Author Archives: rwsmith

Regulatory Reform 2015 — The Senate Bill

March 26, 2015. The Senate has introduced the first regulatory reform bill of the 2015 session – an annual rite of spring. Senate Bill 453 includes a number of environmental provisions. The most significant:

Another attempt to  create an  environmental audit privilege and immunity for violations reported as a result of an audit.  The audit and self-reporting provisions in the bill appear to be identical to those proposed by the Senate in  2014, but not included in the final  Regulatory Reform Act of 2014. See an earlier  post  about the 2014 regulatory reform bill for a description of the environmental audit/self reporting provisions making a reappearance in 2015.

Sec. 4.3 of the bill  eliminates several environmental reporting requirements.  Most of the reports to be eliminated  have become unnecessary, but the bill  also proposes to  repeal  the requirement for DENR to report  on  environmental  permit processing times.  The report on One-Stop and Express Permitting, under G.S.  143B-279.15, has  allowed legislators to track permitting times in DENR programs that issue development permits.  Given the legislature’s strong interest in environmental permitting, the report  seems an odd candidate for repeal.

Sec. 4.4   would allow more construction of sandbag seawalls and revetments on the oceanfront.  Under coastal management rules,  sandbags can only be used if the building on the property is actually threatened by erosion and the sandbags must be installed within 20 feet of the building’s foundation. The bill removes both limitations. It would allow an oceanfront property owner to build a sandbag seawall  if there is a similar sandbag structure on the adjoining lot even if the  building  on their own lot is not threatened by erosion. The bill also  allows the  sandbags to be installed further seaward of the building foundation without putting a  limit on how far seaward the sandbags can be placed.

Sec. 4.6, 4.7 and 4.8 eliminate reports on electronics recycling;  Sec. 4.9 calls for a study of the electronics recycling program.   By eliminating the reporting requirements, the state would lose information on the volume of electronics being  recycled annually. The study language suggests some legislative concern about the current electronics recycling program without identifying any specific problem.

Sec. 4.12  expands liability protection for the owners of contaminated property in a way that may shield some polluters from cleanup responsibility. The bill amends the  state Brownfields redevelopment  law  (which provides incentives  for redevelopment of  contaminated property) to make “brown fields redeveloper” in state law mean the same thing as “bona fide prospective purchaser” under a federal law regulating hazardous substances.  The Senate bill  would also repeal existing language in state law that does not allow  a person  who caused or contributed to  the contamination to receive liability protection and other benefits under the state Brownfields Act.

The  changes  could be a problem because the definition of “bona fide prospective purchaser” in the federal  law (the Comprehensive Environmental Response, Compensation  and Liability Act  or “CERCLA”)   has been defined to mean a property owner who  innocently purchased property contaminated by a “hazardous substance”.  Under  CERCLA, “hazardous substance”  refers to a specific list of chemicals associated with  acute or chronic health effects;  simple possession of  a threshold quantity of one of the listed chemicals  may trigger a federal reporting requirement.  The CERCLA “hazardous substance” list is not intended to cover all  pollutants and contaminants that may  cause harm  if released to the environment.  For example, petroleum products are excluded from the federal definition of a “hazardous substance” although  gasoline  leaked into soil and groundwater presents both a health and environmental risk.

The Senate Bill 453 change could  allow  a property  owner  who actually caused  environmental contamination to get  liability protection and other benefits under the state Brownfields law  (such as reduced property taxes) just by showing the contamination was not caused by a  hazardous substance regulated under CERCLA. That   could seriously undermine state remediation programs and give undeserved benefits to people who actually caused environmental contamination and should have an obligation to clean it up.

Note: The change may have implications for coal ash sites, although that seems to be a more complicated question. Some of the constituents of coal ash are listed “hazardous substances” under federal law. But  the U.S. Environmental Protection Agency’s  decision to regulate coal ash as a solid waste rather than a hazardous waste may take coal ash itself out of the category of “hazardous substances”.  Although it is not entirely clear, it is possible that the Senate Bill  453 change would allow a utility to take advantage of the state Brownfields  law to get  liability protection  on a coal ash site.

A Citizen’s Guide to Climate Change, Part II: The “Greenhouse” Effect

February 16, 2015.  At its most basic, the theory that human activity can affect the climate has  two parts: 1. Changes in  Earth’s atmosphere can affect surface temperature;  and 2. Human activity can alter the makeup of Earth’s atmosphere. This post provides an overview of the science behind both principles, relying on scientific reports and a number of  sources that collect and report data on the link between atmospheric gasses and climate.  This post  focuses on carbon dioxide (CO2) as one of the most significant contributors to warming; other “greenhouse” gasses include methane, nitrous oxide and fluorinated gasses.

How the atmosphere affects temperature; the history of the  “greenhouse effect”.  The scientific  theory  that Earth’s atmosphere affects  the planet’s surface temperature — the “greenhouse effect” — goes back nearly 200 years. As early as the 1820s,   French scientist Jean Baptiste Fourier  theorized that gasses surrounding the Earth retained heat,  allowing the planet to warm more than the sun’s influence alone could explain. British physicist  John Tyndall did some of the earliest experimental work to prove the relationship,  demonstrating that water vapor and carbon dioxide  hold more heat than oxygen and nitrogen.  In 1861, Tyndall published the results  in a  paper titled On the Absorption and Radiation of Heat by Gases and Vapours, and on the Physical Connexion of Radiation, Absorption, and Conduction.  In 1896, Swedish  scientist  Svante Arrhenius published  a  paper  that for the first time quantified the  relationship between CO2  in the atmosphere and  Earth’s surface temperature.

