12 Jan 2015

Smart Utilities Know There Are Responsible Solutions for Their Coal Ash Waste

Written by Jim Pierobon

For a President who likes to champion cleaner, safer and cost effective energy and environmental solutions, it caught some by surprise when Barack Obama’s Environmental Protection Agency punted on December 19th on classifying toxic coal ash as a hazardous waste which would have set stringent disposal requirements.  Instead coal ash is now classified as non-hazardous waste, equivalent in many respects to household garbage.

Many utilities no doubt are breathing a sigh of relief over the absence of a ‘lump of coal’ in their holiday stockings but not so at Santee Cooper in South Carolina and other utilities in the Southeast U.S. willing to connect with viable disposal and recycling solutions.

That’s because Santee Cooper and its coal ash processor, The SEFA Group, have forged markets for dry ash to be recycled and used in cement blocks, bowling balls or reached agreements with environmental groups and state regulators to dispose of  coal ash in specially lined and fortified pits.

image002Santee Cooper is a public wholesale power supplier serving South Carolina. Three-fourth’s of its load is supplied to Central Electric Power Cooperative. CREDIT: Santee Cooper

 With EPA’s ruling “no one can be confident at all that another catastrophic spill won’t happen again,” said Frank Holleman, senior attorney for the Southern Environmental Law Center. Holleman was referring to tons of wet coal sludge broke through levees near Kingston, Tennessee in 2008 and into the Dan River on the North Carolina / Virginia border in February 2014.

Holleman has been instrumental in forging agreements with Santee Cooper, South Carolina Electric & Gas and Duke Energy in South Carolina to keep or remove their coal ash out of unlined dumps that threaten public water supplies and the health of wildlife.

Will the official ruling do enough to eliminate coal ash spills?

The EPA’s ruling does mean coal ash will be subjected to stricter guidelines along with testing and monitoring designed to prevent major coal ash containment disasters. But I couldn’t find a respected environmental advocate who concluded the rules would measurably reduce the odds of another containment failure.

Officially, EPA Administrator Gina McCarthy asserted the new “safeguards will protect drinking water from contamination, air from coal ash dust and our communities from structural failures.” But here too skeptics abound.

One has to wonder what the utility industry did to lobby the Obama White House and how much of a fight EPA Administrator Gina McCarthy might have put up against it. The ruling reeks of just about everything she and her predecessor Lisa Jackson have stood for during Obama’s presidency.

EPA’s ruling leaves a lot of discretion to state authorities and that’s a big problem, Holleman asserted. Investor-owned utilities are very powerful in their home states. They exert significant influence over who’s elected or appointed to administer disposal rules and then how those rules are enforced, or effectively ignored.

‘Coal ash storage is hazardous in every sense of the word except . . .’

“In some instances, state regulators have actually worked with law breakers to frustrate law enforcement by citizen groups, Holleman said in an interview. “Coal ash regulation is an Alice-in-Wonderland world where coal ash storage is hazardous in every sense of the word except for the EPA’s interpretation of its regulations.”

I  think it is safe to say nobody expected utilities in a state widely considered to be as pro-business and conservative as South Carolina to take cutting-edge steps protect the environment and public water supplies. But that’s what some business leaders and government officials are achieving in the Palmetto State.

Other states where utilities burn a lot of coal to generate electricity – especially Alabama, Florida, Georgia, Kentucky, North Carolina, Tennessee and Virginia – might want to assess how South Carolina companies are finding responsible solutions to coal ash reuse and disposal that reduce accident risks, help protect water supplies, create jobs and generate new tax revenues — all while boosting public confidence without raising rates.  “You hit the nail right on the head,” said Tom Kierspe, Vice President of Environmental, Property and Water System Management at Santee Cooper, in an interview.

If Santee Cooper can safely dispose or recycle coal ash, other utilities can too

Santee Cooper’s initial solution was not an overnight success. Kierspe said Santee Cooper’s Board of Directors and senior management have given him and his team significant flexibility to research re-use and storage options. “We’ve tried a lot of things that didn’t work.”


Building on its success to date, Santee Cooper Vice President Tom Kierspe (right) discusses with a news reporter the utility’s efforts to find more innovative ways to reuse or safely store coal ash. CREDIT: Mollie Gore, Santee Cooper

Today, Kierspe said, finding markets for coal ash “is not that unique anymore” but “we’re going to keep plugging away . . . to find what else can be done.”

Santee Cooper dries the coal ash, then sifts it to a finer grade material for shipping to nearby private companies which use it to make end-use products such as concrete, cement blocks, roofing shingles, wall board and bowling balls.

Santee Cooper does have several factors working in its favor: one is geography, the other is the relatively modest amount of ash it processes compared to the largest utilities. The amount of coal ash from its power plants and the costs of transporting it to cement makers and re-processing facilities elsewhere in South Carolina are manageable.  In one instance, The SEFA Group is building a capability next door to Santee Cooper’s Georgetown power plant to help turn fly ash into concrete.  See the accompanying map where other SEFA Group reprocessing facilities are located in the Southeast U.S.


The blue pins are locations of current coal ash reprocessing facilities in the Southeast U.S. owned by The SEFA Group. CREDIT: The SEFA Group
There’s little doubt that utilities and the lawmakers and regulators they help get elected and /or keep in office are counting on an electorate that does not care what doesn’t affect them. “I suspect if it’s out of sight, it’s out of mind,” Holleman said  – until a containment failure strikes close too close to home.

Smart coal ash management can happen without increasing electricity rates

I theorized with both utility analysts and environmental advocates that one underlying reason for avoiding the “hazardous” waste classification is how much residential and commercial electricity rates might increase by having to comply with tougher standards. But if a utility approaches the challenge as methodically as Santee Cooper has with a well-researched, long-term program and a sizable budget, the rate impact might be minimal or non-existent.

It should be noted that Santee Cooper is a public power utility with no shareholders. Management does not have the investment community to think about whether their stock price, rightly or not, might take a hit when faced with a potentially new and expensive regulatory regime.

That said, if an investor-owned utility such as Duke Energy, Southern Company, First Energy or Dominion were hit with a disaster like the 2008 Tennessee Valley Authority Kingston plant coal slurry spill with a cleanup tab projected to be $1.2 billion, top management might want to rethink its priorities.  How costs of a future containment failure – minus any insurance payouts — would compare to proactively recycling coal ash or storing it in properly-designed containment structures is anybody’s guess. Please chime in if you care to.

Perhaps that’s what motivated Duke Energy to digest how its lack of oversight led to the Dan River fiasco. On December 18, the day before the EPA’s announcement, the Southern Environmental Law Center and Duke Energy disclosed an agreement  to more responsibly manage 3.2 billion tons of its coal ash in South Carolina. Here’s to hoping that is an example of more settlements to come.

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