The Nickel Report

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).

The EPA’s CCR rule requires existing surface impoundments to be closed under some circumstances, but allows the facility operator to determine the appropriate closure method assuming certain performance criteria are met.  Environmental groups nonetheless have taken the position that the only appropriate method to close such impoundments is to excavate and remove the CCR and then transport it to a lined landfill.  In a recent decision, however, a federal district court rejected that remedy as “draconian” and not in the public interest.  Sierra Club v. Virginia Electric and Power Company, No. 2:15-CV-112, 2017 WL 1095039 (E.D. Va. Mar. 23, 2017).  As the court observed, Sierra Club’s “proposed injunction will entail years of effort costing hundreds of millions of dollars, for very little return.”  Id. at *9.  Moreover, Sierra Club did not “even attempt[] to itemize the collateral environmental effects of moving this much ash.”  Id.

The need for common sense and site-specific CCR management and impoundment closure strategies is clear.  The Water Infrastructure Improvements Act (“WIIN Act”), signed by President Obama on December 16, 2016, is a step in the right direction.  Pub. L. No. 114-322, 130 Stat. 1628 (2016).  Under this new law, states may implement their own permitting programs for managing CCRs and adopt standards that differ from the national standards based on site-specific conditions.  42 U.S.C. § 6945(d).  Among other things, this program should allow states to adopt risk-based closure alternatives and different technical standards, so long as they are at least as protective as the federal standards.  Id. § 6945(d)(1)(B).  A state program implementing such an approach would be fully consistent with the purpose of the federal CCR rule:  to establish practices that “do not pose a reasonable probability of adverse effects on health or the environment.” 40 C.F.R. § 257.50(a).

Last month, EPA Administrator Scott Pruitt announced that the agency has started developing guidance for states regarding how it expects to review and approve state applications to operate CCR programs under the WIIN Act.  This guidance should encourage states and other stakeholders to develop state permit programs that expressly allow for the consideration of risk in managing CCRs and closing CCR impoundments.  Among other benefits, such a program would allow for flexibility to address site-specific conditions in the most effective manner, provide for state (as opposed to national) oversight of CCR management, reduce costs to consumers, and help provide certainty to a program in much need of it.