Tabletop experiments:  A number of educational and scientific websites provide instructions on how to do your own table-top experiment demonstrating how changes in the atmosphere affect temperature. For a demonstration, see this BBC video.

Sources:  Discovery of Global Warming  website (maintained by Spencer Weart  and hosted by the American Institute of Physics); the National Aeronautic and Space Administration (NASA); the National Oceanic and Atmospheric Administration (NOAA);  the University of York’s Tyndall correspondence website;  and the Tyndall Centre  for Climate  Change Research. For an overview of the history of climate science carried forward through the 20th century, see a post by John Mason on the Skeptical Science website.

Trends in Atmospheric CO2. Scientists have been taking monthly measurements of  CO2 at the Mauna Loa Observatory  (Hawaii) since 1958. The chart below shows the trend line.

co2_data_mlo

 

The red line plots the CO2  measurements; the black line represents the seasonally adjusted CO2 level. In 2014, CO2 levels measured at Mauna Loa reached 400 parts per million for the first time since modern record-keeping began.   Research indicates that current CO2  levels are the highest in  hundreds of thousands of years. Or as science writer Andrew Freedman put it more colorfully in an article for Climate Central:

The last time there was this much carbon dioxide (CO2) in the Earth’s atmosphere, modern humans didn’t exist. Megatoothed sharks prowled the oceans, the world’s seas were up to 100 feet higher than they are today, and the global average surface temperature was up to 11°F warmer than it is now.

Englishman seated on jaw of megatooth shark.

Englishman seated on jaw of megatooth shark

Most of the increase in atmospheric CO2 has occurred since the beginning of the Industrial Revolution (in the late 1700s) when atmospheric levels were around 280 parts per million and the rate of change has increased in the last 50 years. The upward curve in CO2 looks very similar to the upward curve in mean global temperature since 1960 shown in the previous post:

Mean Surface Temps

 

Questions about human activity and  increased CO2 levels

Haven’t CO2 levels on Earth been higher in the past? Yes, but the highest levels occurred around 500 million years ago when Earth was a very different place.  The last time CO2 levels were similar to those being measured now was about 7,000 years ago. CO2 levels fell over  several intervening  centuries; then the curve  reversed  and the rate of increase accelerated  within the last 50 years.

How do we know human activity has caused the recent increase in CO2? Scientists have looked at the relationship in several different ways. Two indications of human influence:

1. Mathematical accounting for the conversion of carbon to CO2.   CO2 comes from both natural processes and human activity.  People convert carbon to CO2 by burning fossil fuels and by clearing and burning forested areas.    Scientists can  calculate both the amount of CO2 produced by human activity (which has greatly increased in the last 150 years) and the capacity of oceans and forests to absorb CO2.  Excess CO2  — the difference between the amount produced and the amount taken up by  the oceans or by plant life — goes into the atmosphere. Atmospheric CO2  significantly increased  as CO2 emissions from industry and energy generation spiked,  indicating a large human  contribution. Human  activity  also  overwhelms   CO2  increases associated with  natural sources like volcanic eruptions.

2. Studying the atomic “fingerprints” of atmospheric CO2. Not all carbon atoms are created the same. Elements like carbon can occur in different forms (called “isotopes”) based on the number of neutrons in each atom. Carbon occurs as three isotopes — 14C (radioactive and least common), 13C (about 1% of carbon isotopes) and 12C (the most common).  Fossil fuels like oil and coal contain  no 14C because the radioactivity has long since  decayed.  Both plants and fossil fuels  tend to have a low ratio of 13C to 12C. Scientists have found that the mix of atmospheric CO2 has become “lighter” in the last 150 years. An increase in carbon associated with plant-based fossil fuels seems to  have changed the ratio of “light” carbon to “heavy” carbon in the atmosphere. The change has tracked the significant increases in CO2 emissions from combustion of  fossil fuels for industrial purposes and electricity generation.

What kinds of human activities contribute to atmospheric CO2? Based on reporting of greenhouse gas emissions, the U.S. Environmental Protection Agency has created a chart showing the most significant sources.

gases-co2

Sources:  “How do we know that recent CO2 increases are due to human activities?”, www.realclimate.org, (December 22, 2004); Andrew Freedmen: “The Last Time CO2 was this High,  Humans Didn’t Exist”,  www.climatecentral.org, (May 2, 2013); World Meteorological Organization: 2013 Global Greenhouse Gas Report; NOAA Earth Science Research Laboratory, Global Monitoring Division website; Scripps CO2 Program website; “Sources of Greenhouse Gas Emissions”, U.S Environmental Protection Agency website; NASA:Vital Signs of the Planet: Carbon Dioxide; Caitlyn Kennedy: “Earth’s Hottest Topic is Just Hearing Up”, www.climate.gov (2009).

Note to Readers

February 11, 2015: Links to bill drafts and North Carolina session laws in earlier posts are not working because the North Carolina General Assembly’s primary website (ncleg.net) went down yesterday.  As of 8:00 this morning,  the site is still dark. (According to news reports,  the domain expired and legislative staff are  working to restore the domain.)

In the meantime, much of the content of the ncleg.net website can be accessed at a backup website here. To pull up a specific bill, go to the box on the upper right of the page where there is an option to “Find a bill”.  First, set the date to the appropriate legislative session.  The bill search function defaults to the current session (2015-2016), but you can use the down arrow to  go to an earlier session. Then enter the bill number.

Example: To find the 2014 Coal Ash Management Act, set the session date to 2013-2014 and enter  S 729 as the bill number.

