Category Archives: Coal Ash

The Ongoing Controversy Over Coal Ash and Well Contamination

August 21, 2016. The controversy over changing state advice to well owners near Duke Energy’s coal ash impoundments has exploded again over conflicting accounts — within the McCrory administration — of the basis for “do not drink” letters sent in 2015 and later withdrawn. Two earlier posts here and here provide background on groundwater and drinking water standards for vanadium and hexavalent chromium (the contaminant of greatest concern).

In 2015, the N.C. Department of Health and Human Services (DHHS) sent health advisory letters to the owners of wells with concentrations of hexavalent chromium (chromium 6 or Cr-6)  above 0.07 ppb.  The 0.07 ppb threshold represented the concentration of Cr-6 associated with an increased cancer risk of 1:1 million. In early 2016, the McCrory administration rescinded most of the letters and advised well owners that water meeting the federal drinking water standard for total chromium  (100 ppb) should be considered safe to drink. The total chromium standard covers both chromium-3 and the more toxic chromium-6.

Within the last two weeks, the conflict between DHHS and the Department of Environmental Quality (DEQ) over the content of the health advisory letters  again made headlines. This post describes the roles of  DHHS and DEQ in groundwater contamination incidents; explains the criteria for developing groundwater standards; and makes a few observations on the implications of the conflict for future groundwater contamination incidents.

The role of DHHS in groundwater contamination incidents and development of groundwater standards. When contamination affects drinking water wells,  DHHS toxicologists often advise on the potential health effects. If there is no existing drinking water or groundwater standard for the specific contaminant, the toxicologists use established protocols to assess the contaminant’s short-term  and long-term health effects. Acute health effects include organ damage, skin rashes, respiratory problems and other short to intermediate term problems. Long-term health effects often focus on increased cancer risk. DHHS may also work with the Department of Environmental Quality (DEQ) to develop a health-based groundwater standard for a contaminant that has no existing numeric standard in state or federal rules.  DHHS toxicologists advise rather than regulate. DEQ has responsibility for enforcement of state groundwater standards and oversight for groundwater cleanup.

Cancer risk as a factor in setting groundwater standards and assessing groundwater contamination.  Both state and federal environmental agencies consider increased  cancer risk as a factor in assessing groundwater contamination and setting goals for groundwater cleanup.  North Carolina’s  groundwater rules list a  1:1 million increased cancer risk as a primary criteria for setting groundwater quality standards.  In 15A NCAC 2L.0202(d),  the rules require a state groundwater standard to be based on the lesser  of  the

(1)  Systemic threshold concentration calculated as follows: [Reference Dose (mg/kg/day) x 70 kg (adult body weight) x Relative Source Contribution (.10 for inorganics; .20 for organics)] / [2 liters/day (avg. water consumption)];

(2)  Concentration which corresponds to an incremental lifetime cancer risk of 1×10-6;

(3)  Taste threshold limit value;

(4)  Odor threshold limit value;

(5)  Maximum contaminant level[the federal drinking water standard]; or

(6)  National secondary drinking water standard.

Based on recent public statements by DHHS scientists, DHHS and DEQ staff in the Division of Waste Management calculated increased cancer risk associated with Cr-6 exposure using a standard protocol. The two agencies concluded that  0.07 ppb represented the break-point for the 1:1 million increased cancer risk.  The  DEQ/DHHS calculation of increased cancer risk associated with > 0.07 ppb of  Cr-6  then became the basis for  “do not drink” letters sent to well owners in 2015.

Health advisories based on groundwater contamination. DHHS has long worked with DEQ staff  to  advise well owners on health risks associated with groundwater contamination. Both DHHS and DEQ report to the Governor, creating  a strong incentive for the agencies to agree on assessment of public health risk.  Environmental and public health experts may debate  the appropriate standard for a contaminant,  but  public conflict between the two agencies is  extremely unusual and may be unprecedented.

The split between DHHS and DEQ over advice to well owners.  According to DHHS scientists, the 0.07 ppb standard for CR-6 based on increased cancer risk reflected the consensus of DHHS public health experts and staff in DEQ’s Division of Waste Management.  DEQ leaders, however, encouraged DHHS to advise well owners that water exceeding the 0.07 standard should still be considered safe to drink as long as Cr-6 levels did not exceed the federal drinking water standard of 100 ppb.  DEQ publicly raised  concerns about the DHHS health advisories  in a January 2016 presentation to a legislative committee. The presentation compared the 0.07 ppb standard  to the federal drinking water standard and to standards adopted by other states.  Within a month after the legislative presentation,  DEQ and DHHS sent new letters advising well owners that well water with Cr-6 levels below 100 ppb should be considered safe to drink because the water meets federal drinking water standards.  Recent  statements by state toxicologist Ken Rudo and state epidemiologist Megan Davies (who has resigned over the issue) make it clear that DHHS public health experts did not believe the existing state and federal standards for total chromium sufficiently protected human health and objected to the revised letters.  The 100 ppb standard for total chromium represents an increased cancer risk orders of magnitude higher than the 0.07 ppb standard — 1:700 increased risk of cancer versus  1:1 million increased risk.

Some observations:

♦   The state’s groundwater standard remains 10 ppb for total chromium and the Coal Ash Management Act of 2014 directs DEQ to use state groundwater standards in assessing drinking water wells around coal ash impoundments.  DEQ  has not  proposed a specific state groundwater standard for Cr-6 based on the DEQ/DHHS cancer risk calculation. As a result, the 0.07 ppb standard remains a health advisory rather than an enforceable groundwater standard. The federal drinking water standard of 100 ppb does not apply to either groundwater assessment or evaluation of well safety near coal ash impoundments.

♦  According to Secretary Donald van der Vaart, DEQ does not question the DHHS calculation of increased cancer risk associated with Cr-6.   Given the gap between the total chromium standard of 10 ppb and the 0.07 ppb threshold for a 1:1 million increased cancer risk associated with chromium-6,  the  total chromium standard does not meet a basic criteria for a N.C. groundwater standards — which requires a groundwater standard to be based on the 1:1 million increased cancer risk —  and should be reviewed.

♦ State and federal agencies routinely use the  1:1 million increased cancer risk as a criteria  for developing health-based standards for permitting  and to set environmental remediation goals.  Both state and federal programs also recognize that there may be a need to move off the 1:1million cancer risk criteria in individual cases because it is not technically or economically feasible to meet the standard.  In those instances, the agency can adjust a groundwater cleanup goal  (for example) to reflect the limits of available technology.

