A few weeks ago, the conventional wisdom was that there might be a stalemate on the budget — but things seemed to be going fine with coal ash legislation. Both chambers of the General Assembly had already passed their coal ash bills, and Senator Tom Apodaca and I (who sponsored the coal ash bills in the Senate and in the House) thought we would be able to reach a compromise on any differences that existed between the Senate and House-passed bills.
Of course, that isn’t what happened. The General Assembly went home having passed a budget, but wasn’t able to reach agreement on coal ash.
The dispute that erupted was about only one or two issues in the competing coal ash bills, but the General Assembly went home without resolving those issues.
Part of the problem was just fatigue, and part of the problem was differing opinions. Senate leaders blasted unnamed House members of the conference committee as having gone “rogue,” but it was clear that the blast was directed at me and two of my colleagues who refused to agree to a conference report. My response was to say that the Senate had no business telling the House what our position ought to be and I pointed out that I had the support of House leadership and my House Republican caucus.
The dispute over coal ash spilled over into other issues, and the two chambers went home without passing several bills, including some regulatory reform bills, an appointments bill, and even an adjournment resolution.
Until an adjournment resolution is approved, the General Assembly technically remains in session, and both the House and the Senate will be holding skeleton sessions with few members attending and no votes being taken. The adjournment resolution is particularly important to some colleagues expected to have close elections in November, since they can’t raise money from political action committees affiliated with groups lobbying at the General Assembly until an adjournment resolution passes.
While there were lots of differences between the coal ash bills passed by the House and Senate, there were five, significant issues:
1. The Moratorium. Both bills prohibited Duke Energy from seeking to recoup costs related to coal ash by seeking higher rates from the public utility commission, but the Senate’s moratorium expired in January, 2015, and the House’s moratorium expired in December, 2016. Duke Energy preferred the Senate’s position because of concerns regarding shareholders or potential shareholders. The issue loomed larger than it really was since any legislator can introduce a bill to direct how coal ash-related costs should be paid — either by shareholders or ratepayers or some mix of the two.
2. The Variance. The House bill provided a variance process that Duke Energy could use if it found that it couldn’t meet some of the challenging deadlines in the bill. The Senate bill didn’t have this provision. While everyone conceded that it was possible that Duke Energy might not be able to meet all of the deadlines, the Senate bill would have likely required the General Assembly to come back and change the deadlines. The House approach was to let those deadlines be flexed administratively.
3. The Location of the new Coal Ash Management Commission. The Senate proposed placing the Coal Ash Management Commission administratively under the Division of Emergency Management of the Department of Public Safety, and the House proposed putting the new commission under the Department of Environment & Natural Resources (DENR). The Senate’s proposal reflected a lack of trust in DENR’s handling of the coal ash issue, while the House probably shared this lack of trust but wanted to handle the perception that DENR couldn’t or wouldn’t appropriately regulate coal ash by putting restrictions on DENR’s discretion, while leaving the new commission administratively with DENR.
4. Defining Low Priority Sites. Under both the Senate and House bills, a coal ash pond that is deemed to be a low priority site can be “capped-in-place.” Critics were concerned that all but the four sites named in the bill might end up being classified as low priority sites and charged that those sites then wouldn’t actually be cleaned up.
“Capping-in-place” is exactly what it sounds like. Basically, and as commonly understood, Duke Energy would drain a coal ash pond, and then put a cap over it to keep water from getting into the coal ash and leeching anything toxic into groundwater. In fact, there are more technically sophisticated ways of doing “cap-in-place” but the idea is the same — drain the coal ash pond and keep anything toxic from migrating into surface waters or groundwater.
In an effort to address the critics, the House proposed language that would have made clear that coal ash ponds sitting at or below the water table couldn’t be considered low priority sites and, therefore, could not be “capped-in-place.” The Senate’s concern (and Duke Energy’s concern) was that with this language all or most of the coal ash ponds might not be able to be “capped-in-place.”
This issue relates to the previous issue as to the location of the Coal Ash Management Commission. While the Senate chose to administratively put the new commission with the Department of Public Safety getting it away from DENR, the House chose to restrict DENR’s discretion by prohibiting some number of coal ash ponds from being “capped-in-place.” In fact, the House’s position was based on DENR’s assurance that no coal ash pond sitting at or below the water table could be “capped-in-place.” The House was just trying to write that into the law.
5. The Compliance Boundary. The most technical issue and the only part of the coal ash bills that had broader application than just coal ash ponds was the so-called compliance boundary issue. Without overly complicating it, the issue relates to when a property owner can legally pollute.
There are many things a property owner can do that might pollute groundwater. Assuming a property owner has the right permits, polluting the groundwater might even be okay as long as the pollution is not migrating beyond the compliance boundary, which may be a property line but typically is some distance from whatever is causing the pollution.
Using a non-coal ash example might help to understand the issue. Many municipalities spray their polluted water from their sewer systems on vacant land. The land and its microorganisms, plants, and trees ultimately clean up the water. But if polluted water from such land application crosses the compliance boundary, the municipality is probably violating its permit to dispose of its polluted water in this way.
Well, the same is true of Duke Energy’s coal ash ponds. Duke Energy can pollute its own property or water under its own property so long as the water doesn’t cross its compliance boundary.
Again, this whole issue is very complex, and the General Assembly made it more complex when it passed a regulatory reform law last year. The Senate attempted to address the problem again in its legislation, essentially repealing confusing language in the earlier regulatory reform bill. The House’s bill went further. It would have had the effect on both repealing the confusing language in the regulatory reform bill and reversing a recent judicial decision that potentially could have caused some municipalities, some large manufacturers and most or all of Duke Energy’s coal ash ponds to not be in compliance with their permits.
Duke Energy and the large manufacturers liked the House compliance boundary language. While the press and environmental leaders might assume that the Senate wanted its language, in fact, the Senate insisted in the conference committee that the House language be adopted.
The question now is where do we go from here, and it is not clear what the answer to that question is. The Senate leadership has said that legislators need to come back during a special session in November and resolve the issues. Others have said that these issues can be resolved in the coming weeks as part of a broader agreement that results in an adjournment resolution.
What is important to understand is that the coal ash problem has been around for decades, in fact, nearly a century. Since the problem has taken that long to create, it shouldn’t surprise anyone that it takes some time to fix. It is more important that we get the legislation right than it is for us to move quickly. Both the House and Senate are trying to find that “sweet spot” where we are prioritizing coal ash pond cleanups based on the risk to our water supplies, then cleaning up all sites that are polluting waters beyond compliance boundaries, while doing all of that in a cost efficient manner.
My view is that the Senate’s and House’s goals are the same. Senators and House Members just aren’t sure we’ve found the sweet spot where we’re forcing the cleanup of polluted coal ash ponds, while leaving Duke Energy with the possibility of simply “capping-in-place” some sites that aren’t as much of a risk.