NC lawmakers pass coal ash legislation; adjourn very long short session

akenney@newsobserver.comAugust 20, 2014 

  • Key provisions in the Coal Ash Management Act

    • The construction or expansion of coal ash impounds is banned, effective Oct. 1.

    • Beginning in January, Duke must test private wells, and eventually replace contaminated drinking-water supplies for residents.

    •  By the end of 2015, DENR will divide coal ash sites into high-, intermediate- and low-risk categories. High-risk sites must be excavated and placed in a lined landfill by the end of 2019, and the same must be done for intermediate sites by the end of 2024. Low-risk sites can be “capped,” which is meant to keep water from carrying the ash into the water supply.

    • The Department of Environment and Natural Resources will consider the response plans, but the Coal Ash Management Commission will have final say in most situations.

    • The Senate leader will appoint three of the Coal Ash Management Commission’s nine members, the House leader another three, and the governor three more, all for six-year terms. The commission would be housed in the Department of Public Safety.

    • By the end of 2018, Duke’s power facilities must convert to “dry” fly ash, rather than liquids or sludge. By the end of 2019, the same rule applies to “bottom ash.”

    •  Coal ash facility owners can request a delay in the closure deadlines of up to three years per project, subject to approval.

    •  The state will impose a 0.03 percent fee on North Carolina revenues with coal ash sites. It will pay related expenses, and the utility may not recover it by increasing retail rates.

— The state’s Coal Ash Management Act, described by advocates as the first of its kind, passed the state legislature with a broad majority on Wednesday, about six months after a corroded pipe spilled huge volumes of the gray, sludgy industrial byproduct into the Dan River.

The measure passed the House 84-13 in the afternoon, and the Senate 38-2 a few hours later. About half the opposing votes in the House came from Triangle-area Democrats.

The approvals were among the legislative bodies’ final actions before they passed adjournment measures for the session, sending the proposal to Gov. Pat McCrory.

Much of the debate on the House floor focused on the question of whether power customers will have to pay to clean the open-air pits and lagoons managed by Duke Energy and its subsidiary, Duke Energy Progress.

The approved bill only temporarily bans Duke from trying to raise consumers’ rates in order to pay for the coal ash fallout. The utility may have to pay billions, though the current legislation only requires a total cleanup of four of 14 sites.

Rep. Paul Luebke argued that state leaders needed to say, loud and clear, that Duke and its shareholders – not its customers – should at least pay to clean the highest-risk sites by removing the ash to a lined landfill, by using it in certain construction projects or by installing a liner beneath the ash.

“If they’re high risk now, it means for a long time they were risky to the public. For a long time the public was hurt by contamination in groundwater,” the Durham Democrat said on the chamber floor.

In response, Rep. Mike Hager, Republican majority whip, pointed out that the N.C. Utilities Commission would handle any request for a rate increase, with opportunity for the public to have its say.

Rep. Chuck McGrady, a Hendersonville Republican who has played a key role in the legislation, said that future bills could address costs – and that perhaps he would work on a new bill himself next year.

“If we had put the cost issue in this bill, we wouldn’t be cleaning these up, because we’d still be debating the cost issue,” he said.

Earlier versions of the House’s proposal would have banned Duke from paying for the cleanup by requesting increased rates from customers before the end of 2016, but the chamber compromised with the Senate, according to McGrady, shortening the moratorium to last only until January 2015.

“Those costs are not going to be incurred anytime soon,” McGrady said.

For his part, McGrady thinks Duke’s shareholders should be responsible for the cleanup in cases of negligence; but in other cases, he argued, coal ash costs are related to the regular operation of power plants.

Dan River backlash

Earlier Wednesday, McGrady laid out some of the convoluted history that produced the legislation.

Different versions of the coal ash legislation had passed the House and Senate earlier this summer, but the bill appeared all but dead before a surprising resurrection this week.

The impetus for the legislation came, in part, with widespread public backlash from the Dan River spill. The incident was a dramatic reminder of a simmering issue, highlighting that about 100 million tons of the substance sits in 33 open-air pits at 14 sites in North Carolina.