Going forward.  As a practical matter, the difference between the DHHS health-based standard and the state groundwater standard has no direct enforcement consequences for Duke Energy. For the time being, the applicable state groundwater standard continues to be the total chromium standard of 10 ppb.  Under 2016 amendments to Coal Ash Management Act,  Duke Energy must  provide a permanent alternative water supply to all well owners within 1/2 miles of a coal ash pond which makes both the  cancer risk  threshold and the state groundwater standard irrelevant to decisions about alternative water supply.

Assuming no change in the state groundwater standard, the 10 ppb total chromium standard will also drive development and approval of  groundwater remediation plans for areas surrounding the coal ash impoundments.

The cancer risk threshold for Cr-6  does raise questions about the adequacy of the state’s  total chromium standard.  The DHHS calculation of cancer risk suggests the  existing total chromium does not meet one of the basic criteria for state groundwater standards — protection against a 1:1 million increase in cancer risk.

The public conflict between DEQ and DHHS raises two other questions —

Should  state environmental and public health agencies inform citizens  of the health risk  associated with contamination that meets existing regulatory standards? DHHS public health officials felt an obligation to inform well owners of the higher cancer risk potentially associated with elevated levels of CR-6; DEQ took the position that the warnings were unnecessarily alarming if the well water met federal drinking water standards.

The other question is more technical and would inevitably come up in any reevaluation of the groundwater standard for chromium: Is there any economic or technical reason not to use the more stringent 0.07 ppb standard as the basis for assessing risk of human exposure to Cr-6 in groundwater and setting groundwater remediation goals?  The choice of a standard has implications  beyond the immediate controversy over coal ash impoundments and so far there has not been a practical critique of the 0.07 ppb threshold based on technology or cost.  The reason behind DEQ’s objection to the DHHS 0.07 ppb threshold as a basis for health advisories still isn’t entirely clear since it appears most  public water systems  in the state meet the DHHS health-based standard. Those that don’t meet the 0.07 ppb standard come much closer than a number of the wells  DEQ argued should be considered safe because the water meets the federal drinking water standard of 100 ppb.

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.

2016 Legislative Session in Review: Environmental Legislation

July 12, 2016. The 2016 General Assembly session resulted in changes to several environmental laws, but ended without final action on a major regulatory reform bill.  Among the more significant environmental provisions enacted outside the budget bill:

Coal Ash. House Bill 630 eliminated the Coal Ash Management Commission, giving the Department of Environmental Quality (DEQ) authority to make decisions about final closure of coal ash impoundments.  The bill also changed the criteria for prioritizing impoundment closures and required Duke Energy to provide a permanent alternative water supply to  well owners within 1/2 mile of a coal ash impoundments (unless separated from the impoundment by a river or lake) and to other well owners potentially affected by the migration of groundwater contamination from the impoundments. See an earlier post for more detail on H630  changes to the 2014 Coal Ash Management Act.

Commissions.  House Bill 630 responded to the Governor’s constitutional objections to three state regulatory commissions — the Coal Ash Management Commission, the Oil and Gas Commission, and the Mining Commission. The Governor successfully challenged  the laws creating  all three commissions as violating separation of powers; in part, the Governor objected to the legislature’s power to appoint a majority of each commission’s members.  A post on the N.C. Supreme Court decision can be found here.  The Governor vetoed an earlier bill (Senate Bill 71)  attempting to resolve the separation of powers issue by giving the Governor a majority of commission appointments.  The Governor’s position  on Senate Bill 71 suggested an ongoing objection to any  commission exercising executive powers unless the Governor had authority to appoint a majority of the members without legislative confirmation;  direct the actions of the commission;  and remove commissioners at will.

The Governor’s Office reportedly accepted H630 as a compromise. The  bill eliminates the Coal Ash Management Commission,  but retains the Oil and Gas Commission and the Mining Commission under conditions the Governor had previously objected to — legislative confirmation of appointees and the ability to remove commissioners only for cause. [Note: Although there have been indications that the Governor’s Office agreed to H630, the Governor has not yet signed the bill.]

Renewable Energy. Two provisions in Senate Bill 770 (N.C. Farm Act of 2016) amended laws related to renewable energy specifically to benefit agricultural sources, such as swine waste-to-energy projects. Sec. 10 of the bill extends the state’s renewable energy tax credit (25% of project costs)  to projects in service by January 1, 2020 (previously January 1, 2017) as long as the facility began construction by December 31, 2013.  The extension will likely benefit some swine waste-to-energy projects that have been in the works for several years, but are not yet generating electricity. Sec. 18 of the same bill gives  poultry and swine waste-to-energy projects priority over other renewable energy generation projects in connecting to electric utility delivery systems.

Sediment Pollution. Sec. 14 of Senate Bill 770 amends G.S. 113A-52.01 to add production of  “[m]ulch, ornamental plants, and other horticultural products”  to the list of agricultural activities exempt from the state’s Sedimentation Pollution Control Act (or “Sediment Act”). The Sediment Act otherwise requires activities disturbing an acre or more to maintain a stream buffer and use erosion barriers to keep sediment out of rivers, lakes and streams. The addition of ornamental plants will not raise many questions, but mulch is not an agricultural product similar to the others. Including mulch production in the Sediment Act exemption will raise two questions:

1. What kinds of operations will be covered by the mulch exemption?  Mulch operations include  large-scale municipal  waste disposal facilities that mulch yard waste and have no relationship to agriculture.

2. How will the mulch exemption affect Clean Water Act permitting? The exemption seems to go beyond the federal stormwater exemption for agriculture. That is important because most land-disturbing activities in N.C.  meet federal construction stormwater requirements by complying with the state Sediment Act.  If the Sediment Act exempts activities that don’t also fall under a Clean Water Act stormwater exemption, the activity may require  a separate federal stormwater permit.

What didn’t happen.   Several efforts to enact legislation significantly restricting wind energy development  failed, although Sen. Harry Brown has already indicated an intent to reintroduce a bill prohibiting erection of wind turbines in designated military air corridors in 2017. Proposals to repeal the ban on landfill disposal of electronics and to end the state’s electronics recycling program also failed.  Legislators apparently could not reach agreement on bills attempting to clarify the protocol for advising well owners on the heath effects of well contamination — an issue sparked by controversies over conflicting advice given to well owners near coal ash impoundments; those bills never got to a floor vote. The Senate received House Bill 593 (Amend Environmental Laws 2)  from the House and expanded the bill to include a number of additional  provisions on stormwater, beach nourishment, stream mitigation and other issues. The House did not concur in the Senate changes, leaving those proposals to die with adjournment.

