Under pressure from industry, EPA proposes weaker coal ash rules; Duke Energy plans to pass $1 million in industry dues to ratepayers

Duke Energy Carolinas (DEC) spent more than $1 million in industry dues — expenses the utility wants to pass along to ratepayers —to the Edison Electric Institute, an industry trade group that has successfully advocated for relaxing regulations governing coal ash.

And just yesterday, under industry pressure, the Environmental Protection Agency announced a proposal to further weaken existing coal ash rules, for the purpose of saving utilities up to $100 million annually in compliance costs.

The CCR rules, as they’re known, were approved by the EPA in 2015. They established minimum national standards regulating the location, design, and operation of existing and new coal ash landfills and surface impoundments at more than 400 coal-fired power plants nationwide.

However, those rules also classified coal ash as “non-hazardous” waste, even though it contains toxic chemicals, such as arsenic, selenium, mercury and lead. As a result, utilities often tout the federal classification when trying to assure customers the material is safe.
The EPA’s latest proposed changes were prompted by a petition filed last May by the Utility Solid Waste Activities Group, which counts EEI as a member. The utilities industry had asked the EPA to reconsider parts of the CCR rules.

The EPA proposal has done just that, under the guise of “state flexibility.” Here are some of the possible changes:

• Modifying restrictions on where coal ash landfills can be built;
• Allowing states to establish alternative requirements for how utilities respond to and remediate releases from CCR landfills and surface impoundments;
• Permitting states to allow utilities to continue operating unlined, leaking coal ash impoundments, as long as “corrective action” rather than forcing the utility to stop receiving coal ash and close;
• Allowing non-coal ash waste to be put in a coal ash impoundment that is scheduled to close; and
• Adding boron to the list of compounds that would need to be monitored, perhaps the only protective proposal on the list.

The rules will be published in the Federal Register, after which there is a 45-day public comment period.

Frank Holleman, attorney with the Southern Environmental Law Center, issued a statement after the EPA’s announcement:

Instead of protecting American communities and rivers from coal ash, the Environmental Protection Agency is trying to bail out utilities polluting our waterways and drinking water supplies. Coal ash is polluting rivers, lakes and wells across America, but President Trump’s EPA is trying to weaken the standards that are supposed to protect Americans from this toxic threat. These proposals will weaken rules that protect our groundwater from arsenic and mercury, and continue to extend the use of unlined, leaking coal ash pits next to our waterways. America’s families and clean water deserve better.”

Duke Energy is reviewing the details of the proposal from EPA to amend the CCR rule.

“Duke Energy supports the EPA’s efforts to align the rule with the provisions in the Water Infrastructure Improvements for the Nation Act (WIIN Act). Because the WIIN Act establishes procedures for states and EPA to implement the CCR rule through enforceable permit programs, it makes sense to revise certain aspects of the federal rule to reflect its implementation through permit programs,” explained Erin Culbert with Duke Energy’s office of Corporate Communications.

“We look forward to constructively working with EPA as the agency considers any revisions to the rule that ensure consistent compliance and cost-effective solutions for our customers that protect the environment and the communities we serve.”

The Edison Electric Institute is a powerful industry group with hundreds of national and international members, including investor-owned utilities. It is also a dues-paying member of the American Legislative Exchange Council. Known as ALEC, it is a conservative “bill mill” that writes industry-friendly model legislation for lawmakers to adopt in their respective states.

However, EEI’s budget — which includes DEC’s dues — was redacted in NC Utilities Commission documents associated the utility’s upcoming rate case. According to the Energy and Policy Institute, a watchdog group that monitors the fossil fuel industry, EEI’s budget used to be audited by the National Association of Regulatory Utility Commissioners to ensure ratepayers weren’t bearing significant costs for industry lobbying. The institute said EEI has not been audited in that manner since the mid-2000s.

DEC serves customers in much of central and western North Carolina.

DEC spent another $928,000 in industry dues in 2016, the test year used to base its calculations. It also made $133,000 in political contributions, expenses it had planned to pass along to customers as part of an upcoming rate case.

Duke Energy spokeswoman Meredith Archie said the utility’s membership with EEI helps it “stay abreast of issues related to reliability, physical and cyber security, energy efficiency, best practices and technologies, as well as current and potential changes in the regulations that govern our work.”

“Like many businesses across the country, Duke Energy belongs to trade associations that focus on topics and issues that affect our company and our customers,” Archie said. “As part of the nation’s critical infrastructure, it is essential that we engage with other utilities and  These associations help to ensure we can provide reliable, secure and increasingly clean energy to customers at a reasonable cost.”

Other DEC sponsorships, dues and contributions in the test year of 2016 include:

• $65,000 in dues the US Chamber of Commerce;
• $50,000 to the NC Chamber of Commerce for lobbying;
• $7,500 to the NC Legislative Black Caucus for a scholarship sponsorship;
• $3,755 to ALEC;
• $2,500 to NC Free Enterprises in membership dues; and
• $2,500 to the John W Pope Civitas Institute for a “conservative leadership conference.”

DEC customers may bear some of these costs, but the utilities commission public staff disallowed the political contributions and donations to various chambers of commerce, according to rate case documents, “because they do not represent actual costs of providing electric service to customers.”

Other costs include $4.2 million in relocation expenses for employees.

The financial disclosures are part of DEC’s rate case, in which the utility has originally asked for an overall 13.6 percent rate hike; the public staff and DEC reached a partial agreement to lower that amount, but until the NC Utilities Commission rules, the final figure is unknown. The commission is holding evidentiary hearings to consider that increase, beginning Monday. The hearings are expected to last several days.