A Citizen’s Guide to Climate Change, Part I: Temperature

January 30,  2015. Controversy over EPA’s proposed carbon reduction rule (see an earlier post)  has again focused attention on the  climate change debate.  This post will look at global  temperature trends as reported by the National Oceanic and Atmospheric Administration (NOAA) and the National Aeronautic and Space Administration (NASA).

The most recent temperature data. In  2014, the average combined land and sea surface temperature on Earth reached the highest level since modern record-keeping began in the 1880s.   The latest temperature data can be found in the National Oceanic and Atmospheric Administration (NOAA)   2014  Global Climate Report here. Similar results reported by  NASA can be found here. Although NOAA and NASA use somewhat different baselines and methods, the two agencies reached very similar results. NASA calculated an increase of 1.4 ° (F) over the historical baseline; NOAA found an increase of 1.24° (F). Both found that higher ocean temperatures made a slightly greater contribution to the total increase than land surface temperatures.

The  chart below has been adapted from a NOAA Chart showing the ten warmest years on record based on the global average temperature. All of those years, with the exception of one, have occurred since 2000.  The third  column shows the increase in temperature by reference to the historical average (1880-2014).

Rank (1=Warmest) Year Increase (Fº)
1  2014  +1.24
2 (Tie) 2010/2005  + 1.17
4 1998  +1.13
5 (Tie) 2013/2003  +1.12
7 2002  +1.10
8 2006  +1.08
9 (Tie) 2009/2007  +1.06

Some temperature fluctuation from year to year can be accounted for by El Nino (warming) and La Nina (cooling) trends in the Pacific Ocean, but the 2014 high occurred under neutral El Nino conditions.  Find the original NOAA chart and other information about NOAA’s  2014 temperature analysis here.

NOAA also provides a bar chart showing the trend in global temperature over the entire period

Comparison to past temperature variation on Earth. Scientists have estimated average global temperature during past warming and cooling  periods based on a variety of natural records — glacial ice, tree rings, geological formations, and fossils. There have been periods in the past when Earth’s average temperature was much higher than it is now.  But once Earth cooled down from a hot rock to  a planet capable of supporting life,  the warming event that followed the last ice age occurred  very slowly.  See NOAA’s  introduction to  climate history here.   The overviews of historical climate studies provided by NOAA and by NASA’s  Climate Observatory  put  context around recent temperature increases:

♦  Earth’s average temperature varies from year to year in response to many influences,  but in recent  decades, the cooler years have represented “noise” in an overall upward trend.

♦ Earth’s climate has been relatively stable for much of the history of human civilization (the past 10,000 years).

♦ The last significant warming period (which  began around 11,000  years ago) led to an increase in the Earth’s average surface temperature of between 7° – 12° F.  That warming occurred very gradually  over a period of about 5,000 years and then another cooling trend began.

♦  The current warming trend began in the 20th century and temperature increases are happening  10  times  times faster than the last  ice age  warming period. (NASA).

For more detail on climate history, both the NASA and NOAA  sites provide links to the scientific studies used as references.

Do these increases in global temperature matter?  An increase of 1.4° F over the average global surface temperature seems — and is —  small, but  even small increases can affect patterns of plant and animal life.  In 2012,  the  U.S. Department of Agriculture released an updated U.S.  plant  hardiness zone map.  The map divides the U.S. into  zones based on the average annual low temperature;  going from north to south, each zone on the map represents  a 10° increase in the average low temperature. By comparison to the 1990 map, the new map shows a half-zone shift (or  5° F) toward the warmer zones. USDA has been careful to say the data sets for the 1990 and 2012 maps differed in a number of ways — the new map reflects data from more  locations and use of more sophisticated technology as well as additional years of data.  But the shifts are consistent with the general trend in global temperature data since the 1980s and suggest that farmers and gardeners  may already be seeing changes affecting plant life.

While a  1.2°- 1.4° increase in the average temperature over 30 years may already be affecting   the environment, concern about rising global temperature really focuses on the future. Two of the greatest concerns:

1. The rapid pace of warming and the unknown stopping point. Earth’s last major ice age warming event took place over a period of 5,000 years and at a time before modern human civilization and reliance on large-scale agricultural production.   Earth’s current  warming  is occurring  at a much faster rate (as much as 10 times faster), increasing the risk that plant and animal life may not be able to adapt quickly enough to changing temperature regimes. While Unites States agriculture has not been harmed by  the  1.2 – 1.4 ° (F) increase in recent decades,  it could be much more difficult to maintain agricultural productivity in the face of continuing, rapid temperature increases.  Other, warmer,  parts of the globe will be much more vulnerable to agricultural disruption because of temperature increases. Temperature increases can also   affect other human food sources like fisheries.

2. The chain-reaction effect of rapid warming on other parts of the human environment. The chain reaction talked about most often:

Higher global temperature ⇒ melting of land ice ⇒more rapidly rising sea levels ⇒ flooding of coastal areas.

The potential for accelerated sea level rise gets attention because of the direct risk to human populations. In 2010, 39%  of the population of the U.S. lived in a shoreline county;  more than half of the population lived within  50  miles of an ocean shoreline. (Source: U.S. census data as reported in NOAA’s State of the Coast Report.)  As a result, accelerated sea level rise could affect some  of the most highly populated areas in the United States.

Note: NASA’s Vital Signs of the Planet website provides visualizations of  changes in the extent of sea ice and land ice.

