A tale of two reports: Why recycling coal ash at Dominion’s sites appears more feasible now than it did a year ago

Dominion Energy’s latest report on the costs and feasibility of recycling and landfilling of nearly 30 million tons of coal ash, instead of capping it in place, has shaved roughly a billion dollars from the upper end of estimates prepared last year.

That, lawmakers and environmental groups say, is the product of soliciting actual bids from companies to do the work.

Last year, Dominion estimated that beneficial use of coal ash — which would include recycling — at four sites across the state would cost between $2.564 billion and about $6.5 billion. (In the same report, the utility’s preferred method for closing the ponds — capping in place with “corrective action” to mitigate groundwater contamination — was estimated to cost nearly $2 billion at the upper range)

Those high estimates for recycling were essentially the reason the General Assembly ordered Dominion to do it again this year, said Sen. Scott Surovell, D-Fairfax. He said he felt the numbers were excessive when the utility came out with its report last year, compared to the per ton cost of recycling in other states, such as North Carolina.

“The main reason why we pushed this legislation was to ask them to go out and get actual bids from companies,” he said, adding that it is difficult to come up with cost estimates for four sites that are very different from each other, which is why bids from companies can paint a more accurate picture.

After it was ordered to try again, Dominion estimated in its most recent report released last week that costs would range between $2.773 billion and $3.358 billion if one company did all the work, and between $2.345 and $5.642 if the work is split between multiple companies.

Last year’s report claimed excavating and recycling the ash would take decades to complete, from 20 to even 50 years. This year’s report suggests most of the work could be done in a little over a decade.

At Chesterfield alone, the 2017 report put the cost at $1.5 to $4.25 billion. This year that estimate shrank to $1.4 to $2.9 billion, with a 15-year timeline.

“This new plan certainly shows that what Dominion showed the first go-round was not accurate,” said Nate Benforado, an attorney with the Southern Environmental Law Center. “When you actually have business people providing bids, they come up with cost-effective ways to do the clean-up, ways that will reduce the community impact.”

Dominion’s full report outlines why there may be differences, particularly because the 2017 report was preliminary and reflected the estimated probable costs, based on 100 percent recycling at each ash pond and no time limits.

“2017 estimates also excluded transportation of the product and revenue generated from product sales,” the report states.

The clock has been ticking on closing coal ash ponds since 2015, when federal rules requiring closure within 15 years were finalized. The General Assembly delayed closing ponds for two years, though, as environmental groups and some lawmakers fought Dominion’s preference to cap the coal ash in place, and then as they waited on cost estimates for recycling.

“I don’t think there’s any reason why we’ve had to take two years to get this information,” Benforado said. “The market has always been there, the recyclers have always been there, the local manufacturers and concrete manufacturers, they’ve been there.”

With less fly ash being generated from coal-fired power production as utilities increasingly switch to natural gas and renewables, demand for ash for concrete manufacture and other uses is increasing, Virginia environmental groups contend.

The final cost will likely be shared by all customers, Dominion states in its most recent report, which is long-standing public policy on so-called “legacy costs.”

“One of the biggest questions I get is: Why isn’t Dominion going to foot the bill for this, why is it a rate adjustment?” said Sen. Amanda Chase, R-Chesterfield. “I want them to understand it’s a very dangerous precedent if we go back and start retroactively penalizing business for things they didn’t know that they were going to be asked to do.”