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.

Coal Ash, Contaminated Wells and Providing a Safe Drinking Water Supply

May 31, 2016. The previous post  discussed legislative efforts to resolve the separation of powers conflict still hovering over implementation of the 2014 Coal Ash Management Act. The same piece of legislation, Senate Bill 71,  also attempts to fix other problems that have developed around coal ash cleanup efforts. One of the most significant changes in Senate Bill 71 responds to concerns about contaminated drinking water wells near coal ash ponds.  The final version of Senate Bill 71 approved today by both the House and Senate gives more well owners the certainty of an alternative water supply.  A comparison of Senate Bill 71 to the original Coal Ash Management Act below.

2014 Coal Ash Management Act:

♦ Guaranteed an alternative water supply only to well owners located within 1/2 mile and down-gradient of the coal ash impoundment.  Well testing and groundwater assessment done around the impoundments since 2014  have detected high levels of one or more contaminants associated with coal ash, including hexavalent chromium, in wells located up-gradient or side-gradient of the impoundments. Although groundwater usually follows surface topography, the  underlying geology and human activity can alter the direction of  flow. The alternative water supply provision in the Coal Ash Management Act did not apply to those wells.

♦   The requirement for Duke Energy to provide an alternative water supply was contingent on well sampling showing a contaminant associated with coal ash above the level allowed under state groundwater standards.  The  lack  of a state groundwater standard for some contaminants  (including venadium and hexavalent chromium) led to confusion, conflicting advice to well owners,  and lack of clarity on the standard DEQ would use to require Duke Energy to provide an alternative water source.  For background on the controversy over the groundwater standards see an earlier post here . Many well owners have received bottled water for months because of documented well contamination, but remain uncertain whether DEQ will require Duke Energy to provide a permanent alternative water supply.

♦  The provision on alternate water supply enacted in 2014, G.S. 130A-309.209(c), did not specifically require a permanent solution — such as connection to a public water system — rather than bottled water.

♦ Under the 2014 law, owners of contaminated wells located up-gradient and side-gradient of a coal ash impoundment might receive alternate supplies under the state’s groundwater corrective action rules,.  The rules (referenced in the 2014 Coal Ash Management Act) apply to all groundwater contamination incidents and require a company responsible for groundwater contamination to address health risks created by the contamination.  The  corrective action rules,  however, only apply to a person/company shown to be 1. responsible for contamination that 2. exceeds state groundwater standards. Two years after enactment of the Coal Ash Management Act,  controversy surrounds the standards for some contaminants and groundwater studies have not yet been sufficient to determine whether the coal ash ponds  caused contamination found  in up-gradient and side-gradient wells.

Senate Bill 71:

♦ Requires Duke Energy to provide an alternative water supply to the owner of every well located within 1/2 mile of the compliance boundary surrounding a coal ash pond. (The compliance boundary — either 250 feet or 500 feet from the edge of the impoundment depending on its age — is the point at which exceedance of a state  groundwater standard would be a violation.)

♦  For wells within 1/2 mile of the compliance boundary around an ash pond, alternative water supply would be required without regard to the location of the well in relation to the impoundment (down-gradient, up-gradient or side-gradient) or demonstration of a groundwater standard violation.

♦ The bill also requires Duke Energy to provide alternative water supply to well owners located outside the 1/2 mile perimeter, but located in an area at risk  of contamination because of the projected migration of groundwater contamination.

♦ The bill expressly requires Duke Energy to provide a permanent alternative water supply source and creates a preference for connection to a public water system.  The bill allows  installation of a filtration system instead if extension of a water line would be cost-prohibitive. The State Water Infrastructure Authority would review Duke Energy’s alternative water supply plan for each impoundment site and make the final decision on the type of permanent water supply.

Several things are notable about the Senate Bill 71 approach.   First, the bill  provides  certainty to well owners  that would not have been possible as clearly or as quickly any other way.  But the bill is also a reminder that property owners affected by groundwater contamination from other sources have a longer, more difficult and less certain road to a safe drinking water supply.

Separation of Powers Battle, Part II

May 25, 2016.  In response  to the N.C. Supreme Court decision in McCrory v. Berger,  the House of Representatives has approved a bill to reconstitute the Coal Ash Management Commission, the Mining Commission and the Oil and Gas Commission.   The lawsuit largely concerned the constitutionality of  legislative appointments to the commissions, but also challenged  a provision in the Coal Ash Management Act  that made the Coal Ash Management Commission independent  of oversight by any executive branch department.   See an earlier post on the court decision here.

The McCrory v. Berger decision does not state any clear, generally applicable separation of powers rule with respect to organization and appointment of state boards and commissions. (The court so stoutly resists providing any general rule, that the decision may raise more questions than it answers.) But the court clearly held that the General Assembly violated the separation of powers doctrine in the N.C. Constitution by giving the legislature power to appoint a majority of each commission’s members. Senate Bill 71 attempts to cure that separation of powers violation.

The Governor’s Office does not believe the bill resolves the separation of powers issues and has put the legislature on notice that the Governor will file suit again if the new bill becomes law.  In fact, the Governor’s objections have broadened and appear to attack the entire concept of giving executive authority to citizen commissions. The expansive interpretation of McCrory v. Berger adopted by the Governor’s Office would potentially affect many other longstanding commissions, including the Environmental Management Commission.

The Senate Bill 71 response to McCrory v. Berger. The bill  amends laws creating the three commissions at issue in McCrory v. Berger to give the Governor a majority of appointments subject to confirmation by the General Assembly. The bill also  insures that the governor’s appointees  represent a majority of the quorum required for commission action. Senate Bill 71 removes language in the Coal Ash Management Act that made the Coal Ash Management Commission “independent” of  supervision by the Department of Public Safety (where the Commission has been administratively housed) and adds a clause noting the powers and duties of the Secretary of Public Safety — appointed by the Governor — with respect to programs in  the department.

As a backstop, the bill has a provision that transfers the responsibilities of the Coal Ash Management Commission to the existing Environmental Management Commission if Governor McCrory fails to make timely appointments or the reconstituted CAMC becomes the focus of new litigation.