How reliable is the data?   Temperature records date back to the 1880s and the amount and quality of the data has only gotten better.  NASA describes the records used in the Goddard Institute of Space Sciences temperature calculations this way:

The GISS analysis incorporates surface temperature measurements from 6,300 weather stations, ship- and buoy-based observations of sea surface temperatures, and temperature measurements from Antarctic research stations. This raw data is analyzed using an algorithm that takes into account the varied spacing of temperature stations around the globe and urban heating effects that could skew the calculation. The result is an estimate of the global average temperature difference from a baseline period of 1951 to 1980.

Next: The role of carbon dioxide and other “greenhouse” gasses in raising global temperature.

EPA’s Coal Ash Rule Part II: North Carolina

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

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

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

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

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

Implications for North Carolina:

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

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

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

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

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

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

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

N.C. Impoundment Closure Dates

CLOSURE DEADLINE RISK CATEGORY
December 31, 2018 High Risk
December 31, 2024 Intermediate Risk
December 31, 2029 Low Risk

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

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

EPA Impoundment Closure Dates

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

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

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

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

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

 Several things to note:

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

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

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

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

EPA’s Coal Ash Rules: Part 1 (The Basics)

December 23, 2014. Staring down a court-ordered deadline, EPA released a final coal ash rule on Friday. Happy Holidays!

Some basic things to know about the federal rule:

♦ This  federal rule sets minimum standards for disposal of  coal combustion residuals (more commonly called “coal ash”), but other state and federal regulations will continue to apply to coal ash disposal as well. The most significant may be the federal Clean Water Act and state water quality standards; the federal Comprehensive Environmental Response, Compensation and Liability Act  (“CERCLA”) which addresses liability for remediation of contaminated property; state landfill regulations; state groundwater protection standards; and requirements of North Carolina’s 2014 Coal Ash Management Act.

♦ As expected, EPA decided to regulate coal ash as solid waste rather than hazardous waste. “Solid waste” covers everything from household trash to nonhazardous industrial waste and discarded construction materials. Although coal ash often contains toxic heavy metals such as selenium, EPA  concluded that the low concentration of hazardous substances in coal ash did not justify applying  hazardous waste regulations to coal ash disposal.  

♦ The federal rule has been adopted under sections of the Resource Conservation and Recovery Act (RCRA) that authorize EPA to adopt minimum standards for disposal of solid waste. As interpreted by EPA, those sections of RCRA do not authorize federal permitting requirements or federal enforcement.  So while the EPA rule sets minimum federal standards for disposal of coal ash,  EPA will  not enforce the standards or require states to adopt and enforce the standards.  If a state choses to incorporate the federal standards into state rules, the state can take enforcement action under state law. Otherwise, the only enforcement of the new federal standards will be through citizen suits. As EPA acknowledged, reliance on self-enforcement and citizen suits creates a higher than usual level of regulatory uncertainty for the electric utilities.  Without a federal or state agency as intermediary, utilities may find it difficult to predict either the filing or the outcome of an enforcement case.

Note:  Existing N.C. laws and rules already incorporate many of the minimum federal design and location standards for coal ash landfills.  N.C. has also long required permits for those landfills. As a result, N.C. already has a regulatory structure that, with only minor amendments, could be used to enforce the new federal standards.

♦ Unlike N.C.’s 2014 Coal Ash Management Act, the federal rule does not directly require electric utilities to phase out the use of  surface impoundments for disposal of coal ash. Instead, the rule sets location and design standards for new, expanded and existing coal ash impoundments. New impoundments and expansions of existing impoundments will require liners. Although the EPA rule does not require existing impoundments to be retrofitted with liners, an unlined impoundment must stop receiving coal ash and move toward final closure within six months after groundwater monitoring detects an exceedence for a listed contaminant. (The rule allows 30 months to install a groundwater monitoring system and gather sample data, so a closure based on groundwater impacts may come only after several years of continued use.)

The rule seems to give the owner of an existing impoundment the option of avoiding the new standards by ending coal ash disposal in the impoundment within six months after publication of the final EPA rule in the Federal Register. Ending disposal within the six-month window makes the impoundment an “inactive impoundment” category under the rule. Inactive impoundments do not have to meet the new standards, but must close within 30 months after publication of the final EPA rule. (But see the next bullet point on uncertainty about how broadly the EPA rule applies to inactive impoundments.)

♦ The EPA rule clearly applies to inactive impoundments at facilities still generating electricity (even if the power plant no longer burns coal).  It is not clear whether the rule also applies to inactive impoundments still maintained by an active electric utility on the site of a shuttered electric generation plant. The Dan River Steam Station impoundment would fit into that category. Some EPA statements suggest the rule only applies to inactive impoundments located at active electric generation plants. That would mean the closure requirements in the rule would not apply to impoundments at idled electric generation facilities like the Dan River plant.  But conflicting statements in the rule preamble and the wording of the rule itself could also support an interpretation that the rule applies to inactive impoundments owned by an active electric utility without regard to the location of the impoundment. Some additional clarification by EPA would be helpful.

♦ The EPA rule treats placement of coal ash in surface mines (such as sand pits, gravel pits and quarries) as solid waste disposal — not as a beneficial use. As a result, disposal in a surface mine will have to meet the federal standards for a coal ash landfill. The rule also  casts a somewhat jaundiced eye on other large-scale uses of coal ash for structural fill and landscaping. With the exception of use in road construction, the rule would not consider use of more than 12,400 tons of un-encapsulated coal ash to be a beneficial use unless it presents no greater risk of release to the environment than use of other materials or will meet  all benchmarks for protection of the environment and public health.  Without those assurances, the application of coal ash would be regulated under the federal rule as solid waste disposal rather than beneficial use.

