You May Pay A North Carolinian’s Coal Ash Costs

An illustration of the coal ash de-watering and treatment process at Bremo Bluff power station, which is now out of favor. Source: DEQ website.

The cost to Dominion Energy Virginia customers for recycling coal ash or moving it into more secure landfills is growing, because the proposed bill now recognizes that Dominion’s North Carolina electricity customers cannot be forced to pay by the Virginia General Assembly or the State Corporation Commission.

This phrase has been added to the current substitutes for House Bill 2786 and Senate Bill 1355: (v) any such costs that are allocated to the utility’s system customers outside of the Commonwealth that are not actually recovered from such customers shall be included for cost recovery from jurisdictional customers in the Commonwealth through the rate adjustment clause.  

Dominion Energy North Carolina’s customers in the northeastern part of that state depend on Virginia-based generation, including those coal plants, but the General Assembly so far seems fine with billing us for their share of these costs.  Why?  Absent that the company’s shareholders might have to pay it.  

The text of the bill, which will be considered in the Senate Commerce and Labor Committee this afternoon, has also lost the promise that the impact on a “typical” residential customer would not exceed $5 per month.  It does retain the annual limit of $225 million that Dominion can recover for its coal ash projects, with no limit however on the number of years.

The costs will not start to show up on customer bills until July 2021, per the legislature’s direction.  But costs can begin to accrue July 1 of this year, and rest assured the ratepayers will pay the carrying charge.

Just what this is going to cost, with or without the North Carolinians’ share, remains unknown.  Neither bill has been the subject of a formal fiscal impact statement, leaving customers to rely on company news releases or politicians’ wishful thinking on the question of total cost.  Whatever the estimate might be, the cost may grow once the process starts.

The SCC is prohibited by the bill from considering the closure in place methods Dominion is now using as an option.  More important, the SCC is prohibited from comparing the cost of that option when considering if the more expensive approach is reasonable and prudent.

As few as two of the four existing coal ash deposits near waterways feeding the Chesapeake Bay may become sources for the 6.8 million cubic yards of ash to be recycled.  The utility will instead be building new on-site landfills, meeting the demanded tighter standards, using its own capital and thus adding to the capital rate base which generates its profit margin.

That will be the solution at the Chesterfield plant, where more than half of the coal ash in dispute is stored.  Speaker of the House Kirk Cox sought and received assurance that his district would not be the one subjected to years and years of truck traffic moving the ash, as reported last week in the Richmond Times-Dispatch.

In fact, its not clear if ash will be trucked out of any location.  Both bills include:  § 2. Nothing in this act shall be construed to require additional beneficial reuse of CCR at any active coal-fired electric generation facility if such additional beneficial reuse results in a net increase in truck traffic on the public roads of the locality in which the facility is located as compared to such traffic during calendar year 2018.

The Senate bill includes a provision lacking from the House version so far, not yet considered  by the House:  3. The Commonwealth shall not authorize any cost recovery by an owner or operator subject to the provisions of this act for any fines or civil penalties resulting from violations of federal and state law or regulation. 

The Senate version also differs from the House on language dealing with delayed recovery of the balances which will build up because of the annual $225 million cap on recovery.  The House version will probably be carrying that language when it leaves the Senate Committee later today.  It seems to provide stronger protection to Dominion stockholders.

Managing two complicated bills moving in parallel tracks through the House and Senate, seeking to end with versions which are identical, is one reason Dominion has such a large lobbying operation.  But not the primary reason.  Getting the bills to read the way it wants is the real goal.