Nation’s First Coal Ash Law Takes Effect in North Carolina

Though unsigned by its governor, North Carolina has enacted the nation’s first comprehensive coal ash management law. 

The statute, which took effect on Sept. 20, applies to all unlined dry and wet coal ash ponds owned by public utilities, including ponds that are covered or no longer in use.

Beginning Oct. 1, 2014, no new coal ash ponds will be allowed by the state. The law also mandates that “high risk” ponds be closed within five years, that ponds posing an “intermediate risk” are closed by December 2024, and that all the state’s coal ash ponds are closed by December 2029.

Risk classifications and closure plans are subject to public comment and must be approved by the nine-member Coal Ash Commission that was newly created by the law.

Significantly, the law also bans the wet disposal of ash beginning in 2020. Prior North Carolina law considered deposition of coal combustion residuals (CCRs) in a wet impoundment as “wastewater residuals,” exempting them from the state’s solid waste disposal laws. But the new law now requires CCRs to be disposed of as solid waste, requiring a liner system, leachate collection, groundwater monitoring, and financial assurance.

It also prohibits public utilities from recovering costs from customers for charges related to unlawful discharges to surface water occurring after January 2014. However, it does not tackle how utilities may recover costs associated with the closure of a coal ash pond. Experts say that decision will be left to the North Carolina Utilities Commission.

“In what undoubtedly will become a model that other states will follow, North Carolina’s coal ash law could cost billions of dollars, leading to higher utility rates for customers, lower returns for utility company investors and other bad economic consequences,” says consulting firm McGuireWoods.

“As utility companies have coal ash ponds across the country, other states likely will consider and many may pass similar legislation. In addition, [the Environmental Protection Agency] is scheduled to finally issue in December its long-awaited rule as to whether coal ash will be considered a hazardous waste, which could increase these costs even more. These potentially astronomical costs pose great risks and uncertainty for all businesses,” it adds.

North Carolina’s Legislature approved the bill on Aug. 20, sending it to Gov. Pat McCrory for signature. Though McCrory initially indicated he would sign the bill—despite concerns about the constitutionality of the Coal Ash Commission created by the legislation—he later announced that he would allow the bill to become law without his signature.

Under North Carolina law, the governor has 30 days from the date the legislature adjourns to sign or veto a bill. If that time elapses and the governor has not vetoed the bill, it becomes law anyway, without his signature.

Sonal Patel, associate editor (@POWERmagazine, @sonalcpatel)