♦ The EPA rule does not set any performance standards for projects that qualify as beneficial use under the federal definition. Instead, EPA has deferred to the states and to federal agencies that have already adopted technical standards for use of coal ash in federally-funded projects (such as highway construction).

The EPA rule includes detailed standards for design and location of coal ash landfills and impoundments; groundwater monitoring; remediation; structural integrity; and final closure of landfills and impoundments. Part II will look at the effect of the EPA rule on implementation of N.C.’s Coal Ash Management Act.

First Meeting of Coal Ash Management Commission

November 10, 2014. The N.C. Coal Ash Management Commission will meet for the first time at 9:00 a.m. on Friday, November 14 at the Friday Center in Chapel Hill.  The agenda for the first meeting will be orientation for the new commissioners, including presentations on open meetings  and public records law;  the Coal Ash Management Act (Session Law 2014-122);  and   issues surrounding coal ash disposal. You can find a copy of the meeting agenda on the State Government Radio website here.

The Coal Ash Management Act gave the commission two tasks to complete in the next year:

1. A report to the legislature’s Environmental Review Commission (ERC) on ways to “promote, incentivize and prioritize  beneficial use of coal combustion products”  by  December 1, 2014.   (Expect a request for additional time.)

2.  By October 1, 2015, the commission must report on the potential for closing some coal ash ponds with no further action or natural attenuation. Natural attenuation relies on long-term, natural degradation of  contaminants rather than active  remediation.  It isn’t clear how legislators plan to use the report.  DENR’s Division of Water Resources  has responsibility for implementing  existing state groundwater protection rules adopted by the Environmental Management Commission. The groundwater remediation rule, 15A NCAC 2L.0106,  already allows DENR to approve natural attenuation of groundwater if other remediation goals can be met. Those  goals include:  removal, treatment or  control of  the original contamination source; elimination of  any continuing source of contamination (including highly contaminated soils); prevention of fire, explosion, and noxious fumes; and containment of the contamination to prevent  migration and violation of groundwater standards beyond a compliance boundary. The Coal Ash Management Act  specifically referenced the  existing groundwater remediation standards in  requirements for assessment and remediation of the coal ash impoundments.

The commission may spend some part of the first year looking toward  early 2016 when the commission will need to take final action on  prioritization of all of the coal ash impoundments as high, intermediate or low risk. This may be the commission’s most important responsibility, since the Coal Ash Management Act links the  risk classification  to specific closure methods. Coal ash impoundments classified as high or intermediate risk must be closed by permanently removing the coal ash or by temporarily moving the ash to allow the impoundment to be converted to a lined industrial landfill. But impoundments classified as low risk can be closed by capping the coal ash  in place — as long as the closure plan includes  measures that will prevent exceedence of groundwater standards beyond the compliance boundary after closure.

The  stakes could be high. Duke Energy has  advocated for wide use of capping in place  because of the lower cost.  See an earlier post  for a link to a Duke Energy presentation to legislators on the comparative costs of removing the coal ash  versus capping the ash in place.  But  information already available suggests that most of the coal ash  impoundments have multiple risk factors, including existing groundwater contamination.

The law requires DENR to  propose a  risk classification for each impoundment by December 31, 2015, but gives the commission final approval authority.  The Coal Ash Management Act  lists  a number of  factors to consider in prioritizing impoundments, but does not provide guidance on how to translate the factors into high, intermediate and low risk categories.   Specific criteria for sorting the impoundments into risk categories would make prioritization more consistent and predictable, but development of those criteria would likely require either additional legislation or rule adoption. (The Environmental Management Commission has authority to adopt rules to implement the Coal Ash Management Act.)  Otherwise, the Coal Ash Management Commission will be left to figure out in the next year how to make those prioritization decisions.

Environmental Issues in the Courts

October 26, 2014.  Some recent state and federal court decisions dealing with   environmental controversies in North Carolina:

Cape Fear River Watch, et al v. Environmental Management Commission. An earlier post provides background on the issues in the case. In  brief,  several environmental organizations  appealed a 2012 decision by the  N.C.  Environmental Management Commission  (EMC)   interpreting state groundwater rules to give  older, unpermitted waste disposal facilities the same groundwater remediation  options available to  permitted waste disposal facilities. All of the coal ash ponds in N.C would be considered “unpermitted” waste disposal facilities and  Duke Energy intervened in the  Cape Fear River Watch case to support the EMC  decision.

In March, Superior Court Judge Paul Ridgeway reversed part of the  EMC decision. Judge Ridgeway  interpreted groundwater remediation rules to require  facilities permitted before December 30, 1983  to  immediately remove the source of any groundwater contamination.  The decision has significant implications for coal ash ponds and old, unlined landfills where the waste material disposed of in the facility often turns out to be the contamination source. Under Judge Ridgeway’s interpretation of the rules,   waste material causing groundwater contamination would have to be immediately excavated and removed.  Although state rules allow the use of other (potentially less costly) measures to control groundwater contamination,  pre-1984 ash ponds and landfills would not have any option other than removal of the waste.

Duke Energy appealed Judge Ridgeway’s  decision to the N.C. Court of Appeals.  But before the Court of Appeals could take up the case, two things happened to alter the course of the litigation.  First,  the General Assembly enacted legislation  intended to moot the  Ridgeway decision. Section 12 of Session Law 2014-122 (the Coal Ash Management Act of 2014)  amends a groundwater statute to direct the EMC to require remediation of  groundwater contamination at a waste disposal facility without regard to the date  the facility had been permitted.  Legislators acknowledged that the provision was intended to reverse  Judge  Ridgeway’s interpretation of  the groundwater  remediation rules  as applied to facilities permitted before  December 30, 1983. As a practical matter, the new law allows DENR to approve an alternative means of controlling groundwater contamination associated with a  coal ash pond or pre-1984  landfill but does not guarantee approval.