The Governor’s opposition.  The Governor’s Office does not believe the bill resolves the separation of powers issues surrounding appointment and supervision of the three commissions. The Governor’s legal counsel, Bob Stephens,  appeared in a House Committee  to oppose the bill and listed several objections:

  1. The Governor opposes  legislative confirmation of  commission appointees as a new violation of separation of powers.  Legislative confirmation has been the exception rather than the rule in North Carolina, but is required for a few boards and commissions.  State law has long required legislative confirmation of the Governor’s appointees to the N.C. Utilities Commission.  The McCrory v. Berger  decision does not discuss legislative confirmation one way or the other since it was not an issue in the case.  Mr. Stephens did not explain the legal basis for the Governor’s position in committee, but a letter from Mr. Stephens to legislative leaders contends that legislative confirmation inappropriately interferes with the Governor’s appointment power.
  2.  Governor McCrory  objects to provisions giving the Governor authority to remove a commission member only for  misconduct or failure to perform their duties. Stephens argued that the decision in McCrory v. Berger means the governor must have the power to remove governor’s appointees at will.  On this point, the McCrory v. Berger decision itself is unclear.  The court talks about power to remove commission members as necessary for the Governor to effectively supervise commissions with executive powers.  Although the decision can be read to imply that removal for cause may not be sufficient,  the court never  expressly holds the Governor must have power to remove commissioners at will.  Instead, the court treats power to remove as one of several factors  to be considered in determining whether the legislature has inappropriately limited the Governor’s executive authority. The actual holding in the case turns on the number of legislative appointments to each commission.
  3. Governor McCrory does not believe Senate Bill 71  sufficiently  recognizes the Governor’s authority to supervise the Coal Ash Management Commission. The CAMC  has  been administratively housed in the Division of Emergency Management of the  Department of Public Safety, but the 2014 Coal Ash Management Act  included language that put the CAMC outside the supervision and direction of either the Division or the Department. Senate Bill 71 removes the “independence” language and adds a clause noting the statutory authority of the Secretary of Public Safety (which includes supervisory responsibility for programs in the department).  Stephens rejected the changes as insufficient to  give the Governor supervisory control over the CAMC consistent with  McCrory v. Berger, but did not suggest alternative language to the committee.

 Questioning the entire concept of citizen commissions. Yesterday, Mr. Stephens sent a  letter  to House and Senate leaders to express the Governor’s concerns in writing. The letter goes beyond the comments offered in committee and opposes the exercise of executive authority by any citizen commission not entirely within the governor’s  supervision and control.  The Governor interprets McCrory v. Berger to mean the  Governor must have the ability to appoint members without legislative confirmation; remove members at will; and direct commission actions  in much the way the Governor, through cabinet secretaries, directs state agency employees. The letter to Senate President pro tempore Phil Berger and House Speaker Tim Moore rejects the idea of using the existing Environmental Management Commission as a backup for the Coal Ash Management Commission because:

The Environmental Management Commission suffers from the same constitutional defects as the proposed Coal Ash Management Commission. Again, the Governor must have a majority of appointments, the ability to remove his appointees at will and the ability to supervise the day to day activities of the commission.

The letter goes on to argue that commissions with ability to “review and approve” executive agency decisions:

pose an exceptional threat to the Governor’s duty to execute the laws…Some in the General Assembly believe that independent commissions superior to our agencies are a good idea — they serve as a check on the executive branch. But McCrory v. Berger rejects this argument.

That conclusion cannot be found in the McCrory v. Berger decision.  The court  went out of its way to avoid  grand declarations — to the point of leaving a lot of confusion about how to apply the decision beyond the three commissions directly involved in the case. The statement reflects the Governor’s expansive interpretation of McCrory v. Berger and signals an intent to use that interpretation to either eliminate semi-independent citizen commissions or to force a significant change in the role of commissions.

The practice of giving citizen commissions authority  to develop and implement state policy has a long history in North Carolina.  Commissions — rather than the Department of Environmental Quality– adopt most state environmental rules. While checking the executive branch may have been one purpose, commissions also bring a broad range of expertise and practical experience to policy development and implementation. Laws creating the commissions require  members to have backgrounds more diverse than those typically found among the technical staff of a state agency. By law, the Environmental Management Commission  must have members with  backgrounds in business, agriculture, public health, local government, conservation, etc. Members  bring that expertise and experience to bear on environmental policy decisions.  EMC members, like most state commission members, have other full-time jobs;  volunteer their time to the state; and in return receive only reimbursement of travel costs and a very small per diem for meeting days.

Given the different perspectives among commission members and a perch outside state government bureaucracy, commissions will not always see an issue in quite the way a Governor’s political appointees do. Recent friction between the Environmental Management Commission and the Department of Environmental Quality attests to that. On balance, the benefits of bringing citizen commissions into state policy development have outweighed the messiness and occasional friction. The Governor seems to prefer something more like the federal model — where policy development and policy implementation are both firmly under the control of a government agency. The question is whether a separation of powers argument can take him there.

Next steps for Senate Bill 71.  The bill passed the Senate last year as a bill to adjust the terms of Rules Review Commission members. Since the House has stripped out the original Senate bill text and replaced it with something entirely different, the bill now goes back to the Senate for concurrence in the changes.  The bill also makes other substantive changes to the Coal Ash Management Act to be discussed in another blogpost.

A Proposal: Insure owners of wells near coal ash sites aren’t exposed to greater health risks as a result

April 18, 2016. An earlier post discussed the confusion over “do not drink” advisories issued — and later withdrawn —  for  a number of wells near coal ash sites.  There continues to be confusion among legislators, state agencies and the public about the correct response to high levels of hexavalent chromium (Cr-6) and vanadium in drinking water wells near coal ash impoundments. This post attempts to  clarify some misconceptions and offers a proposal.

First, a clarification about individual contaminant standards.  Some legislators understood presentations by the  Department of Environmental Quality (DEQ) and the Department of Health and Human Services (DHHS)  to mean that there are multiple, inconsistent standards for a contaminant. In fact,  the state uses one standard for each contaminant to determine health risk and require groundwater remediation. But as the earlier post explained, the standard may come from Safe Drinking Water Act standards  or state groundwater rules.  Drinking water standards address a narrow set of contaminants  likely to be found in public water systems; groundwater standards  cover a broader range of extremely hazardous substances that may become a health threat because of a specific pollution incident.

