply to any other riparian buffer requirements identified by the Department of Environmental Quality (DEQ).   Still hoping for an alternative to  rules, the Senate budget also appropriates $500,000  to  study use of freshwater mussels to reduce the water quality impact of excess  nutrients.

In most cases, state nutrient management rules also satisfy a federal Clean Water Act requirement to reduce the discharge of a pollutant (in this case nitrogen and/or phosphorus) causing impaired water quality. In North Carolina’s  “nutrient sensitive” river basins and watersheds,  the U.S. Environmental Protection Agency (EPA)  has approved the nutrient reduction targets in state rules as meeting Clean Water Act  requirements.   To achieve the reduction targets, the rules require reductions in nutrient  discharges by wastewater treatment plants and nutrient runoff from agriculture and development activities. Walking away from the nutrient reduction targets has implications for Clean Water Act enforcement and the state’s delegated water quality permitting programs.

Although the Goose Creek rules rely on similar pollution reduction tools (including riparian buffers and stormwater controls),  those rules protect endangered species habitat.  The rules resulted from a lengthy negotiation with the  U.S. Fish and Wildlife Service which has responsibility for enforcing the federal Endangered Species Act. Repeal of the rules would likely bring both U.S. Fish and Wildlife  and EPA into the conversation.

Nothing similar to the Senate provision appears in the House version of the budget or in any other legislation pending in the House.  The two chambers are currently negotiating this (and other) differences between the House and Senate budget bills.

Have the Nutrient Rules Failed? The Senate provision describes the state’s existing nutrient management  programs as failures. In reality, legislation has prevented full implementation of the Falls Lake and Jordan Lake nutrient rules.  The rules that have been fully implemented  — such as those in the Neuse River and Tar River basins — significantly reduced nutrient loading from wastewater discharges, agriculture and stormwater runoff.  In judging the effectiveness of watershed-based strategies, some things to keep in mind: 1.  Population growth and development in the watersheds continued to increase; and 2. Existing nutrient reduction strategies do not address all potential nutrient sources (smaller wastewater treatment plants; failing septic tanks; atmospheric deposition of nitrogen; and soil erosion).

DEQ has tracked the effect of nutrient rules in the Neuse River and Tar-Pamlico River basins; some of the results can be found here.  A  number of independent academic researchers have also studied the Neuse and Tar-Pamlico  river basin rules.  All of the studies confirm that sources covered by the rules significantly reduced their nutrient discharges. Wastewater treatment plants met the goal of reducing nitrogen discharges by 30% from the baseline years even as population and wastewater flows increased. Agriculture met or exceeded the 30% reduction goal for agricultural operations through use of  Best Management Practices. A recent EMC report confirmed  the value of  riparian buffers as part of a watershed-based plan to reduce nutrient runoff from developed areas.

Complicating the picture is the fact that  total  in-stream nutrient concentrations  have not consistently remained below  baseline levels.  A DEQ  study completed in 2008 found that in-stream concentrations of inorganic forms of nitrogen  (nitrates and ammonia) declined at the monitoring sites, but  increases in organic nitrogen offset those reductions.   The rules haven’t  failed; given population growth and increased development in the Neuse and Tar-Pamlico river basins,   nitrogen concentrations would have been higher in the absence of the rules. But the rules have not fully solved the problem of nutrient over-enrichment.

Opposition to the Nutrient Rules.  Opposition has tended to be strongest in the communities on the Haw River arm of the Jordan Lake watershed affected by the Jordan Lake rules. (The Haw River watershed includes the cities of Greensboro and Burlington.) Since EMC adoption of the Jordan Lake rules in 2009,  legislation to repeal or delay implementation of the rules has been introduced every year.  Objections  have focused on the cost of wastewater treatment plant upgrades to meet tighter discharge limits;  expansion of  stormwater programs;  and the development impact of new riparian buffer requirements. To these upstream Haw River communities, the costs have no local benefit; water quality improvements benefit downstream communities. (Although many of the downstream communities have met similar requirements under the Neuse River rules for years to benefit the Neuse River estuary.)

The City of Durham and Durham County, affected by both the Falls Lake and the Jordan Lake rules, also have concerns about the feasibility and cost of meeting nutrient reduction goals.

Also in the background — riparian buffer requirements have long been unpopular with real estate developers and homebuilders in all of the river basins/watersheds where buffers have been part of a nutrient reduction strategy.

DEQ’s Position.   DEQ has not taken a public position on the Senate proposal, but a February presentation by DEQ Assistant Secretary Tom Reeder to the legislature’s Environmental Review Commission questioned the effectiveness of the watershed-based nutrient rules.  Reeder’s presentation tended to emphasize the cost of the nutrient rules and  limited impact on instream nitrogen and phosphorus concentrations.  Asked what alternative to the nutrient management rules would protect the Falls Lake and Jordan Lake drinking water supplies, Reeder responded that drinking water treatment may become more expensive. The presentation suggested little DEQ commitment to defend watershed-based nutrient rules and a willingness to shift the cost of impaired water quality to communities using  Falls Lake and Jordan Lake as drinking water sources. Reeder’s presentation did not  address the impacts of a failure to reduce excess nutrients  on natural resources such as fisheries; recreational use of these rivers, lakes and estuaries; or compliance with the Clean Water Act.

Possible compromises.  Past studies of the Neuse and Tar-Pamlico rules suggest a need to fill gaps in the nutrient strategies, but do not provide a  scientific case for  abandoning watershed-based nutrient reduction strategies. Nearly seven years after final adoption of the Jordan Lake rules, opponents have not identified an alternative approach to protect drinking water  and meet Clean Water Act requirements.

At the same time, the  EMC’s recent riparian buffer report  identified potential buffer rule changes to ease the burden on property owners while maintaining the buffer’s  water quality benefits.  The legislature could also look at the possibility of  authorizing cost-sharing arrangements to allocate some of the upstream cost of water quality improvements to  the  downstream communities that will benefit. The idea surfaced briefly during development of the Falls Lake and Jordan Lake rules, but wasn’t pursued at the time.