Then,  on October 10, 2014,  the N.C. Supreme Court issued an  order removing  Cape Fear River Watch v. Environmental Management Commission from the Court of Appeals docket  to  the Supreme Court docket.  The Supreme Court removed the case on its own motion, surprising the parties and their lawyers.  (The court  issued similar orders in four other civil cases at around the same time.)  The court’s action  has no recent precedent and little precedent  in the court’s history. The one-paragraph  order offered no explanation for removal of the case to the Supreme Court.  The next step in the Cape Fear River Watch case will now be the filing of briefs in the  N.C. Supreme Court.

City of Asheville v. State of N.C. and Metropolitan Sewerage District of Buncombe County.  In 2013, the General Assembly enacted a law transferring the City of Asheville’s water system to the  Metropolitan Sewerage District of Buncombe County.  Session Law 2013-50,  drafted  to apply only  to the City of Asheville water system,  had the unprecedented effect of transferring the system’s assets  (infrastructure and a 17,000 acre watershed) and debts (over $67 million in water bonds) to a new entity without the city’s consent and without compensation.  Two earlier posts, here and here, provide background on the legislative action and constitutional issues raised by the law.

In June, N.C. Superior Court Judge Howard Manning issued an order concluding that Session Law 2013-50 violated several provisions in the  N.C. Constitution. Among Judge Manning’s findings:

♦ The law violated Article II, Section 24  of the N.C. Constitution which prohibits the General Assembly from adopting  certain types of legislation  to apply in  only one jurisdiction in the state. Judge Manning concluded Session Law 2013-50 violated  constitutional  prohibitions against local acts relating to “health, sanitation or the abatement of nuisances”  and local acts regulating  nonnavigable streams.  Although  Session Law 2013-50 did not mention the City of Asheville or the  Metropolitan Sewerage District of Buncombe County  by name,  it described water systems affected by the law  in a way that only applied to the Asheville system.  As a result, Judge Manning found the law to be an unconstitutional  local act addressing  health and sanitation (operation of a drinking water system) and regulation of nonnavigable streams.

♦  The law violated Article I, Section 19 by transferring the Asheville water system to a different entity without the city’s consent and without any rational basis. Article I, Section 19, known as the “law of the land” clause of the N.C. Constitution, has been interpreted to require both due process and equal protection. Judge Manning found Session Law 2013-50 violated the clause by depriving the City of Asheville of property without any  rational basis, suggesting a due process violation and expressly finding a denial of equal protection.

♦ Other sections of  Judge Manning’s  order concluded that Session Law 2013-50 violated Article I, Section 19 and Article 1, Section 35 (a broad reservation of rights) by taking city-owned property and by doing so without providing compensation for the property.

One key to the court’s decision:  operation of a  water system is considered to be a proprietary rather than a governmental function. Proprietary functions don’t involve peculiarly governmental powers and could also be carried out by a nongovernmental entity. Other examples of proprietary functions would be  operation of an electric utility, a recreational facility  or a sports venue.   With respect to proprietary functions,  Judge Manning concluded that  local governments have  the same constitutional protection against  uncompensated taking of property as a nongovernmental entity.

Judge Manning’s order did not address the city’s argument that the law also unconstitutionally interfered with contracts between the city and bondholders.  The state, throughout the Attorney General’s Office, indicated an intent to appeal the decision to the N.C. Court of Appeals. A final decision by the appeals court would not be expected for about a year.

Erica Y. Bryant, et al v. United States, 11th Circuit Court of Appeals, October 14, 2014.  The plaintiffs  had sued the United States government seeking compensation for health problems allegedly caused by exposure to contaminated drinking water at the Camp Lejuene Marine Corps Base near Jacksonville,  North Carolina.  A recent U.S. Supreme Court decision in another North Carolina groundwater contamination case, Waldberger v.  CTS, Inc.,   held that the state’s 10-year statute of repose barred a lawsuit alleging injury and property damage caused by groundwater contamination filed more than 10 years after the  last act contributing to the contamination —  even though the plaintiffs first learned of the contamination much later.  (You can find more on the Waldberger decision in an earlier post. The same post also includes additional background on the contamination problem at Camp Lejuene.)

The N.C. General Assembly responded to the  Waldberger decision  by enacting a law excluding claims for property damage and personal injury related to contaminated groundwater from the 10-year statute of repose. See Session Law 2014-17.  The law was written to apply to both pending cases and cases filed after its enactment. In the Bryant decision, however, the 11th Circuit Court of Appeals ruled that the new law could not retroactively apply to pending cases. The appeals court treated the 10-year statute of repose as a sort of property interest benefitting (in this case) the U.S. government. The court ruled  that the state legislature could not retroactively remove that benefit.  The decision turned, in part, on the court’s conclusion that Session Law 2014-17 changed rather than clarified the state’s prior law.

The 11th Circuit decision seems to leave the Camp Lejeune plaintiffs without any legal remedy for long-term health effects allegedly caused by exposure to the contaminated drinking water.

