The Economics of Coal Ash Disposal

A trucks hauls coal ash from a retention pond to a permanent pond at Domiion's Possum Point Power Station. Photo credit: AP

A truck hauls coal ash from a retention pond to a permanent pond at Dominion’s Possum Point Power Station. Photo credit: AP

To cap coal ash pits in existing locations or to haul it off to landfills is the multibillion dollar question facing the electric utility industry.

by James A. Bacon

The debate over coal ash hasn’t gone away — it’s just morphed. For much of the year, public attention focused on how to de-water millions of tons of coal-combustion residue that utilities and industrial companies accumulated over decades in large retaining ponds. Discussion centered on how to ensure that the water released into rivers and streams did no harm to aquatic life and human health. Now attention is turning to what to do with coal ash once it’s dry.

The October 17 deadline is fast approaching for industrial-scale coal burners to file written closure plans for their coal ash ponds. Each company must choose whether to go with the “closure-in-place” option or the removal option. Closure in place could spare ratepayers billions of dollars in added costs, but “removal” could reduce long-term health risks from potentially toxic metals that could leach from the coal ash pits into the groundwater and, from there, into rivers and streams.

Here in Virginia, Dominion Virginia Power has laid out plans to consolidate coal ash on-site at its power stations, and to cap the material with an impermeable plastic lining and vegetation to prevent rainwater from percolating through. Environmentalists say that won’t prevent groundwater from migrating through the ponds and picking up heavy metals in the process. As evidence, they point to water quality tests that show elevated levels of metals appearing in locations outside Dominion’s facilities. Clouding the matter, however, the state Department of Environmental Quality says that its tests show contradictory results.

In a recent conference call with media, Jim Roewer, executive director of the Utility Solid Waste Activities Group, emphasized the high cost of transporting the ash to lined landfills, as environmental groups have called for. In an informal survey early in the regulatory process, he said, four out of five utilities said they expected to go with the closure-in-place option. That preference reflected the economics of coal ash disposal at their particular locations. A June Tennessee Valley Authority study concludes that it would cost about $280 million to close its six coal-ash sites using closure-in-place but $2.7 billion using the cheapest combination of truck and train — almost ten times as much.

Dominion has said that the tab for the removal option could run the clean-up cost to as much as $3 billion. Virginia environmental groups have pointed to decisions by Duke Energy, Santee Cooper, and SG&E in the Carolinas to transport the coal ash to landfills, arguing that Virginia citizens should have no less protection from exposure to toxic levels of chemicals than those of North and South Carolina.

Roewer argues that the economics of closure-in-place versus removal vary widely from site to site. While removal may be an economically viable option in some locations, it is far more expensive in others. Trucking coal ash long distances is economically impractical. While most coal-fired power plants are served by railroads, that doesn’t mean it’s simple to load the ash into trains for shipment to landfills. The rail lines were designed to dump coal at the station; loading facilities would have to be constructed at considerable cost to load the ash onto trains. Unless the landfill were located directly on the rail line, the other end of the line also would require another facility to unload the coal ash onto trucks for the short haul to the landfill.

Environmentalists suggest that recycling the gritty coal ash into cinderblocks or other products could reduce the need to dispose of so much ash. “Recycling of coal ash … costs far less than excavation and removal,” says Brad McLane, a Southern Environmental Law Center (SELC) attorney who has represented the James River Association in coal ash litigation. “This is happening at the Winyah plant in South Carolina and is being performed by the Southeastern Fly Ash Association. Coal ash recycling may not be feasible everywhere, but where it is feasible, it is a win-win solution.”

Recycling coal ash tends to be most feasible in large metropolitan areas where a third party enjoys a big enough market to justify building a dedicated recycling facility. Dominion has ruled out that option for its rural Bremo Power Station. In urban areas, obtaining the needed permits to build a recycling plant could add years to the disposal process. And any solution that entails trucking large volumes of coal ash through residential areas, as would be the case with Dominion’s Possum Point Power Station, poses problems of its own.

But McLane also questions Roewer’s estimate that four out of five power stations will pursue closure-in-place. “That is not consistent with our experience in our region.  All sites in South Carolina are being excavated, and more than half of the sites in North Carolina are being excavated, with review still occurring regarding the long-term approach for the remaining sites in North Carolina.”

Moreover, Roewer is not considering some of the costs and risks associated with closure-in-place, McLane says. The Environmental Protection Agency’s Coal Combustion Residue (CCR) rule generally provides for only 30 years of post-closure care, but coal ash pits, some of which in Virginia are located near low-lying waterways, will incur “the risk of catastrophic failure over the millennia” to sea level rise and increased storm intensity as a result of climate change.

EPA’s risk assessment looks at the risk of coal ash leaching over a 5,000-year period. If heavy metals do leach into the groundwater and contaminate surface waters after 30 years, additional measures will be required to address the pollution, McLane says. “Utilities may end up needing to go back and excavate these sites years in the future to comply with the CCR rule after having wasted money on half measures that will not work. Why not do the right thing from the start?

Bacon’s Rebellion asked Dominion for input to this story but, preoccupied with hurricane preparations, the company was unable to respond.