June 16, 2014. The Senate Agriculture and Environment Committee began debating a revised  version of Senate Bill 729 (Governor’s Coal Ash Action Plan) that makes significant changes to legislation proposed by Governor Pat McCrory. The most important new  provisions  are described below.

End disposal of coal ash in wet impoundments. The bill would prohibit construction or expansion of surface impoundments for disposal of coal combustion residuals (CCRs) after June 30, 2014. The bill requires all electric generating facilities in the state to convert to “dry” fly ash disposal or be retired by December 31, 2018 and to convert to “dry” bottom ash disposal or be retired by December 31, 2019. The bill also sets interim deadlines  for ending CCR disposal and stormwater discharges to surface impoundments at facilities that no longer produce coal combustion residuals.

Groundwater assessment and corrective action. The bill sets timelines for groundwater assessment, survey of drinking water wells, and groundwater corrective action similar to those in the Governor’s Coal Ash Action Plan, but  the bill goes on to  require the corrective action plan to restore groundwater in conformance with the requirements of North Carolina’s groundwater rules. (See, Title 15A NCAC Subchapter 2L).

Structural fill. The bill revises the definition of “structural fill” to allow use of CCRs in mine reclamation and construction of embankments. The bill also sets new standards for structural fill projects. Smaller structural fill projects (those using less than 10,000 tons per acre or less than 100,000  total tons) could be “deemed permitted” without an individual permit review based on meeting design and construction standards set in the bill. For these smaller projects, the bill applies standards  essentially identical to those already in state rules. Larger projects would need an individual permit and be required to meet more stringent design/construction standards including: use of an encapsulating liner system; leachate collection; a cap liner; groundwater monitoring and financial assurance.

In a somewhat confusing turn, the bill then puts a one-year moratorium on some structural fill projects. The moratorium has two  exceptions: 1. projects that meet the new standards for large structural fills (i.e. a liner system, leachate collection, cap liner, groundwater monitoring and financial assurance); and 2. use of CCRs as the base for a public road constructed of asphalt or concrete. As a result, some very large structural fill projects could go forward during the moratorium, but smaller projects would be delayed for additional study of the standards that apply to those projects.

Closure of impoundments. The bill creates a new 9-member Coal Ash Management Commission in the Department of Public Safety and gives the commission final authority over decisions about closure of existing surface impoundments. Six of the nine members would be required to have experience or knowledge of engineering; waste disposal; manufacturing; use of CCRs in structural fill; economic development; and electric co-op management. The other three members would be a state resident (no other qualification required); a doctor or person with public health expertise; and a representative of a conservation organization. More on prioritization and closure:

♦ Prioritization for closure. The bill requires all of the existing coal ash impoundments to be prioritized for closure based on a list of factors in the bill and then ties the risk classification (high, intermediate or low risk) to deadlines for closure and to allowable closure methods.  Although DENR would propose priorities for closure, the Coal Ash Management Commission would make the final decision on prioritization of sites. Since the prioritization factors listed in the bill are not weighted in any way, it is not possible to know how many (or which) sites would fall into each risk category.

♦ Alternatives for closure. Understanding how sites will be prioritized for closure becomes important because low risk sites will be given the option of  dewatering and capping the coal ash in place. The bill also requires the Coal Ash Management Commission to study whether it may be appropriate to allow  some low risk impoundments to  remain in their current condition (without either dewatering or capping) if the CCRs have no contact with groundwater or surface water and the site has returned to a “natural” state. A report on the no further action alternative would be due October 1, 2015. Even if  recommended by the commission, additional legislation would still be needed to authorize use of the alternative.

High and intermediate risk impoundments would have to: 1. convert the surface impoundment to an industrial landfill; or 2. remove all  coal ash to a permitted disposal facility off-site; or 3. remove  all coal  ash for use in structural fill or another beneficial reuse. Conversion to an industrial landfill would require temporary removal and then replacement of the CCRs after bringing the disposal facility up to industrial landfill standards. Those standards generally require installation of a liner system, although  current state rules allow the owner/operator to request approval of a different design that would be equally protective of groundwater. The Senate bill goes beyond existing industrial landfill standards in one way; an industrial landfill created on an impoundment site would require a 300-foot setback from surface waters as compared to the 200-foot setback required for other industrial landfills. The bill also requires high and intermediate risk sites to meet the same closure and post-closure requirements applied to municipal solid waste landfills. Those requirements include post-closure groundwater monitoring and financial assurance.

♦ Role of the Coal Ash Management Commission. The commission would have the final word on both prioritization for closure and approval of closure plans.  The bill  directs the commission to approve  a closure plan only if it finds that the plan meets the requirements of the law; is technologically feasible; “and that the benefits to the public health, safety, and welfare; the environment; and natural resources outweigh the negative impacts on electricity costs and reliability”. Under the last criteria, the commission could reject a closure plan based solely on the cost to the electric utility or impact on reliable power generation. Applying the criteria could be extremely complex and unlike the N.C. Utilities Commission, the new commission will have few resources to put toward cost analysis.  The bill does not require any commission member to have expertise on electric utility cost structures and only authorizes a  staff of four.

Preemption of local ordinances. Using language very similar to the preemption section in the most recent fracking legislation (Session Law 2014-4), the bill would limit the ability of local governments to regulate disposal of CCRs. Although local governments could potentially apply development regulations that apply uniformly to all types of development (such as setbacks and stormwater control standards), the Environmental Management Commission would have the authority to determine whether state law preempts a local ordinance regulation affecting coal ash disposal.

Next steps:  The  Senate Agriculture and Environment Committee did not vote on  the bill today. The committee  noticed another meeting for tomorrow at 11:00 and the bill will be back on the agenda for further discussion and possible amendment then. The bill could go to the Senate floor by the end of the week.