Legal & Regulatory

Nation’s First Comprehensive Coal Ash Bill Awaits Enactment in North Carolina

North Carolina’s Legislature last week became the first in the nation to approve a sweeping coal ash bill, but the state’s governor isn’t fully endorsing it. 

Both the House and the Senate on Aug. 20 approved the Coal Ash Management Act (S.B. 729), a measure that became an urgent legislative priority after Duke Energy’s February 2014 coal ash spill. That incident occurred when a pipe connected to a power plant coal ash pond ruptured and spewed 39,000 tons of coal ash into the Dan River.

The bill that only passed both houses after two contentious weeks of debate requires Duke Energy to drain and close all of its 33 coal ash ponds in the state by 2030 and prioritize their cleanups based on risk.

Significantly, the bill 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 S.B. 729 requires CCRs to be disposed of as solid waste, requiring a liner system, leachate collection, groundwater monitoring, and financial assurance.

And, along with imposing a new fee on utilities that own CCR impoundments to support implementation of the law (by allocating funds for 30 new state positions to work on coal ash), the bill requires utilities to identify drinking water wells close to CCR impoundments, and to provide alternative water supplies to any well owner whose drinking water well shows high levels of coal ash contaminants.

Meanwhile, the bill prohibits utilities from recovering assessment and cleanup costs associated with an illegal spill in a rate case, but imposes a moratorium on recovery of costs associated with assessment, cleanup, and closure of coal ash impoundments only until Jan. 15, 2015.

Among other aspects, it also creates a new Coal Ash Management Commission in the Department of Public Safety (DPS) with the authority to overrule the Department of Environment and Natural Resources (DENR).

The controversial bill now sits on the desk of North Carolina’s Gov. Pat McCrory, who must take action on it before Sept. 20.

The Republican governor on Sunday said during an interview with NC SPIN that he will likely sign the bill, even though he is “not happy” with a provision that gives the General Assembly—not the governor—the power to make the majority of appointments to the proposed nine-member Coal Ash Management Commission.

“I think this concept of creating commissions that are appointed by the legislature—or a majority by the legislature—is unconstitutional, regardless of the subject,” McCrory said on NC SPIN. The governor said he might challenge the provision in court.

On Sunday, McCrory also criticized the Legislature’s decision to set up the commission under the DPS rather than the DENR, saying it “makes no sense, whatsoever.” When drafting the bill, the primary reason for the variance cited by state lawmakers involved an ongoing criminal investigation of the DENR’s relationship with Duke Energy.

McCrory retired from Duke Energy in 2008 after working 29 years for the company.

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



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