Coal Ashy Afternoon in a Senate Committee (SB 729)

This afternoon the Senate Committee on Agriculture, Environment and Natural Resources met to debate its version of the Governor's Coal Ash Plan -- which is now titled the Coal Ash Management Act of 2014 and is definitely the Senate's.

The new bill is a 44-page list of expensive identification, monitoring and remediating requirements for the NC electric utilities that have the 14 coal ash ponds, and requires immediate closure of 4 of them while requiring extensive monitoring and inspections of all of them in the years leading up to their eventual closure. The bill then requires lots of testing, research and reporting going forward. It provides for conversion to fly ash or closure -- by 2029 for the lowest risk impoundments.

The bill starts off with a sledgehammer: it prohibits the Utilities Commission from allowing a regulated utility that has a coal ash impoundment discharge from recovering those costs from retail customers unless the Commission determines the discharge to be the result of an "event of force majeure".  That moratorium remains in effect at least until the State studies the disposition of impoundments as well as adoption of final rules on coal combustion residuals by U.S. EPA.

With particularity the bill requires the assessment, ranking and closure of ponds with coal combustion residuals into three classifications: Low-Risk, Intermediate-Risk and High-Risk impoundments. The bill identifies the following four as high-risk which expedites the timeline for closure even in relation to others that will eventually be deemed high-risk. They are:
  1. Dan River Steam Station, Rockingham County. Owned and operated by Duke Energy-Progress.
  2. Riverbend Steam Station, Gaston County. Owned and operated by Duke Energy Carolinas.
  3. Asheville Steam Electric Generating Plant, Buncombe County. Owned and operated by Duke Energy Progress.
  4. Sutton Plant, New Hanover County. Owned and operated by Duke Energy Progress. 

The bill establishes a Coal Ash Closure Commission that will be housed at the Department of Public Safety's Emergency Management Section but will be independent. This commission will approve the prioritization classification of impoundments; review closure plans for impoundments; make legislative recommendations regarding coal combustion residual; and provide expertise for studies etc. The bill also provides funds for 25 state positions using a newly imposed fee on the utility payable quarterly. (The fee is 0.03% of NC jurisdictional revenues of each public utility with a coal combustion residuals surface impoundment. It is expected to raise $1,750,000.) The fee is also not recoverable by rate case.

When it comes to electricity someone always pays, so who will it be -- the State, customers or shareholders? Just remember, when you flip on your light switch your lights come on. Every time.

Find the new version of SB 729 here: http://www.wral.com/asset/news/state/nccapitol/2014/06/15/13735977/coal_ash_bill.pdf

 

 

Topics:  Electricity, Legislative Committees, Oil & Gas, Pending Legislation, Utilities Sector

Published In: Elections & Politics Updates, Energy & Utilities Updates, Environmental Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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