State groundwater rules list health-based concentration limits for many hazardous substances, but also recognize that a pollution incident may involve a contaminant that does not yet have a groundwater standard.  For those contaminants, the rules set the default standard at “non-detect” —  any detectable concentration of the contaminant would be a violation. But the rules also create a process for setting  an interim groundwater standard that would allow concentrations above detection levels based on an evaluation of health risk.  DHHS used that process  to develop the interim standards for vanadium and hexavalent chromium (CR-6) that  led to  “do not drink” advisories for  a number of wells near coal ash facilities.

Gaps in the changing state response.  DEQ and DHHS offered a two-part explanation for withdrawal of the “do not drink” letters. The two points and some additional context for each:

  1. Levels of vanadium and Cr-6 in the wells do not violate state or federal drinking water rules.  Since there is no drinking water standard for either vanadium or Cr-6, this is true as far as it goes.  But the lack of a drinking water standard does not imply safety.  State and federal agencies have never relied solely on drinking water standards to make decisions about mitigation of health risks at contaminated sites  because drinking water standards do not cover many extremely hazardous substances.  That is why the process for asking DHHS to set interim state groundwater standards  exists. The question should be whether concentrations of vanadium and Cr-6  in the wells represent a significant additional health risk that can be minimized by either providing an alternative water source or remediating the groundwater.
  2. A number of large N.C. public water systems also do not meet the DHHS interim standards for vanadium and Cr-6.  The implication has been that the well water is as safe as water supplied to customers of public water systems.  In recent weeks, media and public interest organizations have looked more closely at the levels of vanadium and Cr-6 in public water systems as compared to the wells near coal ash facilities.   Although some N.C. water systems exceed the DHHS interim standards for vanadium or hexavalent chromium, most  water systems appear to meet the DHHS standards. A WRAL news story includes a chart showing both maximum and average concentrations of Cr-6 in public water systems across the state here.  DHHS set the interim standard for Cr-6 at 0.07 parts per billion, representing a 1:1 million cancer risk over a lifetime. WRAL’s analysis found that only about one-third of N.C.’s public water systems have average concentrations of Cr-6 exceeding 0.07 ppb.  More importantly, those public water systems come much closer to meeting the  DHHS standard than a number of the tested wells. The public water systems with the highest average concentrations of Cr-6 had concentrations less than half that of some wells tested near Buck Steam Station.

A proposal:  Issuance of health advisories and steps to provide alternative water supply to well owners should be based on comparative health risk.

The discussion of health advisories issued to well owners around coal ash sites has become focused on whether  public water systems meet the DHHS recommended standards for vanadium and Cr-6.  That is the wrong question. Many (most) North Carolina water systems meet the DHHS standards;  those that do not still provide water that is safer than water in a number of the tested wells. Environmental remediation programs exist in part to reduce  health risks created by a pollution incident.  To the extent well owners will be exposed to greater health risk as a result of groundwater contamination, the additional risk should be eliminated or minimized to the extent possible.  The question is not whether all public water systems meet the DHHS standards. The question is whether groundwater pollution has exposed these well owners to greater health risk — and one way to answer that question is to compare contaminant levels in the well water to the nearest public water system. If the public water system provides water with lower contaminant concentrations that translate into lower additional cancer risk and less risk of acute toxicity, the well owner should be provided with advice on the higher risk of drinking the well water.  And any person responsible for the contamination should be required to provide an alternative water source.

The Fate of the Coal Ash Management Commission

March 19, 2016. An earlier post discussed the N.C. Supreme Court decision in McCrory v. Berger. In brief, the court ruled that laws giving the General Assembly  power to appoint a majority of the members of the Coal Ash Management Commission (CAMC) and two other state commissions violated the N.C. Constitution’s provisions on separation of powers.  (See the earlier post for more detail and a link to the court’s opinion.)   The decision means the Coal Ash Management Commission cannot take any further action until the General Assembly amends the CAMC’s  appointment statute  to be consistent with the court’s decision and new appointments are made.  The most likely solution would be to give the Governor power to appoint a majority of the members;  the law could be amended as early as April of this year when the legislature convenes again.

Multiple news outlets have now reported that the McCrory administration has taken steps to effectively disband the Coal Ash Management Commission in advance of the April legislative session.  The Charlotte Observer’s Bruce Henderson reported that the Governor’s Office informed CAMC executive director  Natalie Birdwell  that the commission is “no longer a legal entity”.  The same Charlotte Observer article reports that the move by the Governor’s Office to shut down the commission’s work will dissolve contracts with independent experts retained by the commission to provide an outside review of  the Department of Environmental Quality’s (DEQ) proposed risk classification of coal ash ponds.

A few observations about the Governor’s decision to shut down the Coal Ash Management Commission:

The Governor’s action  wasn’t required by the decision in McCrory v. Berger.  The court did not find anything unconstitutional in the creation of a Coal Ash Management Commission to oversee decisions on closure of coal ash ponds and coal ash disposal.  The court  only held the method of appointing CAMC members  to be  unconstitutional.  The N.C. Supreme Court has found commission appointments statutes unconstitutional in the past and the solution has been to amend the statute to change the appointment scheme.  In 1982, the N.C. Supreme Court  ruled in Wallace v. Bone  that the General Assembly violated the N.C. Constitution’s separation of powers provisions by designating four seats on the N.C. Environmental Management Commission (EMC) for active members of the legislature.  In response, the General Assembly amended the EMC appointments statute to replace the legislators serving on the commission with citizens appointed by the General Assembly.  Nothing in the court’s decision suggested the EMC must be dissolved and that did not happen; nothing in the decision questioned the validity of past EMC actions.  The decision in McCrory v. Berger likewise  does not hold that actions already taken by the Coal Ash Management Commission — such as hiring staff and entering into contracts  for services —  are void or voidable.

Another separation of powers case still pending in  Wake County Superior Court challenges appointments to the Mining and Energy Commission  (MEC) and specifically asks the court to void the MEC’s past rulemaking actions.   But to date, no  court has ruled that the presence of unconstitutionally appointed members invalidates a commission’s  past acts. The MEC case directly  raises the issue for the first time and could lead to a decision affecting future separation of powers cases. In the meantime, the McCrory administration has chosen to go further than the decision in McCrory v. Berger  requires to  undo the existing organizational, staff and contractual arrangements supporting the Coal Ash Management Commission.  (It isn’t clear whether the McCrory administration’s position on the CAMC  would carry over to support for the plaintiffs seeking to invalidate the Mining and Energy Commission’s past rulemaking actions on similar grounds.)

