McCrory expects his coal ash plan to be part of legislation

bhenderson@charlotteobserver.comMay 8, 2014 

Gov. Pat McCrory expects his coal ash disposal plan to be the foundation of legislation that Republican leaders will file as the General Assembly convenes next week.

“I’d be surprised if that’s not the main framework,” McCrory told the Observer after speaking Thursday at the Charlotte Business Journal’s annual energy conference.

“I anticipate some changes. Any improvements we’d welcome,” he said. “But I think we provided a very sound plan not only for North Carolina, but I wouldn’t be surprised if other states start copying the plan, because there really is no national plan on how to deal with coal ash.”

McCrory’s proposal, released April 16, is similar to what Duke Energy offered to do about its 33 ash ponds after a Feb. 2 spill into the Dan River.

The proposal requires pond closure plans within 60 to 90 days for four plants, including Riverbend west of Charlotte. Other ash ponds would be evaluated individually, with options to remove ash or leave it covered in place.

“I’m a big advocate of hearing from the scientists and engineers first before telling them what to do” with the remaining sites, McCrory, who worked for Duke for 29 years, told the conference.

Senate leader Phil Berger told reporters Thursday that McCrory’s proposal is a good starting point and will be incorporated into a bill.

Rep. Mike Hager of Rutherford County, who chairs the House Utilities and Energy committee and is a former Duke employee, called McCrory’s proposal “somewhat of a codification of Duke’s plan.”

Legislation that Rules committee chair Sen. Tom Apodaca, R-Hendersonville, is expected to sponsor will go “a step further in what we’ll do with the rest of the ponds,” Hager said Thursday. The legislation is also likely to include more timelines for disposal plans to be drawn.

It’s not clear whether the bill will address the costs of removing ash. Duke has said it will pay to clean up the Dan River spill but will ask regulators to pass other disposal costs – estimated at up to $10 billion – to customers.

“I want to keep as much of that off the ratepayers as possible,” Hager said.

McCrory, speaking to reporters after the Charlotte conference, said the North Carolina Utilities Commission should decide who pays. He said it’s “wrong for politicians to try to override a system that we’ve had in place for decades.”

Piedmont Natural Gas chief executive Thomas Skains, speaking as part of a CEO panel at the conference, said customers should pay to close the ash ponds. Duke, which is moving to gas-fueled power plants, is Piedmont’s largest customer and collaborator on a proposed interstate gas pipeline.

“The coal ash situation has been part and parcel of the production of low-cost electricity for decades ... and should be treated in utility rates just like any legitimate cost,” Skains said.

Duke CEO Lynn Good, like McCrory, said ash issues aren’t Duke’s alone – more than 650 ash ponds are scattered across the U.S.

“It’s not a simple issue. It is a complex one,” she said.

McCrory, in an onstage interview with the Business Journal’s Erik Spanberg, said his administration’s energy policy tries to balance environmental protection with economic interests. Energy costs, he said, are one of the first questions industry prospects ask about the state.

McCrory said he wants an agreement that North Carolina share in oil and gas drilling revenues before allowing offshore exploration. He said he would like to sink test wells for natural gas on state-owned land.

“We don’t even know what (reserves) we have at this point, similar to offshore,” he said. “It’s time we find out.”

Asked his view on climate change, McCrory demurred.

“I focus on cleaning up the environment and if that positively impacts climate change, great, but that way you don’t have to get into the left and right sides of the argument,” he said.

Henderson: 704-358-5051; Twitter: @bhender

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