Fools Rush In: Coal Ash Scene Setter

Coal ash pond at Bremo Power Station. Photo credit: CBS 19

“I hate to give out directions without knowing what the cost is going to be.  There’s far too much of that in government.” 

That was Senator Frank Wagner of Virginia Beach expressing his deep reservations about various proposals to deal with the 27 million cubic yards of coal ash that Dominion Energy Virginia has collected over decades near its major power plants.  Wagner, who chairs the Senate Commerce and Labor Committee, was part of a joint subcommittee of that committee and its House counterpart that heard testimony  Monday but took no actions.

Legislation is coming.  Coal ash disposal in 2019 might turn into a replay of grid transformation in 2018, an omnibus electric utility regulation bill that takes on epic and expensive proportions as it moves through the legislative process.  It will also be a textbook example of what happens when legislators jump in to make billion-dollar decisions that could be made a better way.

The General Assembly doesn’t need to do this and could leave it to the State Corporation Commission and environmental regulators.  No legislation is required for the utility to comply with environmental regulations, and the SCC will allow full recovery of regulatory costs if the work is done right.   Legislation is only required if the utility is being ordered to do something beyond the EPA mandates, or if the SCC is being ordered to approve something unreasonable or imprudent.

Here is a short list of some of the issues facing the General Assembly which should be sorted out at the commission, with interrogatories, cross examination and testimony under oath and without the intervention of lobbyists all around.

Cost.  The first phase of costs destined for home and business electric bills was outlined in an application Dominion filed with the State Corporation Commission on Friday.  As reported by the Richmond Times-Dispatch, the company is spending $302.4 million at three of its coal-fired plants, one of them in West Virginia.  Most of the money will build a new lined and capped landfill for coal ash at a Chesterfield County plant, plus a new roadway and bridge to ease the process of filling it.

The utility proposes to pay for the work with a special monthly rate adjustment charge (RAC) on customer bills, Rider E, which will last for at least twenty years.  Initially it will add a couple of bucks to a residential bill, more for a larger user.  But that’s just the start.

Dominion also has spent about $300 million bringing coal ash storage up to Environmental Protection Agency standards at four additional plants, money that will not be recovered through a rate adjustment clause.  Dominion Vice President for Generation Mark Mitchell told legislators Monday that those costs will be recovered through current base rate revenue.

Those costs will be reviewed for approval by the SCC the next time it examines Dominion’s books, set for 2021.   Unlike the new RAC, those costs will not increase customer bills, but using the dollars that way means they also will not be available to return to customers as credits. Pay now, or pay later.

Dominion says it can comply with EPA regulations by improving its existing on-site storage at a total cost of about $700 million (not including financing costs or profit margin, if any).  Based on the comments today, much of that has already been spent or will be covered by the requested Rider E.

Cost Allocation.  This issue was not discussed Monday, and everybody assumes that 100 percent of the cost of whatever is done will be passed on to Dominion ratepayers.  As some point the question must arise if that is fair.  This issue represents deferred costs from a time when Virginia enjoyed low-cost electricity produced in an environmentally dirty way.   Did only ratepayers benefit from that?  Did not utility shareholders also benefit from that?  The entire economy?   Why should future customers foot the entire bill?

On-Site Storage vs. Off-Site Disposal.   Dominion is building stronger storage facilities for the ash near the plants, a method being used by other utilities with EPA blessing.  Two members of the Virginia Senate who represent neighborhoods near some of those plants or downstream continued Monday to advocate for more aggressive plans to excavate the existing storage ponds and move the ash, either to recycling uses or to secure landfills away from water bodies (and their constituents.)

Senators Amanda Chase of Chesterfield and Scott Surovell of Fairfax both have had legislation in previous sessions, and Surovell already has a draft bill ready for 2019.  Environmental activists also complain the on-site storage won’t be safe in the long run.

In response to an earlier legislative directive to seek options for moving the ash somewhere else, with as much recycling of ash as possible, Dominion estimated that cost at between $2.35 and $5.64 billion, much of it for a massive transportation effort by truck or rail.   Advocates, including Surovell, pointed out that it might be the lower cost in the estimate and not the higher, and others who spoke Monday said it isn’t costing that much in other states where the decision has been to excavate and relocate the ash.

Moving 27 million cubic yards over long distances will take hundreds of thousands of truck trips, often through areas where the residents will be upset, potentially over many years.  Storing the material on-site leaves it close to the rivers where the plants were intentionally located.  That’s a tough dilemma to decide and legislators might consider not deciding it, leaving it to the environmental regulators.

Recycling.  Many of the same advocates claim there is a growing market for the coal ash as an ingredient in other products, such as concrete and other building materials.  In response to earlier legislation, Dominion put out a request for proposals during 2018 and claims that perhaps half of its coal ash stash could find such a market.  But there are also costs in getting the material ready for such uses.  The competing claims on what is feasible and makes economic sense are hard to sort through.