The General Assembly’s next move may depend on continued legislative interest in providing oversight for DEQ’s coal ash decision making.  In 2014, the General Assembly created the Coal Ash Management Commission to provide independent oversight for DEQ decisions related to coal ash disposal and closure of existing coal ash ponds. At the time, legislators expressed concern about relying entirely on DEQ’s judgment because of controversy surrounding early McCrory administration decisions on coal ash enforcement and a pending federal investigation of relationships between state regulators and Duke Energy. The question is whether those concerns still exist and,  if so,  how the legislature will react to the Governor’s unilateral move to disable the commission. The General Assembly can resolve the separation of powers issue and revive the CAMC by simply changing the CAMC appointment provision to  allow the Governor to make a majority of the appointments.

By forcing the Coal Ash Management Commission to start over, the Governor’s action may make it impossible for the commission to meet its first critical deadline –risk classification of coal ash ponds. The Coal Ash Management Act gave the CAMC final authority to determine the appropriate risk classification of each coal ash pond; the risk classification will determine how quickly the ash pond must be closed and whether the coal ash must be excavated and disposed of in a lined landfill. Only coal ash ponds classified as Low Risk can be closed out by dewatering and capping the ash in place.  Under the law, the CAMC must make a final decision on risk classification of a coal ash pond within 60 days after DEQ sends the commission a proposed risk classification. If the commission does not act within 60 days, DEQ’s proposed risk classification becomes the final classification by default.

Timelines in the law will  require DEQ to submit proposed classifications for all of the coal ash ponds to the  Coal Ash Management Commission by mid-May.  Some proposed classifications may be ready sooner. Even if  new appointments to the CAMC can be made under an amended appointments statute by that time, the Governor’s action means the newly appointed commission will have to reassemble a staff, re-engage consultants and revive basic  operating systems to function.  Unless the General Assembly extends the time for the CAMC to review and act on proposed risk classifications,  the DEQ proposed classifications may become final by default before the commission can act.

After the ash ponds have been classified, the next major set of CAMC decisions under the Coal Ash Management Act  involve approval of final closure plans for each coal ash pond.  The closure plans determine whether coal ash will be excavated and removed from the site or capped in place and  includes approval of technical specifications for final disposal of coal ash. The closure plan may also involve approval of a beneficial reuse project as an alternative to landfill disposal. The law directs the CAMC to make the final decision on  approving a final closure plan based on a recommendation from DEQ.  The law again gives the CAMC a limited time to act on each recommended closure plan; if the commission does not act within the time allowed, DEQ’s recommended closure plan becomes final by default.

If the General Assembly does not intervene to protect the Coal Ash Management Commission’s ability to carry out its responsibilities, the practical result could be a significant change in the way the Coal Ash Management Act works. Delaying the commission’s ability to act in time to affect DEQ’s decisions on closure of coal ash ponds will have the practical effect of ceding all  decision-making back to DEQ.  The original concept of providing  independent oversight of those decisions through the Coal Ash Management Commission will be lost.

To Drink or Not to Drink: A Change in Advice for Well Owners


March 17, 2016. In 2015,  the N.C. Division of Public Health (Department of Health and Human Services) sent letters advising the owners of  369  wells located near coal ash ponds not to drink their well water because of elevated levels of vanadium and chromium-6.  Last week, the Division of Public Health sent letters to those same well owners to withdraw the “do not drink” advisory.  Some questions and answers on the conflicting advice below.

What are vanadium and chromium-6 (Cr-6)? Both elements occur naturally in the environment and can be found in coal ash. Both may  be concentrated in the air or in groundwater as a result of industrial activities.  Inhalation of Cr-6 (or hexavalent chromium) has been associated with increased risk of lung cancer. In 2010,  the U.S. Environmental Protection Agency  began a new health study to determine whether ingestion of  Cr-6  in drinking water increases other types of cancer risk. The Erin Brokovitch story of hexavalent chromium contamination in the town of Hinkley, California raised public awareness of Cr-6 as a public health issue. In Hinkley, Pacific Gas & Electric  had used Cr-6 as an additive in cooling water for a natural gas compression station. The  Cr-6 percolated into groundwater from unlined ponds used to store the cooling water, contaminating the town’s drinking water supply. (Levels of Cr-6 in  Hinkley’s groundwater were exponentially higher than concentrations found  in North Carolina  wells.)

Are there drinking water standards for vanadium and  Cr-6? There is no federal drinking water standard for vanadium.   The U.S. Environmental Protection Agency has adopted a drinking water standard for total chromium of 100 parts per billion (ppb);  the standard covers combined concentrations of chromium-3 (a nutritional element found in plant material) and chromium-6.  Water systems required to meet federal Safe Drinking Water Act standards monitor  total chromium levels, but not necessarily  Cr-6. Nationally, only the State of California  has adopted a specific drinking water standard for Cr-6. In 2014, after  years of  study prompted by the Hinkley contamination,  California adopted a standard of 10 parts per billion for Cr-6 in drinking water — 1/10th the concentration allowed under the federal drinking water standard for total chromium.

How are  N.C. groundwater standards different from  federal drinking water standards?  In part,  the two sets of standards serve different purposes. Drinking water standards adopted by U.S. EPA under the Safe Drinking Water Act only apply to the treated water that public water systems  provide to their customers.  Under the law, “public water system” means any system providing water to 15 or  more connections or to 25 or more people whether the system is  operated by a local government or a for-profit water utility.  Federal drinking water standards do not apply to privately owned water supply wells serving individual homes or businesses.

N.C.’s  groundwater standards are used to identify unsafe levels of groundwater contamination;  set goals for groundwater remediation; and advise well owners on use of water from affected wells.  Most N.C. groundwater standards track the federal drinking water standard for the same contaminant, but in a few cases the state has adopted a more stringent groundwater standard or has adopted a groundwater standard for a contaminant that has no corresponding drinking water standard.  Leading up to the well testing around coal ash ponds, N.C. had no groundwater standard for vanadium and no specific standard for Cr-6. although the state had a groundwater standard of 10 ppb for total chromium (more stringent that the 100 ppb drinking water standard for total chromium.)

How does N.C. set groundwater standards?  The N.C. Environmental Management Commission has adopted state groundwater standards as rules. Since existing groundwater standards may not address every potential contaminant,  the rules also create a process for developing  a temporary  standard  — an Interim Maximum Allowable Concentration or “IMAC” —  to address an unregulated contaminant.  Epidemiologists in the N.C. Division of Public Health generally develop a recommended IMAC based on review of human health effects such as toxicity and increased cancer risk.