North Carolina and EPA’s Proposed Carbon Rule

September 30, 2014. On June 2, the U.S. Environmental Protection Agency  released  a draft rule to reduce  carbon dioxide (CO2)  emissions from power plants.  Gov. Pat McCrory’s administration has taken a number of opportunities  to  question the legal basis for the  rule. An earlier post described  a presentation by DENR Deputy Secretary Don van der Vaart  to the N.C.  Energy Policy Council soon after EPA  released the draft rule in June.  DENR actually began staking out a position in opposition to the proposed carbon rule even earlier. (See the DENR website for a number of agency policy documents related to the carbon rule.)  Each time, DENR focused on legal arguments — challenging EPA’s authority to regulate a power plant’s CO2  emissions under Section 111 of the Clean Air Act —  rather than the actual impact of the rule on the state and its electric utilities.

Evaluating the impact of the rule on an  individual state can  be challenging because the rule takes an innovative approach to reducing CO2. Instead of putting the burden and cost of CO2 reductions entirely on the power plants,  the rule tries to harness  other  trends in energy generation — increased  reliance on renewable energy;  adoption of  energy efficiency standards for buildings, appliances and equipment; and a shift in generation from coal-fired plants to natural gas units — to help lower CO2 emissions associated with power generation.  Many of those trends developed in response to other environmental concerns (stricter  air quality  standards for ozone and particulates) or economic incentives (the lower cost of natural gas). EPA’s proposed  carbon rule builds on those trends to also drive down CO2 emissions associated with power generation.

Steps  North Carolina has taken over the last 10-15 years to increase renewable energy  generation and energy efficiency seem to put  the state  in a favorable position to meet the CO2 reduction goal in the rule and come out the other side with competitive energy costs.  This post is intended to provide some  (very basic) background on how the rule works and to  identify the questions that need to be answered to understand what more the state may need to do to meet the CO2 reduction goal in the proposed rule.

BASICS OF THE CLEAN CARBON RULE

♦ The rule only addresses CO2 emissions associated with electric generating units (EGUs) that burn fossil fuels; the rule does not affect industrial sources of CO2.

♦ The rule sets a carbon reduction goal for each state in the form of a rate – pounds of carbon dioxide emitted per megawatt hour of electricity generated or CO2/MWh.

♦ Instead of setting a CO2 emission limit for each EGU, EPA proposed a statewide average CO2 emission rate – allowing the goal to be met in part by shifting electric generation from high to low emission units; increasing renewable energy and nuclear generation; and creating “savings” through energy efficiency measures.

♦ The rate is based on net generation (electricity delivered to the grid) rather than gross generation measured at the EGU. Net generation excludes energy used at the power plant to run fans, pumps, motors and pollution control devices.

♦ The rule sets a final goal for each state to meet in 2030 and interim goals for 2020-2029.

♦  CO2 reduction goals differ from state to state. In calculating the goals, EPA considered the existing mix of electric generation facilities in each state (nuclear, coal, natural gas) and each state’s potential for  increased renewable energy generation and growth in energy efficiency savings.

HOW EPA CALCULATED STATE REDUCTION GOALS (THIS IS REALLY IMPORTANT)

State goals are not based on simply requiring  fossil-fuel burning power plants to reduce their CO2 emissions per megawatt hour from 2012 levels.  Although  EPA used the EGU’s 2012 reported emissions of CO2 as one factor in calculating  the goals, it is not quite correct to describe 2012 as the “base year” for reductions.   The state goals represent something different — reductions in EGU emissions combined with a shift in electric generation capacity to cleaner sources (such as renewable energy and nuclear power) and increases in energy efficiency. More about the rate calculation below.

To set the state CO2 emission rate goals, the EPA rule adjusted the  2012 calculation of CO2/MWh in two ways:

1. EPA reduced the net CO2 emissions  reported by regulated EGUs in 2012 (the numerator in the CO2/MWh equation) by assuming those units can achieve a 6% improvement in heat efficiency. In states where there are both coal-fired plants and natural gas plants, EPA adjusted the numerator again if any natural gas plant in the state operated at less than 70% utilization. Assuming  every natural gas plant could operate at 70% utilization, EPA shifted a corresponding amount of electricity generation from  coal-fired plants to the underused natural gas plants and and adjusted the pounds of CO2 emitted to reflect the natural gas plants’ lower CO2 emissions rate.

So the numerator in the goal represents pounds of CO2 emitted by  the state’s existing power plants after each individual plant has become more heat efficient and after power generation across the entire system has been  reallocated  to better utilize low-emission natural gas units. Both adjustments reduce the amount of CO2 generated by the EGUs  below the amount actually reported  in 2012.

2. EPA then adjusts the denominator in the CO2/MWh equation to spread the pounds of CO2 generated  by the EGUs across the megawatt hours generated by all electric generating sources in the state and megawatt hours of electric generation saved through energy efficiency measures. The denominator becomes:  total megawatt hours generated by the EGUs + new renewable energy generating capacity + new or preserved nuclear generation capacity + an estimate of annual avoided power generation associated with demand-side energy efficiency.  (“Preserved” nuclear power refers to  an existing nuclear plant operating beyond a previously announced closure date.)

The final 2030 CO2 emissions goal as a rate =

Net CO2 emissions for regulated EGUs – 6% heat efficiency*
Total net MWh (EGUs + renewable energy + new/preserved nuclear + avoided generation)

* In some cases there has also been an adjustment for under-utilized natural gas plants.

Although the rule does not propose CO2 reductions from any baseline year, EPA has estimated the rule will result in a 30% reduction in CO2 emissions as compared to 2005.