Hazards.  The two sides disagree on just how hazardous the material is, despite its official designation as solid waste but not hazardous waste.  They also squabbled in front of the committee Monday about what testing has shown about the spread of heavy metals into nearby rivers or groundwater.  Test wells on the Dominion property at Chesterfield have shown heavy metal concentrations above what’s considered safe.  Just how dangerous that really is, however, remains contentious.

At the General Assembly, that question and the others will be decided by politics, not science.

 

There are currently no comments highlighted.

14 responses to “Fools Rush In: Coal Ash Scene Setter

  1. My view is that as long as this is in the hands of Dominion – it will end up being a ratepayer revenue stream rather than a true cost-effective operation.

    All of this should be put out for RFPs from other companies and go from there.

    Dominion has spent years dragging their feet on this and has tried to manipulate the process by hiring their own consultants how to proceed – in a way that, not at all surprisingly benefits Dominion at the expense of others.

    I cannot believe the General Assembly which in other areas – like economic development and Medicaid presents itself as hard-nosed fiscal conservatives but when it comes to Dominion’s overcharges, tax-rebates, bogus grid transformation and this – they can’t seem to be accommodating enough.

    It’s time to start looking at the individuals in the GA who profess to be fiscal conservatives but vote otherwise when it comes to this foolishness… Maybe with a few less of them and few more honest ones – we’ll get on a better path for taxpayers and ratepayers.. not only for coal ash cleanup but for a better path forward on electricity overall.

    Let me add, once again, I support the important role that Dominion plays in our lives – no question – but this foolishness does not help any of us – even Dominion in the longer run.

  2. For those who have really been paying attention, the Wagner quote I use (and the one in the RTD) drip with irony.

  3. I am pretty sure this issue has transcended reality into the la-la land of politics.

    Dominion seems to be arguing there is zero contamination, therefore no need for excavation. Dominion will probably lose that arguement becuase I am quite sure there is lots of contamination. But still may be best (pending site specific assessment) to cap place. But the public is enamored with the that the idea that sites should be taken “away”. As a steward of the environment, I am not convinvced relocating the issue is better than cap in place.

    • Is this not a cost benefit issue? If so, why does cost seem not to concern the environmental community, in the least? Or is it for them, the higher the cost, the better?

    • I would be fine if an independent 3rd party was assigned the task of determining what to do with it on a per-site basis.

      The problem with cost-effective when it comes to remediation is that some believe that the cheapest approach is to leave it which is pretty much what “cap in place” is… I do not believe these sites should be returned to a pristine condition. I’m okay if the water table is deep and there is no chance a river will flood over it like we have seen with NC pits.

      I’m just not okay with Dominion taking the lead on it. I want to see a more objective approach – not only with recommendations but options – that include how long and costs.

      Every single one of these sites has rail access – that’s how they got the coal there to start with and yet Dominion is costing moving it with trucks. One railcar can hold several truckloads…

      So I’m in favor of cost-effective strategies and I’m not at all convinced in Dominions numbers. Let’s see some 3rd party numbers and if in the end – we’re talking about a dollar or two a month on a bill over 5-10 years – I think most folks would be fine with that.

  4. Good summary.

    The issue that interests me most — and is getting the least attention of all — is the scientific one. Assuming Dominion goes with its preferred, lower-cost plan, what are the odds that some contamination will reach public waters, and what are the odds that the contamination will reach levels that could harm human health or aquatic health?

    A federal judge determined that the Chesapeake plant was leaking contaminants but at such a slow rate that it created no risk to human health. While Dominion’s proposed cap-in-place plan might be less than perfect, it will be better than what’s in place now, so the risk of contamination will be even lower than it is at the Chesapeake plant.

    Environmentalists are essentially asking for zero risk. But how much risk reduction does an extra $1 billion or $2 billion actually buy you? Can it even be measured? No one is talking about that.

    • On the background to the issue, I just covered items you had covered back in ’17 and earlier in ’18. I re-read some of your old stories – no new ground. But you ask what I consider the key question: What is really gained by digging it all up just to move it? Which prompts my question: Where do you think you’ll get a better answer – in a regulatory process at DEQ and hearings at the SCC over weeks and months? Or in a General Assembly room where the discussion lasts two hours and lobbyists on both sides have been wiring it up in advance in ex parte conversations?

      • Just want to point out that in NC and Tennessee where the ponds failed after record rains and the ash flushed into the rivers – it was not left in the rivers.

        So.. we’re hearing two different things here… on one side we’re asking a “what if” question of the severity of contamination if it gets loose and on the other hand in NC and Tenn.. there was no such consideration – it was removed – at great expense – at a far greater expense than if they had removed it before the pits failed.

        So, the question is – if we leave it and cap it – and then a catastrophe happens like we saw in NC and Tenn – who pays to clean it up then?

        If Dominion bears that responsibility – then I’d be willing to leave it in place.

        that’s the defining issue – What we should not be doing is agreeing to leave it in place and if a disaster happens later – the cost belongs to taxpayers. That liability should belong to Dominion if we leave it in place.

        Beyond this – we need credible and trustworthy estimates of the cleanup options before we can actually make a truly informed decision.