Why did the  Division of Public Health send “do not drink” letters in 2015 based on  vanadium and chromium-6?   Since no state groundwater standard or federal drinking water standards existed for vanadium and  Cr-6, DEQ  asked the Division of Public Health to develop interim groundwater standards (the IMACs described above)  to be used in assessing wells around the coal ash ponds. Division of Public Health calculated a standard of 0.07 ppb for Cr-6 and 0.3 ppb for vanadium.  In each case, the deciding factor was the concentration associated with an  incremental increase in cancer risk. The table below shows the IMAC standard compared to the federal Safe Drinking Water Act standard and the N.C. groundwater standard.

Contaminant Fed. Drinking Water Standard N.C. Groundwater Standard IMAC
Vandadium No standard No standard 0.3 ppb
C.hromium-6 None –Total Cr 100 ppb None – Total Cr 10 ppb 0.07 ppb

Why did Division of Public Health withdraw the “do not drink” letters?  None of the  well owners who received “do not drink” letters  based solely on the vanadium and Cr-6 IMAC standards have well water that would violate Safe Drinking Water Act standards for a public water system.  DEQ has reported that 70% of public water systems in the U.S. exceed the IMAC standards set by Division of Public Health, including several large public water systems in North Carolina. (The information, provided in a report to the legislature’s Environmental Review Commission,  did not indicate how many of those systems exceeded the IMAC standard for vanadium versus Cr-6. You can find the entire DEQ presentation to the Commission  here.)

The gap between the IMAC standards and Safe Drinking Water Act standards meant that well  owners were being advised not to drink water that meets current drinking water standards and could lawfully be provided to customers of a  public water system.   As a practical matter, that also  means the well owners may not have access to an alternative water supply of any better quality  since  the nearest public water system also may not meet the IMAC standards.

None of this  means the analysis done by the Division of Public Health in developing the IMACs was wrong. Environmental and public health standards change with additional knowledge; the fact that the U.S. Environmental Protection has undertaken a new health study of Cr-6 in particular suggests some question about the adequacy of the  federal drinking water standard based solely on total chromium.  The standards adopted by EPA and the states also sometimes involve compromise between the most protective health-based standard and the practicalities (and cost) of meeting that standard.

Making Sense of a Coal Ash Penalty

March 8, 2016.   The  civil penalty for  groundwater violations around Duke Energy’s Sutton Plant in New Hanover County has taken several unprecedented  twists and turns.  This post looks at the  $25 million civil penalty for groundwater contamination at the Sutton Plant that became a $7 million civil penalty for groundwater violations at all 14 coal ash sites in the state and then a $7 million civil penalty just for the Sutton violations.

Groundwater Enforcement 101.   The Department of Environmental Quality (DEQ) can order remediation of groundwater contamination and assess civil penalties for violation of the state’s  health-based groundwater standards.  Some contaminants (like arsenic) occur naturally; if natural  “background” levels of the contaminant exceed the state standard, the background level becomes the standard. State rules allow for some exceedence of  groundwater standards within the footprint of a waste disposal facility, but set a “compliance boundary” around the facility where the  standards must be met.  Coal ash ponds permitted before 1983 must meet groundwater standards within 500 feet of the ash pond; those  permitted later have a  250-foot compliance boundary.

To assess a civil penalty for coal ash contamination,  DEQ  must show: 1. Contaminants in the groundwater exceed the state standard (which may require determining background levels if the contaminant occurs naturally); 2. Exceedences occur at or beyond the compliance boundary; and 3. Coal ash  caused or contributed to the contamination. State law caps the maximum penalty for a single groundwater violation  at  $25,000.  In setting the specific penalty amount within the cap, DEQ considers a number of penalty factors including the extent of environmental harm;  whether the violation was intentional; and any compliance costs the violator may have avoided.  Since  DEQ can assess daily penalties for continuing violations, the total civil penalty may exceed $25,000  if a violation continues over a period of time.

Now a Little Coal Ash History. The state originally permitted  coal ash ponds as wastewater treatment systems. The ponds receive, treat and discharge  process wastewater and sometimes stormwater.  A coal ash pond functions like  the  settling basins used  in other wastewater treatment systems; the coal ash settles out of the  wastewater slurry,  reducing pollutants in the top layer of pond water.  The utility then discharges wastewater  from the top of the pond to a river, stream or lake under a  Clean Water Act Permit —  the  National Pollutant Discharge Elimination System (or “NPDES”)  permit.  NPDES permits  protect surface water from pollution; since groundwater was never the focus, the  permits  historically required very limited groundwater monitoring around coal ash ponds.

In response to pressure for national coal ash disposal standards,  companies operating coal-fired power plants began a program of voluntary groundwater monitoring in 2006 and provided results to the state.   (As a voluntary program, the power companies alone decided what contaminants to monitor for and where to put monitoring wells.) By  2009,  state water quality officials had become so concerned about the utilities’ groundwater data  that the Division of Water Quality  (DWQ) moved  to put stronger  groundwater monitoring conditions on NPDES permits for coal ash ponds as the permits came up for renewal.  The new permit conditions made monitoring for specific contaminants mandatory and required  DWQ approval of the monitoring plan so monitoring wells would be appropriately placed to identify violations at the compliance boundary.

As DWQ began adding monitoring conditions to permits,  the senior manager in DWQ’s groundwater protection program issued a  memo  explaining how the program would take enforcement actions based on the new groundwater monitoring data. The memo applied to any facility that had operated for a long period of time before being required to do groundwater monitoring.  It  implicitly recognizes that imposing groundwater monitoring conditions  after many years of facility operation may result in immediate detection of groundwater exceedences — giving the operator little opportunity to prevent  a violation. The memo did not completely foreclose  the possibility of a civil penalty for groundwater violations at these facilities, but indicated that  DWQ  may not issue a Notice of Violation (the first step to a penalty) as long as the operator responded to state requests for assessment and clean up of any contamination.

The Sutton Plant Civil Penalty. The Sutton Plant’s wastewater system, consisting of two coal ash ponds built in 1971 and 1984, has had an NPDES  permit since 1977.    For most  of the system’s history,  the  permit only required monitoring for a  limited number of  groundwater quality parameters —  groundwater level, pH, Arsenic, Iron, Total Dissolved Solids, Chlorides and Selenium.   When DWQ renewed the Sutton Plant’s NPDES permit in 2011,  the new permit required monitoring of  additional contaminants (including boron, thallium, and manganese) under a state-approved monitoring plan designed to detect exceedences at the compliance boundary.  In March 2015,  DEQ assessed a record $25 million civil penalty for groundwater violations around the Sutton Plant. The civil penalty  covered a number of different groundwater standard violations over varying periods of time. The earliest violations identified in the assessment  document  dated back to 2009 (for boron) and 2010 (for thallium).    Most of the violations  (for iron, arsenic, selenium, manganese and total dissolved solids)  dated from 2012 or 2013. To reach the  $25 million assessment, DEQ  assessed either $1,000 or $5,000  per day (from initial detection to the assessment date) for each contaminant that exceeded state groundwater standards.