Speaking before the House Rules Committee, McGrady acknowledged criticism of the Department of Environment and Natural Resources’ response to this year’s crisis, saying that the final bill won’t allow the department to manage the commission that will hold much of the final say over the cleanup process.

“There’s ongoing criminal investigations right now,” McGrady said, referring to a U.S. Department of Justice probe of the department and its relationship with Duke. “The argument that the Senate made, which we understand, is that at least when we set this thing up, we need to keep it away from things that may have occurred in the past – let it be set up in a neutral part of government.”

As host of the commission, DENR would have provided “administrative” staff, according to a department spokesman.

Drew Elliot, a DENR spokesman, said this about the department’s ability to manage the commission: “Credibility comes from action, not words,” he wrote in an email. “As for this administration, we have been working on the coal ash problem since our first weeks in office.”

McCrory’s original proposal did not include a commission, instead leaving management of the plans largely in the hands of DENR and his appointee, Secretary John Skvarla. Overall, though, his plan suggested a process similar to the final legislation’s.

Under the legislature’s timetable, it could take 15 years for Duke to close all its pits and lagoons and dispose of the ash. Some environmental advocates had pressed for immediate action because the facilities have been polluting groundwater for years and possibly more than a half-century.

The legislative debate this summer also brought arguments about which coal ash ponds to fix first, according to McGrady.

“We had a whole series of amendments put forward by people who wanted their coal ash pond to be high priority,” he said.

That concept, of priority, has been a sticking point for critics, too. The approved bill only requires immediate removal of coal ash from four of the 14 polluting sites.

‘High priority’ sites

Under the bill, the ash from the “high-priority” sites at the Asheville, Riverbend, Dan River and Sutton plants would be placed in industrial-lined landfills.

However, the bill would allow ash to remain at the other sites, with various measures taken, including the controversial “cap in place” approach.

Rep. Pricey Harrison, a Greensboro Democrat, said the bill wasn’t “strong enough” and urged votes of no.

“All of these sites are currently leaking contaminants, and capping is not going to stop that leaking,” said Rep. Verla Insko, a Chapel Hill Democrat. “I just think this is too weak, and we can do better.”

Communities whose sites aren’t “high priority” will have to “wait for a commission of political appointees to decide their fate,” wrote Amy Adams, a coordinator for Appalachian Voices, in a release by the N.C. Conservation Network.

The Southern Environmental Law Center, meanwhile, argues that that the state has ignored, or even given up, its existing powers to require an immediate and full cleanup.

McGrady acknowledged that the bill would overturn a Wake County judge’s recent ruling won by the nonprofit law center.

The judge ruled that groundwater pollution at nearly all coal ash sites must be fixed immediately, but a clause in the new bill instead has polluters submit a “plan and proposed schedule” to the state.

McGrady previously said that the ruling was likely too broad and too strict, and that by requiring removal of a contamination source it could have unexpected results.

The N.C. Sierra Club knocked the bill for undercutting the ruling, but offered a moderately positive review of the final legislation.

“Without this legislation, coal ash would have remained essentially unregulated, an untenable position for North Carolina residents,” said Molly Diggins, state director for the group, in a statement. “Still, today’s action does not go far enough to prevent more contamination of our treasured water resources.”

As the bill neared a vote in the House, McGrady cast it as just the beginning of a long and unprecedented process, including sequel bills.

“This is Coal Ash 1. There’s going to be a Coal Ash 2 and a Coal Ash 3,” he said. “We’re not going to get it right on the first time … but we’ve got to get going. This bill gets us going.”

House Speaker Thom Tillis described the coal ash legislation as a big accomplishment for the session, during which the House rejected an incentive bills backed by McCrory.

“We still had a pretty good session,” he said. “We got a lot done. If you look at what we got done today – historic coal ash legislation unlike any in the United States. We are literally setting the direction that is hopefully going to make the other states follow suit and address problems like we did on the Dan River.”

Staff writers John Murawski and John Frank contributed.

Kenney: 919-829-4870; Twitter: @KenneyNC

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