        Right now – it’s more like a betting game and Dominion is setting the odds and if they are wrong – taxpayers lose.

        But here we are with Dominion owing it’s excess profits back and well as their tax rebate – and they are now asking for a rate adjustment for the coal plants:

        Dominion files to recover $302 million from ratepayers for environmental upgrades
        By MEL LEONOR Richmond Times–Dispatch Dec 14, 2018

        Dominion Energy is angling to recover roughly $302.4 million from ratepayers across the state to cover the cost of upgrading three coal-burning power plants to meet federal and state environmental regulations. ”

        I thought these plants got shut down when they converted to gas… no?

    • On what Scientific info did the Judge based his opinion? The impression
      I got was that it was HIS opinion…. no?

      It’s totally hard to believe that NC is now having to go get the ash that escaped from holding ponds into the rivers and Va does not. I’d like
      to see some non-Dominion scientific data.

      The trouble with contamination is that it is “okay” until all of a sudden,
      it’s not and no one other than the govt/taxpayers is responsible at that point.

      The Possum Point site HAS contaminated nearby wells… by the way.. but
      it’s an older site that has had a lot of years for the contamination to spread.

    • There is almost obviously groundwater contmination in the vicinity, so people/nearby households should not be drinking the water from just below the surface. City water or other solutuion would be needed. But digging the ash is not going to wash the contaminants out the groundwater.

  5. I agree with Steve that this issue is not one to be decided in the immediate legislative arena. His comment about ” lobbyists on both sides … wiring it up in advance in ex parte conversations” is wonderful; it encapsulates the process perfectly. Using the SCC and DEQ could be the answer. That would enable the scientific questions that Jim raises and the cost benefit issue that Reed posits to be addressed in a more systematic and, hopefully, objective manner and it would be the the third party that Larry wants, which I agree with. The General Assembly could deal with it, but it would have to resort to the approach that it used to use, but has abandoned in recent years: taking some time to examine a complex issue over several months or years, rather than trying to do everything in the compressed atmosphere of a session. That would mean selected members meeting several times during the year to examine specific aspects of an issue, possibly with a professional staff to perform the research and arrange expert testimony. One example of this approach to a similar problem in the distant past was the Solid Waste Commission. Another thorny issue was annexation: Tom Michie’s joint committee took several years to work out that out, meeting weekly in the last summer. (I know: I am dating myself here.) A contemporary example might be the Crime Commission, although that is a continuing body that is not focused on a specific issue.
    One question that has not been addressed in this cap-in-place vs. remove debate is: where are you going to take the stuff if you remove it? What poor, rural community is going to get stuck with it?

  6. Here are some FACTS .. put together by EarthJustice from EPA and DEQ statistics …

    Information on Virginia Coal Ash Ponds:
    30 ponds at 11 plants. Average height of ponds exceeds five stories (50 ft).
    13 ponds are unlined. Their average age is 47 years, exceeding the projected lifespan of ash ponds (40 yrs).

    VA has 8 “significant hazard” ponds, which means that failure of these ponds would cause economic and/or environmental damage. Four of the significant hazard ponds are unlined. Two significant hazard ponds have been rated in “poor” condition by EPA. Bremo, Chesapeake, Possom Point, Chesterfield all have Significant hazard ponds.

    • Dominion Energy Chesapeake Energy Center, Chesapeake, VA: In 2011, EPA gave a “poor” rating to the plant’s ash and sedimentation pond. The pond is ranked a significant hazard, because a failure would release toxic coal ash to the Elizabeth River, which would flow into Chesapeake Bay. The pond is contained by an earthen dam and is unlined, holding fly ash, bottom ash, and leachate contaminated with arsenic from the plant’s coal ash landfill. EPA identified the need to make “urgent” repairs to address slope failures at the pond.
    • AEP Clinch River Power Plant, Carbo, VA: In 1967 Ash Pond 2 experienced a major collapse into the Clinch River, which caused a massive fish kill. In 2011, EPA found that the slope stability analysis of the unlined significant hazard bottom ash pond (Ash Pond 2) could not be used to assess stability “based on design parameters used and inappropriate assumptions concerning saturated ash levels”.

    So this problem is more complicated than just move in order to line or not … The location near rivers as well as the age and construction of the ponds makes a difference for the need to move or not. Some are lined. Some are not. High hazard ponds need to be addressed according to what the hazard is.

    Regarding who pays … I submit that we paid a bit less for electricity because the utilities ‘cheaped it out’ on environmental issues that have now come home to roost, so a portion of the clean up cost belongs to customers. However, that is true for the Shareholders too. That allocation could be worked out but customers should NOT pay the full bill.

  7. One of the speakers Monday was from a company that claims it can go to an existing pond, partially empty it, build a proper liner in various stages, and basically convert it to full up to standard. I don’t know if that’s true, and no legislator will either – but the company has hired a lobbyist and is walking the halls because that is (unfortunately) where decisions are now made.

  8. Sounds worth looking into but my point was that only 4 of the 8 hazardous labeled ponds are unlined … We my need to move ponds that have other failure issues.

Leave a Reply