April 2017 Member Advisory Committee (MAC) post: Cost of Coal Ash Removal – $5 billion?

The proper term is Coal Combustion Residuals, but most folks refer to the material as simply coal ash. The material can certainly be controversial. The Sierra Club and other environmental groups call coal ash “a toxic pollutant”. The Environmental Protection Agency (EPA) has determined that “regulating coal ash as hazardous waste is not warranted”.

https://www.epa.gov/coalash/frequent-questions-about-coal-ash-disposal-rule

The proper disposal of coal ash was big news several years ago with the coal ash spill into the Dan River and will likely become big news again as Duke Energy begins to recover the cost of complying with new state requirements dealing with coal ash disposal.

While they are certainly related, we think it is helpful to think of the issue in two parts:

First, the 2014 coal ash spill into the Dan River near Eden, NC was clearly Duke Energy’s problem. Inadequate inspections and maintenance were the primary issues. Including the cost of fines and penalties, we understand that the cost of the Dan River spill was nearly $100 million. Duke Energy has stated that it does not expect to recover these costs from its retail or wholesale customers.

Second, we understand that the new state requirements (the original legislation was approved in 2014 and was modified in 2016) for coal ash disposal go far beyond the current EPA requirements. They will require the closure of Duke Energy coal ash disposal sites at 14 locations across the state. In some cases, the coal ash will be removed from the site, transported some distance and placed in new lined landfills (as you would dispose of hazardous waste).

While the NC Utilities Commission and the Federal Energy Regulatory Commission will ultimately determine the amount of cost recovery allowed, full cost recovery is usually allowed for regulations that are applied retroactively. According to news reports, Duke Energy expects to fully recover these costs from its retail and wholesale customers.

http://www.charlotteobserver.com/news/local/article133081529.html#1

Recent reports appear to indicate that the estimated cost of meeting the new state requirements for coal ash removal and/or disposal in NC could be a staggering $5 billion.

Questions or comments about coal ash disposal in NC? Please let us know atmailto:mac@wemc.com.