WASHINGTON — The Trump administration wants to give electric utilities a pass on proving they could finance a hazardous waste cleanup in the event of a Superfund disaster.
The proposed rule from the U.S. Environmental Protection Agency says electric utilities should not have to make “financial assurances” to cover the risk the industry will produce pollution it cannot afford to clean up.
The rule comes in response to a decade-long push and legal battle with environmental groups, who petitioned the EPA to write the rules during the Obama administration. But under the Trump administration, the agency decided electric utilities do not pose a significant risk and can forego the requirement.
The decision calls into question who will be on the hook to pay for and clean up old waste sites with lagoons of coal ash, the toxic byproduct that is left when coal is burned in power plants to produce electricity. Stored in pits, coal ash can contaminate drinking water or blow into nearby communities. It went largely unregulated until EPA issued rules in 2015 to address the problem.
Virginia has more than 28 million tons of coal ash stored in pits in the state, according to the Virginia Conservation Network. Much of Virginia’s coal ash is part of a cleanup agreement the state legislature passed earlier this year, but some remains unaddressed. The state’s waterways can also be affected by coal ash in neighboring states.
Some advocacy groups are concerned the EPA’s proposal could open the door for coal-fired power plants to abandon toxic coal ash pollution or leave consumers to foot the bill.
“We know there is coal ash pollution across the United States that will cost billions of dollars to clean up, and the question becomes who is going to pay for it,” said Sarah Saadoun, a researcher at Human Rights Watch, an international human-rights advocacy group that is tracking the regulation.
The obscure federal rule has gone mostly overlooked since its proposal in July. The public comment deadline closes Sept. 27, but there are currently only seven comments filed — while other environmental regulations garner hundreds of submissions.
“This regulation is a little technical-sounding … but it can have very real repercussions in terms of whether or not coal ash will be cleaned up and whether consumers will be saddled with that expense, or whether the companies that have been polluting will pay to clean it up,” Saadoun said.
The regulations would not change a recent law requiring cleanup for four of Virginia’s most polluted coal ash sites. The state legislature passed a bill last January to require Dominion Energy to clean up four coal ash ponds. The unlined ponds, all of which are within the Chesapeake Bay watershed, hold more than 27 million cubic yards of toxic ash.
“The 2019 law addressed the largest and dirtiest power plants, but there is still coal ash in Virginia that is not covered by the 2019 law,” said Lee Francis of the Virginia League of Conservation Voters.
There are 20 active coal ash sites in Virginia, according to the Virginia Department of Environment. The state also has eight coal ash ponds that are no longer being used but still hold toxic waste.
Who has to pay?
Congress passed the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) or “Superfund” law in 1980, in response to environmental disasters like Love Canal. It allows EPA to clean up contaminated sites and forces responsible parties to help pay for it.
Superfund includes a requirement for industries to make “financial assurances” if there is a risk the industry will produce pollution it cannot afford to clean up. The “assurances” can include trust funds, bonds, insurance policies or corporate guarantees. But the government had never written regulations to actually make industries do it.
The financial assurances could help provide some financial backing in case of disaster and protect taxpayers if there is contamination after a company goes out of business. Congress wrote at the time that another goal is to “enlist insurers to provide additional policing and incentives” to monitor the industry and make sure it does not pollute.
Environmental groups have been working for a decade to get the EPA to write the rules for electric utilities, oil and gas, and mining companies. The agency is on a court-mandated timeline to complete them in the next year. EPA officials say they plan to release proposals on petroleum and chemical manufacturing in December.
The agency already decided the financial reporting requirements were not necessary for hardrock mining, a 2017 decision that environmental groups have challenged in court.
The current proposal, due to be finalized by early December, covers electric power generation, transmission and distribution facilities. EPA officials decided there was not enough of a risk to warrant the extra work of financial assurances.
Publicly-owned utilities have a low risk of bankruptcy and already have detailed financial reporting requirements, according to the EPA.
“By proposing no new financial requirements, we will be ensuring that no duplicative or unnecessary burdens fall on America’s energy producers,” EPA Administrator Andrew Wheeler said in a statement announcing the rule.
But Saadoun of Human Rights Watch takes issue with how the EPA calculated the risk of power plants. The agency only looked at pollution generated after 2015, when coal ash was first regulated. And it grouped coal-fired plants with other utilities, which she says downplays the financial risk.
“As a practical matter we have coal-fired utilities which are closing and not setting aside funds to pay for decades of coal ash pollution that is continuously contaminating groundwater in ways that threaten drinking water,” Saadoun said.