A Big — and Short-Lived — Settlement. Duke Energy  appealed the penalty and several months later  DEQ agreed to a settlement reducing the civil penalty to $7 million.  The most notable thing about the September 2015 settlement agreement was not the penalty reduction, but the fact that the settlement would have resolved all groundwater violations (known or discovered in the future) around all 14 Duke Energy coal ash impoundment sites in the state.  Southern Environmental Law Center (SELC),  on behalf of several environmental organizations, challenged the settlement agreement in court. SELC’s appeal did not contest  the penalty reduction for the Sutton violations, but argued  Administrative Law Judge Phil Berger, Jr. had no authority to approve a settlement agreement affecting issues beyond the Sutton civil penalty.  SELC particularly complained that the settlement agreement affected other coal ash enforcement cases without notice to the parties in those cases — including organizations represented by SELC.  Those enforcement cases dealt with specific actions required of Duke Energy to  address groundwater contamination around coal ash ponds at multiple sites.

Key provisions in the September 2015  DEQ-Duke Energy   settlement agreement

♦ Duke Energy agreed to pay a civil penalty  of $7 million and accelerate groundwater remediation at the Sutton, Asheville, Belews Creek and H.F. Lee plants. The settlement agreement did not set a timeline for the accelerated remediation.

♦ DEQ agreed to dismiss groundwater enforcement cases already pending in superior court related to the Sutton Plant and the Asheville Steam Station. See the SELC appeal of the settlement agreement for more on the relationship between the settlement agreement and pending enforcement cases.

♦ DEQ agreed not to issue Notices of Violation,  notices requiring assessment or remediation, civil penalty assessments or to  take any other enforcement actions against Duke Energy based on groundwater conditions “at any of the Duke Energy Sites” as long as Duke Energy complied  with requirements of the Coal Ash Management Act related to groundwater assessment, remediation and closure of the coal ash basins. Under the agreement, the “Duke Energy Sites” included all 14 coal ash sites across the state.

♦ DEQ agreed not to change groundwater monitoring conditions in existing or future NPDES permits for the coal ash ponds unless required by  court order;  a federal or state law; a rule; or in response to an immediate threat to public health.  Under the agreement, an “immediate threat to public health” had to involve something more than violation of a  health-based groundwater standard.  In effect, the settlement prevented DEQ from using its permitting authority to requiring monitoring for additional contaminants.

♦ DEQ agreed not to use groundwater monitoring data collected under either the NPDES permit conditions or under provisions in the Coal Ash Management Act for any purpose other than classification and closure of the coal ash ponds. In other words, DEQ agreed not to use groundwater monitoring data for enforcement purposes.

Reversing Direction.  In February, Superior Court Judge Paul Ridgeway held a hearing  on SELC’s objections to the Sutton settlement agreement.  Persuaded that the settlement agreement  affected the other enforcement  cases already before him,  Judge Ridgeway indicated an intent to take jurisdiction over the settlement agreement unless Judge Berger  narrowed the scope of his order in the Sutton civil penalty case.   Charlotte Business Journal has  reported  that Judge Berger later issued a revised order at the request of DEQ and Duke Energy.   According to the article, the settlement agreement between Duke Energy and DEQ did not change, but the  order  approving the settlement has been expressly limited to the Sutton civil penalty case.  (I have not been able to find the  revised order  on either the Office of Administrative Hearings  or DEQ website.)  As a result, the $7 million civil penalty now covers only  groundwater violations at the Sutton Plant.

Signs and Portents? DEQ made several unusual decisions in assessing and then settling the Sutton civil penalty case:

The  original $25 million civil penalty for the Sutton groundwater violations broke from past enforcement practices.  State programs  rarely impose daily penalties for newly discovered groundwater violations. Daily penalties are usually reserved for willful, intentional violations and for violators who  fail to quickly address contamination once it has been detected.  DEQ didn’t cite either of those aggravating factors in assessing the original $25 million Sutton penalty.  To reach the $25 million total, DEQ assessed a penalty of either $1,000 or $5,000 a day (depending on the contaminant) from the date of detection to the date of assessment.  (The contamination persists today and will until coal ash on the site has been removed, which everyone understands will require more time.)  The question is whether DEQ’s very aggressive penalty for the Sutton violations indicates a change in enforcement policy that may affect  other groundwater cases.

There doesn’t seem to be any precedent for DEQ agreeing –as it did in the original Sutton settlement — to limit its own permitting and enforcement authority to settle a civil penalty case.  State agencies often settle  civil penalty cases for a lower penalty amount. In the Sutton settlement, DEQ  also agreed not to change groundwater monitoring conditions on Duke Energy’s NPDES permits except in very narrow circumstances. Most of those circumstances required  some outside force  — federal law, a court order — to compel the change. In effect, DEQ  gave up the ability to use its permitting authority to  require monitoring for additional contaminants. The department also agreed not to issue Notices of Regulatory Requirements (orders for assessment and remediation of contamination)  or take  new enforcement actions against Duke Energy based on coal ash contamination at the 14 sites in N.C. The settlement agreement was conditioned on Duke Energy complying with provisions in the Coal Ash Management Act on  groundwater assessment and corrective action, but those requirements assume application of state groundwater regulations. It isn’t clear why DEQ would agree to give up use of normal groundwater enforcement tools like the Notice of Regulatory Requirements. Limits on DEQ use of groundwater data for enforcement purposes could have affected the state’s ability to address  groundwater problems discovered later.

What Does it Mean?  Assuming Judge Berger’s revised order has set much of the Sutton settlement agreement aside, the Sutton case is mostly  interesting as an insight into DEQ’s enforcement decision-making. It is hard to identify a consistent principle that would explain both  DEQ’s very aggressive use of civil penalty power in the first instance and DEQ’s willingness to  give up significant permitting and enforcement authority  to settle the  case. The question is whether the Sutton decisions  were peculiar to it or have broader implications.