THE NORTH CAROLINA CO2 REDUCTION GOAL

The proposed  2030 goal for North Carolina is  992 lbs CO2/ MWh. By comparison, North Carolina’s electric generating units reported 2012  emissions  of  1647 lbs CO2/ MWh. (Source: Congressional Research Service report.) The EPA rule would require North Carolina to reduce CO2 emissions from:

1647 lbs of CO2 per megawatt hour  of electricity generated by fossil fuel EGUs

to

992 lbs of CO2 per megawatt hour of electricity generated by fossil fuel EGUs + estimated new renewable energy generation+ new or preserved nuclear capacity+ electricity generation avoided by energy efficiency measures

The Clean Power Plan goal does not require  North Carolina power plants to reduce CO2 emissions by 40%.  The rule requires the state’s  electric generation  system  as a whole to  meet demand for electric power at a 40% lower rate of CO2 emissions.

MEETING THE GOAL

The draft EPA  rule  requires  states to  use four “building blocks” to comply; the building blocks correspond to the factors EPA used to calculate each state’s  CO2 reduction goal:

1. Increased heat efficiency at EGUs —  EPA has  assumed each EGU can achieve  6% improvement in heat efficiency.

2. Increased “dispatch” of power generation from higher emission coal-fired units to lower emission Natural Gas Combined Cycle (NGCC) plants —   EPA has assumed every NGCC  unit can be operated at 70% utilization.

3. Increased generation of electricity from renewable sources and new or preserved nuclear generation.  EPA has estimated the  potential for growth in renewable energy generation and new or preserved nuclear generation individually for each state.

4. Energy efficiency measures to lower demand,  measured by  megawatt hours of generation avoided. EPA set a  goal of increasing demand-side efficiency by 1.5% annually.

The individual building block goals set out for each state are not requirements. EPA  used  these assumptions and estimates  to calculate  each state’s  CO2 reduction goal, but  the rule allows a state to weight the  building blocks differently in  its  compliance plan.  For example,  difficulty meeting EPA’s expectations  for demand-side energy efficiency can be offset  by increasing renewable energy generation (or vice-versa).

RELYING ON EXISTING PROGRAMS

Media reports have  reflected a lot of confusion about the impact of the proposed rule on states like North Carolina that have already taken significant steps to increase renewable energy and energy efficiency.   The proposed federal rule actually stresses  reliance on programs already in place and gives the states  credit for expanded renewable energy generation or growth in energy efficiency as a result of  existing programs.

In talking about the final state emission rate goals,  the rule notes that  “EPA is also proposing that measures taken by a state or its sources after the date of this proposal, or programs already in place, and which result in CO2 emission reductions at affected EGUs during the 2020-2030 period, would apply toward achievement of the state’s CO2 goal.” 

The rule makes a similar statement about renewable energy generation:  “We note that with the exception of hydropower, the renewable energy generation levels represent total amounts of renewable energy generation, rather than incremental amounts above a particular baseline level. As a result, this RE generation can be supplied by any RE capacity regardless of its date of installation.”

Table 6 in the proposed rule  shows North Carolina’s 2012 renewable energy generation as 2% and a proposed final 2030 goal for North Carolina of  10%.  The  N.C. Utilities Commission has reported that North Carolina electric utilities met the first state Renewable Energy Portfolio Standard (REPS) goal of  3% of retail electricity sales in 2012. The final goal under the existing state law will be 10% of retail sales for electric membership corporations/ municipal systems  (by 2018) and 12.5% of retail sales for the electric public utilities (by 2021).  Under the EPA rule, the state will get credit for any new or expanded renewable energy generation in 2014 or later as a result of the existing state REPS requirement.

Since the state REPS goal requires electric utilities to continue to increase renewable energy generation and energy efficiency through 2021,  the increases realized between 2014 and 2021 will also move North Carolina toward the federal goal. To know whether the proposed carbon rule will require the state to do more on renewable energy, the state will need a gap analysis.  The analysis will have to separate  renewable energy generation from energy efficiency savings; the two have been combined in the state REPS goal, but are calculated separately under the federal rule.

The federal rule sets a goal of having every state achieve a 1.5% annual incremental savings based on  demand-side energy efficiency measures.  EPA assumes that states already realizing  a 1.5% in annual incremental savings  will continue  and  maintain that rate through 2029 — giving states that engaged in energy efficiency measures early full credit for the incremental energy savings achieved through existing programs. To understand how close North Carolina may already be to meeting the  carbon rule’s  energy efficiency goal, the state will need to calculate the incremental annual  demand side savings that can be attributed to the state REPS goal and  add incremental savings associated with other energy efficiency programs (such as energy efficiency standards incorporated in the State Building Code).

THE QUESTION

The big  question to be answered is this: How far will North Carolina’s existing renewable energy and energy efficiency programs go toward closing the gap between 1647 lbs CO2/MWh generated by EGUs that burn fossil fuels  and 992 lbs CO2/ MWh generated by power plants+ renewable energy + new/preserved nuclear + generation avoided by energy efficiency?

It appears the remaining gap may be small, giving  North Carolina  an advantage over states that haven’t adopted policies supporting renewable energy generation and energy efficiency.   If so, the advantage will be economic as well as environmental by holding down increases in state energy costs.

RESOURCES

Text of the Clean Carbon Rule (from the June 18, 2014 Federal Register notice)

Congressional Research Service Report: State CO2 Emission Rate Goals in EPA’s Proposed Rule for Existing Power Plants, Jonathan Ramseur, Specialist in Environmental Policy, July 21, 2014.

2013 NC Utilities Commission Annual Report Regarding Renewable Energy and Energy Efficiency Portfolio Standard in North Carolina