The Nickel Report

On May 18, 2023, EPA proposed a rule that would expand the federal regulations governing the management of coal combustion residuals (“CCR”) to cover landfills and surface impoundments that were previously excluded from regulation under the CCR rule, first promulgated in 2015 under the Resource Conservation and Recovery Act (“RCRA”). 88 Fed. Reg. 31,982 (May 18, 2023). The CCR rule, codified at 40 C.F.R. Part 257, sets national minimum standards for the management of CCRs at existing and new landfills and surface impoundments, but it currently does not impose requirements on impoundments at inactive facilities (those that no longer generate electricity).

Recent federal court decisions continue to show that Article III standing can be a formidable defense to environmental citizen suits, particularly following the Supreme Court’s decision Spokeo v. Robins, 578 U.S. 330 (2016) (vacating decision below and emphasizing that an alleged injury in fact must be “concrete and particularized”).  Just last week, for example, a North Carolina federal court dismissed on standing grounds almost all of the plaintiffs’ Clean Air Act citizen suit claims asserted against the University of North Carolina at Chapel Hill (UNC).  Center for Biological Diversity v. University of North Carolina, No. 1:19-CV-1179, 2021 U.S. Dist. LEXIS 163459 (M.D.N.C. Aug. 30, 2021).  In their complaint, the plaintiffs asserted nine claims, including seven for alleged failures to maintain records, inspect equipment, report permit deviations to government authorities, and monitor pollution controls, as required by UNC’s Title V permit.  On summary judgment, the plaintiff citizen groups offered declarations from two members who alleged “health, aesthetic, and recreational interests in air quality in Chapel Hill and the areas around UNC’s campus.”

In April 2020, the Supreme Court issued its opinion in County of Maui v. Hawaii Wildlife Fund et al., 140 S. Ct. 1462 (2000), vacating the Ninth Circuit’s decision.  The appeals court had affirmed a district court’s finding of Clean Water Act (“CWA”) liability for the County’s alleged failure to obtain a discharge permit for subsurface releases of pollutants that reach navigable waters by way of groundwater.  In vacating the judgment below, the Supreme Court rejected the Ninth Circuit’s conclusion that a discharge permit is required where pollutants reaching navigable waters are “fairly traceable” to a point source.  It set forth a new standard for determining when a source needs an NPDES permit:  “the statute requires a permit when there is a direct discharge from a point source into navigable waters or when there is the functional equivalent of a direct discharge.”  Id. at 1468 (emphasis added).

In April 2020, the Supreme Court issued its opinion in County of Maui v. Hawaii Wildlife Fund et al., 140 S. Ct. 1462 (2000), vacating the Ninth Circuit’s decision.  The appeals court had affirmed a district court’s finding of Clean Water Act (“CWA”) liability for the County’s alleged failure to obtain a discharge permit for subsurface releases of pollutants into groundwater that conveys pollutants to navigable waters.  In vacating the judgment below, the Supreme Court rejected the Ninth Circuit’s “fairly traceable” test and set forth a new standard for determining when a source needs an NPDES permit:  “the statute requires a permit when there is a direct discharge from a point source into navigable waters or when there is the functional equivalent of a direct discharge.”  Id. at 1468 (emphasis added).  In other words, “an addition falls within the statutory requirement that it be ‘from any point source’ when a point source directly deposits pollutants into navigable waters, or when the discharge reaches the same result through roughly similar means.”  Id. at 1476 (emphasis added).

Environmental groups are raising the stakes for power companies facing allegations of coal-ash liability. Power plants that burn coal to produce electricity also create byproducts in the process, known as “coal combustion residuals,” or CCRs. CCRs go by several names, but are commonly known as “coal ash.”

Historically, power companies have stored CCRs in settling ponds, also known as “coal-ash basins.” Coal-ash storage and disposal can lead to allegations of groundwater contamination and environmental contamination claims. Environmental groups have sought to require companies to pay for remediation of disposal sites and alleged groundwater contamination; address alleged natural resource damages; and conduct extensive monitoring and sampling of onsite and offsite sediments, groundwater, fish, and other wildlife.

Over the past several years, the EPA and states have wrestled with the highly controversial question of how to manage ash and other residual materials produced by the combustion of coal in coal-fired power plants.  These so-called “coal combustion residuals” (“CCR”) have been traditionally managed in large man-made ponds at many power plant sites.  While discharges from these impoundments directly to surface waters are regulated by permits issued under the Clean Water Act, the impoundments themselves have been regulated under state waste management programs.  In 2015, EPA fundamentally changed the regulatory landscape for these facilities when it promulgated a federal rule setting national standards for design, operation and closure of CCR impoundments.  EPA, Hazardous and Solid Waste Management System; Disposal of Coal Combustion Residuals from Electric Utilities, 80 Fed. Reg. 21,302 (Apr. 17, 2015).